What’s the secret to creating an effective strategic plan? Here are our tips.
3 July 2019
A strategy is a detailed set of plans that are made to achieve an end goal. When the end goal is the launching of a new business, the strategic business plan is the map that guides the way. It helps to match the goals of the business with the needs of the market.
Most usefully, the act of writing the business plan not only offers the entrepreneur an opportunity to create a blueprint for success, but it often clarifies the problems with current ideas and the potential speed bumps along the way.
For anybody else involved in the business, the plan helps to ensure they’re all, quite literally, on the same page. It boils down big ideas and outlines easily digestible (and, as we’ll discuss, achievable) action items into a form that everybody can understand and follow.
And for those who value action over planning, as most entrepreneurs tend to do, the strategic business plan is a plan of action. It is a way to ensure that no effort is wasted on action that will not directly contribute to the achievement of the end goal.
So how is a strategic business plan best created? Here are our top tips for strategic business planning success.
Just do it
What are you waiting for? If there’s information that you don’t yet have, go ahead and make the plan, anyway. Along the way, you’ll discover that some of the information you thought was valuable is actually less important. You’ll also find other gaps that need to be filled.
The process of developing the plan will itself act as a valuable guide to the type of information that needs to be collected in order to get the business started. So get onto the plan right away and update it as you gather further knowledge.
Start at the end
It’s impossible to figure out how to get somewhere if you don’t know where you’re going. What is your end goal? Many argue that a business plan should contain an exit plan, a way out after you have created a successful business. But don’t be afraid to set step goals, perhaps at one, two, five and ten years.
Keep it simple
Keep everything short and concise. Avoid wordiness and long lists of objectives. Focus on the end goal and cull anything that does not push the business forward toward that goal.
Define your core values
Knowing exactly why you’re launching or running a business will answer many of the questions you have about how you do it. For example, if your business purpose is to encourage healthy living by helping busy executives to lose weight, then the products and services offered by the business, and its marketing strategy and branding, will immediately become clearer.
However, if you simply want to make money from the fact that you’re a qualified personal trainer, the details of how the business works will be more difficult to define.
Values and purpose also offer clues around the types of people who should be employed within the company and the messaging that must be utilised or avoided. A personal training service for women who have recently given birth, for example, might employ different people and convey different marketing messages to one that targets male bodybuilders.
Write the purpose and core values as a concise list, including no more than four or five bullet points. This could be defined as your vision statement.
Figure out how to measure success
Along the way you need to check in to see how things are going, whether you’re ahead of where you thought you might be, or behind. So how are you going to measure success?
Perhaps it is a weekly sales figure, a total number of clients, a monthly revenue target or staff headcount. It might be possible to use data analytics to measure whatever it is that you define as success – levels of customer experience, staff satisfaction, or product innovation, for example.
Whatever your metric, figure out how often it needs to be applied and what each milestone means. If your client numbers are far higher than expected at a certain stage, for instance, you need to know what that means in terms of staffing and resources.
Here is the action part of the plan. What needs to be achieved and by when? How does each action contribute to the business achieving its goals? Who is responsible for each objective and what resources will they need?
It’s vital that every objective is achievable. Shooting for the moon in terms of actionable objectives can very easily bring an entire plan tumbling down.
Keep it simple so the team can continue to move forward, and check back in with the plan as often as possible – not just when you hit roadblocks or need to make a change.
Don’t ignore weaknesses
It’s only human to concentrate on the positives, but a business plan must be realistic. List strengths and weaknesses, perhaps as part of a SWOT analysis. Use these to guide actions, such as employing or outsourcing for specific skills that are lacking.
Essential strategic business plan ingredients
The plan must answer:
- What does the business do and why?
- What is the business’s structure?
- What is the end goal?
- Who is the core customer?
- How big is the core market and how is it best approached?
- What is the unique value proposition for the core customer?
- Who are the major competitors and what do they do well?
- What budget do you have to work with and what is the financial plan?
- Summary of the marketing plan
- Summary of personnel requirements
- Summary of technological requirements
- Funding model
Remember, this document is flexible
A business plan should be revisited regularly and changed as the business environment evolves.
The changes to the plan might be a result of input from a new staff member, pressure from a competitor, an opportunity that has been identified, sudden changes in raw material costs, or any number of other issues.
Constantly updating the plan keeps it relevant and gives the company direction. Lose direction and it’s likely the business will be lost soon after.
Find out more about learning these business skills and more by studying an MBA with SCU Online.