Strategy is a difficult thing for small business. We always believe that we have found the perfect niche in the market and that we will make the most of it. But sales don’t always come as quickly as you hope and you start to spread the service offering to get more customers through the door.
Are you guilty of this? Have you strayed from your niche? Have you become a bit of everything to everyone in your field to make the most of the potential sales on offer? Have you lost your way a little for sales?
One book I love is called “Strategy and the fat smoker”. In the words of the author David Maister, he knew that being fat and smoking was really bad for him but did nothing about it for 37 years until a vital organ failed. He had to change his ways. And fast.
He relates his personal situation to business owners – the place he found himself is one which many small businesses find themselves on a daily basis. They know something is not working and is bad for their business, but they keep on doing it anyway. Each time hoping for a different outcome, until finally, they pull the plug on their business or someone does it for them. I have two local bookstores.
One is currently holding out against what really is a painful re-adjustment process. Selling 50 Shades of Grey, textbooks, and fluffy toys, they are struggling to stand out in the market and have definitely become a bit of everything. The second bookstore has said no to 50 Shades of Grey sales but instead focuses on specialty hard-to-source titles, and has an in-store wine and jazz bar. The owner tells me that business is strong.
Maister describes strategy as deciding whose business you are going to turn away. It’s not about describing who you are going to do business with, it’s working out who you are not going to do business with. And who you may lose sales from as a result. The reason he goes down this path is because he is focusing on what will bring a point of differentiation to your customers or help you establish your reputation.
Having a strategy that focuses on providing a certain product or service can easily be spread wider than you anticipate. But articulating who you will say no to is a lot harder and gives you greater discipline to stick to what your core strategy is. The second bookstore in my example may have lost some sales by saying no to customers wanting to buy 50 Shades of Grey, but they appear to be creating more sales by sticking to their own point of differentiation.
As an online accounting firm for small business, we often get asked why we are focusing just on small business “Aren’t you limiting yourself by having one focus?”, “You can get higher fees if you go for bigger sized businesses too”, “Are you sure you don’t want to focus on SMEs more broadly and include medium sized businesses?” are some of the comments we often receive from others in our industry.
It’s something we have struggled with in our business and had many discussions about, some focusing on whether this is madness or whether sticking to our strategy of servicing small business is the right one.
But hearing from satisfied small business clients and the fact they like our specialisation on small business means that that it is something that is paying off. It’s important to stay patient and always remember why you need to sometimes say no.
Some tips for sticking to strategy:
- Know your strategy. Always be clear of your strategy before starting your small business. Make sure it is one you are passionate about – this will make sticking to strategy much easier.
- Implement. If you waiver from your strategy, is it really your core strategy or just a vague mission statement that doesn’t mean anything to your business.
- Consider the strategy-fit of a potential client. When approached by a potential client, think hard about whether a client ties in with your strategy. Is this a client who you would be proud to place on the front page of your website? Whilst it is hard to turn down business – ask yourself ‘What is good for my business in the long-term?’
- Consistency. Ensure all your messaging and communications ties in with your strategy
- Educate. When new employees join your business, ensure their buy-in of the strategy. Otherwise they may have very different goals and ambitions that may not match your business leading to wasted time and money.