What is a business strategy and how do I write one?
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We've written an expanded version of this popular article. Stay here for a quick read or visit our guide - How to Write a Business Strategy - for more in-depth information.
What is a business strategy?
A business strategy is a document that provides objectives and direction for a company. At the heart of any business strategy is the aim of achieving financial security, competitive advantage, and often growth too.
But don’t think strategy is just for bigger businesses. Even if you’re the only person who works in your company, having a business strategy can give you a competitive advantage.
Is a business strategy the same as a business plan?
No. Although business plan and business strategy sound like they could be interchangeable, they are actually two different documents, with very different roles.
If you’ve started your own business, you’ll probably have already written a business plan. This is a document that outlines your business and plans activity for the first year.
A business strategy, on the other hand, is for more established businesses. It explores the objectives and opportunities available to businesses. It provides strategic direction to your business activities and, if you have them, your staff.
Put simple, a business plan is about starting a business; a business strategy is about steering it.
How do you write a business strategy?
Writing a business strategy requires a lot of preparation before you write a single word. You’ll need to think about realistic targets for your business, then work out what can help you get there. Here's some structure to help you think about what to include:
Establish where you are now
Think about where you want to be in three to five years
Think about ways to get there…and what might stop you
Brainstorm different options to achieve your goals
Assess and select the most viable options
Start writing
Research, creative thinking and number-crunching will be required. It takes time but, done well, can pave the way to a profitable future.
What should I include in a business strategy?
1. Executive summary
An overview of what your business strategy contains. This is something that people can read separately to your full strategy, to get an overview of what it covers. Write this last, once your strategy is finished.
2. Elevator pitch
What do you say at a networking event when someone sidles up and asks: ‘So what do you do?’ This is your elevator pitch. The who, what and why of your business in under 60 seconds.
Write an elevator pitch for where you are now and where you want to be in three to five years time. This provides the A to B of the roadmap you’re about to write for your business.
3. Mission and vision
Your mission statement says what you do and don’t do. Your vision describes where you want to be. This is what Amazon say:
Mission: Our mission is to continually raise the bar of the customer experience by using the internet and technology to help consumers find, discover and buy anything, and empower businesses and content creators to maximise their success.
Vision: We aim to be Earth’s most customer-centric company.
4. Market analysis
This relates to Step 3 described above. Thinking about where you’d like to be…and what might stop you getting there. You’ll need to conduct market research to explore things like strengths, opportunities, weaknesses, threats, competitors, market demand, economic challenges etc. Take a look at our articles on SWOT, PEST and competitor analysis.
5. Goals
This is where you describe your goals for the company. Start with annual goals, then break them down into quarters, and then monthly goals. This helps break down your overall strategy into manageable chunks.
Don’t forget they need to be SMART (which we all remember means specific, measurable, achievable, realistic and timely).
Think about who and what you need to know to achieve these goals and work out how you’ll access that. For example, through networking, mentoring, formal training or by hiring someone with the relevant skills.
6. Tactical plans
These are the nuts and bolts of what you’re going to do to achieve your goals. You don’t need to describe every activity to the smallest details. But you do need to have an idea about what you need to do in the coming weeks and months. You can assign different actions to different staff, if you have them, so everyone knows what they need to do.
7. Budget
You’re going to need to allocate budget and other resources to achieve your business goals. It is important to be realistic about costs. If something is strategically valuable to your business, it deserves to be properly funded. Think about the cost of marketing, product development, staff, distribution etc.
Don't forget to thinking about cash flow too. Consider whether you'll need to borrow and invest any money to help achieve your goals, such as a Government-backed Start Up Loan from Transmit Startups or a growth loan from Transmit Growth Loans.
8. Measurement
Once you’ve set your goals and worked out how you’ll achieve them, think about how you’ll measure your progress. Otherwise, how will you know if you’re on target? Set deadlines to review your progress against your strategy and make any changes you might need.
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