Did you know that 50 percent of businesses fail within the first five years of opening their doors? However, the chances of a business surviving long-term increases significantly if it has a strategic business plan in place.
As a business owner, you may wonder if you need a strategic business plan for your company and its continued success. But what does that mean, exactly? And how do you go about creating a strategic business plan?
What is a Strategic Business Plan?
A strategic business plan is a document that outlines the primary goals and objectives of a company. A good plan also includes a detailed analysis of the market, the competition, and the growth potential.
Businesses use a strategic plan to guide the decision-making process of the company’s management team and help them make informed choices about where to allocate resources.
Why is a Strategic Business Plan Important?
A strategic business plan is an essential tool for any company, large or small. It provides a roadmap for the future and helps the company stay focused on its goals. Without a strategic plan, it would be very easy for a company to lose sight of its objectives and wander off course.
Where to Start: Define Your Business
Now that we know what a strategic business plan is and why it’s important, let’s look at how to develop a plan. You’ll want to start by defining who your target audience is. Make a decision about the demographic you aim to serve, their behavior, and where they are located.
Next, create a vision and mission statement. These statements will be the foundation of your entire plan, so it’s essential to get them right.
Your vision statement should be a short, one- or two-sentence description of what you want your business to achieve. For example, your vision might be “to become the leading provider of XYZ products in the world.”
On the other hand, your mission statement should be a longer and more detailed description of your company’s purpose. It should answer the question, “Why does our business exist?” For example, your mission might be “to provide high-quality XYZ products that improve the lives of our customers.”
Assess the Current Health of Your Business
Now that you have a vision and mission for your business, it’s time to look at where your business currently stands. Assessing your business will involve conducting an internal and external analysis of your company.
The internal analysis will assess the strengths and weaknesses of your company. You can do this analysis by looking at your financial situation, marketing efforts, product offerings, and organizational structure.
The external analysis will assess the opportunities and threats that exist in the market. You can start by looking at your competition’s performance, economic trends, and social media.
Determine Performance Measures
Performance measures are benchmarks that you use to track your progress and determine whether or not you are on track to achieve your vision. Companies typically use key performance indicators (KPIs) to measure performance and set standards that employees can strive to achieve. KPIs might include sales figures, customer satisfaction rates, call volume, and market share.
Choose a Framework
Once you have conducted your internal and external analysis, it’s time to choose a business strategy framework. There are many different frameworks out there, but some of the most popular ones include SWOT analysis, Porter’s Five Forces, and Value Chain Analysis.
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This framework helps you identify the areas where your company is strong and where it needs to improve.
Porter’s Five Forces is a framework that assesses the competitive forces in the market. It will help you understand your market position and how to compete against your rivals.
Value Chain Analysis is a framework that assesses the different steps in your value chain. This particular framework helps identify areas where your business can improve efficiency and reduce costs.
Develop Your Goals and Objectives
Now that you have a good understanding of where your company currently stands, you can begin to develop your goals and objectives. However, you don’t want to set just any types of goal – you want to set SMART goals.
Setting SMART Goals
SMART is an acronym for Specific, Measurable, Achievable, Realistic, and Timely. To be deemed SMART, your goals must fulfill all of these requirements.
For example, a SMART goal might be “to increase sales by 20 percent within the next 12 months.” This goal is specific, measurable, achievable, realistic, and timely.
Setting a Business Objective
In addition to setting goals, you’ll also want to set objectives. Objectives are specific actions that must be taken to achieve a goal. They should be SMART, just like your goals.
For example, if your goal is to increase sales by 20 percent, your objectives might include increasing your marketing budget by 20 percent or hiring two new salespeople.
Implement Your Strategy
Here, the rubber meets the road, and you start seeing results. To implement your strategy, you’ll need to do things like allocate resources, develop a timeline, and create a budget. You’ll also need to create a cross-functional planning team and assign roles and responsibilities to employees.
As you implement your strategic business plan, it’s important to monitor your progress and evaluate how well your business is doing. Monitoring your business progress will help you to make adjustments to your plan as needed and ensure that you are on track to achieve your goals. Keep an eye on those KPIs and adjust your strategy as needed.
Developing a strategic business plan may seem daunting, but it is essential for any business. By taking the time to create a plan, you can ensure that your company is focused on its goals and has the best chance for success.
Now that you know how to develop a strategic business plan, you may wonder what’s next. If you’re ready to start developing your strategic business plan, sign up for a no-pressure call to speak with us about how to make creating a game-changing business plan.
Let’s set up a time to talk: Mark R. Steinke 1.610.768.7774 Email Me