Business Development Strategies
Welcome to the 1st edition of Business Guide Section of this newspaper - We will be discussing various topics as it relates to business, marketing, finance and accounting issues. For this I wish to have you on board every Monday of the week.
Today’s discussion is titled ‘Business Development Strategy’ and will be centered on small and medium scale businesses and how individual and our nation economies can be improved. The economies of most European countries are driven by small and medium scale businesses, In UK for example,-more than 80% of businesses are small and medium scale oriented.
It is imperative to note that strategies or plan for starting and developing business, small, medium or multinational are the same but become more complex as you move from one level to the next. Hence most issues that will be raised today will apply to all business but with an emphasis on small and medium scale businesses.
How do I start a Business?
This and many more related questions to starting a business are in the minds of people. However because a vivid answer cannot be provided, many tend to forget about it and resign to fate. Others provide an answer which give them the impression that starting a business is not feasible for them. One of those answer could be .’a)I need at least USD1000 to start the business’ or b)‘ Others are already selling what I want to sell’’.
While money, i.e capital and the market potential are very important in starting a business. The first thing to put in place is the ‘Good Idea’ of what you want to do and be sure of it. This could otherwise be called your MISSION
Mission can be formulated by asking yourself a question ‘What business am I going into’- Mission is the general expression of the overall purpose of your business or organization which must be in line with the values and expectations of the business owners and other stake holders.
Let us take a personal example. Your mission might be ‘ To be well educated’ that would have answered the above question, ‘What am I going into’. Take note of the word ‘WELL’ in the answer which can be termed the Mission Statement. It’s not just to complete 12th grade and you assume, you are well educated, but to get to a level where others (Stakeholders) that have interest in your affairs will believe that you are well educated.
Therefore if you want to be in the business of producing sachet water for drinking, your mission could be ‘ To produce good drinking water ‘.
Then you need to have a desired future state of your business otherwise called Vision. Let us continue with our example. For a person whose mission is to be well educated, he will certainly have a desired future state, possibly to become a Lawyer, a Doctor. etc.
The same apply to business; you must have a vision of the desired future state of the business you intent to have, like being the best drinking water company in Liberia.
Goal: The goal of your business must be in line with your mission, it is usually a general aim or purpose of your business or organization. Going by our personal example, the goal could be to become a professional. This is in line with being well educated and it’s a general statement of your vision. Being a Doctor or a legal practitioner will automatically make you a professional.
Objective: This is a more precise statement of your Goal, and If possible it could be quantified. For example, being a - legal practitioner can make you a ‘ Senior Advocate’ . Preferably you would set the time line for yourself to achieve that status.
Therefore in a business environment, your Objective should be able to state precisely what you intend to achieve within a specific time frame. For a small scale business in distributing of drinking water, it could be stated that your Objective could be market oriented and state that you want to control a specific geographical area of the city within the next two years.
Strategic Capabilities. These are the Resources and the Competences needed by your business or organization to provide value to your customers or clients.
The Resources are things you need to make a business. e.g fund or capital, people , space or buildings, vehicles, patents etc. Without the Resources, it is impossible to have a business. This also brings us to the fact that capital is important, but if you take your time to have a good plan or strategy on how to achieve your goal, you may not need all of the capital initially thought of. Planning might assist you to know how possible it is, to limit your resources to what is actually relevant to start the business. More often, people spend more money than what is actually needed to start the business and if the business fails, all the resources are lost.
Competences explain how you make use of your Resources. No matter the level of the Resources you have, you have to put them effectively to use or it can be wasted within a short period. Therefore, you should have a detailed strategy on how and when to put your resources to use.
Hence, your competences are the key elements in the business formulation, These are what will give your business the competitive advantage and sustain you as you move along.
If you have few Resources and more Competences, the few Resources (small business) can be utilized and make your business to grow and become successful. However many Resources with little Competence will only waste your Resources. As a result, if you are already in business and you realize you are not doing well, it is better to look for someone who has Competences in your line of business to assist and learn from. Otherwise you may lose all your investment in the business.
Strategic Capabilities can be divided into two types:
a. Threshold capabilities. These are the minimum capabilities for a business to exist. No matter the size of your business, the fact that you are able to form or have a business of your own shows that you posses a quality. This quality include the ability to bring people together, ability to convince people to buy your product, ability to get the product into the market etc.
b. Additional capabilities. These are capabilities that give you competitive advantage over your piers. They differentiate your business from others and make your business more popular in the market. It could come as a result of :
1). Unique resources possessed by you or your organization which others do not have. For someone who is in the business of distributing drinking water, you may own more distributing trucks than your pier. It shows that you have more resources that will enable you to reach more customers than others. This will certainly give you a marketing edge over others.
2). Core competences, enabling the organization to make use of its resources better than others. Core competences are generally difficult to identify. They are inherent in an organization and are always difficult for others to copy. They provide an organization the ability to achieve and retain its competitive advantage over others. Organizations that value their core competence and make use of it are always successful.
In our next edition, we will be talking about what makes you a successful business person.