This article explains how to write a simple strategic plan using six essential parts. Before we get to that, let’s talk about the why and more importantly the how of your business. Both are fundamental to strategic planning.
Why you do what you do is really important to your business; It’s why your business exists, why you committed to making your product or providing a service and why you struggle every day to make it work.
Once you know your why, the next step is determining the how. You may be asking yourself questions like these: How will my small business operate? How will our company deliver on our brand promise? How do I overcome the fear of my competitors?
As a business owner, take time to think through the promises you make to your customer regarding your product or service. Does your company honor those promises every day in every decision, every transaction, and every action taken?
The process of defining your how is strategic planning. You may be thinking, “I don’t have time for strategic planning because I don’t have time for planning!” I hear you. But think of it this way – strategic planning and thinking strategically will ensure that every decision you make and the actions you take will drive results that matter to your company. Boom!
If you don’t define the strategic steps towards your ultimate goal, you will find yourself stuck working really hard in the business only to discover when you lift your head up out of the dirt, that your business is exactly where it was a time ago.
Confused? Let’s use an example of an independent women’s clothing store. The business plan outlines monthly sales, who the target customer is and the marketing that will be used to make sure intersections happen – customer meets inventory and hence, a sale.
A strategic plan speaks more to how the retail business fits in the market and how the brand is positioned strategically. In this case, the owner saw that the only local options for women were chain clothing stores. The owner sensed a need in the market place for a women’s clothing store that offered stylish, unique clothing separates at reasonable price points. How this plays out in a strategic plan is that the business 1) buys each clothing item, one unit in every size. Once the item is sold in a certain size, that’s it. Limiting selections and quantities on every item insures the promise of a unique item to the buyer. The customer may pay a little more but she can be confident that she can were her purchase in town and not see someone else wearing the same item. Buying limited quantities is a strategic decision that honors the brand and the promise of unique items for the customers.
Does it make more sense now? Once your company is up and running and you’ve gotten your feet wet that first year, I recommend you begin spending time thinking strategically and writing a strategic plan.
Strategic planning is for you and your management team if you have one. If you don’t have a management team, consider forming an advisory board that can give you outside perspectives. Strategic planning requires discipline i.e. making the time for it. The investment of time will return decisions and actions that will shape and guide the company brand, who it serves, what it does, and why - all with a focus on the future.
The plan should only be as long as is necessary for you to outline a few key strategies. Your strategic plan will set priorities. A strategic plan will help your team work towards a common goal and also make room for buy in on intended outcomes and results. As much as a strategic plan sets direction, it will also show how the company has been successful.
There are various formats to a strategic plan. These vary by business and /or industry. Here is a short but essential list of the content that matters.
Mission and Vision
The key to a good strategic plan is having a concisely written mission statement and vision for your company. In a few short sentences, your mission statement should state the purpose of your business, why it exists and what you expect to accomplish. Your vision statement is how you see things when you have achieved your purpose.
Even though the mission and vision you have for your company is the starting point, it is also the end all. It defines where you want to go. Developing it further with the strategic plan will help get you there.
Core Values
Core values are the principles that guide you and your employees each day. Core values most often refer back to your mission and vision. Think about what is inherent in your company, your service to customer and your employees. Look to what motivated you to start your business – fair price, friendly service etc. In the example, individuality might be a core value. “Our company believes the clothes you select is an expression of your individuality. This is why we purchase six sizes of any one item. “
SWOT analysis
Have you done a SWOT? SWOT stands for strengths, weaknesses, opportunity and threats. Make sure you do one for your business. Look internally to create a list of your company’s strengths and weaknesses; look externally to your competition or the market environment to compile opportunities and threats. Strengths and opportunities are helpful to achieving the business objectives whereas weaknesses and threats are of concern to the health of your business.
If you take a deep dive into your SWOT, you should be able to identify at least one competitive advantage — your unique selling point — that puts you at the front of the field in your market.
For our retail store example, in reviewing the market the store sees that there are other stores that also offer unique items. However, the quality isn’t so good and the price point is lower. Hence, our store is going to target a woman who has the income to spend a little more on her clothes and willing to invest in a better quality for ease of wear and care.
Long Term Goals
This is where strategy truly begins. Engage in strategic thinking to clarify how you will take action and do business that moves your company towards long term goals. Think about your company’s key purpose and how you plan to achieve it. Goals could include strengthening presence in your existing market or expanding operations and sales. For our retail store, the owner’s long term vision is to develop loyal customers who trust the sales associates to recommend items and dress them for all their special occasions. This means that strategically, the store’s inventory will have to be enhanced and expanded into more offerings and the staff will develop a form of record keeping about customer preferences and style notes and all sales associates will be trained with a very high level of friendly, personal and professional service.
Yearly Objectives
Long term goals are furthered defined by yearly objectives. These objectives should be as SMART as possible: Specific, Measurable, Achievable, Realistic, and Time-based.
Continue breaking down the yearly goals into short term goals and objectives, those to be accomplished in the next 3 months. These become your action plan for the next 90 days.
Measurements and Results
Summarize all the indicators you will use to measure your SMART goals. As an example, a goal to increase sales could be broken down into customers, ticket price or class of item e.g. sweaters, pants etc. Decide the best way to measure progress; select the indicators that best measure change Set realistic targets.
I am all about making things simple and concise. Don’t spend weeks writing a twenty page strategic plan. Even large companies with good leadership, can adequately explain their strategic plan on one page or sometimes even less.
Making Sense of it all
The six essentials:
Mission and Vision
Core Values
SWOT
Yearly Objectives
Long term Goals
Measurement & Results
Strategic planning allows for your business to evolve and develop along with rising trends and new ideas. Strategic planning doesn’t always mean pushing forward. It may mean holding back on new ideas. Instead of buying inventory to fill shelves or offering a slight twist to what your competition does, a strategic plan will focus your ideas and point your work in directions that matter. Work that links back to the why and ultimately to whom, your customer.
Lastly, during this time of change and uncertainty, review and revise your business plan. Go back to your why and think strategically about the marketplace, your customer and what may have changed for her. Then ask yourself, what does this mean as to how we will do business moving forward?
If you are stuck making the leap from your mission statement to strategies, allow me the opportunity to help. You can reach me here.