|
Most business owners understand that strategic thought is important in the growth of their business. We submit that not only is it important, but as the years go by, only those businesses that not only think strategically but act strategically will thrive and prosper.
Alan Aardvark ran a great company. All of his Customers raved about the service he and his organization provided. The problem Alan had was that every year it got harder and harder for him to show a reasonable profit. He felt that he had to work harder just to stay even. He often thought about defining his Customer base better or finding new niches for his company, but there never seemed to be enough time for him to actually take action on those projects.
Alan has gotten himself into a classic trap of a private business owner. He was spending all of his time making sure his business ran properly. He had to get Customers, supervise the service his company provided and make sure there was enough money in the bank to pay the bills.
He sometimes thought about opening some new niches in his business. He noticed that over the last several years, his core business had become a commodity and the price competition was tougher than ever. He also noticed a few areas in his industry where the competition didn’t seem so brutal, areas where he might get better margins.
You can’t just think about strategic activities, you have to take action
Alan was doing what many business owners do, they think about strategic activities they could take, but they never make the time to actually take action in these areas. We believe there are several reasons for this:
• The business owner doesn’t have any free time because they are so busy running day to day operations in their business that strategic activities never move to the top of the list.
• The business owner believes they can’t afford to work on strategic activities because there is no immediate payoff.
• They don’t know what the difference is between tactical and strategic actions.
• The owner doesn’t understand that acting strategically is the only way for their business to prosper in the future.
Of the above issues, we find that most of the time owner’s don’t work strategically because they don’t understand the importance of doing so. They also don’t believe they can take the time to work strategically.
Present Business versus Future Business
Steve Reilly, a business coach who specializes in working with law firms has developed a concept he calls future business activities. These are strategic activities that your business will do in the future, but are not presently doing today. The problem with future activities is they cost money today while producing no income to immediately offset the costs of development.
We often find that owners of companies are also the people who provide the drive for income the company produces. There just never seems to be enough time to produce sales, manage those sales and develop a future business at the same time. The majority of the time, you as an owner will concentrate on business activities that produce revenue now versus business activities that might produce revenue in the future.
The Solution: Act Strategically
The situation we find many business owners in today is they work harder and harder producing less and less profit. The reason for this is that owners have not made any time to work on their future business. Eventually this catches up with every business and the business becomes less fun and profitable.
The way to overcome this problem is to set aside time on your calendar to work on your future business. You need to make an appointment to work on strategic issues just like you make appointments to see an important Customer.
At first, schedule a couple of hours per week. Eventually, you will want to have a day per week scheduled to work on strategic issues that produce no present revenue for the company. This is the only way you will stay ahead of the competition curve and have revenues in the future that are not always being commoditized and devalued by your Customers.
Acting strategically is not something that comes naturally to most business owners. Those who practice this activity will see better profits and enjoy their business more. We invite you to become one of them.
If you would like more information or support from our firm, please visit us online or e-mail us and your Stage 2 Associate will get back to you.
With Warm Regards,
Stage 2 Planning Partners
Josh Patrick © 2006
Securities and Investment Advisory Services are offered through Representatives of NFP Securities, Inc. a Broker/Dealer, Member NASD/SIPC and Federally Registered Investment Advisor 1250 Capital of Texas Highway, Bldg. 2 Suite 125 Austin, TX 78746 - 512-697-6000 Representatives listed on this website are currently registered to conduct securities business in the following states: AZ, CO, CT, FL, IL, IN, MA, MT, NC, NH, NY, PA, RI, VA, VT, WA Stage 2 Planning Partners is an affiliate of National Financial Partners Corp., the parent company of NFP Securities, Inc.
NFP Securities is not affiliated with Harris- Murray
|
