Why this strategy will give your start-up an edge

A business strategy is a framework you develop for a start-up. It typically outlines what you want to achieve within a set period, and determines both the day-to-day running of a business, and its mid to long-term activities.

Unfortunately, too often, people get into entrepreneurship without a strategy in place because they think it only applies to big businesses or multinational corporations.

Yet, having a strategy for your business, no matter how small it is, is very crucial.

Keep in mind, though, that given its importance, drafting a business strategy will take plenty of time, introspection, research and consultation.

But it’s worth the effort for your future success as a business owner. And it will save you time and resources down the line.

Here are five reasons creating a business strategy will give your start-up a competitive edge:

1. Allocation of resources

When going into business, deciding where to allocate the resources you have can be a major challenge.

A strategy, however, takes the guesswork out of the decision. Knowing where you want the company to be in the future will help you identify which resources must be spent and which ones are frivolous.

More importantly, it ensures that you don’t put your capital in areas that won’t contribute to achieving the business’ vision.

It could also help you secure funding since you can use it to draw in investors who share your vision.

2. Prioritisation of activities

Starting a business can be overwhelming because there’s so much that needs to get done to get it on its feet.

A strategy will provide clarity, making it easier to know what you should prioritise given the resources you have at your disposal.

This way, you can focus your time and energy on what will get you closer to success, and keep the momentum going once you finally take off.

3. Planning and decision making

A good business strategy will help you plan your daily activities and set goals that you work towards.

It’ll also be the basis of many important decisions, including staffing needs, choice of suppliers, funding, expansion and financing options.

Since the plans and decisions you make can mean the difference between success and failure, you want to make sure they’re based on a solid foundation.

4. Alignment

All founders know what they want to accomplish when they set out on their entrepreneurial journey. Creating a business strategy will ensure that this vision isn’t just in your head, but is communicated to everyone involved.

Essentially, a strategy will ensure that you, your partners and employees are all working towards the same goal.

5. Vision, mission and values

Two competing firms in the same industry could have vastly different methods of operation and see vastly different results. This is because their business strategies – the basis for their mission, vision and values – are different.

A strategy will enable you to define what you consider to be success, and what values your business relies on to achieve it.

The writer is an investments analyst at Cytonn Investments.