Main menu

Pages

Where to start your business: strategy

Where to start your business


You have decided to create your own business, but so far you only have an idea in your head. Let's figure out how to turn this idea into a program of action.


The company's strategy is a general, master plan. She answers questions:


  1. What am I going to create? What will my business be?
  2. Who am I doing this for? How can I improve the lives of these people?
  3. How can I stand out from the competition? What is unique about my offer?
  4. What is the potential of my business? What are the threats and opportunities? How will I proceed if business conditions change significantly?
  5. What results do I want to achieve in a few years?

Consider the company's strategy on the example of an online chocolate store. Suppose you decide to sell sweets online. The idea is doomed to success, because everyone in the world loves chocolate, you think. Is this true and how exactly to implement a brilliant idea?


one.Explore the Market


Before starting a business, you need to understand if it has potential. Study supply and demand.


If a product or service is in demand, the demand for them grows, it makes sense to enter this market.


On the other hand, if there are already a lot of offers in this market and there are more every day, then the competition is high. All work on the verge of profitability, it is difficult to get a profit.


Sales of chocolate and sweets in general practically do not change from year to year. At the same time, more and more people are making purchases via the Internet, and online sales are growing at a gigantic pace. There is potential.


There are only five specialized online sweets stores in your city. This means that you can win back your share, and profitability, most likely, is still acceptable.


But you have much more competitors: these are also confectioneries, gift shops, supermarkets, as well as private craftsmen who make sweets to order. To take your place among them, you need to offer something new and different.


2.Choose your clients

Among the many potential buyers, you need to choose your target audience and focus on it. Don't try to include everyone. Find those whose needs or desires have not yet been met by current salespeople and focus on them.


Get a feel for your potential customer. What need can you fulfill? How do these people think? Where do they shop? What are their characteristics and behaviors?


There are a lot of sweet-toothed people who love chocolate - in fact, all people from 1 year to 99 years old. Among them, 40% are young and middle-aged people, active Internet users: they appreciate it for the speed and convenience of shopping. In addition, the Internet is usually used also for entertainment.


Among the entire Internet audience, a separate group can be distinguished. These are people who want to stand out, like to give non-standard gifts, to the creation of which they put their strength and creativity. Let's assume that they make up 20% of Internet users. These people will be your target audience.


3.Formulate an offer


To stand out from the competition and best meet the needs of your target audience, formulate a unique selling proposition (USP) .


Think about how you can implement it: on your own or with the help of suppliers or business partners.


For example, you will cook chocolate according to the unique recipes of your grandmother, who uses natural dyes to color it and add unusual ingredients: cloves, sea buckthorn, carrots, red peppers.


At the same time, you will offer your young customers who love creativity and entertainment not only to buy ready-made chocolate, but to become its co-author: choose a pattern, color, taste and packaging. To do this, you will make a special constructor on your site.


At the first stage, suppose you can produce such chocolate yourself, and when the volume of orders increases, attract a small private factory.


4.Assess the potential


Assess the prospects for your development in the market. You can use a SWOT analysis for this .

This method helps to identify internal strengths of the project (strengths) , weak internal aspects of the project (weakness) , potential external / market opportunities (opportunities) and potential external / market threats (threats)  - risks that may affect the development of the company.

SWOT analysis example

Strengths
Buying online in one click
Possibility to design your own order
original products
High quality goods
A wide range of
Same Day 24/7 Express Delivery
Development of a mobile application to attract an audience

Weak sides
Lack of experience in organizing own production
Lack of funds for the project to develop a mobile application at the first stage

Potential Opportunities
Opening a physical point of sale - chocolate
Expansion of the assortment due to other original sweets, except for chocolate
Formation of a permanent clientele, which can be offered new options and bonus programs
Consumers are ready to use mobile applications for shopping, so the project will be able to attract an additional sales channel

Potential Threats
competitive market
Consumers in the first stage - only those who buy online
Strengthening the position of competitors
Additional state control of product quality
Unreliable manufacturer and threat of recipe disclosure to competitors
Unfavorable economic situation in the city, bureaucracy

Using the same method, you can study an individual competitor or the market as a whole.

After you have compiled such a table, draw conclusions: how to respond to threats, work with flaws, and maximize all opportunities based on the strengths of your product.

Competitors can also go online and offer original chocolate. You must prepare a response to such actions: for example, create an even more convenient mobile application for customers and expand the range. Your weaknesses, for example, work only through online, can be strengthened over time - go offline. First, you can work with partners, and then open your own point of sale - a chocolate shop.

5.Define a promotion strategy

Evaluate exactly how your competitors are promoting their products or services, what channels they use, and how much money they spend on advertising.

A well-thought-out company promotion strategy will allow you to use the budget as efficiently as possible. For example, if there are a lot of competitors in the market, and your budget is small, it is better not to spend a lot on advertising, but to expand partnerships.

Since you are selling online, the main advertising support should be concentrated on the Internet. More returns for less investment can come from your company's participation in workshops, promotions and barter partnerships.

6.Formulate a business goal

Be bold, but stay realistic. Determine specific figures for sales volume, number of customers, territory. Set a high bar for yourself to strive for.

Let's say you can set yourself a goal in a year to sell 2500 tiles per month in your city, make half of the buyers your regular customers, offer 5 toppings and 3 shape options.

In three years, you plan to expand the assortment to 10 fillings and 5 forms, expand delivery to the entire region and increase customer loyalty to 80%. Thus, you expect to take a share of 35% of the online chocolate sales in the city.

And in five years, you intend to open a network of chocolate shops in the region, sell a franchise, send your goods throughout the country and increase sales to 10,000 bars per day.

After you have drawn up a business dev

Comments

table of contents title