People say that failing to plan is planning to fail. Especially in business, this is a resounding truth. And to make informed decisions and actions, you must craft a blueprint: your winning business strategy.
HubSpot defines business strategy as “a roadmap for achieving your business’s goals.” It’s not the tactics per se but the set of principles that will guide you as you grow your business.
The economic impact of SMEs
The growth of your business is more than just your organization’s success.
According to the World Bank, small and midsize enterprises (SMEs) make up about 90 percent of all businesses in the world. Among emerging economies, formal SMEs contribute up to 40 percent of the gross domestic product (GDP). And this figure only gets higher when informal SMEs are taken into account.
In the Middle East, the sector also serves as an important economic cornerstone. Like how it is globally, 9 in 10 businesses in this region are SMEs. In particular, Saudi, the largest economy in the region, is home to 1.2 million SMEs as of the first quarter of this year. Earlier in March, various financing agencies in the country committed $2.9 billion for SMEs and entrepreneurs in the country.
“The Kingdom has undertaken a series of bold initiatives to develop its economy, reduce its dependency on oil, and contribute to achieving Vision 2030’s goal of building a diversified and sustainable ecosystem, developing SMEs, and supporting entrepreneurs through private and public sector cooperation,” remarked Munir Mohammad Nasser bin Saad in a report. He is the chairman of Al-Madinah Al-Munawarah Chamber.
Crafting a winning business strategy
If you’re one of the many SMEs in the region, you need a business strategy to stand out, reach your audience, and sustain growth. Here are tips to follow.
1. Identify your purpose and set long-term goals
A business with no clear purpose is bound to fail. If you want yours to grow, you must know where you want to take it. So take the time to evaluate your values and align them with what you want to achieve.
When setting goals, a popular framework you can follow is the SMART framework. It stands for specific, measurable, attainable, relevant and time-based. It is not adequate to simply want to increase clients. You must be clearer and say, for example, “I will reach out to five clients weekly until I double my clientele in one quarter.” Research shows that in 90 percent of goal-setting studies, having defined and challenging goals contributes to more success.
However, it doesn’t end in knowing your goals. You must have a system where you can monitor and keep track of your progress. This is where key performance indicators (KPIs) become essential. These specific metrics give an overview of your development as a business. Popular KPIs include sales, net and gross profit, foot traffic, customer retention, sales quotas and job satisfaction among others.
2. Understand your market
Growing any organization is a data-driven process. And for any type or size of business, conducting comprehensive market research is imperative to understand how you can stand out and ensure the success of your offerings.
A vital component of your winning business strategy, this process typically involves investigating opportunities (especially in unsaturated market segments), understanding the behavior of your target audience, identifying and analyzing competitors and gaining insights into industry trends.
In the context of regions like the Middle East, it also requires a solid grasp of local market dynamics and familiarity with cultural and religious nuances. The ultimate goal is to identify gaps and develop a tailored approach for your business to address and fulfill those market needs.
3. Offer value to various stakeholders
When strategizing for your business, don’t just concentrate on what you will offer to your customers. You must take into account various stakeholders, including your suppliers, employees, partners, and potential investors.
For instance, ensure that you have a transparent communication system in place and follow fair practices when dealing with suppliers. For your employees, include in your tactics how you can boost their morale and enhance retention. According to Gallup, motivated employees demonstrate a 17 percent increase in productivity. As for your investors and partners, emphasize common business values.
In today’s world where sustainability is a huge, vital movement, you also might want to consider boosting your green endeavors. A survey from McKinsey & Company reveals that around 85 percent of chief investment officers see ESG (environmental, social, and governance) as integral to their investment decisions. Similarly, a PwC study shows that in the Middle East, 40 percent of consumers are willing to pay more for luxury goods that are produced locally or those from companies practicing ethical methods.
4. Be flexible and have a forward-thinking approach
The world of business is an ever-evolving one. Hence, along with measuring your results, you must be flexible and rectify where your strategy is falling short. This entails pinning down whether the factors that impact your strategy are internal, external or both. From there, you can determine what needs to be modified.
You should also be adaptable in the sense that you must expand avenues for growth. According to another McKinsey report, companies that develop growth strategies encompassing all available avenues are 97% more likely to achieve profitable growth above industry peers.
One important avenue you must consider is the digital economy. From digital marketing and mobile application development to e-commerce and artificial intelligence, there are various things you can explore. Estimates from Tradeling, a Middle East and North Africa (MENA)-based B2B marketplace, show that global e-commerce retail sales could reach nearly $7 trillion by 2024, with a projected 8.9 percent growth rate in 2023. The MENA region, having reached a $37 billion market size in 2022, could hit a $57 million figure by 2026.
SMEs bring forth great economic impact. And if you’re an owner of one, know that your success hinges on a well-crafted business strategy — one that sets clear goals, leverages market insights and considers the diverse needs of stakeholders. Keep in mind that sustainable growth requires utmost flexibility and adaptability. And to thrive in an ever-competitive business environment, being a forward-thinker pays off.
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