sales channels

The journey towards home in Tokyo, Japan

The Right Strategy for Your Business

Strategy can be a bit of a scary word, I am told. 

It sounds ‘businessy’, probably not creative, possibly not relevant, and certainly daunting. It is one of those words which creative marketing people (such as yours truly) and less comprehensible business die-hards and textbooks bandy around. It has the air of the unachievable about it for most mere mortals, and is much, much easier just not to think about.

Not so! I view strategy as simply taking stock, taking control and making do-able goals for your business – in short, knowing where you are going. And the good thing about strategies is that they get you from A to B, step by step, how you want to do it. Oh, and it’s actually quite easy…

So, in this post, I will take you through how to define a strategy (or approach) for your business, that will underpin everything you do and how your customers or clients see you. This year, I am sure you have promised yourself, is the year you will make the business work, move it forward, and see the financial rewards.

Let’s get started.

What is a strategy?

There are different types of strategies, but they all aim to be solutions to existing problems and overcome challenges in the business. They are an approach for you to follow. They can be specific to functions of your business – perhaps distribution, marketing, sales, social media and so on. This is so that you can really focus on each area, come up with a way to manage it, and then follow it.

Also, the good thing about strategy is that it helps you be competitive in your direction. What this means is that you do well, if not better, compared to your competitors, and see sustainable profit and business growth as a result. In real speak, this means you can keep making and creating and designing and earn a living from it, plus branch into areas you want to go into because your customers or clients or buyers get it and want to come with you. For this, you first need clarity about how you want to operate – your business direction.

Overall, there are three main ways that you can operate, compete and grow as a creative business, whether it is fashion, ceramics, interior design or sculpture. Porter[1], in 1985, presented these as Cost, Differentiation, and Focus (or Niche, as I call it) Strategies. I mention this here, because I believe this knowledge about the direction of your own business will help clarify the next steps of developing individual function strategies. Many businesses I work feel they need this clarity to do this.

Which business strategy (approach or direction) to adopt

Cost strategy businesses operate on a low-cost (not necessarily low price) basis. They drive and keep all costs down, and produce products or service that can compete on price and/or large volumes and availability. Hard to do in a crisis-stricken economy and, as we tragically saw in Bangladesh, hard to do ethically. This isn’t for exclusive, high-end or quality orientated businesses – the main goal with these businesses is keeping costs low and mass production, quality is less of an issue.

A differentiation business is literally different, they innovative their product or service in some way. They have an added value, a unique benefit or feature perceived by the customer who is willing to pay a premium for this – they can’t get it elsewhere. The business can be more original, exclusive, more quality or luxury focussed, their offers aren’t available everywhere, but perhaps in selective outlets or bespoke and one-offs. Quality brings with it higher costs for the business, but be mindful that small designers’ higher sale prices can be undercut by better known and larger scale competition.

Lastly, a focus strategy business, or a niche business. This is where a designer or maker spots a narrow gap in the market and targets it. Products and services are developed for this new area – it might be a specific product like ties and pocket-squares, or interior floor tiles only, or a specific type of customer – over 60’s only, or babies. All the marketing of the business will be targeted to this particular customer or client segment.

How to work with Porter’s strategies

Obviously, the three different strategies above need to produce and market their offers in different ways, in different volumes and to different customers. The creative businesses I work with tend to fall into the latter two camps. I think as a creative business you have to offer something different or specialised – the high street is full of mass-market ‘me-too’ products. You need to stand out to gain awareness and build custom.

So, if you are a differentiation strategy business, exploit it! Know your market and customer, and be clear that the work you are producing is always unique and original, high quality and higher-priced, and build a brand identity around this. This business will be more selective in distribution, or even exclusive to one or two outlets.

Or are you a focus strategy business (niche)? Where perhaps you have a limited and very specialised product range or demographic, and push and promote this. You need to know your customer well, and target all your energies onto reaching them and not dilute this specific approach by moving into other products which might also suit other people. The costs here will also be higher, as your production runs may be smaller. But try it, stick to your guns and develop it as you go. And make sure you market and promote the product or service’s features.

