Most businesses when they start up will have, or be required to have, a business plan. This is especially true if you want people to invest in your new venture. But a business plan may not be enough in the intermediate to long term prospects of your new enterprise. A business plan will take care of marketing, finances, strengths and weaknesses, staffing and business structure, but there needs to be more.
One key part of any business plan is the business strategy. A definition of a strategic plan is a formal document setting out an organisations goals and initiatives over a defined period of time. A good business strategy will determine if you will achieve your business goals as set out in your business plan. In today’s challenging business environment, you need to examine your strengths, weaknesses, opportunities and threats (SWOT). This process will help you identify your point of difference or your ‘competitive advantage’. Competitive advantage on its own may not be enough as it can be easy for your competitors to match your competitive advantage by supplying the same products or services either of the same quality, or superior, and a similar or cheaper price. To secure a competitive advantage it needs to be sustainable. There is a difference between a competitive advantage, which a business currently enjoys but is able to be copied by your competitors, and sustainable competitive advantage, that your competitors find it very difficult to imitate despite their best efforts. By using the resources within your organisation you are able to achieve a sustainable competitive advantage.
Examples of desirable resources within your enterprise may include employee knowledge and skill, physical technical systems, managerial systems and values and norms. Each of these on their own may not protect against imitation, (there are plenty of examples in the past where groups of highly skilled and knowledgeable employees have left an organisation to work for another business or start up their own firm), but with these resources combined, it makes it very difficult for your competitors to imitate and copy your processes.
Another way to protect your product or service is to ‘Trademark’ it. Providing it meets the criteria, it will provide a significant level of protection for your business for a certain period of time.