Every small business needs to have an effective long-term plan in place to keep the company on track. You need to consider your company's mission and values and collaborate as a team to determine a plan of action. Your strategic plan helps everyone understand the vision for company growth and work through the challenges together.
An Introduction to Strategic Planning
If you're wondering, "what is strategic planning?" you're certainly not alone. Perhaps you want to know "what is a strategic plan?" or "what is in a strategic plan?" There's not an exact strategic planning definition, and you're free to define planning in any way that suits your company.
The important thing to remember is that the strategic planning process and scenario planning should be a collaboration that involves all of your team members. By including your whole team, you'll have the most complete possible picture of your business as you plan for your company's exciting future.
Benefits of Strategic Planning
Your future success depends on effective organizational strategy planning. The purpose of your strategic plan is to analyze your business, set realistic goals, and lay out your objectives. Your goal is to develop a formal document that lays out your company's views and its goals for the future.
Strategic Planning Template Checklist
There are many great strategic planning models and templates to use when you create your business plan, or you can develop your own strategic plan template with word processing or spreadsheet software. A simple strategic plan template should function as a checklist and should include the following sections:
- Executive Summary: This includes your basic business profile. You should also include an implementation timeline for your business's strategic plan.
- Your Company: This section should include your mission statement, company vision and profiles of your top-level leaders.
- Research: A section that includes current industry trends and other relevant information that will inform your company’s decisions.
- Products and Services: The focus of this section should be on product delivery and day-to-day operations.
- Measurable Goals: These goals need to be both realistic and time-based.
- Action Plan: This section should provide clear implementation instructions.
- SWOT Analysis: Helps you honestly evaluate your organization’s strengths, weaknesses, opportunities and threats.
- Reviews and Updating: This should include an implementation timeline, benchmarks to evaluate progress and a list of individuals responsible for implementation. You should also schedule time in the future to tune up the plan as needed.
Communicating your strategic plan
You should also consider including your vendors and other partners in the planning process. The creative process benefits from a diversity of opinions, and outsiders can offer a lot of new perspectives to your plan.
Increase productivity
When you include your team members in the strategic planning process, they'll be much more productive. They'll be more invested in your company's success if they fully understand the business's goals and objectives. Keeping them in the loop ensures that they'll all pull in the same direction.
Identifying strengths and weaknesses
Be honest with yourself about where the company can improve and encourage all stakeholders to be honest about your shortcomings. Your line employees are often the best source of information about the plan's effectiveness, and they should be encouraged to speak their mind at all times without fear of reprimand or reprisal.
Setting the direction of the business and fostering a proactive environment
You and your stakeholders should have a shared vision and a clear direction for the business at the end of the strategic planning process. Be sure to consider long-term challenges and set a timeline to revisit your strategic plan at least every three years.
Strategic Planning Misconceptions
Many business owners don't understand the full value of strategic planning and might be hesitant to move forward based on faulty information. Your strategic planning decisions should always be based on the best available data, and it is a time-intensive process to make fully informed decisions.
The good news is that all the hard work pays off when you develop a great plan. Just remember that your strategic plan is a living document, and you should never be afraid to make adjustments. You should give your plans time to work but have contingencies for the times when they don't.
What Makes Strategic Planning Successful?
Successful strategic planning can't be evaluated in the same ways that you evaluate successful financial planning, but it shares some similarities. For starters, it should involve all of the stakeholders who have an interest in the company. It should also be flexible and responsive to new information. Finally, it should be evaluated using measurable indicators.
The correlation between your planning and your profits isn't quite a straight line, but increased profitability typically has its roots in solid planning. Some successes are flukes, and some setbacks are temporary. The important thing to remember is to find ways to make your progress (or lack of progress) measurable.
When Should Strategic Planning Be Done?
Your strategic plan should be written at the same time as your business plan, but many business owners might choose to delay long-term planning until they get "settled in." If this sounds like your company, you're not alone. Some companies happen into an untapped market or an unmet need, and then they spend their first few years struggling to fill orders.
It's a great problem to have, but the life cycle of a new product or service will predictably level off after the first few years. You need to start planning your next big move while your hot new business is still flush with cash.
Where Do Strategic Plans Go Wrong?
