When was the last time you updated your business strategy? If it’s been a while, it might be time to revisit your plan. The past year has been challenging and many businesses were forced to pivot in order to stay afloat.
Maybe you’ve realized that the new direction of your business can work long-term or you’ve reevaluated the possibilities for expansion. By revamping your business strategy, you ensure that you’re taking action steps toward the right goals.
We’re looking at the five major elements of business strategy as shown in the Strategy Diamond model.
Why Do You Need A Business Strategy?
Running your business without a strategy is like driving somewhere new without a map. You might eventually get to your destination, but it will probably take longer and you might make some wrong turns along the way.
A business strategy is the map that points you toward your business goals. To reach a certain goal, you need to take the right actions. Your strategy is what outlines the actions you’ll take to achieve your goals.
*If you need help developing your business strategy, you should check out my Business Basics course that’s specifically designed for business owners in the salon and spa industry.
Strategy Element #1 – Arenas
In what areas will your business be active and with how much emphasis?
Arenas refer to not only the geographic location of your business but also the products and/or services that your business will offer, as well as what segment of the market you focus on.
If you run a salon or spa, you need to decide where will your business be located and how many locations you’ll have. You need to know if you’ll offer only services or products as well.
You also need to decide on your target market so you can tailor your marketing appropriately.
Strategy Element #2 – Vehicles
Through what means will you reach your business goals?
The vehicles of your business relate to the strategic ways you’ll run your business to be successful. For example, if you want to have a retail section of your salon, you need to know which product lines you’ll sell. Will you sell multiple lines or a single brand?
If you want to expand your business, will you take on a partner to oversee a second location or will you consider franchising your salon or spa?
Strategy Element #3 – Differentiation
How will you stand out from your competition?
Differentiation includes customization, image/branding, price point, product reliability, and services. In a nutshell, it determines what makes your business unique.
Your business should have features or attributes that help you stand out from the competition. Essentially, you’re answering the question, “what makes a customer choose your business over another option?”
There are almost definitely other spas and salons in your area so differentiation is what helps you ensure that you stand out in a way that attracts the customers you want to serve.
Strategy Element #4 – Staging
What will be the speed and sequence of your strategic action steps?
The element of staging centers around the order of the action steps you need to take to reach your goals, as well as how quickly you’ll work to take those steps. Often staging reflects the resources available to your business.
The goal of staging is to match opportunities with available resources. For example, if your goal is to open a second salon location but you don’t have the money yet, you might first expand your existing space with a retail element.
Strategy Element #5 – Economic Logic
How will you make your business profitable?
The final element of the Strategy Diamond is economic logic, which is focused on how your business will earn a profit. In order to be profitable, your revenue must be more than enoug to cover all your expenses.
Economic logic ties together all the other strategy elements. Using the example of opening a second location, economic logic shows that moving too fast on plans for expansion could have a negative effect on your overall profitability if you don’t have the available resources.
You need to plan out a strategy that results in profit or your business won’t last long.
Business Basics – Learn the Skills to Make Your Business Flourish
If the idea of developing a business strategy has you paralyzed like a deer in headlights, you should check out my Business Basics course. I designed this course for businesses in the spa and salon industry so you’re learning practical skills that are specific to your business.
You’ll learn everything from business strategy to marketing to sales tips. Plus when you purchase the Business Basics course, you also get the Social Media bundle, arming you with the skills you need to grow your online presence.