Strategic Business Planning

Growing a business involves making many decisions regarding the development of your operations. Creating a strategic plan is a key component of planning for growth. This will help you establish a realistic vision regarding the future of your business and can maximize your business growth potential.

We must not confuse a strategic plan with a business plan. A business plan is about short or medium term goals and defining the steps needed to achieve them. A strategic plan usually focuses on a company’s medium and long-term goals and explains the basic strategies for achieving them.

This guide outlines the basic principles of the strategic planning process. It explains how to write a strategic plan, highlights some important issues to keep in mind, and shows how to move from planning to implementation.

Why is strategic planning so important for growing a business?

Taking the active decision to grow a business means accepting the risks that come with growth. Spending time identifying where you want to take your business, and how you will get there, should help you reduce and manage these risks.

As your business becomes larger and more complex, strategy formulation will become more complex, both to support growth and to help you gather the leadership and resources you need to keep your business going. develop.

To do this, you will also need to start collecting and analyzing a wider range of information about your business, both about how it operates internally and how conditions are developing within. of your current and potential markets.

Differences between strategic planning and writing a business plan

The strategic planning process is about determining the direction in which you want to take your business. It involves setting your overall goals for your business. In comparison, the purpose of the business plan is to provide the detailed road map that will take you in the desired direction.

Your strategic planning and your business planning should complement each other, but effective strategic development requires you to detach yourself from the day-to-day concerns of your business and consider your more ambitious, longer-term options.

Three key elements of strategic planning

Developing a strategy for growing your business requires deepening your understanding of how your business operates, and where it stands relative to other businesses in your markets. As a starting point, you need to ask yourself the following three questions:

1) Where is your business now?
This involves understanding as much as possible about your business, including how it operates internally, what drives profitability, and how it compares to competitors. Take this exam outside of daily work; be realistic, detached, and critical when distinguishing between cause and effect about how your business operates. You should also put it in writing and review it regularly.
Where do you want to take it? Here you must indicate your priority objectives. Develop your vision, mission, values, techniques and goals. 

2) Where do you see your business in five or ten years?
What do you want your business to focus on and what source of competitive advantage do you want it to have over your opponents within the market? This step should form the basis of the final plan and motivate change.

3) What do you need to do to get there?
What changes will you need to make in order to achieve your strategic goals? What is the best way to implement these changes? What changes will need to be made to your business structure and funding, and what goals and deadlines will you need to set for yourself and others within the business? Think of the business holistically, for example, consider diversification, existing growth, acquisition plans, as well as functional issues in key areas.

You need to assess your vision for the business against the practical realities of your current situation and the changes, such as increased capital investment and other resources that would be required to implement your vision. A strategic plan must be achievable.

Starting strategic planning

As is the case with any business activity, the strategic planning process itself must be managed wisely. Responsibilities and resources need to be assigned to the right people and you need to stay in control of the process.

Who to include
Try to find people who demonstrate the analytical skills that successful strategic planning depends on. Try to find a combination of creative thinkers and people with a good understanding of operational details.

A good rule of thumb is that you shouldn’t try to do everything yourself. Consider the opinions of other personnel: key employees, accountants, department heads, board members, and those of external stakeholders, including consumers, customers, advisors and consultants.

How to structure the process
There is no right or wrong way to set up the strategic planning process, but be clear in advance how you intend to proceed. Each person concerned must know what is expected of them and when.

For example, you might decide to hold a series of weekly meetings with the strategy team before delegating the drafting of a strategy document to one of its members. Or you may decide to block out a day or two for brainstorming sessions, some of which may involve obtaining input from a wider range of employees and even key customers.

Write the planning document well
The priority in strategic planning is to get the planning process right. But do not neglect the result. It’s also important to make sure you capture the results in a strategic planning document that clearly communicates your priority goals to everyone in your business.

The document should:

  • reflect the consensus of the people who drafted it
  • be supported by key decision-makers, particularly owners and investors
  • be acceptable to other stakeholders, such as your employees
  • Develop your plan based on solid strategic analysis

Strategic planning is about positioning your business as effectively as possible in the marketplace. You should therefore make sure that you carry out an analysis of your business as well as of the market, as completely as possible.

There is a range of strategy templates here that you can use to help structure your analysis. These models provide an abstract and simplified picture of the business environment. The SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis is probably the most well-known model and is used by both smaller and larger companies, in both for-profit and corporate sectors. non-profit sectors. STEEPLE analysis (social, technological, economic, environmental, legal and ethical) and five competitive forces analysis are two other widely used models.

SWOT Analysis

This involves identifying a goal of a business or project, then identifying the internal and external factors that are favorable and unfavorable to achieving that goal.

These factors are taken into account using four elements:

  • strengths – characteristics of the company that can help achieve the goal
  • weaknesses – characteristics of the company that may represent obstacles to achieving the objective
  • opportunities – external factors that may be helpful in achieving the goal
  • threats – external factors that may represent obstacles to achieving the objective


S.T.E.E.P.L.E.

