Strategic Planning is accomplished by many entrepreneurs at an unconscious level. However, if you want to grow your business in a meaningful way, this process needs to be formalized.
So what is Strategic Planning? Strategic Planning gives you a direction and a target for your company over the next “x” years. This is typically over a 3-5 year period but I have seen them as short as one year and as long as 100 years. With the 1 year plan being very detailed and the 100 year plan being a bit on the vague side. Your business decisions should be in line with achieving the goals set forth in your Strategic Plan.
While the Strategic Plan should include many elements of your Business Plan, such as the SWOT and PEST analysis, the core of your Strategic Plan should answer these three questions:
- What is the current situation or condition of your company?
- What is your goal/target/objective for the future state of your company?
- What are the things that need to happen to achieve your goals?
A very important aspect of the Strategic Plan is that is does NOT go into excruciating detail about how to implement the plan. Those aspects are detailed in individual Tactical Plans that are generated to implement the strategy.
A VERY simplified example: say you are working from home and want to move into an outside office. The basic essence of your plan would be:
- Working at home in a home office.
- Monthly Sales are currently xxxx
- Monthly Expenses are currently yyyyy
- Monthly Profit of zzzzzz
- Home office occupies xxx sq ft
- Unable to meet with clients at home
- There are many distractions at home, including x, y, z.
- There is not enough space for xxxxxxx
- In 12 months be renting/leasing external office space.
- Location will be xxxxxxx
- Amount of sq ft will be at least xxx sq ft
- Street traffic will be yyyyyyyyy
- Cost per sq ft will be zzzzzzzz
- Increase sales by $2,000 per month.
- Move into another vertical market space
- Generate passive income
- Increase sales to existing customers
- Obtain new customers
This 3rd bullet is then expanded on in much greater detail within Tactical Plans generated for each of the sub-bullets.
Your Strategic Plan will most likely have far more than only one goal. Perhaps in the example above about the home office some other goals could be:
- Be in the top 10 companies in sales volume for my product/service in the city of xyz.
- Hire two assistants
- Lower the Cost of Sales to less than 5% of the service/product sales price
- Etc., Etc., Etc
The Strategic Plan is the tool you use to focus on WHERE you want your company to be in x years.
As times change, so to should your Strategic Plan.