An Introduction to Strategic Planning
Strategic planning is the process of documenting and establishing a direction for your small business. This can be done by assessing both where you currently are, and where you are going. Strategic plans also provide a place where you can state your mission, vision and values in addition to long-term goals and the action plans you will use to reach them. By writing a well-written and clear strategic plan, this can play a pivotal role in your small business’ growth and success in addition to outlining how you and your employees can best respond to future opportunities and challenges.
As your future success depends on effective strategic planning, looking ahead of your entire business is highly recommended, since it can oftentimes lead to changes that can make a lasting impact on your business. Altogether, strategic planning involves analyzing the business and establishing realistic goals and objectives that can lead to the creation of a formal document that lays out your business’ views and goals for the future.
Benefits of Strategic Planning
Although the strategic planning process can be time-consuming, the results are beneficial for everyone involved. As the small business owner, you’ll gain better ideas of the goals and objectives you want to accomplish and the path to achieve them. For your employees, this can mean an increase in overall productivity, which will contribute greatly to the success of your business.
Communicating Your Strategic Plan
Strategic planning should also involve your employees, since they are involved in the day-to-day operations of your business and can further provide a unique view of your company. During a regular business day, employees can discuss with you what isn’t or is working, which will additionally help your planning for the future as well. On top of your employees, it also helps to reach out to individuals outside of your business, such as vendors. They can provide a unique perspective on your industry, and how they think the business landscape can possibly change in the future. Based on a recommendation by the US Small Business Administration, the strategic planning process should be a flexible one, and that when meeting with your employees or people outside of the company, to remember that discussions should encourage new ideas and thoughts.
When you involve your employees in the strategic planning process, this means they will receive a sense of accountability that can help increase overall productivity. For example, either they can contribute during the process or can be informed of the business’ goals and objectives after the strategic plan was created. Either or, they are more likely to want to help achieve those goals.
Identifying Strengths and Weaknesses
You will be able to examine and analyze every aspect of your entire business during the strategic planning process, such as areas where your business does well, and areas where they can improve. By knowing exactly what your business’ current strengths and weaknesses are, this will give you as well as your employees the opportunity to improve in the future and become a durable business – all by minimizing risks along the way.
Setting the Direction of the Business and Fostering a Proactive Business
Towards the end of the strategic planning process, you and your employees should foster a clear direction of where you want your business to go in the near future. By having these discussions and planning the process itself, this helps put the business in the best possible position to succeed as time goes on.
Strategic Planning Misconceptions
There are various strategic planning misconceptions, from not having enough time to thinking it only benefits larger businesses to fearing your business is being placed on the wrong path. These are just the few examples of why business owners can be wary when they start strategic planning. However, strategic planning will help your business – whether big or small, there are numerous benefits that far outweigh any perceived negatives. Regardless of your business’ size, a strategic plan is beneficial. No matter if you own a small business or a larger corporation, strategic planning helps make sure your company is headed in the right direction.
But how does one know they are actually steering their company in the right direction? The first couple of phases of strategic planning focus primarily on research and discussions, as the decisions that you make during strategic planning aren’t based on assumptions. They are based on research and information you’ve gathered while having discussions with your team of employees and others outside of your company. Although it can seem daunting at first, the strategic planning process is actually very simple. Even though it can be time-consuming, the amount that is invested in the process will pay off when everyone in your company works toward accomplishing all the goals and objectives you have laid out for the company.
The strategic planning process also doesn’t prevent creativity either. When meeting with employees for strategic planning, you have the opportunity to have a discussion and brainstorm ideas with everyone. The strategic planning process basically combines all minds to think of creative ideas for the company. If you go through the strategic planning process once, that doesn’t mean you won’t have to do it again. In simpler terms, the strategic plan is a living document that could change over time. It is not uncommon for business owners to create a strategic plan with their employees and rarely, or never, revisit that document. By reviewing and evaluating your strategic plan regularly, you will be able to stay accountable and on track while achieving your main goals and objectives.
What Makes Strategic Planning Successful?
Successful strategic planning involves team effort among you and your team of employees in addition to your vendors and others on the outside. The more your employees engage with strategic planning, the better they will understand the strategy you have for your company’s success. Strategic planning also needs to have more flexibility. While having goals and objectives are great for your company, you can’t be afraid to adapt to changes that come along the way. For example, it may take you longer than expected to achieve a goal, but this isn’t an issue – it’s an opportunity to incorporate changes to your plan in order to place you in a better position to succeed.
