Maria Peloponisiou~ 5 min Reading time | 03. Feb 2020
After you’ve laid the groundwork for your business with a solid business plan, you might still have questions about how you’re going to get there, and what will come next. While a business plan is all about the short and mid-term planning involved in getting a business going, strategic planning is the long term planning which will help you chart a course for the growth of the business. A strategic plan can help you solidify priorities, manage risk, and allocate resources effectively over the long term. If your business doesn’t already have a strategic plan, it’s time to make one!
The level of formality your strategic plan will need to have depends on its purpose. If you’re preparing it for investors, it should be broken down into specific sections including an executive summary, company description and mission statement, industry analytics, budget, and action plan. Although there’s no standardized way of putting one together, a formal strategic plan should be similar to a business plan, with a longer timeline and added action items. However, even if you’re only preparing the strategic plan for yourself, keeping it carefully organized will help you keep it up to date and accurate.
Here are the steps to making a strategic plan to help you achieve your vision for the future of your company:
Gather Your Team
If you’re running a mid-level or larger business with employees, get a small team together; bring together the managers of each department to help you make sure you consider your business from a marketing, financial, and operations perspective. Even sole proprietors and freelancers can schedule appointments with accountants, consultants, or other freelancers in their field to bounce ideas off of. If you’ve already written a business plan, you can use some of the elements from your business plan to help you compose your strategic plan. Or, if you’ve been in business for a while, gather together financial statements, project histories, and any other documents from the last 12 months that might help you plan ahead.
Revisit your Mission Statement and Brainstorm Goals
When you wrote your business plan, you probably developed a mission statement to help achieve your aims. If you’ve been in business for a while, you may decide to modify your mission statement to reflect the current nature of your business; or, if you’re just starting out, you can use your mission statement as a starting point for your strategic plan. The questions a strategic plan answers are:
“Where is my business now?”
“Where do I want to take my business?”
“How do I get there?”
With your mission statement in mind, brainstorm the answers to these questions; ask your team for guidance when necessary.
Conduct an Industry Analysis
Take some time to research what’s going on in your industry—what are the latest trends, tech developments, and sales figures like in your line of work? Are your target clients the same, or have they changed? This can be particularly important if it’s been a while since you wrote your business plan. New opportunities and challenges might have arisen in your industry since you last took a good look, and you may need to adjust some of the goals and strategies (or even your mission statement) to reflect the current state of your industry.
Conduct a SWOT Analysis
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and is a method of analysis that takes both internal (strengths, weaknesses) and external (opportunities, threats) factors into consideration for strategic planning purposes. Take some time to brainstorm what your strengths and weaknesses are as a business, and what opportunities and threats you’re likely to encounter as a result of your business type. Once you’ve made this analysis, you can develop strategies that use your strengths and mitigate your weaknesses in order to take advantage of opportunities and avoid threats.
Develop a Timeline
Now that you’ve done a brainstorm of your goals and your potential to achieve them, try to give yourself a realistic timeline for making them happen. A five-year plan is a common time frame to work with. Begin by setting five-year goals for your business, then break those down into one-year milestone goals that you’ll have to reach along the way. Break those down further into quarterly goals, and even further into monthly goals. These should be small and manageable enough that you can come up with specific tasks for completing them; you can make a list of these for each month over the next five years.
Develop KPIs that Reflect Your Goals
If the above sounds vague, here’s where the numbers come in: KPIs, or Key Performance Indicators, are statistics that businesses use (such as monthly sales, utilization, marketing pipeline, etc) to help them evaluate performance. Using your goals, decide what statistics you need to track and what your targets for those statistics will be each month. That way, you’ll be able to measure your actual progress against your plan and adjust your plan if you’re too off base.
Have a Process for Keeping Track and Adjusting your Strategic Plan
Remember that your strategic plan isn’t written in stone. Although it will give you some direction, it’s likely that it will need to be updated over time as your business encounters challenges and opportunities you couldn’t possibly have predicted when you wrote it. Keeping your strategic plan current can be an important way to maintain your focus on the mission of your business, so you can maintain a balance of careful intention and practical consideration when you undertake new projects. It can also be a helpful way to keep a strategic plan complete in case you need to seek new investors in the future.
One of the best practices you can put in place when planning is to compare your predicted outcomes to the actual outcomes of business strategies. Having an ongoing strategic plan will help you fine-tune your strategy and keep your business and its mission statement on the same track.