April 12, 2022
Everything for small businesses has become competitive and it has become essential for small businesses to build strong business strategies. Even the most successful businesses encounter periods where their strategies become outdated or ineffective.
For small businesses, it is crucial to understand and recognise when it’s time to reevaluate and refigure their strategies to make significant differences. This article explores how a small laundromat can identify its need for a new business strategy and how to create and implement a strategy effectively.
Imagine a local laundromat that thrived at one point with steady customers and consistent revenue. But with time, the owner starts to notice concerns: customer complaints have increased, revenue has stalled, and a new laundromat opened in town, attracting customers with its modern commercial laundry equipment. When things like this start to happen, it's typically an indication that the current business strategy is no longer working.
The most obvious indication that a business strategy needs to be reevaluated is when revenue and profit margins start to decline. If the laundromat enjoyed profitable earnings at one point and then slowly started seeing a decline, this suggests that the business isn’t meeting the current needs of its customers or the market dynamics shifted.
Customer dissatisfaction is a critical indicator of a need for a better strategy. Frequent complaints about issues like machine malfunctions, poor customer service, or unclean facilities signify a need for changes. For the laundromat, the negative feedback could mean the business isn’t delivering a quality experience.
Increased competition can also bring to light the need for change in the strategy. When competition presents itself with more modern equipment and features in a more appealing environment can put pressure on an existing business. Competition can reveal gaps in the current offerings, like outdated equipment or inadequate services.
Lastly, operation inefficiencies are a significant indication of a new strategy. For the laundromat, when equipment is breaking down often, the maintenance costs are rising, or the utility bills are rising indicating there are deeper issues within how the business operates. These inefficiencies impact customer satisfaction and how the business performs.
Once a business identifies the issues that need changing, the next step is to focus on a strategy that brings solutions to each of the existing problems. There are several steps the laundromat owner can take to build this kind of strategy.
The first step in creating a new business strategy is to thoroughly assess each area of the business. This includes analysing areas like customer service feedback, operational processes, and market trends. For the laundromat, this could mean doing surveys to better understand what customers think, reviewing financial statements to identify revenue trends, and evaluating what competitors are offering.
A SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) is a great tool for businesses to use when taking analysis for a better business strategy. The laundromat could find strengths, like a loyal customer base or a prime location. Weaknesses like outdated equipment, unwanted vending machine options, or poor customer service. And threats like competition or higher operational costs. The laundromat needs to understand each of these elements to pinpoint areas that need improvement and make informed decisions when developing a business strategy.
Now that the business has a thorough analysis, the next step is to set specific, measurable, achievable, relevant, and time-bound (SMART) goals. Setting clear objectives offers direction and focus to a business strategy. This aligns the goals with the visions and addresses the most pressing issues in the analysis.
A successful strategy needs to understand and meet the needs of its target market. When the target market is understood, the business can customise its services to meet the specific needs. For the laundromat, they would need to identify if their main customer base is college students, working professionals, or families.
A good strategy incorporates something that makes the business stand out from the competition. The laundromat needs a unique value proposition, like a distinct factor that makes them unique. The laundromat could introduce eco-friendly cleaning options or a loyalty rewards program.
With a new strategy in hand, the next step is to implement it. This means creating an action plan that outlines specific tasks, deadlines, and responsibilities for team members. For the laundromat this could mean upgrading equipment, launching a target market campaign, or training staff to improve customer service.
Recognising the need for a new strategy and knowing how to develop one is essential to any small business looking to overcome challenges and achieve success. By conducting a thorough analysis, setting clear goals, understanding the target market, developing a unique value proposition, and implementing the strategy, business owners can better their operations and enhance their competitive edge.
