There have always been individuals who did not recognize working for someone, wanting to do their own business. There are also people who, after working at an enterprise, open their own business.
Today, the question of opening your own business is especially relevant, as real incomes have fallen due to the state of the country's economy. And opening your own company, you can have decent earnings, working for your own pleasure.
What do you need to start your own business?
In order to start working for yourself, you need an idea, a large amount of money needed to acquire fixed assets, as well as a clear business strategy.
But how to make sure that the business not only worked, but also brought the necessary income, without involving its owner in losses? The answer is simple - you must have and follow a professionally designed strategy.
A business strategy is a certain approach to conducting business activities that is developed on the basis of the current state of affairs, as well as the wishes of shareholders or company owners.
What species are there?
In the world there are many ways and plans that are developed both for a specific enterprise, and for the industry as a whole, or suitable for a particular group of companies.
Moreover, each business strategy has its own specific features. Examining each of them, we can distinguish the following types:
- Concentrated increase.
- Integrated magnification.
- Diversified expansion.
- Abbreviations.
In addition, each of them has several subspecies, which will be discussed later.
Concentrated increase strategy
Let’s figure out what the essence of such a business strategy is. It is associated with a change in the manufactured goods or services provided, as well as with a change in the market. At the same time, the main industry in which economic activity is conducted does not change.
In such a business strategy of the enterprise, the following areas of change can be distinguished:
- Increased market share. It implies winning more customers through various marketing moves, as well as establishing new partnerships (buying up competitors or merging into one company, mutual cooperation agreements). Advertising is expensive, but organizations see it as an investment in their business.
- Search for new markets. In this case, the company will diligently seek new sales markets. Usually this is an expansion of the sales territory or an attempt to attract a new category of consumers.
- Product improvement. It involves redesign or improvement of products. If this does not bring success, then a new type of product is created, which the company begins to sell.
A business strategy of this nature works well especially for those companies that have enough resources and have products that suit different categories of consumers.
Such a business development plan is not suitable for all manufacturers due to the lack of recognition on the market.
Integrated Increase Strategy
This type of strategy is usually used by companies that are successfully developing and want to increase their market share, as well as profit.
Such a development plan is divided into two subspecies:
- Supply regulation. By this we mean strengthening control over suppliers of resources for production. In addition, it is possible to open branches or subsidiaries that will partially or fully fulfill the role of suppliers of raw materials.If only one or two suppliers have the necessary raw materials, then they can begin to impose their conditions, which will run counter to the goals of the company and be unprofitable for it. In this case, it is better to start mining resources on your own and not go about it.
- Development network implementation. It often happens that points of sale do not correspond to the level necessary for large sales and cannot satisfy all demand both in quantity and quality. The purpose of a business strategy of this kind is to start selling goods on their own at the proper level, as well as improve the quality of current points of sale. In this case, this is an excellent plan for the development of the company.
Such business strategies of the organization will require certain financial resources, which will need to be invested in the development of a sales network or supply sources.
The company should be soberly assessed whether it can painlessly “pull” the necessary funds out of working capital, or it is worth turning to outside investors for help.
Diversified expansion strategy
Such strategies are developed for companies that have exhausted themselves. This can be expressed in a slowdown in development or a decrease in its popularity due to the following factors:
- the goods are already boring to consumers and tired of the order;
- the market is already crowded with the type of product;
- the industry has seen a decline in consumption.
Despite the dangerous circumstances for the further development of the company listed above, there are several subspecies of this strategy that will allow the winner to come out of this situation:
- Mastering a new production. The main task for the company when following such a strategy is to accumulate the necessary resources in order to begin production of new products that can be sold on the occupied market. Resources will be required a lot, because you need to master new production processes and technologies.
- Mastering the production of related products. You can try and manufacture products that will complement the main product. This requires less cost compared to the previous subspecies, however, a lot of injections are required. It is not necessary to look for new ways of marketing for such products; existing opportunities will suffice, as it will complement the main product.
- Start of production of new products for other markets. If the management is confident that the previous two subspecies will not help the company, it decides to try to establish additional production, which will focus on a new type of product and new markets. A lot of cost will require such a strategy. Small businesses will not be able to easily and painlessly find the necessary funds, unlike large corporations.
Such types of strategies require a much greater involvement of resources and largely depend on the skills of management personnel in solving such issues. Without competent leadership, such a path will not succeed.
Reduction strategy
Very often, after a period of rapid growth, a slowdown in development or even a decline in production is observed. This is due to many factors that depend not only on the company itself, but also on the surrounding market.
In addition, there are also foreign economic and political components that also affect the development of a particular industry, market and individual company.
Need to soberly assess the situation.
In such cases, there is a sound grain in considering strategies of the type of reduction in order to preserve and increase the level of production efficiency, as well as strengthen the financial security of the company.
Such a business management strategy has the following subspecies:
- Liquidation. Used only when the company no longer has a chance to exist. It is considered a plan to close the enterprise.
- Immediate revenue generation.The strategies of this subspecies are used to maximize revenue in the minimum amount of time. Usually it is used by those companies that do not see their further development and want to leave the market. Moreover, they want in this process to get the maximum possible profit. To do this, they begin to reduce workers, stop servicing goods and reduce other costs that do not affect profit.
- Partial closure. Used when the company wants to get rid of the non-profit sphere of its business, or to obtain additional funds that can be invested in successful production.
- Cost reduction. Such a business development strategy is used by companies that want to increase labor productivity and production efficiency. To do this, ways to reduce costs are being sought. This can be achieved both by automation of the production process, and by reducing the "extra" staff.
Of course, in practice, the same company can simultaneously use a strategy that will include several of the types listed above.
Without a good clear strategy, results can be unpredictable.
Recently, they often use the word startup (from the English. Start up), which means the beginning of the implementation of some new and good business idea.
Indeed, it is very important to occupy your niche in the market for the provision of services or the sale of goods - it is quite difficult in the conditions of developed competition.
You must have and follow an approved development strategy
But, in addition to a good start, you need to have the right business plan so that such a start does not quickly give way to bankruptcy. Such a plan is a business strategy, adhering to which, you can not only successfully carry out business activities, but also successfully develop, increasing profits.
Therefore, if you want to conduct a profitable business, then be sure to engage in such a business as developing business strategies, or entrust it to knowledgeable professionals. After all, this procedure is a difficult task that can be mastered only by experienced specialists.
