Recently we’ve been on a journey to set your small business up for success in 2023. In a three-part series, I’ve been guiding you in creating a small business strategy to launch in the new year and bring your business to new heights in 2023. In part 1, I laid the foundation by explaining why business strategy is important (and worth your time!). In part 2, I shared a 6-step path to creating an effective small business strategy. In this final article, we’re going to answer the question, ‘why does strategy fail?’
Why Does Small Business Strategy Fail?
The harsh reality is that business strategy failures happen all the time for a variety of reasons. Understanding why can help you avoid the pitfalls and better understand the criteria for creating a good business strategy. So, why does small business strategy fail? Here are some of the reasons.
1. Emotional Decisions
When answering the question, ‘why does small business strategy fail,’ I have to start with a big one: sometimes small business owners make emotional decisions. Shooting from the gut may feel right, but in the end, it’s toppled more businesses than you can imagine. In the last article, I mentioned the importance of gathering data and using it to drive your business decisions so that you will avoid this strategy fail.
2. Chasing Too Many Opportunities
Another thing I emphasized in my last article is the importance of being specific about your goals. A lack of specific targets (and time frames) will lead to chaos. A good small business strategy identifies specific goals, and anything out of that scope which could distract you from those goals can be put aside for another time.
3. Focusing on Problems (Instead of Opportunities)
To follow up on that last comment, I want to mention that you should be looking out for opportunities—just make sure to select those within your business strategy’s scope. Sometimes small business owners focus too much on the problems. They’re constantly ‘putting out fires’ and stressing over problems (and how to fix them). With your eyes on the problems, it’s hard to see opportunities right before you. As you execute your business strategy and encounter problems, ask yourself, ‘what is the opportunity here?’
4. Lack of Market Intelligence
A final strategy fail is related to #1 on this list, and that is not gathering enough market intelligence to guide your strategy. There is an abundance of information about everything online. Take advantage of it to research your market and make calculated decisions.
Criteria for a Good Business Strategy
We’ve examined the question of ‘why does business strategy fail?’ and the reasons point to some important principles for creating a solid business strategy. Namely, your strategy should have specific goals based on data instead of emotions. Let me add to that by sharing four criteria for a good business strategy.
1. Consider the Alternatives
As you create your strategy, remember that there are always multiple ways to do things. While you need a specific data-based strategy, also take some time to evaluate the other options. Considering various approaches allows you to choose the best one and have a backup plan should your business strategy need revising down the road.
2. Learn from Mistakes
When you’re running a small business, mistakes are inevitable. The key is to only make a mistake once! If you’re encountering the same error repeatedly, it indicates that you’ve got a real problem. Learn from your mistakes and fix them so you don’t have to repeat them.
3. Pay Attention to External Factors
Another thing that will help you avoid a strategy fail is paying attention to what is happening outside your business. It’s easy to put your head down and get lost in the day-to-day concerns of running a business, but you must be aware of what is happening around you. Don’t obsess about your competition but you should keep an eye on what they’re doing. Pay attention also to industry trends and regulatory changes in the marketplace. Finally, always look for technological advances that could help your business. Your small business doesn’t exist in a bubble, so pay attention to these and other external factors around you.
4. Measure Your Progress
A final criterion for a good business strategy is that you can measure your progress over time. If your goal is to increase revenue by 50 percent in six months, you’ll need to be looking at the numbers and measuring traction toward your goals every month. That way, you can ensure that you’re making progress and are on track to reach the goal—or if not, you can use the data to make wise decisions about pivoting your focus or strategy.
The main thing that I hope you take from this article about ‘why does business strategy fail’ is that strategy isn’t just something you ‘do’ and are finished with it. On the contrary, strategy requires ongoing effort to execute, evaluate, and revise as needed. Get your plan together, track those KPIs, and move forward toward your goals in 2023. I’m rooting for you!
What’s your perspective on our question, ‘why does business strategy fail’? Share your thoughts in the comments!