Strategies to address business problems

Once you have decided what type of business you are (i.e. differentiation or niche), you then start to build individual function strategies, as mentioned before, from this. At this point of discussion with a client, I usually mention the five steps of strategy: you start with an external analysis, then an internal audit (yes, you’ve already done this!), before beginning to map out your function strategies for marketing or sales etc, then implementing them, and then, lastly, reviewing and monitoring.

If you want to be super-rigorous and do an external analysis, then this is a market, competitor, and economic review. But I think this level of depth is best left to the professionals, rather than hard working small businesses and entrepreneurs.

What I recommend you do instead is browse online and in the shops, see what other makers/designers are producing, how much they are charging for it, and how widespread they are selling it. Note whether stores are having lots of sales (i.e. consumers not buying full price products). Have an awareness of trends and shifts within your specialism, opportunities that may be developing, and likewise, areas that interest is dying off in. This way you can take the market’s temperature easily.

From the business review we looked at over the last two blog posts Taking Stock of Sales and Costs and Reviewing Your Business, you have – and congratulations once again – thoroughly got to grips with your own business, its strengths and weaknesses and areas for development. Armed with this, and your new market knowledge, you now know the areas you need to tackle, refine and improve internally. You also know the trends, gaps and opportunities that are out there, and what to avoid. Next, all you need to do, one step at a time, is develop your strategies.

I think that for businesses at your stage and scale, generally this will fall into distribution and sales, marketing, and social media strategies, and I will cover these in my forthcoming posts.

For your creative business, these are your next steps.

In my next post Creative Planning – Next Steps 4: Easy Distribution Strategy, I will guide you through different approaches to how and where you sell your work.

If you have any questions after reading this, or would like me to work with you on your creative business, then feel free to email me on hallandco@outlook.com, or drop a comment on the blog.


[1] Michael Porter’s ‘Three Generic Strategies’ in Competitive Advantage: Creating and sustaining superior performance, 2004, Free Press

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Flower market stall in Bangkok, Thailand

Reviewing Your Business

I am sure your business and sales will fluctuate with the seasons (and the British weather). Most of the creative clients I work rush through autumn, in a manic flurry of making and promoting for the pre-Christmas gift market, to then find spring slow; buyers and clients are less willing to spend money. It can be hard to be positive when sales are thin on the ground. However, this down-time is ideal for planning!

But the outlook isn’t bleak! No! This year you are focusing and streamlining and moving the business forward. Like many of my clients you are probably using this period as reviewing or thinking time. And my Creative Planning – Next Steps blog series can help guide you.

So, last time, in Taking Stock of Sales and Costs we looked at your Revenue Streams and Cost Structures and now, tax return behind you, you are on top of the financial side of your business! Let’s continue to review the other areas of your business. This post will now help you audit all of your business and develop action points. But do refer back to my last post if you need to.

If you have armed yourself once again with the Business Model Canvas[1], Post-it notes, pens and a cup of tea, I will take you through what to review and some action points for you below, step by step.

How to fix your business problems

Customer Segments

You may have different groups of customers/buyers with different needs and relationships (more on the latter later). Some will be more or less profitable and price sensitive. Different segments may have differing distribution channels – where and how you sell. You may have distinct product or service offers for distinct groups e.g. private commissions vs. trade or retail.

Action point: Consider how you can cut back time, investment, and involvement on the less profitable and reach more profitable customers – you may need to put some customers or types of work on hold for now if they are not earning their keep. Plus, is there any way you can reduce your time and money on the profitable customers throughout all your activities without it being apparent?

Value Proposition

This is where you offer something different that the customer wants, your unique mix of elements catering to meeting their needs. This can be price based, or speed/ease of service, or design – perhaps the originality (or breadth) of your creative process or finished piece(s), or the customer experience of your offer.

Action point: Is there a part of your offer that deep down you know isn’t quite good or original enough, or needs a refresh or update? Is there a new feature or innovation that you want to build in? Do you know if your customers would want this? Try honing your offer, but ensure through some research that it is actually desired and also doesn’t dilute the brand or confuse the customer!

