Strategies are actions a business takes to compete more aggressively, to acquire additional customers and to operate the company more profitably. A successful strategic plan provides the information and guidance the management team needs to run the company with greater efficiency and help the business reach its full potential. Strategic planning helps managers make decisions based on logical assumptions and a clearer view of the future.
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Positions Company Vs. Competitors
Strategic planning creates a game plan for the management team to follow to meet the challenges posed by competitors. During the planning process, competitors’ weaknesses are analyzed. The company’s marketing strategies are then designed to take advantage of these weaknesses by positioning the company as offering a superior mix of products and services to its target customers. Positioning also means making sure the company doesn’t waste resources trying to compete in an area where a competitor has already established clear and sustainable market dominance.
So here are 7 steps for small businesses to build a successful strategic planning process:
1. Include the right people:
Often business owners are resistant to share information out of fear that it will end up in the wrong hands. So, they keep a tight circle on who they have strategic conversations with. The problem with this is that the people closest to the customers are the ones with the most information about their problems and potential solutions. In many companies, capable employees are unwilling to share their opinions. We encourage our clients to include as many people as they can trust (and who can think strategically) in their strategic planning process, and that tends to be a wider circle than they might expect.
Successful Strategic Business Plan
2. Gather the data:
Having access to pertinent market data is the number one barrier for most small businesses. Like investment bankers, we access industry reports on behalf of our clients, but that is not practical for most businesses. However, there is a wealth of free information available at sources such as low-cost consumer research tools at sites.
How we define a Successful Strategic Business Plan
Also, companies often do a poor job of capturing and mining internal data. Every company should segment their reporting by channel, customer, product categories, etc. Surveying your strategy participants is also a useful way to gather information and rank strategic issues by importance.
If you are a really small company, these principles may be executed with five people, but it is still the same.
3. Expect preparation:
Strategic planning is garbage in, garbage out. Every person participating in strategic planning should be expected to prepare for a strategy conversation, whether that be by developing information or learning more about the mechanics of the business.
4. Create the right environment:
Creating a safe harbor, a place where people feel safe about having strategy conversations, is as important as making sure the physical environment (such as an off-site location) is suited to creativity. Many companies hire facilitators to keep the meeting on track.
5. Build your plan:
Entrepreneurs have a lot of anxiety about writing a plan, but it is actually the easy part if you have done your homework. Components of a strategic plan usually include things like an executive summary, financial projections, SWOT analysis, external factors, market/competitive analysis, vision map, and action plan.
6. Focus on growth and value:
Often, companies engage in operational planning and call it strategic planning. Continuing to do what you have always done is not a strategy at all (unless you have weighed alternatives). Focus on how you will grow the business and, in particular, what product or service innovations will improve the customer experience.
7. Organize around strategic objectives and an actionable plan:
The number one thing that should come out of a strategic plan is unity about four or five overarching objectives that serve as a script for the management team. They should be illustrated in some form of a vision map that can be shared with managers (and perhaps all employees) throughout the company.
I get to clean up after a lot of companies that hold strategy sessions and fail to put their strategy into action. Don’t even bother doing strategic planning if you don’t come out of it with an actionable plan with an assigned champion and due dates. When objectives organize action items, the objectives remain alive even after action items are completed.
