Strategy

A choice about where to compete and how to win. If it does not rule anything out, it is not one.

What it means

A strategy is a coherent set of choices: which customers, which needs, what you will do differently, and — crucially — what you will not do.

It is not a list of goals. "Grow to £5m" is an ambition; how you intend to get there in a way competitors cannot easily copy is the strategy.

Why it matters

Without one, a business takes every opportunity that appears, which spreads its resources across activities that do not reinforce each other.

The test of a real strategy is that a reasonable person could disagree with it. If nobody could object, it is a statement of intent.

What it looks like in practice

Answer four questions in writing: who is it for, what do we do for them, why us rather than the alternatives, and what will we deliberately not do.

Check that the parts fit. Pricing, hiring, marketing and the customers you accept should all point the same way.

Revisit annually, not quarterly. Strategy that changes every quarter is a mood.

What to watch out for

Frameworks as a substitute. SWOT and its relatives organise thinking; they do not produce a decision.

Strategy that lives in a document nobody has read. If the people making daily decisions cannot state it, it does not exist operationally.

Where to get proper advice

A non-executive director or an experienced chair. Peer groups of other owners are often more useful than consultants and cost far less.