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Budgeting. Are you using your budget as a tool for improving your business relationships and uncovering opportunities in the marketplace?

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Our experience as consultants has exposed us to an enormous number of small businesses. We’ve found that most small-business owners are highly intelligent, passionate about what they do, and driven to build a legacy. These qualities can lead to an extremely successful small business, as long as they are complemented with a sound strategic perspective.


But the same passion and drive that lead entrepreneurs to start small businesses can be a strategic liability. Since entrepreneurs are intimately involved with their businesses and are highly skilled at what their businesses do, they are at risk of developing a skewed strategic perspective. They may not look at fundamental aspects of their businesses—such as planning for growth, budgeting, and setting prices—in the best possible way. This can lead to missed opportunities.


We’ve created this short guide to help small-business owners maintain a sound strategic perspective. Each chapter is, essentially, an introduction to a specific type of strategic thinking. Our goal is to help small-business owners avoid common pitfalls and take advantage of opportunities that are frequently missed.
This is not a How-To manual. We do not give specific instructions, because every small business is different, and without knowing your business’s details, we can’t effectively say, “This is the best thing for you to do.” We want to help you view key parts of your business in a way that will make them more successful, and so instead of giving you instructions, we pose general questions that will make it easier for you critique your strategic perspective.
Our approach is based on the most important lesson we’ve learned as consultants: most entrepreneurs already know everything they need to know about their businesses. They simply need to apply their knowledge in the most productive way possible, which generally involves someone asking them the right questions.


With that in mind, we address the following areas, which are where small-business owners often go astray.

Growth. Are you approaching growth in a way that will be sustainable over the long term? Is your method of pursuing growth right for your business?
Budgeting. Are you using your budget as a tool for improving your business relationships and uncovering opportunities in the marketplace?
Pricing. What does your pricing strategy say about your business? Does your pricing strategy put you in an advantageous relationship with your competitors?
Sales and Self-evaluation. Are you using your role as owner to drive sales? Does your level of involvement with sales help or hurt the company?
Compensation. Does your current compensation structure effectively attract and motivate your skilled personnel?
Transition Planning. Could your business run without you? Does your business project a sense of continuity to lenders, investors, and customers? Will you be able to reduce your involvement with day-to-day leadership tasks over time?

Our suggestions in each area are not intended to be groundbreaking or paradigm-shifting. Rather, they address relatively simple issues that entrepreneurs commonly miss or misconstrue. Our goal is help entrepreneurs apply their existing expertise in ways that may not come naturally but will increase their businesses’ stability and long-term profitability.

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Growth In Practice

Again, avoiding growth is obviously not the answer. To do so would be bizarre and unhelpful. We don’t want to see that—rather, we want to see entrepreneurs be more selective about when and how they grow. We want to see growth take its place as an element of a business strategy, rather than a defining characteristic of a business.


It’s not so easy to accept that growth is best pursued cautiously, rather than automatically or by default. The idea sounds reasonable on paper, but the habit of construing growth as the end-all be-all of small-business development runs deep, and is often reinforced by popular business literature. So don’t underestimate the sheer value of saying to yourself, “I need to pick and choose when and how this business is going to grow.” That’s a lesson most entrepreneurs have to learn the hard way.


Of course, it’s only a starting point: you have to go on to actually construct a growth strategy. Here you’ll truly run up against the limits of books, articles, and blog posts, including this one. None will give you specific, detailed instructions—at least, none worth reading. That’s because there is no generalizable recipe for successful growth, and in our practice, we don’t pretend to have one. You, as the person running the business, already have all the answers you need. What remains is to ask the right questions.


With that in mind, we’ve created a list of critical strategy points. The purpose of the list is to provide a helpful lens through which to see your business, a lens particularly suited to planning for growth. It’s not a comprehensive template or a magic recipe. It’s simply a set of basic, general areas you need to be thinking about when you consider expanding. Articulating your approach to these areas is a necessary part of maintaining a positive ROI and gross margin during the growth process.

 

http://www.opportunity-inc.com