When the strategic planning process’ outcome is successful, everyone included in your business will be on the same page with your business’ direction and goals. This means that each employee will understand what makes the business stronger and what needs to be worked on in addition to being more likely to want to contribute to the business’ growth and success.
When Should Strategic Planning Be Done?
When beginning the strategic planning process, you want to start it sooner rather than later. This doesn’t necessarily mean you have to be finished in the first few days or weeks of your company’s launch, as you may want to be in business for a few months to give yourself a better idea of what is and is not working. Even if you’ve been running your business for a long time, however, it’s not too late to get started on strategic planning. There will always be a good time to sit down and think about the current status of your company and where you see it going in the next five to ten years. So whenever you’re ready, gather your team together, and start schedule regular meetings dedicated to your strategic planning process.
Where Do Strategic Plans Go Wrong?
Strategic planning is a continuous commitment, even when you finish the initial round of strategic planning and it leads to your business’ first strategic plan – it’s still not complete, considering the plan has to be implemented. Additionally, if the goals and objectives you set are unrealistic, strategic plans can go wrong. Even though all business owners want to watch their business grow and gain success, overly ambitious goals can potentially discourage both you and your employees.
Writing a successful strategic plan requires commitment, meaning your entire team needs to remain focused on the business itself to carry out the strategic plan. If the strategic plan isn’t used regularly or as the foundation of the business, you as well as your employees can lose sight of your company’s overall direction and goals. The top three reasons implementing strategies can fail:
- Poor Communication
- Lack of Leadership
- Using Wrong Measures
Reviewing and Updating Your Strategic Plan
Strategic plans are living documents. Don’t invest all of your time creating a well-thought out strategic plan, just to let it collect dust on the shelf. You have to live by it, while regularly updating it. Updating your strategic plan depends on how your company operates. If your company is part of a fast-paced industry and could be changed by outside factors, you should always review and update your strategic plan frequently. For example, if your business takes part in the ever-evolving tech industry, you will most likely need to check on your strategic plan after each quarter.
Moreover, you should at the very least, review your strategic plan every year. When doing so, you can look at the assumptions made and check to see where your business stands in relation to those specific assumptions. Challenges and threats to your business a year ago may change within the next year, so don’t be afraid to change any moving part of your strategic plan. If outside factors place a larger impact on your business that what you initially intended, your goals and objectives for the company may have to change.
Regular reviews of the strategic plan are also a great opportunity to check in on your employees. As they help you create your business’ strategic plan, they become invested in the success of it as you are. All you need to do is essentially provide a summary of where your business currently stands, and talk to them to see if things have improved or if they still carry some concerns about the company (or if any of their initial concerns have changed). After reviewing the strategic plan, share all changes with your team of employees. Even when there were no changes made, it provides a great opportunity to discuss your own personal thoughts on the business’ status and to confirm if things are on the right track. While doing so, you can also encourage your employees to continue working hard to achieve the goals and objectives set forth in the strategic plan.
The Strategic Planning Process
The strategic planning process is basically divided in three phases: discussion, development, and review and updating. The overall goal of the strategic planning process is to ensure everyone involved in the business is aligned when it comes to the goals and objectives you created for your company, in addition to creating a formal strategic plan document.
The discussion phase includes gathering as much information, opinions and input as possible. First, you must set up regular scheduled meetings with your employees and any other staff members in your business who will want to be involved in the strategic planning process. During each meeting, it’s recommended to make sure you have an agenda and clear expectations of what you want to accomplish. Not only will this keep discussions on track and help prevent distractions, but you can answer questions that will help define what the business’ current status is. This can include, “Where are we now?” and “Where are our competitors?” Once you and your team establish a good idea of where your company is, you can start focusing on specific details in future meetings.
In addition, you can reach out to vendors, investors, analysts and other people outside of your company to gather even more information. On top of your employees, external people will provide a unique perspective on not only your business, but also the industry itself. When getting other opinions on where they think the industry is heading and what they think will change in the future, you will be able to have a unique perspective for your strategic plan as well as determine where you want your business to be as the years go on.
A SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis can also be developed. When conducting a SWOT analysis, you and your employees can examine what your business does well, where it can improve, any future opportunities, and any competitors or external factors that could prevent your business from gaining success. Strengths are generally easy to identify. When breaking down your weaknesses, you will have to be candid, considering every business has weaknesses that can be further outlined in the strategic plan to be improved. Opportunities are also generally clear, while your identifying threats to your business can be more difficult. By speaking with external people outside of the company, you will be able to get a good idea of where the industry is heading and if there are any major competitors or challenges along the way. If these threats and challenges can be identified in the company’s early stages, this means you will be in a better position to address them if and when you encounter them.
The next phase is Development, where you start putting together your business’ strategic plan. A strategic plan will include five key components: a vision statement, a mission statement, goals and objectives, an action plan, and details on how often the strategic plan should be reviewed and updated. First, decide with your employees what you will use to create the strategic plan. Will you be creating a strategic plan by purchasing software to create and house the plan? Or will you be creating the plan by yourself and save it in the cloud for easier access. Moreover, when creating goals and objectives for your business, it’s best to ensure they’re realistic and measurable. Along with your employees, you can create goals and objectives for the next one to three years as well as discussing how these goals and objectives can be measured and tracked.
One example would be, if you have a goal of increasing sales by 10% by next year, you can track this by measuring sale numbers. Having an action plan is equally important to achieve these goals and objectives. If increasing your sales by 10% in a year was truly your goal, you can also implement more marketing and social media outreach tactics as part of your overall action plan. In the end, if an action plan doesn’t help your business achieve its goals and objectives, then the plan needs to be rewritten.
Review and Updating Phase
One of the most critical parts of creating a strategic plan should be how often it will be reviewed and updated. You can designate someone within your team to hold responsibility for reviewing, updating, and sharing any changes with the rest of the company’s team members. Whether that role is taken on by you or another employee, you’ll want to make sure everyone in the business is aware of the changes made and how they will affect the overall strategic plan. Speaking to this, the strategic plan is meant to be a fluid document. As aforementioned, don’t create the document to let it just sit on a shelf for years. If meaningful objectives and action plans were developed, they will help with regularly checking the strategic plan. For example, if your action plan requires you to put in sales numbers after every quarter to track revenue, you could take that time to review the rest of the plan.
Additionally, you can also set an alert to check the strategic plan regularly – whether it’s every few months, every quarter, or every year, a continuous alert can help you review and update the document. While also reviewing your strategic plan, you may find that your objectives and goals are not on track. But don’t worry. All you have to do is reassess the situation and, if needed, discuss the issues with your employees. From there, you can figure out what went wrong and why your business isn’t on pace. For example, maybe your goal was too ambitious or unrealistic. Now, all you need to do is change the goal or the objective and update the action plan to help your company get back on track. While doing so, you also may discover that your small business has met goals or objectives earlier than you intended. If that’s the case, you can now create new goals or objectives to work toward. If not, you can try to maintain the progress you’ve already made; discuss the ideas with your employees to see what they think is possible.
Strategic Planning Template Checklist
Any template utilized for strategic planning should be like a checklist. A good strategic plan will have a template that includes different sections for you to complete and to help you cover a variety of topics. It will also ensure you have a well-thought out, organized and comprehensive strategic plan for your business. You can either use computer software for your strategic planning template, or you can create your own with Microsoft Word or Excel.
- At the top of your template, label it “Executive Summary”. Then, provide a basic overview of your business. Make sure to include the time-period you’re looking at for your business’ strategic plan (i.e. your strategic plan provides a three to five-year outlook).
- Underneath the Executive Summary section would be information on “Your Company.” In this section, you will clearly state your mission statement, vision, values, and background on leadership.
- Then, there is a section called “Research” that will include information on your clients and customers, competitors, and the overall macro industry you participate in.
- A section called “Products and Services” can also be created. This part will detail any products you are offering, the pricing strategy, delivery systems and capabilities, as well as suppliers.
- Your template should also focus on “Measurable Goals.” In this section, you will state realistic goals or objectives that you want your business to achieve within the time-period you have established. You’ll need to include details on how the progress of each goal or objective will be measured.
- Additionally, remember you “Action Plans”, whether you place it within the Measurable Goals section or as a stand-alone group in the template. This provides an overview of how you and your employees are going to achieve your business goals and plans.
