Having a great idea is just the start for any successful small business. That great idea must be backed by a strategy for long-term success. Here’s our step-by-step guide to help you build a solid foundation from which your great idea can grow.
1. Start with the end in mind
First things first – you need to know, and be able to articulate, what you want your business to be. What’s the vision?
You may want to be the café of choice on Lambton Quay, or maybe you want to expand your design company into the South Island. Whatever it happens to be, your big idea will allow you to see what the finish line looks like – and then you can work out what you need to do to get there.
2. Know what makes you special
What truly sets your business apart from your competitors? What is your point of difference that makes what you do so much better – or be so different – than anyone else? If you’re unsure, your customers won’t know either.
It’s natural to find this difficult – often, small business owners are too close to their day-to-day operation to truly see what makes them unique. In that case, talk with your customers and your staff to get a sense of what they value about what you do. It could be your customer service or the quality of your products, or it could be something completely different.
3. Identify what your audience needs
While talking to your customers about what they value about you, take the opportunity to ask about their lives, and their needs too. Understanding how often they go on Facebook or Instagram, for example, may not seem immediately relevant, but it will help you define your marketing strategy. Talking about other products and services they use regularly will help identify product areas worth exploring, or new directions to take your business in.
The best way to conduct this research is by having one-to-one conversations, while you could also complement this with an online survey. Offering an incentive is a smart way to increase the number of people giving you feedback. Provide the option of anonymity too. While the feedback may be painful to read, it will enable people to be brutally honest. Ask the tough questions and be prepared to act on the results.
4. Be aware of your competition
While it would be lovely to have a monopoly on the market, very few companies do. So, you need to know who your competitors are and what they are doing. What products do they stock? What services do they offer? What’s their customer service like? Use this information to improve what you’re doing, and more deeply define your point of difference.
Just because someone else is doing something doesn’t mean you should copy. However, if someone is doing a smart promotion or adding a new service, take note of what works and then think about how you could improve on it.
5. Set SMART goals
Now you’ve gathered information about your business, your customers and your competition, it’s time to define some goals around what you want the business to achieve.
For example, one of your goals might be to increase sales. However, just saying ‘I want to increase sales,’ doesn’t give you much to go on.
A common approach to goal setting is to follow the SMART method. That means setting goals that are specific, measurable, achievable, relevant and timely.
- Specific: Rather than ‘increase sales’, pick specific stock categories of which you want to increase sales in.
- Measurable: How much more do you want to sell? Put a number on it.
- Achievable: Be realistic. It must be achievable, otherwise it’s meaningless.
- Relevant: Is this goal going to help you achieve your business vision?
- Timely: The timeframe needs to work for you, your customers and your type of industry.
An example of a SMART goal would be: Increase sales of summer skirts by 20% between October and January.
From there, you need to work out what’s required to do it – do you need more staff, a wider range of stock or a different marketing campaign?
Having your goal is one thing – achieving it is another.
6. Investing in the future
With a clear business vision, understanding of your audience and clarity around how you’re going to achieve your goals, you can now make informed and educated decisions on business finance.
Can you achieve it all with your current finances, or do you need to seek additional investment, such as taking out a small business loan?
If you’re not sure you’re ready to invest, think about where you want to be in five years’ time or even in 12 months’ time, and work backwards to see precisely what needs to happen to get there.
7. Don’t set and forget
Business plans are great, but they should grow and change with you. It should be a living document that you review and evolve regularly.
Opportunities emerge and changes happen in industries, so your business plan should keep on top of that.
Schedule a recurring time to revise your business strategy. If you’re not on track or a new opportunity has come up, be flexible. An ever-evolving plan is the only one that will be able to keep up with your changing business.
And if you need a little help or advice, there are plenty of business coaches, planners, financial advisors and fellow business owners who can help you pull your plan together – and keep it on track.
8. Embrace the challenge!
Being a business owner is tough – that’s why not everyone does it. However, running your own business is also extremely rewarding. Hopefully, you’re excited at the prospect of having a road map for your business’s success. If you have the strategy – and the motivation – to succeed, then you’re giving your business the best possible chance.
Is investment part of your plan to succeed and grow? At Prospa, we provide small businesses across New Zealand with small business loans to suit a variety of growth needs. Call our team on 0800 005 797 or apply online.
The information on this website is provided for general information only and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from financial, legal and taxation advisors. Although every effort has been made to verify the accuracy of the information, Prospa, its officers, employees and agents disclaim all liability (except for any liability which by law cannot be excluded), for any error, inaccuracy, or omission from the information or any loss or damage suffered by any person directly or indirectly through relying on this information.