When preparing for the future of your business, you should be aware of the importance of strategic plans to help keep your business on track.
Know the Differences Between a Strategic Plan and a Business Plan
A business plan focuses on the viability of a company and typically covers no more than the upcoming year. Business plans are also regularly used in the beginning stages of starting a business and can include obtaining funding and developing all aspects of the business before getting started. During this stage, you must investigate the market and establish realistic financial goals to create your business plan.
A strategic plan, on the other hand, is more conceptual and dynamic. It serves as a roadmap for your small business to reach its goals. It allows you to gauge your company’s performance, strengths and weaknesses over time. By revisiting the plan regularly, you can analyze and update marketing, sales, product development, operational and revenue goals to achieve your desired results.
Write Your Mission Statement
The first step of creating your strategic plan is to write your company mission statement. Your mission statement can range from a sentence to multiple paragraphs, but it should convey your company’s purpose to customers, employees, and the community.
When developing a mission statement, ensure the statement will answer the following questions:
- What is your small business? What type of organization are you creating?
- What are your products or services?
- What are your target markets?
- Who is your ideal client?
- Who is your ideal employee? What are the desired skills in team members?
- What are your long-term goals?
After answering these questions, develop a succinct message that can be easily digested by anyone who reads it.
Set Aside Time to Re-evaluate Your Plan
To create or update your strategic plan, evaluate current operations. Periodically, you should take inventory of your business and see where you’re heading, what’s working, and what’s not. When re-evaluating your plan, focus on the following six areas to determine the state of your small business:
1. Your Clients
Who are your current customers? How would you describe your relationships with them? Who are your prospective customers? How can you attract them?
How to use this information: Develop new products for your ideal customers, discover new ways to connect to customers, or change up your marketing efforts.
2. Your Products or Services
What are your products and services? How are they unique? What are their benefits? Which are not selling well? What are your plans for the underperformers? Do you hear any frequent requests from customers?
How to use this information: Determine what products or services should stay in your lineup, which should leave, and what you can add to create a better experience for customers.
3. Your Financial Performance
After reviewing past financial statements, are your sales growing? What is one thing you could change to improve performance? How can you achieve that goal?
How to use this information: Take a close look at your sales to determine where you can either increase revenue or cut back on expenses in order to create a better return on investment.
4. Your Operations
Is your business running smoothly? Do employees complain about ineffective processes? How can you streamline operations? Are there affordable technological solutions?
How to use this information: Talk to your employees about ways the business can be streamlined. Creating a better work environment often leads to happier, more productive employees.
5. Your Competitive Edge
What makes your company unique? Consider your culture, location, resources, staff, technology and pricing.
How to use this information: Discover what makes your company stand out and use those qualities to showcase why your company is so special.
6. Your Environment
What external factors, such as investors, influence your business? Who are your competitors? How do they affect your business?
How to use this information: Knowing what outside factors can influence your business changes how you do business. Recognize when competitors are doing something unique and stay ahead of the curve.
Determine and Implement Goals
After creating or re-evaluating your plan, you will notice potential areas of improvement. Pick your top 3 or 4 feasible goals. Goals are either qualitative, such as provide better customer service, or quantitative, such as increase profits by 5%. They are usually focused on general performance, financial performance, operations and deadlines.
With your list of objectives in hand, how will you achieve them? A good technique to examine the best solutions is a scenario analysis. This entails asking “if-then” questions—if I change X, then what is the outcome? You and your team can perform a scenario analysis of each action and write the possible outcomes. These techniques will guide you to create your new strategic plan.
To learn more, watch the online workshop “Creating a Strategic Plan.” For more guidance geared to your business, connect with a SCORE mentor. And check out our other free resources on strategy and planning.