Posted by Dave Lorenzo - Business Coach

What does the word strategy mean to you? 

In most large companies, strategy is a complicated process.  Large firms take a look at their position in the industry, they contrast this with the position of their competitors and they look for opportunity in the market.  Once they have identified the opportunity, the reposition the company – or adjust the company’s offerings – to capitalize on the “hole in the market that they believe exists.  This is an oversimplified description of the classic approach to business strategy. 

Small businesses can benefit from conducting a market analysis.  They can also benefit from understanding the industry and aligning their efforts with current industry trends.  Where small businesses fall short of the classic approach to strategy is in adjusting to take advantage of market conditions.  In most cases, a small business does not have the resources (money) to constantly adjust to keep up with cutting edge industry trends.  It is just not fiscally responsible for a small business to chase the latest innovation.

The big opportunity for entrepreneurial businesses exists in their personal nature.    Many business owners have become successful precisely because they are resourceful.  In most cases, this means that they have learned to do most of the day-to-day business tasks themselves.  In fact, they have become very good at those day-to-day tasks. They may be so good at them that their customers many have come to EXPECT the business owner to personally handle their transactions. 

This philosophy, while necessary during the start-up phase of a business, can stunt that business’ growth as sales increase. 

Some time within the first few years of a business’ existence the owner come upon a moment of truth.  That moment comes when the owner reaches his capacity to “do everything”.  This is precisely the time when frustration sets in.  Why?  Because these amazing people have built up a nice income while literally working day and night.  They are afraid that if they turn over some of the day-to-day tasks to others, the business will immediately fall off a cliff.  Vendors won’t get paid so supplies won’t show up. Customers will leave. The business will go bankrupt.

This is just not true.

It is at this moment of truth that small business strategy should kick in.  Small business strategy is about aligning the strengths of the owner with the goals of the business.  If the owner is a fantastic salesperson, he/she should delegate (or subcontract) all of the work that does not involve sales.  If the owner is a great operator, he/she should hire the best sales person on the planet to bring in business and use their talent to squeeze efficiency out of the business while delivering top-quality service..

I know this is a difficult concept to grasp but it works.  It works so well that many entrepreneurs find that they double the size of their business when they embrace it.

So how do you make this transformation?  We’ll discuss that next time.

Filed under: Entrepreneurship - Success
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