Welcome once again. It’s a pleasure connecting through this blog.
Now, in my article entitled ‘Critical Issues An Entrepreneur Must Know About Business Strategy’, I mentioned that your business strategy is an articulation of the overall direction of your enterprise in the medium and long-term. I also said that your enterprise strategy is a specification of the way your enterprise competes in your industry, whatever that industry is. It therefore means that your strategy should define the rules and guidelines by which the mission, objectives etc. of your enterprise will be achieved.
So, today I would like to say something briefly about critical strategic decisions an entrepreneur needs for business success. Now, you might ask me why these are critical. My response to you is that these items are part of the fundamentals of your enterprise, and this means that if you get them right you can smile to the bank with your business success, and of course the opposite is true in case you get them wrong. I trust you understand what I mean. Don’t you? Come on, let’s just proceed and take a look, even if you have some arguments at this stage. OK?
- The right business name, brand, proposition, business location, structure etc. Mr. Entrepreneur, these are strategic issues you have to decide on even before you hit the ground running. That enterprise requires a location, a name, brand identity, proposition, business structure etc. Now, I know that in this modern age people can operate enterprises in their briefcases or even bedrooms. Problem starts when you begin landing some good business and you start appearing sheepish when pressed for more details about your enterprise. You have got to be above these basics if you desire to project your enterprise properly to the world out there. Don’t you think so?
- The product or service you are going to offer. Another critical strategic decision relates to the products or services you will have on offer. Don’t mind coming up with something unique, instead of being a copycat. As an example, you might be the only one rearing dogs and cats in your region – by the way I don’t mean to offend anyone here, even those who dislike these creatures with a passion. The reality is that your enterprise and possibly you will be known largely by the nature of products and services that you offer. You could offer products or services that will make people never forget your enterprise name. Can’t you enumerate some of these products and services that you can hardly erase from your mind? If your product is among them – congratulations!
- The market to operate in. Your will also have to make a strategic decision about the market you intend to operate in. If you decide to sell sand in the desert where everybody can get it in their backyard, that’s up to you. If you decide to promote your smart phones in one remote rural area where the inhabitants will have to save money for two years before they can afford one phone, that’s up to you. Do you get what I mean by good strategic market decision? You don’t need to blame anybody. Do you? Within the market you are targeting strategically, you could consider many other things such as promotional approaches, segmentation, competitors, entry and exit strategies etc.
- Financing structure. Another critical strategic decision relates to your enterprise financing. I guess at this stage some people are beginning to get more alert because I’m talking about money – referred to by some people as the thing which speaks a language everybody understands. Some sources of capital and related financing structures, conditions and costs are a headache, and you need to be smart enough to avoid such challenges. For example, debt financing is good but if you choose to over-rely on it and give the bankers a chance to knock onto your front doors anytime they like, you might lose your sleep. They will even enter into your guestroom! You might become oppressed in your own enterprise. Will you like such a scenario? Of course not. I’m not telling you to hate bankers. They are good colleagues and sometimes are wonderfully very good!
- Human capital. Human capital strategy has become very critical in today’s very competitive world. Entrepreneur, you should know that the people you have can make you successful in your enterprise, but they also have the potential to make you a failure. You could choose to be a good Samaritan and employ every human being that comes across with a CV. Again, you might choose to make ten staffs do the work of twenty people until you lose them all because their backs are all broken. Your remuneration strategy might also drive away even the most patient man. What about your retention plans, quality of manpower, skill sets etc? These are all critical strategic decisions that can determine your success.
- Correct buying and selling. This is a bit embarrassing but candidly many entrepreneurs do not even know how to buy and sell well. By the way, you don’t need to blame your procurement and marketing guys always. First consider your own position. You can’t be a spendthrift and expect your team to be very frugal. Can you? What about negotiation. You might spring up in the office with an item you have paid thrice the normal price for, and your procurement guys will have a good laugh at you – of course with some courtesy to the boss. Do you understand me?
- Networking and business relationships. There is what we call synergy, through which one plus one equals five for example, and not two. If you don’t know this principle then better get reading. OK? The success of your enterprise also depends on the strategic decisions you make about the business networks and other relationships you are going to build over the years. Do you know why investors invite others to be shareholders or partners with them? Do you know why enterprises scramble for regional bodies, professional associations etc? The value is in strategic business relationships that add multiple values to the benefit of all the members. Be smart Mr. Entrepreneur.
- Avoiding common pitfalls, and getting out of them if you fall into any. Talking about common pitfalls, I remember that I one time did an article on this. I’m not going to give you another link here, because the write-up might not even be on this site. If you need it you will search for it. OK? What I’m saying here is this: Your strategic decisions can help you avoid pitfalls in your entrepreneurial journey, and also help get you out of these pitfalls if you happen to slip. Don’t try and make a bad history by being the kind of entrepreneur who falls once and runs forever. You need to be resilient and tenacious – with wisdom. I mean, reorganize and succeed but don’t be a perpetual loser. Am I communicating some sense here?
- Risks and rewards. Again, I have written about the critical balance between risk and reward in my blogs. Being an entrepreneur, you need to make conscious strategic decisions about the level of risk you can swallow, and the corresponding rewards. Normally the higher the risk the higher the rewards. Now, please don’t go gambling because I have mentioned this. You will have only yourself to blame. However, if you like the comfort of your home and you can’t step into the rain sometimes; you will never discover some good properties of rain. Sometimes you have to leave your shores to be able to reach another shoreline. Don’t you agree with me?
- Staying power. Are you a strategic entrepreneur that is working at building an enterprise that will last? Congratulations to you. Candidly, I think it makes a lot of sense to create and build enterprises that last. Don’t be a gambling entrepreneur that snatches profits for a few years then runs away like someone is chasing. Your value, and the value of your enterprise, will be meaningful to humanity if you build an enterprise that stands the test of time. So, Mr. Entrepreneur, make strategic decisions for the long-term positive effect on your enterprise.
I think we should close it here today. Don’t you think so? I do hope I’ve added some value. I want you to be counted among the successful entrepreneurs. Isn’t this a good idea?
With every good wish – enjoy your weekend.
The Wise Entrepreneur