Have you thought about how your business can deliver on its full potential? A robust strategy is a must, but it should be guiding you in practice, not sitting on a shelf gathering dust, says William Taylor, Head of Value Creation in KPMG.  

Regardless of whether your business is a start-up or running for many years, working to develop and implement a meaningful strategy is extraordinarily valuable. A solid strategy embeds resilience and gives stakeholders the comfort and confidence that you have a plan and you’re sticking to it.

Developing or renewing the strategy for your business allows you to take stock, reassess your performance to date and plan for the future. It helps you to understand your business and its potential, and to answer questions such as:

  • Is your business as big and profitable as it could be?
  • Are you maximising the value your business can create?
  • Are you leading or a laggard compared with your competitors? 
"A strategy can help you...embed resilience and material growth in your business."

Enabling you to run your business better

In this time of economic uncertainty, with challenges around inflation and pricing, along with logistics and supply chain problems, energy issues, ESG concerns and more besides, business owners and managers must contend with many moving parts.

A strategy can help you cut through all that noise, weigh up those tensions and pressures, and focus on what is material to you to help you embed resilience and material growth in your business.

Developing a strategy enables you to have a real-world, grounded view on what you can achieve, but also enable you to set your house in order so you can manage disruption and actively know what to focus on and when. 

Invest effort to grow your business and access finance

This is incredibly useful work to do for your business. This strategic work shouldn’t be seen as a cost, but as an investment of your time and thinking. It will bring focus, structure and rigour to how you run your business. Moreover, it will build confidence in the business and its leadership internally and internally.

If you’re running an SME and tell your bank you need more cash for growth or you go looking to attract investment, for example, you’ll get a lot further if you have already developed your three- to five-year strategy.

You can show potential lenders or investors your objectives, your forecasts for capital and operating expenditure, your operational plan and so on. By showing you have thought about it and have a detailed plan for earning returns, that will help hugely.

If you’re thinking of selling, don’t let the buyer identify untapped value and take that off the valuation, identify it proactively first to excite valuations.

The value of external expertise

No matter what business you’re in, it’s interesting and valuable to get an external view on how you’re operating and how you can maximise the difference between your top line and your bottom line. 

How to develop a robust and meaningful strategy

Your strategy should be anchored in the mission, vision and values of your business. Your vision is what you’re trying to do, your mission is why you’re doing it and your values are how you do it. Once your strategy is complete, everyone should be clear on the company’s ambition and on their role in fulfilling it.

  1. Know your ambition. Set your goals and objectives, and consider how you’ll measure success.
  2. Consult with internal stakeholders. This is vital to secure buy-in. Strategy development should be done with your people, not to them.
  3. Consult with clients, customers, regulators, investors and lenders and carry out further research and testing, so you can iterate the plan as needed.
  4. Develop your strategy in detail, with particular focus on value creation by driving revenue and minimising costs.
  5. Develop an operational plan, so your teams understand how to deliver on your strategy.

Assessing and benchmarking costs

A key aspect of our work with private enterprise involves value creation. We examine and recommend new ways for a business to drive revenue and top line growth, while also minimising its cost base.

You can benchmark businesses against your peers. If you look at 15 of your peers, are your costs comparatively higher? You might find out, for example, their energy costs are much lower than yours so you learn that is a cost you could cut.

Across the board, you can re-examine contracts and pricing for services, along with the quality of services you’re getting from your supply chain and how you can build more meaningful supplier relationships. 

Considering resource use and routes to market

It’s essential to ensure you are the right thing to the right market at the right price. It’s crucial to get your products or services to market in the most efficient way. While you need operational capacity, staff and resources to grow, you need to make sure you’re deploying them in an efficient and effective way where they’ll deliver the most value across your operations and active markets.

It’s also crucial to understand your peers and competitors are doing, and to take some lessons from that. Many or all may have shifted to a more cost-effective business solution, for example. 

"At the core of strategy development is examining what you’re doing with your people, capacity, capabilities and markets."

Building resilience over the coming years

At the core of strategy development is examining what you’re doing with your people, capacity, capabilities and markets you’re in. You need to understand this so you can build in resilience and not be overly dependent on any one market, product or type of customer.
While your business strategy may cover the next three to five years, it should never be set in stone. It offers guiding principles for the work you’re doing, but you need to be pragmatic, and treat it as a flexible and purposeful document.

Case study

KPMG Strategy delivered an end-to-end Elevate (value creation) engagement for a family-owned mid-sized Irish retail chain. Working closely with the CEO and executive team, KPMG identified almost 100 new opportunities for value creation across top-line growth, bottom-line cost efficiencies, working capital optimisation and new digital enablement, which were narrowed down to nine critical initiatives that could have a significant impact within the first year.

KPMG and the client management team co-developed an implementation plan to launch new business initiatives and achieve the quantifiable improvements identified through the analysis. This approach reflects a truly end-to-end approach involving both strategy and implementation support.

Get expert advice

Take the time this quarter to develop a meaningful multi-year strategy for your business. Talk to us today to discover more about how we can help.

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