When you start your own business, what do you need?
As an entrepreneur, you need a strategy. By starting your journey into entrepreneurship with a clear strategy, you will avoid many pitfalls that can doom your business to an early failure. A clear business strategy will keep you focused and help your business grow as smoothly as possible.
Read on to understand why you need a strategy, how you can make one that suits your business and what’s the best marketing strategy for your business.
Why do you need business strategies?
As an entrepreneur, there are many reasons why you should have a business strategy in place. A business strategy will provide a framework and guideline for healthy business growth. That’s a broad and a bit vague so here are some more specific benefits of having a business strategy:
- Having a business strategy helps you avoid doing things haphazardly with no purpose while you’re trying to kickstart and grow your business.
- Having a business strategy helps you look a few steps ahead and avoid obvious pitfalls that you wouldn’t have seen coming without a strategy in place.
- Having a business strategy keeps you focused on the things that matter for growing your business and avoid “shiny object syndrome”.
Depending on your business and industry, having a business strategy is a must to ensure you stay afloat for the long term.
What should a beginner’s strategy be in order to succeed with their business?
The unfortunate answer is that it depends on what your business is and what your goals for your business are. Do you sell a product directly to customers? Are you a B2B service provider? Do you run a physical business or do you run a business that’s run completely remotely online?
That being said, there are a few things you can implement into your business strategy as a beginner to make succeeding much more likely. By implementing these steps into your business strategy, you’ll avoid some of the biggest pitfalls faced by ambitious, beginner entrepreneurs.
When you start off your business, start small with a small budget. You absolutely do not need to dump huge amounts of money into your business when you’re just starting out. In fact, you really shouldn’t.
The best thing for a beginner to do is to start their business with a small budget by building MVPs (minimum viable products) for their potential customers. This will let you test the market for your offering with minimal costs and if you find that your product isn’t going to be viable to sell, you will have minimal losses. On the other hand, if you find that your MVP offering has potential, you can more confidently put more resources into improving your MVP as well as marketing your offer.
Another thing that you can implement into your business strategy is to not take out business loans when you’re just starting your business. This is closely related to the point above but it deserves to be a separate point for a few reasons.
- You will make mistakes with your business when you first start out. Making mistakes on a smaller, bootstrapped budget will hurt much less than making mistakes on a big business loan that you need to pay back.
- If your first business fails, you can just start again without much problems since you’re only down on your investment. If you fail while on a loan, you will have many more problems going forward.
- While starting a business used to need a reasonably large starting investment, the internet has made the barrier to entry for starting a business much lower than it was even a decade ago. Starting a business can be absolutely cheap depending on what business you want to start.
With those points out of the way, let’s go into the next section.
A step-by-step strategy for beginner entrepreneurs.
As mentioned in the section above, your business strategy depends heavily on your business. This strategy works best if you take the time to customize it to your business needs and goals. Here’s what you should do as a beginner that’s just starting out:
- Do market research.
Study up on your industry, your target market, your competitors and your costs to run a business in your selected industry.
- Save up some money to bootstrap your business.
This will be painful for the future entrepreneurs who want to be free of their bosses to hear… but you’re going to need to get a job to save up money to start your business. Figure out how much you need to start your business, save up the amount you need and start your business!
Also, it’s entirely possible to start your business as a side hustle while having a day job. Use the money from your 9-to-5 to fuel your business!
- Build out an MVP offering and start getting customers.
Let’s say you want to own your own bakery. Think smaller and make an MVP business. Instead of opening a bakery that requires you to pay for a physical location and workers, start selling homemade cakes from your home kitchen online. Advertise your cakes and pastries on Facebook and sell them by delivery.
Is your business selling cakes and pastries from home doing well? That’s great! You can move onto the next step.
- Scale up and grow your business.
