Do I Really Need a Strategic Plan?
Some business owners may feel like strategic plans are old school, especially since external forces (like the pandemic!) make them obsolete. Whether you’re a business owner who seeks to grow exponentially or are happy maintaining the stability you currently have, strategic plans are crucial to ensuring the health of your business.
If you’ve never created a strategic plan before, or your old one is no longer relevant, now is the time to get on track before 2022. Here are the key steps to developing a strong strategic plan.
Strategic Plans Encompass Business Life
Common goals are central to strategic plans — and getting every employee to work toward them together is essential. Developing a strong strategic plan avoids reactionary tendencies and making decisions to stay afloat rather than actively growing.
COVID-19 forced nearly every business to reactionary mode. Now that things are opening up and we’re learning to live in this day and age, it’s time to be proactive again. Strategic plans empower leaders and their teams to define the organization’s direction, develop company objectives and create measurable goals.
Phase 1, 2, 3
For the first few phases, only owners and key executives should be involved. This gives them the opportunity to set the long-term (3-5 year) vision and realize an exit/succession plan to ensure the business’ longevity after the current owners/leaders retire. Establishing these objectives first helps the rest of the strategic plan fall into place. Phase two also only involves owners and key executives as they perform an analysis to evaluate the current standing of the organization. This includes an employee survey, industry analysis, and an economic analysis to find out how the company stacks up against itself, its competitors, and outside forces.
Then, establish 3-5 year goals for specific departments, market sectors, products/services, people, and locations. Remember the question we were all asked in our first job interviews: Where do you see yourself in five years? Well, this is exactly what needs to be answered in a strategic plan.
Next, financial forecasting comes into the equation in order to determine whether the growth goals are realistic. This process involves projecting numbers of a potential decision to determine if it will be possible and/or beneficial to make that decision. Project the funding and capital needs by department and detail a capital investment plan to support the 3-5 year goals.
All of this work looking into the future is done at this point. Now, the owners and key executives will look at annual milestones. These are taken from the 3-5 year goals and divided into annual goals that are specific and measurable to evaluate progress; they will build upon one another until the end of the strategic plan is achieved.
Finally, it’s time to bring in key managers during phase 3 of the strategic plan. Here, owners and key executives will present phases 1 and 2 to their managers, who will begin implementing the goals with their teams. Input from managers and their key team members is essential to gain expert experience and insight into budget, metrics benchmarks, and levels of investment needed to attain specific goals to identify the Key Performance Indicators that will aid in tracking progress.
That’s Not All
While the above outline is the bulk of the strategic plan, it will not succeed if ongoing review of it is not performed. Progress in reaching short and long-term goals should be reviewed monthly, quarterly, and annually. After each review, strategy and timeline can be adjusted accordingly to ensure short-term goals are achievable and aligned with the long-term vision.
Don’t be afraid to adjust as needed! Give yourself the permission to set solid goals and adjust as necessary based on any external or internal factors that were previously unforeseen. Working within a strategic plan gives businesses the authority to achieve their desired growth.