Posted: Thu 14th Dec 2023
Strategic planning is not just for large companies. Successful small to medium-sized businesses usually have a plan that drives their business goals both for the short term and well into the future.
The purpose of strategic planning is to set overall goals for your business and to develop a plan to achieve them. It involves stepping back from your day-to-day operations and asking where your business is heading and what its priorities should be.
For a small business owner, strategic planning helps you create a document that details the current status of the company and the direction you want to take it in.
It's a process that helps your employees understand what the goals and objectives are and that contributes to your small business's growth and success.
The five stages of the process are:
forming a strategy
implementing your strategy
monitoring your strategy
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Why you should have a strategic plan
Your strategic plan is your success roadmap. Going through the strategic planning process can help you assess your business's strengths, weaknesses and potential opportunities. It can also give you:
insight into past, current and future direction
a clearer understanding of your goals
tools for budgeting, forecasting and financial wellness
a framework to help define and measure your results
a better ability to identify, monitor and manage risks
Your strategic plan should be specific and focused. It helps determine what kind of company you are, and what you want to be.
Step 1: Start with an honest assessment
The first step is to take an honest look at your business and your competitors. Here are some considerations to get you started:
Your company mission, vision and values
What you sell and why
The unique value your company offers customers
How you acquire and sell to new customers (marketing, advertising, referrals and so on)
How you retain current customers (events, discounts, VIP or exclusive offers)
How you measure up against the competition (product/service selection, price, value, location and so on)
Your company goals (revenue, growth percentage, store and/or website traffic, employees and intangibles such as branding and community standing)
Step 2: Define the elements of your plan
A strategic plan provides an accurate picture of the present state of your business and a roadmap into the future. To be most effective, your plan needs to be driven by realistic goals – both ambitious and achievable. Here are some things to think about when designing your plan:
Consider the current state of your business
Define three to five measurements/key performance indicators (KPIs). This gives you a more accurate picture, without being overwhelmed with figures.
Consider the external baseline
This means the current marketplace, economy, competitors and customer trends. Think about how customers perceive your business. Reflect on your standing and level of engagement in your community.
Once you've established the current state of your business, think about where you want to go, and which goals can help you get there.
Step 3: Create the plan
Most strategic plans contain several similar elements. These include the following:
Mission or purpose statement
This is the reason you created your business (your 'why). Keep it short, clear and direct.
For example: "We strive to help business owners to achieve the life they dreamt about when they set up their business."
Your values statement focuses on the benefits to your customers. It lays out the principles and beliefs that guide your business.
For example: "By helping them to focus on the areas of their business that will drive the growth they want and generate more customers, increase their overall revenue and profits… quickly and inexpensively."
Business and financial objectives
This is where you define your goals for market share, sales targets and earnings growth. Make these goals measurable to help you better evaluate your performance.
Here, you define no more than three key initiatives that will help you to achieve your business and financial objectives. This may include testing new products in specific categories or training your team in areas like upselling.
Think about the resources you need to achieve your goals. Consider requirements like increasing your staff, technology needs, working capital and others.
Plan of action
Finally, your plan of action outlines the specific steps you need to take to achieve your goals within a specified timeframe.
Step 4: Evaluate the plan and adjust as needed
Your strategic plan is a living document that can help guide your business to success. Refer to it often and, because things change, adjust it and evolve as necessary. Compare your business results against your plan, learn from the results and keep fine-tuning.
Take charge of your company’s future
A strategic plan is well worth the time and effort. It gives you and your team an inspiring vision of the future and a roadmap to help you get there.
Once you've finalised it, share it with your partners in success, especially your employees. This creates a shared understanding of where the company is headed, and how everyone can contribute to a more successful future.