No two companies are alike, but they tend to fail for the same reasons. Strategic planning and scenario planning require full commitment from all stakeholders, starting at the top. Be prepared to accept your own responsibility for the plan's setbacks, and create a culture where people aren't afraid to speak up if something isn't working.
Be sure to lead from the front, communicate effectively with your team members and think of setbacks strictly as teachable data. Many new companies are successful in spite of themselves, and they get complacent. Setbacks should always be welcome opportunities to address previously unknown problems.
Reviewing and Updating Your Strategic Plan
The strategic planning process steps are pretty straightforward, and we'll be showing you plenty of strategic planning examples in an upcoming section. Every industry sector is a little bit different, but your strategic plan should always be considered a living document. You'll want all hands on deck when you make sweeping changes, but you also need to give your plan enough flexibility to be revised on the fly as needed.
Many businesses are subjected to the whims of the market on a daily basis, and their leadership shouldn't be forced to stick with decisions based on outdated information. Your team members need to have the ability to "call an audible" when the old plan doesn't make business sense, and then you need to revisit your plan as soon as possible.
The Strategic Planning Process
Your strategy plan outline should have steps for an initial discussion, plan development, and updating. Your strategic planning outline needs to be aligned with your company's mission, and it should have the goal of creating an action-oriented document to inform your future planning decisions.
1. Discussion phase
Your first step is to brainstorm as a team and collect information and viewpoints. You should include as many stakeholders as possible but stay on schedule and stick with the agenda. If the discussion begins circling around to the same points, wrap things up by defining some action items.
A SWOT analysis is a crucial component of your plan. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats, and it's a great process to take a holistic look at your company's health. Your strengths are pretty easy to identify, but you should always be more concerned with what doesn't work. If your employees are afraid to speak their minds about your plan's shortcomings, you'll learn about them the hard way from your customers or your competitors.
Identifying immediate threats is usually easier than projecting long-term problems, which is why you owe it to yourself to be familiar with market trends and make informed predictions about the perpetually uncertain future.
2. Development phase
The next step is putting your plan into action during the development phase. Your business's strategic plan should fully develop the following parts in writing during this phase:
- A vision statement for the plan.
- Your company’s mission statement.
- Realistic and measurable goals and objectives.
- An time-based implementation schedule.
- Procedures to review and update the plan.
3. Review and updating phase
Always remember that your strategic plan is a working document. After spending all that time developing a plan, you have to put it into action to see if it works. You shouldn't expect to get everything right on the first try, and you need to make your plan flexible. You should also designate personnel to review and update the plan as needed and communicate the changes with the rest of your team.
Strategic Plan Examples
It's not possible to include a full strategic business plan example for every type of business. Strategic plans will look different for businesses in different industries and market sectors. We've included a strategic plan example for a few different types of organizations, and most of the concepts are pretty consistent across different industries.
Strategic plans for business
A strategic plan for a catering business might look different than it would for a construction company, but they should both include clearly defined goals and objectives for growth. Your business plan focuses mainly on your daily operational expenses and other fixed costs, but your strategic plan should outline your plans for the future in terms of observable and measurable benchmarks.
Strategic plans for nonprofits
Nonprofit agencies can take on a lot of different organizational structures, including ad hoc agencies created to meet short-term goals. Nonprofit organizations are also frequently at the mercy of a number of external factors, including funding shortfalls and reorganizations. Your nonprofit organization should develop a flexible strategic plan that can adapt to a highly volatile world and anticipate the ongoing expectation to find new ways to do more with less.
IT strategic plans
The IT business sector is one of the most volatile industries that there is, so the strategic plan for an IT business might follow a shorter timeline than other business sectors. The plan should also include planned equipment upgrades and more frequent upgrades as necessary.
Marketing strategic plans
Marketing and sales both involve generating revenue, and the marketing component of your strategic planning should be based on measurable indicators. You can aim for 10% growth or a certain number of new customers, but don't focus on short-term growth to the exclusion of an overall plan. It costs money to make money, so don't be afraid to budget for new technology or software. Do your research to determine the best way to spend your advertising budget, and don't be afraid to try some new marketing tactics that your competitors haven't tried yet.
The important thing to remember is that your strategic plan should be a true collaboration. Involving all of your stakeholders is always a smart move because the best plans are developed from the ground up.