Small business strategic management processes are your road map to success. There are various philosophies and concepts linked to strategic management.
The simple definition of business is that it is an organization that makes or sells products or services. Many individuals are looking into starting their own business.
There are various reasons many would love to develop their business idea. Some start their own business as an extra source of income. They manage their business on the side in conjunction with a full-time job.
Others would leave their full-time job to start a business. Yet others in this generation go with the trend. They are searching for ways to start an online business and work from home. The benefit of having an online business is that you have access to millions of customers.
But there is tough competition as well. Hence, forethought about strategic management methods is important.
Strategic Management Benefits
In the ultra-competitive world that we live in today, it has never been more critical for a business to have clear goals and targets for the future. A company must be aware of where its objectives lie so that it can hold itself accountable against them and assess performance.
What are strategic management tools or concepts? Strategic management concepts to associate with your small business idea include:
- Mission statement
- Vision statement
- Business Goals and Objectives
- Milestones
Strategic management and planning are even more crucial for a business startup with a new idea. Having clear and tangible goals is an excellent way for a business startup to focus its efforts, organize its assets, and even secure new investments from external sources.
How can strategic management achieve success? For you to be successful, you need a good start. Your vision, mission, objectives, and milestones will bring your business idea to life. Good knowledge of these will set you off on the right path to get your business started.
These are a few effective measures successful entrepreneurs take the time to consider. When it comes to startups, it is extremely beneficial to produce and clearly define business objectives for the short, medium, and long term.
That way, management can develop an effective strategy for working towards and hitting these targets and making the idea become a reality. This strategy is among the top ways to bring your business idea to life.
Define the Mission Statement
Often, a new business will focus too much on short-term projects and managing cash flow problems rather than defining a clear purpose for their brand.
The mission statements outline WHY the company exists. This is crucial for all stakeholders of the company. A mission statement aims to ensure that all stakeholders understand what the reason is for the company’s existence.
Wikipedia defines a mission statement as follows:
“A mission statement is a short statement of why an organization exists, what its overall goal is, identifying the goal of its operations: what kind of product or service it provides, its primary customers or market, and its geographical region of operation.” (Source)
Who are we as a company? What do we stand for, and what do we believe in? What problems are we solving, and for what target market? These are all questions that should be answered clearly in the mission statement.
Here is the mission statement for Facebook:
“Founded in 2004, Facebook’s mission is to give people the power to build community and bring the world closer together. People use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them.”
The Balance Small Business explains how to write a mission statement with real-world examples in the article: How to Write a Mission Statement & Mission Statement Examples.
Create the Vision Statement
The vision statement is there to outline “WHERE” the company wants to go in the future. After we have addressed why the company exists, it is essential to look to the future and decide where the company needs to be.
Where do we want the company to be in the future? Who do we want to become? How do we want our brand to develop? What industries do we want to affect? These are all questions that should be addressed in the vision statement.
This vision must then become actionable, and the company should be seen to work toward these goals and objectives effectively.
This is crucial for a startup company. A clear vision allows the new business to set goals and align all the worker’s interests. This will give a sense of unity, transparency, and trustworthiness to the brand image and provide confidence to all stakeholders.
Here are some real-world examples of vision statements:
- Amazon.com – “Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”
- Harley-Davidson – “To fulfill dreams through the experiences of motorcycling.”
For more examples of vision statements from actual companies read the article “Vision Statement Definition With Vision Statement Examples” by The Balance Small Business.
How to Write a Vision Statement?
Consider the article, “A Guide to Writing the Perfect Vision Statement (with Examples)” from ProjectManager.com to get some ideas on how you can write your vision statement. The article also defines a vision statement as:
“A vision statement is a document that states the current and future objectives of an organization. The vision statement is intended as a guide to help the organization make decisions that align with its philosophy and declared set of goals. It can be thought of as a roadmap to where the company wants to be within a certain timeframe.” (Source)
Vision vs Mission Statement
The vision and mission statement is an excellent way to formalize the purpose of a new startup.
Panmore Institute analyses Amazon’s and Wal-Mart’s vision and mission statement in the following articles:
- Amazon.com Inc.’s Mission Statement & Vision Statement (An Analysis)
- Walmart’s Mission Statement & Vision Statement, Generic & Intensive Strategies
Consider the article on HubSpot’s blog, “17 Truly Inspiring Company Vision and Mission Statement Examples” that gives examples of vision and mission statements of various companies and highlights what is special/good about them.
Have Business Goals (Objectives)
Business objectives are the results a business desires to meet as its business grows.
Goals are usually expressed in a numerical format, typically in a percentage. For a startup, an example of a goal could be, “increase revenue to $20,000” by 2021”. Let’s expand on this with business objectives.
Once we have our goals that are outlined by the mission and vision statement, companies should look at what actions they can take to make them a reality. This is done by setting objectives.
Using our last example, “increase revenue by $20,000 by 2021”, managers and decision-makers can sit down and decide upon what appropriate action to take to achieve this target.
They may come up with ideas such as “increase marketing activities in the researched target market, “acquire 10,000 new customers in year one”, “reduce costs by outsourcing tasks.” Whatever it may be, the objectives should be clear, actionable, and countable.
Under the heading, “How to Create Effective Business Objectives”, in the article, Business Objective, Sprout Social highlights that objectives must be, Specific, Measurable, Attainable, Relevant and Timely. Building the acronym SMART. (Source)
Set Milestones to Monitor Business Goals
Microsoft’s vision statement from Bill Gates in the 1970s was:
“A computer on every desk, and in every home, running Microsoft software.”
That is an example of a simple yet bold statement that would lay out a mammoth of tasks for the young computer company back in the 70s.
Some objectives, like this one, will be too large and should be broken down into smaller, more manageable chunks for them to become a reality.
Setting smaller objectives is a useful tool in project management and allows the company to create a clear and realistic roadmap. A startup should set tangible milestones to work towards.
For example, “acquire 1,000 customers this month”, “achieve $5,000 revenue in the second quarter”, “release software patch update in the third quarter”.
These will make it easier for stakeholders to understand where the company is going. Milestones provide morale boosts for staff hitting short-term targets. It will also provide key benchmarks for startups to assess their ongoing performance.
Read the article, “How to Develop Milestones for Your Business” by Chron.com. Observe how “Milestones…give you the opportunity to visualize your company’s future, and then measure your progress as you proceed.”
Closing: Is Strategic Management Important?
To accomplish any objective, you must have some sort of master plan. It is the same in business. Entrepreneurs need a plan of action or strategy of how they will accomplish business success. Hence, there is business strategic management, which helps you to define a winning game plan.
For your business idea to work, do strategic management. It would be extremely beneficial to produce a vision and mission statement. Then clearly define business objectives and goals and work to meet them. Have short, medium, and long-term milestones to monitor your business progress. It is vital for a new startup is to set clear goals and targets for itself. Once a company understands WHY it is operating, and WHERE it wants to be in the future, then it can set clear, actionable objectives to achieve it.
When a company clearly defines objectives, it becomes much more attractive to stakeholders and outside investors. Attractiveness increases when individual milestones are met, and the business is providing evidence for this.
Just remember that strategic management is an ongoing process.
