Building a strategic plan for your business sounds like something hard and expensive. A luxury that only big companies can afford. At least that’s how I felt when I first heard the term.
I could clearly picture a meeting room filled with top-notch executives (dressed in their finest garbs) at the Apple headquarters. I could almost hear them screaming, arguing, discussing, and writing a strategic plan.
But what I pictured cannot be further from the truth.
A company’s strategic plan is the tool that any sized businesses need to reach their goals. Putting it into practice doesn’t have to be an overwhelming task, nor you need to wear your best suit to do so.
In this article, we will explain to you precisely what a company’s strategic plan is. We will also guide you through the steps you need to take to build one for your business.
What is strategic planning?
A strategic plan is a written document that details the direction of a business. It establishes its goals and explains how to achieve those goals. In other words, a strategic plan is a guide to make your business grow.
Strategic planning is like creating a map. There is a destination (the objectives and goals for your company). You can also see the best route to get there (the steps your company must take to guarantee its success).
Why is strategic planning important to a small company?
Strategic planning helps your company improve its performance. It brings ideas on how to restructure it and thus reach its highest potential. A well designed strategic plan allows you to identify new opportunities or challenges. Also, it points out the best ways to face them.
Now you know why a strategic plan is vital for your business.
But you may be wondering, “how do you develop a strategic business plan?” The following model details what you should do to build a strategic plan, step by step.
Strategic Planning for Small Business in 11 Steps
1. Define your competitive advantage
Think hard and long about what makes your business special. To do so, ask yourself these questions:
What makes your company better than others?
What makes it different?
Why do your customers prefer your products or services rather than those offered by your competitors?
The answers are what we call “competitive advantage.” You’ll have to define it when starting to build your company’s strategic plan.
2. Prepare your pitch
We are talking about the kind of speech known as the elevator pitch. This pitch has to cover your business model and how you plan to meet your customers’ needs.
Think that’s easy enough?
You will have to do it during the lapse of time you could spend in a hypothetical elevator. The goal of an elevator pitch is to ease everyone in your company a clear and concise idea of your business.
3. Establish your company’s mission
Here is where you sit and write down in detail your company’s purpose. Your company’s mission works as a guide for the daily operations of your business. It’s also the starting point to make future decisions.
The mission should answer these questions:
What exactly is our business?
What do we do for our customers?
What motivates us to work?
4. What’s your vision?
It’s crucial that you also establish your business’ vision. This is what you envision your company being in the future. Your vision should answer these questions:
What kind of impact do I want my company to have in my community?
What do I expect to achieve in the future?
How can my business help improve people’s lives?
5. Carry on a SWOT analysis
SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.
A SWOT analysis lists the parts of a business that can be improved and the ones that are already strong. It allows you to pinpoint the opportunities for growth. It helps you to identify what elements you have to develop to improve your company’s performance.
6. Write down your company’s goals
Write three to five goals that illustrate your company’s mission. Each goal must be clear, measurable, and quantifiable. These goals exemplify your company’s strengths. They serve to mitigate possible weaknesses, to make the most out every opportunity. They also help you identify the elements that could threaten your business.
7. Include Key Performance Indicators
The Key Performance Indicators (KPIs) are quantifiable values. A company uses KPIs to define its performance in relation to the established goals. A Key Performance Indicator must have verified information. They should be able to put the company’s goals in context.
8. Establish your customer’s profile
To build your customer’s’ profile, answer questions such as:
What motivates your clients?
What do they need?
What characteristics define them?
What added value can you offer them?
What can your business do to attract more clients?
9. Analyze your company’s sector
Carry on an analysis of the industry your company belongs to. Find out if the market is increasing, or if there are any opportunities for growth. Make a list of your competitors, including their strengths and weaknesses.
10. Integrate your team
For this step, make sure you can count on the human resources needed to carry on the actions detailed in your plan. Make a list of all your team members. Finish with an outline of the professional profile of prospective employees that could help you achieve your goals.
11. Never stop planning!
You must make a habit of your strategic planning. Make sure everyone in your company knows the plan. Set meetings to check the progress of the plan. If the goals are not achieved, make adjustments to correct the course of your company. This will help you adapt to changes in the market.
What should a strategic plan include?
So, let’s summarize what your strategic plan should include:
- Basics of your business (like name, sector, size, etc.)
- Competitive advantages
- Goals and Objectives
- Action plan
- Customer’s profile
Now You’re Ready to Write a Strategic Plan!
A company’s strategic plan doesn’t have to be perfect or even finished to put into practice. After all, it’s a dynamic document that you should update as your company grows or the market evolves. In any case, it’s always better to have a draft of a plan than no plan at all!
At Camino Financial, we always strive to fulfill our motto, “No Business Left Behind.” That’s what drives us to write articles like this one that can help business owners grow and thrive. If you want to receive more free tips and resources that will help you better manage your business and your finances, why not subscribe to our weekly newsletter?