- A SWOT analysis can also be placed into the template. While listing your identified strengths, weaknesses, opportunities, and threats, make sure to be honest and candid. When reviewing your strategic plan in the future, you can always go back and reference the initial SWOT analysis and check to see what has changed.
- The last section of the strategic plan should detail “Reviews and Updating.” This is where you will explain how often the plan should be checked –whether it be every few months, quarterly, annually, etc. Then, provide a list of people who will hold responsibility for reviewing and updating the strategic plan, as well as communicating any changes with the broader business.
Strategic Planning Examples
Strategic plans can also vary; they depend on the type of business you are currently operating or the industry your company takes part in. Here are a few examples of different strategic plans:
Strategic Plans for Businesses
Writing a strategic plan for a business will include the company’s mission, vision statement, goals and objectives as well as the action plans to achieve them. In light of this, it also helps to know that a strategic plan is different from a business plan. A business plan is typically developed to help start the business and acquire the necessary capital funds to jumpstart operations. However, a strategic plan outlines your company’s strategy for growth and success in the future by using existing resources.
For example, the Canadian Soccer Association’s strategic plan for 2014 to 2018 is filled with useful information and details. Its strategic plan includes an examination of the organization’s current status and what the focus in the future will be. It also the Canadian Soccer Association’s goals and objectives, as well as the strategies the business will use to achieve them.
According to small business owners in the US, their top challenges in 2017 were:
- 67% said lack of capital and/or cash flow
- 24% said effective time management
- 28% said effective marketing or advertising
Strategic Plan for Nonprofits
Writing strategic plans for nonprofit organizations include the same key components. These types of strategic plans may also focus more on the internal and external factors that can potentially pose threats and challenges to the nonprofit organization. To note, as the structure of a nonprofit organization can change rapidly due to different factors within the industry, nonprofit strategic plans will take this into account, aiming to address possible changes that can be made ahead of time.
For example, the Minnesota Council of Nonprofits’ strategic plan for 2010 through 2014 outlines the organization’s vision, mission, the community it serves, as well as its goals for the four-year period. The Minnesota Council of Nonprofits also stated each goal it had in mind, and included in-depth descriptions of why each goal was important as well as the strategies involved to achieve those goals. The nonprofit strategic plan also lists the people responsible for working on the strategic plan.
IT Strategic Plans
Considering the IT industry is constantly changing, this generally means an IT business strategic plan should identify and address the changes in the future. While other strategic plans for various businesses may focus on the next three to four years, an IT strategic plan will commonly look at the next year to year-and-a-half. When it comes to developing, reviewing, and updating an IT strategic plan, it’s crucial to involve your business’s Chief Information Officer (CIO). The CIO’s knowledge and skill set is useful in developing a strategic plan for your IT business. To add, you and your team of employees can see whether you need to upgrade any part of your infrastructure in order to meet the goals and objectives outlined in your strategic plan.
However, due to the rapidly changing circumstances of the industry, you may be reviewing your IT strategic plan more frequently than with other businesses. As a result, you will need to adjust your plan as necessary to ensure your business is on the best path to success. The strategic plan should also include details on how to make a decision when it comes to investing in new equipment or technology.
Marketing Strategic Plans
Writing a marketing strategic plan should be centered on generating sales for your business. For example, whether the goal is to increase sales numbers by 15% or to increase the number of customers in the next quarter, a marketing strategic plan will help businesses generate more revenue in addition to helping increase a loyal customer base. Marketing strategic plans can include marketing technology, software, or web-based platforms to also help track your business’s progress toward its goals and objectives. The marketing strategic plan also could address specific types of marketing your business can pursue – such as, whether your business will pursue two different marketing initiatives: traditional print advertising or digital ads.
Further, as a marketing strategic plan will aim to increase your business’s exposure as well as numbers through different techniques and methods, it’s always a good idea to include the budget in the document. By doing so, you and your team of employees will work toward the marketing goals and objectives you want to achieve without spending too much money. Focusing on the long-term strategy of your marketing business is also essential. Since strategic planning is as important as having a business plan, this means it can lead to the success of your business in a short period of time. You and your employees will then understand the current status of the company, increasing productivity as every single individual works toward achieving your business’ goals. This will place you in a better position to address any potential issues that may come up in the future.
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