Clear strategy key to business success
Posted 27 Oct 14
Are you and your business partners clear on strategy?
Having a clear strategy and direction is incredibly important to ensure success in business.
When you have multiple owners, whether family or not, this can present some challenges that don't really exist for single owner businesses.
Even if a single owner business does not have a clear strategy (and like all businesses, it should), it has the advantage of the business direction resting solely with the owner when strategic decisions do have to be made.
In our experience, it's not uncommon for the different owners of a business to have different views on the direction they want to take, whether that be maintaining the status quo, expansion into different markets or offering a new service.
There are a number of risks to not having an agreed, consistent direction or strategy in mind, such as:
- Conflict between owners - if decisions are being made and executed that others do not agree with, it will almost certainly cause conflict.
- Below par business performance - you might get lucky and do well regardless but why take that risk? Every decision made in a business should be with the view to achieving the ultimate goals and strategy, which is essentially impossible without clear direction.
- More difficult to attract additional investors â€“ sure they can see how the business has historically performed, but how do you demonstrate where you are trying to take it?
How can you reconcile different views and make sure everybody agrees on business strategy?
- Make sure you take the time with your co-owners to define and agree on your strategy - using external advisers to facilitate this process can be very effective.
- Be prepared to compromise - if you can't, you might need to think about exiting.
- Make sure you come back to it regularly to confirm it is still valid and track progress against the objectives.
- Define the parameters by which the business is governed and decisions are made, and protect each owner with buy/sell and shareholder agreements.
Don't run your business blind - make sure you know where you're heading and avoid trouble by making sure you and your business partners are on the same page.
Talk to any of our Business Advisory specialists to discuss the strategic direction of your business.