30 Jan Why You Need a Strategic Plan for Your Business
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 headed and what the priorities should be.
Making the decision actively to grow a business means embracing the risks that come with growth. Spending time on identifying exactly where you want to take your business – and how you will get there – should help you reduce and manage those risks.
As your business grows and becomes more complex, you will need to sustain growth by building leadership positions and expanding your resources.
You will also need to start collecting and analyzing a wider range of information about your business – both about how it operates internally and about how conditions are developing in your current industry.
The process of strategic planning is about determining the direction in which you want to take your business. It involves setting out your overall goals for your business.
Your strategic plan and your business plan should complement one another. The difference is that strategic development requires you to shift your focus from the day-to-day concerns of your business and to consider your broader and longer-term options.
Key Elements of Strategic Planning
Developing a strategy for business growth requires you to deepen your understanding of the way your business works and its position relative to other businesses in your markets. As a starting point, you need to ask yourself these questions:
- Where is your business now? This involves understanding as much about your business as possible, including how it operates internally, what drives its profitability, and how it compares with competitors. Keep your review separate from day-to-day work and be realistic, detached and critical in distinguishing between the cause and effect of how your business operates. You should also write it down and review it periodically.
- Where do you want to take it? Here you need to set out your top-level objectives. Work out your vision, mission, objectives, values, techniques and goals. Where do you see your business in five or ten years? What do you want to be the focus of your business and your source of competitive advantage over your rivals in the marketplace? This step should be the foundation for the final plan and motivate change.
- What do you need to do to get there? What changes will you need to make to deliver on your strategic objectives? What is the best way of implementing those changes – what changes to the structure and financing of your business will be required and what goals and deadlines will you need to set for yourself and others in the business?
You should balance your vision for the business against the practical realities of your current position and changes, such as increased investment in capital and other resources that would be required to implement your vision. A strategic plan needs to be realistically achievable.
How to Get Started with Strategic Planning
As with any business activity, the strategic planning process itself needs to be carefully managed. Responsibilities and resources need to be assigned to the right people and you need to keep on top of the process.
Try to find people who show the kind of analytical skills that successful strategic planning depends upon. Try to find a mix of creative thinkers and those with a solid grasp of operational detail.
Take on board the opinions of other staff – key employees, accountants, department heads, board members – and those of external stakeholders, including customers, clients, advisors and consultants.
How to structure the process
There is no right or wrong way to plan the process of strategic planning, but be clear in advance about how you intend to proceed. Everyone involved should know what is expected of them and when.
For example, you may decide to hold a series of weekly meetings with a strategy team before delegating the drafting of a strategy document.
Or if you’d like help with your plan, we can block off a day or two for strategy brainstorming sessions with you.
Our SWOT analysis involves identifying an objective for your business or project and then identifying the internal and external factors that are favourable and unfavourable to achieving that goal.
These factors are considered using four elements:
- Strengths – attributes of the business that can help in achieving the objective
- Weaknesses – attributes of the business that could be obstacles to achieving the objective
- Opportunities – external factors that could be helpful to achieving the objective
- Threats – external factors that could be obstacles to achieving the objective
Contact us with your questions and if you’d like more information to get started.