February 12th, 2018 Read in 7 minutes
10 Easy Steps to Develop a Strategic Plan for Your Small Business
Building a strategic plan for your business sounds like something hard and expensive. A luxury that only big companies can afford. But strategic planning is the tool that small and mid-size businesses need to reach their goals. Putting it into practice doesn’t have to be an overwhelming task. In this article, we will explain to you exactly what a strategic plan is. We will also guide you through the steps you need to take to build one for your business.
What is a strategic plan? What are its benefits?
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).
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 strategies to face them.
How can I develop a strategic plan?
Now you know why a strategic plan is important for your business. But you may be wondering how to build one. The following model details what you should do to build a strategic plan, step by step.
Step 1: Define your competitive advantage
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 answer to these questions is what we call “competitive advantage”. You’ll have to define it when starting to build your strategic plan.
Step 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? Think again. 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.
Step 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?”
Step 4: Carry on a SWOT analysis
The SWOT analysis lists the strengths and weaknesses of a business. 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.
Step 5: 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.
Step 6: 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.
Step 7: Establish your customer’s profile
“What motivates your clients?”
“What characteristics define them?”
“What added value can you offer them?”
“What can your business do to attract more clients?”
Step 8: Analyze your company’s sector
Carry on an analysis of the sector 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.
Step 9: 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.
Step 10: Never stop planning!
Repeat! Repeat! Repeat! 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.
Your 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!
Does your business have a strategic plan? if so, what does it include and what is missing? Are you going to work on a strategic plan after reading this article? Let us know!