The last thing you want as a business owner is for your business to become stagnant.
While you may be making a profit, long-term success could remain a pipe dream if your business lacks a sense of direction, a proactive approach, and operational efficiency.
The tried and tested way to make your business more sustainable and increase market share is through a strategic business plan.
Even if you already have a strategic plan, improving it could help you make decisions that align with the current market demands and company objectives.
This overview of strategic planning is what you need to start creating a strategic plan of your own.
What is a strategic business plan?
A strategic plan is like a road map. It outlines where the organization is trying to go, what it is trying to achieve, and the blueprint of how to get there. While there may be similarities between a strategic plan and a business plan, both are unique.
A business plan describes the business's day-to-day activities that bring in cash, and it is presented to investors. On the other hand, a strategic plan has goals and the steps to achieve them, but the core audience is your team or stakeholders.
What are Components of strategic planning?
Certain elements are included in every effective strategic plan, whether the project is for a small business or an established business. They include:
Statement of purpose
Where do you see your business in five or eight years? The answer to this question is your vision statement, and it is the foundation of an effective strategic plan.
So, clearly outline your vision statement. Keep it brief and concise for your team to understand.
Core values
Core values are the second integral part of a strategic plan because they list the values and beliefs of your business. Besides, they typically outline your organization's musts and must nots, which influence everyday decision-making.
Never look too far for your company's core values, as they're most likely already part of your company culture.
What is SWOT analysis?
SWOT (strength, weakness, opportunity, and threat) analysis is a detailed analysis of your business's current position in the market.
A SWOT analysis details the unique opportunities available, the pitfalls, and the competitive advantage your company has in the prevailing market.
For example, your business's unique selling proposition could be a strength, while its inability to venture into the international market is a weakness.
Long-term objectives
Long-term objectives are goals that align with your business's vision and mission statement. They take longer to accomplish, usually between three and eight years.
But more importantly, these objectives give your organization clarity on what needs to be done for the goal to become real.
The trick is to create SMART goals to keep your objectives as specific, measurable, achievable, realistic, and time-sensitive as possible.
This involves breaking down the longer goals into shorter ones that are more actionable.
Action plan
The last attribute of an effective strategic plan is the action plan. The plan indicates the steps your organization intends to take to make its goals a reality.
What's more, the action plan lists the resources needed to accomplish the goals and where those resources will come from.
The action plan is the hardest part of the strategic planning process because the results depend on the steps you decide upon.
Types of strategic planning models
Before you can create a successful strategic plan, you must determine which model suits your business development goals. Here is a roundup of effective business strategic plan models that can guarantee your dream becomes a reality. They include:
Balanced scorecard
A balanced scorecard is a strategic management framework that looks at internal business functions and their external outcomes.
The objectives, measures, and initiatives, which are part of the scorecard, connect to help view your business from different perspectives.
Customer perception
Evaluating costs, availability, and quality gives you an indication of whether customers like or dislike your product or service. It does this through surveys, complex data, and focus groups.
Internal processes
It shows you which internal processes are lagging and, thus, are preventing your business from moving forward.
For example, perhaps you aren't creating as many new products as possible to get the market's attention. Internal processes will help you know that.
Financial performance
Analyzing the financial performance of the company shows you where you are getting the best return. You can eliminate risky or unprofitable actions and focus on the ones that create the most value.
Alignment model
The alignment model is the most preferred when your business isn't meeting its goals and you'd like to adjust the objectives. The aim is to align the internal operations with the strategic long-term business plan.
Typically, the strategic plan involves:
- Outlining the vision and identifying resources needed
- Weeding out the non-performing operational parts
- Incorporating new ideas
- Aligning innovations with the company objectives
Issue-based strategic planning
An issue-based model is a short-term strategic plan that aims to iron out issues within the organization. It almost always causes a shift in strategy, but this is necessary if you want to move forward.
First, your team and stakeholders do a SWOT analysis to identify what works and what doesn't. Then they create a new strategy, which includes a new budget. And lastly, you execute and monitor the progress over time.
What are steps to creating a successful strategic plan?
The strategic planning process occurs through a series of steps that help you achieve long-term business success. Provided you strategically execute these steps, you'll be hitting your short-term and long-term goals in due time.
Determine your strategic position
Before proceeding with the strategic plan, do an honest evaluation of your business and competitors. Determine where you are, where you want to go, and what you'll have to do to get there.
Together with the business stakeholders, identify strategic issues within your organization. Factor in customer insights and pull in financial market data to get a clearer picture of your market position.
It would be best to perform a SWOT analysis to know the opportunities, threats, strengths, and weaknesses.
All this information combined gives you the exact position of your business in the market and, thus, shows where it needs to go.
Prioritize objectives
Now that you know your market position, the next step is to create objectives that align with the market demands. Again, the best way is to find goals that align with the company's mission and vision statement.
Generally, your objectives should outline:
- The priority for your business, i.e. customer acquisition, increased revenue, etc.
- Addressing competition and competitive pressures
- Initiatives with the most impact
- The process of accomplishing the goals
- Methods of monitoring progress.
With a proper outline, developing a plan becomes simplified. This is a crucial step that should not be overlooked.
How to develop a business plan of action?
Drafting a plan of action is the hardest part of creating a strategic plan. It requires sticking to the objectives, even if you must use different tactics such as a strategy map to develop the final plan.
A strategy map is a visual representation of the strategic goals an organization is pursuing. It shows a direct relationship of cause and effect between strategic objectives, initiatives, and targets.
Since it includes diagrams, strategy mapping is an effective way to get your message across to the entire organization. The secret is that it:
- Provides a clean, simple visual representation
- Unifies company goals into a single strategy
- Helps you understand elements that work and those that don't
- It gives each employee a specific goal in mind as they dispatch their daily duties
Remember that your plan needs to align with the mission and vision for long-term success.
Execute and manage the strategy
Now that the plan is in writing, the next step is to execute the strategy based on your strategy framework at all levels in your organization. For plane execution to happen, you must communicate the strategic plan to all relevant stakeholders and your team.
Set key performance indicators (KPIs) to communicate the core responsibilities of each department. Then, allocate resources for your new strategic plan, even if it means forgoing other expenses.
Lastly, constantly re-evaluate your strategy by regularly analyzing reports.
Review and revise
Once you've analyzed the strategies for some months, determine whether they're working or not. If there are concerns, like specific measures not being effective, review and revise them but align them to the objectives.
Do as many reevaluations as you need to throughout the years, since priorities change and the market shifts.
Scale your business with an effective strategic business plan
Strategic business planning is a tool for success, much like utilizing an effective strategy execution software that helps outline, govern, and manage your business operations.
It provides a road map of where you are and where you need to be. Furthermore, it specifies the actions to take to get where you desire to be instead of relying on luck.
Admittedly, creating a strategic plan can be time-consuming. With the right objectives and action plan, planning for business success becomes much easier and more straightforward.
Contact us today if you'd like our experts to help create a short-term or long-term strategic business plan.