Channels (of Distribution, Marketing, and Sales)

As mentioned before, this is how and where you sell your offer to your customers, clients and buyers. You may sell directly to the end customer through your own website, stall or shop, or you may do this indirectly through other retailers, online or offline, or wholesalers. You may also have individual clients.

Action point: Do you have too many channels, stockists, marketing bumpff or not enough? Is it all manageable or taking up too much of your time for not enough profit? Do you need to simplify, or to improve your efficiency with each one? Perhaps wind down your involvement with less profitable and lower commission channels if your sales and income aren’t great.

Customer Relationships

This is where and how you acquire new customers and retain existing ones, encouraging them to buy again (and again) from you. Some customers you will invest more time in because they are, or you hope they will become, more profitable such as a new bespoke or trade client or a new department store buyer. Depending on how you sell to each group of customers, you may need to offer different service levels to each.

Action point: Consider each group of (or individual, if bespoke) customer. How can you better manage your time with them? Should you pull back from less profitable ones, and seek out new customers instead, and do you have time for this? Can you nurture the slower or lapsed customers to buy from you again – are they worth keeping.  How can your best customers be encouraged to buy more? Pareto deemed that 80% of your sales will come from 20% of your customers, so cull and spend time wisely!

Key Resources

These are the ‘assets’ that you need and use to create, distribute and reach your customers. These might be physical resources such as machinery, packaging, kit and stock, or intellectual such as your brand identity, copyright and licensing agreements, plus technological such as your website, e-commerce and social media platforms. There are also human resources – you, your co-director, your staff or ad-hoc freelancers. Lastly, there are your financial resources such as investment, grant funding, cash, capital, reserves and buffers, and credit. Without all of the above you would not be able to produce your work.

Action point: Is your money tied up unnecessarily in any of these? Can you sell or hire out your machinery or space? Can you re-work your existing stock and packaging rather than expend on new? Is your website hosting and transaction process cost effective for you? Can you afford to take on freelance staff to help you increase your productivity? Where can you secure additional funding from? Streamline those that are eating up your cash or capital and put on hold what you can to build up reserves.

Key Activities

The actions and functions that your business takes to operate successfully to create, distribute to, and reach customers. So, for example, design, production, distribution, marketing, PR, IT, plus outside teaching or consultancy, and networking etc.

Action point: Similar to key resources, what functions and activities can you trim or pull back on, what do you need to invest more in to improve your productivity or ability to reach customers? If you currently outsource some functions, or is it cheaper to have an ad-hoc freelancer or do it yourself? Do you actually have the skills to do in-house functions, or would it be more efficient and achieve better quality to start to outsource these?

Key Partnerships

These are alliances that are vital to running your business: your relationships with your suppliers and buyers, your reliance on your investor or partner. Perhaps also support networks and grant-giving bodies.

Action point: Are you engaged in networks and clusters with other similar businesses, and can you share knowledge and expertise? Do you attend networking events, to raise your profile and forge new relationships? Do you spend time nurturing your existing relationships to iron out glitches? Do you need to dedicate time to finding grant funding or gaining free/subsidised skills or business support? Likewise, what can you reduce or say goodbye to? Is it better to work at solving existing issues rather than moving on?

And here is where I congratulate you on having completed your review! Now, warm in the glow of accomplishment, you have your head firmly around your business, and have taken control of what isn’t working, and can plan to build on your strengths and successes and what areas to streamline. Now, you need strategies to focus this down and take it forward.

Over my following blog posts, I will show you where to start with creating strategy, then how to map this out through distribution strategy, marketing strategy, and social media strategy.

Next time: Creative Planning – Next Steps 3: The Right Strategy for Your Business

If you have any questions after reading this, or would like me to work with you on your creative business, then feel free to email me on hallandco@outlook.com, or drop a comment on the blog.


[1] Osterwalder and Pigneur’s Business Model Canvas, from their book Business Model Generation, 2010, Wiley and Sons.