There are other models you can use to assess your strategic position. The STEEPLE analysis, for example, breaks down the business environment into the following components:

  • social – p . e.g., demographic trends or lifestyle changes
  • technology – p . e.g., the emergence of competing technologies or equipment improving your company’s productivity
  • economic – p. e.g., interest rates, inflation, and changes in consumer demand
  • environmental – p. e.g., changes in the expectations of consumers, regulators and employees regarding sustainability
  • policy – p . e.g., changes in taxation, trade relations or the granting of business support
  • legal ( equal) – p . e.g., changes in employment law or the way your industry is regulated
  • ethics – p. e.g. ethical and moral standards governing policies and practices

STEEPLE analysis is often used with SWOT analysis to help identify opportunities and threats.

The five forces model

The five forces model aims to help companies understand the drivers of competition within their markets. It identifies five key determinants that predict how doing business in a given market is likely to look for a business:

  • the bargaining power of consumers – the higher it is (perhaps due to the small number of significant buyers for your product or service), the more they will be able to exert downward pressure on prices and therefore on turnover
  • the bargaining power of suppliers – the ability of suppliers to push up prices (for example if you depend on one company) can have a significant impact on costs and profitability
  • the threat of new competitors entering your market or industry – more companies competing with each other makes retaining market share and maintaining price levels more difficult
  • the threat posed by consumers switching to substitute products and services – an example could be the threat faced by manufacturers of fax machines due to the widespread availability of e-mail
  • the level of competition between companies within the market – this depends on a wide range of factors, including the number and relative strength of companies as well as the cost to consumers of switching between companies.

What should a written strategic plan include?

There are no set rules for how to structure a strategic plan, but it is good practice to include the following elements:

  1. Analysis of internal drivers – corresponding, for example, to the strengths and weaknesses of a SWOT analysis (strengths, weaknesses, opportunities and threats).
  2. Analysis of external enablers – this should encompass factors such as market structure, demand levels and cost pressures, all corresponding to the opportunity and threat elements of a SWOT analysis
  3. A vision statement – a concise summary of the vision you have for your business in five to ten years.
  4. Top-Level Goals – These are the major goals that need to be achieved in order for your vision for the business to become a reality. This may involve attracting a new type of customer, developing new products and services or obtaining new sources of funding.
  5. Implementation – this involves stating the key actions (along with desired outcomes and due dates) that will need to be carried out in order to achieve your first-level objectives.
  6. Resources – a summary of the impact your proposed strategy will have on the resources your business needs. This summary will reflect financial requirements, as well as factors such as staffing levels, premises and equipment.

You may also consider adding a management summary . This can be useful for potential investors and other key external stakeholders.

Questions to consider during strategic planning

Growing a business can pose significant personal challenges for the owner or manager whose role can change significantly as the business develops.

Effective strategic planning requires considering choices that challenge the way the business has been operated to date. It may be that decision-making in some areas is passed on to others, or that processes that have worked well in the past will no longer match future plans.

It can be tempting for owners or managers to ignore alternatives that don’t suit them personally, but ignoring your options for these reasons can seriously jeopardize your strategic plan and ultimately , the growth of your business.

Examples of the kind of issues that tend to be overlooked by growing businesses include:

  • The future role of the owner – for example, it may be in the company’s interest for the owner to focus on a smaller number of responsibilities, or to hand over all day-to-day control to someone with more power. ‘experience.
  • Business location – most small businesses are located close to where the owner lives. But as a business grows, it may make sense to relocate the company, for example, to be closer to more customers or employees with certain skills.
  • Ownership structure – growing businesses in particular need to ensure this is understood. The more a business grows, the more sophisticated it needs to be to meet its financial needs. In many cases, the best choice for the owner is to give up a share of the business in exchange for equity financing, but this can be emotionally difficult to achieve.

In the final analysis, it is the business owner who decides on the strategic plan. The development of a company is not carried out “at any price”.

However, an honest assessment of the choices helps to make the most informed decisions possible.

Implementation of a strategic plan

The plan must be implemented and this process of implementation requires planning.

The key to implementing the goals identified in the strategic plan is to assign goals and responsibilities with budgets and due dates to those responsible – key employees or department heads, for example.

Monitoring the progress of the implementation plan and reviewing the strategic plan against implementation will be an ongoing process. The match between implementation and strategy may not be perfect at the outset and the implications of implementing the strategy may necessitate modification of the strategic plan.

Monitoring of implementation is essential. Using key performance indicators (KPIs) and setting targets and due dates is a good way to control the process of introducing strategic change.

Your business plan is another important tool in the implementation process. The business plan is usually a short-term, more concrete document than the strategic plan and it tends to focus more closely on operational considerations such as sales and cash flow trends. If you can ensure that your strategic plan informs your business plan, that will go a long way in ensuring its implementation.

Remember that strategic planning can lead to both organizational and cultural changes to the way your business operates.

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