Once you get your MVP business to do decently well, you can reinvest profits into your business to grow it at a nice and steady pace. Growing it like this will be pretty slow but it’ll make sure that you don’t overwhelm yourself while your business is going through its inevitable growing pains. If you’re really confident in yourself and your business, you can consider taking out business loans to grow your business faster. It’s safer to grow your business slow and steady but if you have a working MVP business, you’re still in a much better position than someone who takes out a business loan before they start their business.
What’s a good strategy for doing market research
When you study the market, you’re doing something called market analysis. Market analysis is exactly what it sounds like. You gather data about your industry, your niche, your target market as well as your competition and then you do analysis based on that information.
Doing market research and doing market analysis is a deep topic but here’s the basics of it.
- Decide what the main goal of your market research and analysis is.
Do you want to figure out who’s most likely to buy from your business? Do you want to figure out the buying tendencies of your potential customers? Or do you want to figure out how viable going after your target market is?
You need to decide what your main goal is before starting your marketing analysis. How complex your market analysis is going to be greatly depends on your goal. For example, doing analysis on the internal factors of your business is much simpler than doing analysis on factors outside of your business.
- Study how your industry is doing on the whole.
Look at your industry and how it’s faring currently. Figure out how it’s doing right now, read up about trends in your industry and gather information about the projected growth of your industry.
- Take a look at your potential customers.
Get to know your customers. Figure out how old they are, what they work as, how much they make, where they live and whether they have a family or not. All of this information will help you tailor your marketing and offering to better suit them.
- Take a look at your competitors.
Take at the other people who work in your industry. Get to know your competitors as well as you can. Figure out what they’re doing and how well they’re doing. Do your best to find out their strengths and weaknesses. This information will help you build your business by helping you figure out what you can do better than your competition.
- Read up on other information that might be helpful.
You never really know what data, statistics or even random articles will help you come up with ideas to improve your business. Spend some time taking a look at e-commerce data, read some trade journal articles or even watch an interview with someone who’s successful in your industry. Come to think of it, watch interviews that involve people in your target market!
- Do your market analysis with all the information you have.
Take all the information and data you’ve gathered and analyze it. Remember what the main goal of your market analysis was and get to work to accomplish your goal. Do your best to keep your biases out of your analysis and really try to go along with what the data shows.
- Put it all together and take action.
Once your market analysis is complete, take action and implement steps to improve your business based on your analysis.
Your target market seems to respond well to advertisements that use the color green? Make all your ads have the color green in them from this point on! Your target market wants to have more options available to them? Start offering different packages to them depending on what they want and how much they want to spend.
How do you price your business’s product?
The simplest way to price your business’s offering is to take a look at what your competitors are charging and base your prices off of them. It’s more complicated than that but what you can do when you’re just starting out is:
- Figure out your costs to run your business. Figure out the cost price of your product, the cost of labor to run your business and all your other overhead costs.
- Figure out how much your competitors charge. Don’t copy the first pricing structure you find. Take a look at as many of your competitors’ pricing structures as you can to give yourself a good estimate on what you should be charging.
- Figure out how much your target market is willing to pay for offerings similar to yours. This will also help you get a good estimate on what you should be charging. Try your best to not position yourself as the cheapest option if you can help it.
- Set the price of your product.
You can adjust the pricing of your products later on. This is a quick and easy way to set your price in the beginning.
What is the best marketing strategy?
The best marketing strategy is the marketing strategy that suits you and your business. Everyone out there is going to try and sell you on their particular business strategies but the truth is that there is no “best” marketing strategy. You need to figure out what marketing strategy will work best for you through research as well as testing.
Remember that every business strategy is worth a look but you can’t follow something made for someone else and hope for a great result. There are cookie-cutter business plans available out there that claim to be great for every business but business plans always work best when they’re customized to suit your particular business.
You’ve reached the end of this article and have hopefully learnt why you as an entrepreneur need to have business strategies in place to grow your business. Planning and thinking strategically will help your business prosper in the long run. Take all the advice in this article and implement them into your business today!
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