First of all, you need one.
If you want to get somewhere, it is important to both clarify where you are going and HOW (your strategy) you are going to get there.
If we use driving as a metaphor, we rarely drive without a destination (Vision of where we want to be) in mind.
We also pick a route (the Strategy); we choose how we are going take the myriad of baby steps that will take us to our destination.
Every time I drive to my office, I have to decide between several routes.
My chosen strategy reflects my knowledge of traffic patterns, amount of time available for the scenic route, and how exactly aggressive I am feeling (do I have the emotional strength today to cut off a whole line of crabby commuters).
We strategize all the time, and directing a business, however small, is no different.
Strategy can be simple.
You don't have to be WalMart to use low pricing as your strategy or a part of it.
You just have figure out how to deliver your uniqueness better than your competition.
By the way, in service industries, it is often a more useful frame to hold local practitioners of the same service as colleagues, while competitors would be especially large or distant providers.
To create a strategy, focus on defining your unique competitive advantage; the reason (benefit) why anybody who needs your service should use you and not A.
N.
Other.
Be careful to separate the features of your service from the benefits to the customer and in your strategy focus on the benefits.
Selling information and expertise is increasingly common in today's economy, so I wanted to mention a strategy that is widely used in the consulting and training industry, especially when the service is unconventional and the potential clients have to be taught what the service is and what it can do.
The "funnel" strategy has you create low price/free entry point products (the wide end of the funnel), then a progression of mid-tier products ($100 to several thousand dollars), and finally your consulting service.
The low price/free entry products (information workshops, audio conferences, books, $7-$25 CD recordings...
anything that's priced between free and a not too special evening out) allow potential customers to get an experience of you.
As trust builds, they may choose to attend a workshop or buy a more expensive DVD seminar .
.
.
ultimately some customers may fall off, but some will "funnel" into more lucrative consulting customers.
The strategy is based on the retail concept that, if you want to have someone come into your store, you need to make it easy for them to leave.
Big businesses need to spend thousands of dollars analyzing industry trends because they spend millions creating a product or implementing a strategy.
Recognize the strength of being a small business.
You can change your product or service to meet changes in the marketplace much more quickly than a large company can.
So, you don't need to spend your precious resources on lengthy industry analysis (unless you will be investing more than 100K in development and/or you are seeking significant funding).
However, you do need to be aware of industry trends, what is happening in the world that could affect your business, and most importantly the direct feedback of your customers (both the ones who chose to buy and the ones who are "your customers" but didn't buy from you).
If something isn't working, it may be time to work with a coach, or someone who you trust, to think outside the box (it's quite hard to see this on your own).
First figure out if it's your own belief limitation or if it's actual market feedback (your product isn't quite in the right format to meet customers' needs or the market/environment just changed radically e.
g.
when the internet changed the travel industry).
In the latter case, use your fleet small business sense and do something different; change your strategy.