Valuable Strategic Planning In A Business

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Estimated reading time: 10 Min

Strategic Planning provides the link between your Business Plan and Day-To-Day operations. Here we explore practical aspects of what a business strategy is.

I know… it’s tempting if you have a business plan, to allow it to hide away in a drawer on stapled A4 or even beautifully bound in full view on a shelf, collecting dust.

The thing is that, having invested time and energy towards creating a business plan (an exercise of immense value), that’s just the start of what it takes to get organised!

A business plan defines your vision and ideas for the business, explores the feasibility of those ideas and outlines specific opportunities and objectives for your business.

The Link Between A Business Plan And Day-To-Day Operations

A comprehensive business plan can include ideas for specific plans and projects.

It provides the beginning of a roadmap to success that helps a great deal towards decision-making when developing more detailed plans.

A business plan includes short-term objectives – perhaps 12 to 24 months – along with what you want the business to achieve over the next 3-5 years.

It’s an essential document that provides inputs to strategic planning, which in turn becomes the link between your business plan and day-to-day operations.

A Business Strategy includes:

• Clarity of objectives.
• Specific plans.
• Specific projects.
• Day-to-day processes and procedures.

So the purpose of your strategic plan is to provide broad instructions on what actions will be taken to achieve defined objectives.

Clarity Of Objectives

Objectives in a Business Plan are usually broad statements about what you want your company to achieve.

Strategic Planning should refine the objectives. It should at least deliver SMARTER Goals (specific, measurable, achievable, resourced, time-bound, environmentally friendly and risk-aware).

These objectives guide decision-making within your organisation and are often used to measure whether or not operations are aligned with company strategy.

Specific Plans

Plans are developed that describe what needs to happen for the objectives to be achieved.

They also include details about budgets and resources needed to achieve them.

Having a well-defined plan will help you identify what tasks need to be performed when they need to be completed, and who will be responsible for each task.

Specific Projects

Projects are usually specific actions taken within a plan.

For example, if one of your objectives is “to increase sales by 25% within 12 months” then this could be broken down into specific projects such as creating new products or implementing advertising strategies and improving customer service.

Project outcomes are usually designed using SMARTER criteria too.

Business Processes

Processes describe how things get done within an organization. They provide standards for the management of day-to-day operations and decision-making.

Including things like research, product development, marketing strategies or customer service procedures etc, and processes are important in providing a focus for achieving objectives as they help ensure that tasks are performed consistently and efficiently.

What Is Strategic Planning?

Strategic planning involves developing plans for your company’s short-term and long-term future in order to get organised.

Once the business plan has been approved, it enables businesses to move on to strategic planning as guidance for day-to-day operations.

The aim of operations is to achieve results by implementing plans and projects and establishing procedures and processes that have been outlined and agreed upon through strategic planning.

Strategic planning takes on board the content of a Business Plan and defines specific strategies that will be used to organise day-to-day business activities (operations) to deliver the business’s objectives.

So a Strategic Plan Is…

A document that focuses on the ways your business will achieve its objectives.

In order to achieve objectives, you must have plans, projects, and processes in place. Each of these elements is linked to the others in some way.

A business’s strategic planning process is typically broken down into different phases (like a project) such as planning, execution, monitoring, and evaluation.

Each phase plays a critical role in ensuring that the overall strategy is implemented effectively and achieves its intended objectives.

During the planning phase, businesses refine their goals and develop a detailed roadmap outlining the steps necessary to achieve those goals.

The execution phase involves putting the plan into action, while the monitoring phase tracks progress and identifies areas where adjustments may be needed.

Finally, the evaluation phase assesses the effectiveness of the strategy and provides valuable insights for future planning.

By following a structured approach to business strategy, companies can increase their chances of success and achieve sustainable growth over the long term.

Benefits Of Developing A Business Strategy

Simply put, by clarifying objectives, plans, projects, and processes, your business strategy provides a clear roadmap that you can use to guide day-to-day decision-making.

Ensures everyone is working towards the same goals.

By aligning your operations with your business plan, you can ensure that everyone in your organization is working towards the same goals.

This can help to improve efficiency, reduce waste, and increase profitability.

Improves decision-making.

By having a clear understanding of your objectives, plans, projects, and processes, you can make more informed decisions about how to allocate resources and prioritize tasks.

Increases accountability.

By defining roles and responsibilities for each project or process, you can increase accountability and ensure that everyone is held responsible for their actions.

Helps you adapt to changing circumstances.

By regularly reviewing and updating your business plan, you can ensure that your operations remain aligned with your objectives, even as circumstances change.

Example Of A Business Strategy Document

The business strategy needs to be documented and is a critical tool for any organization to set clear operational standards.

The purpose of the document is to guide the organisation in making day-to-day operational decisions that align with the business’s vision and mission.

A well-crafted strategy document communicates to stakeholders, including investors, employees, and customers, what the organisation stands for and how it plans to compete effectively in the market.

In this section, we outline the essential elements of a useful business strategy document, using an example of a hypothetical software company.

Strategic Plan Executive Summary

The executive summary provides a brief overview of the business strategy document, outlining the critical aspects of the plan.

It should be concise, providing a high-level understanding of the organization’s vision, mission, goals, and objectives.

For our hypothetical software company, the executive summary could read as follows:

“XYZ software company is a technology start-up that aims to disrupt the market by providing innovative software solutions that meet the needs of businesses and individuals.

Our mission is to become the go-to software company for organizations that need reliable and cost-effective technology solutions.

Our business strategy focuses on developing a product portfolio that meets market demands, optimizing our operations, and creating a strong brand that resonates with our target market.

Market Analysis

The market analysis section of the business strategy document provides an in-depth understanding of the market environment in which the organisation operates.

This section should provide a comprehensive analysis of the industry, competitors, and customers.

The goal of this section is to identify market trends, challenges, and opportunities that the organization can exploit.

For our software company, the market analysis section could cover the following aspects:

• Industry Analysis
  This section could provide an overview of the software industry, including market size, growth trends, and key players. It could also highlight emerging technologies and disruptive forces that could impact the industry.
• Competitive Analysis
  This section could provide an overview of the key competitors in the software industry, their strengths, weaknesses, and market positioning. It could also provide insights into their product portfolios, pricing strategies, and marketing tactics.
• Customer Analysis
  This section could provide a detailed understanding of the target customers for our software products. It could include demographics, psychographics, buying behaviour, and purchasing criteria. importantly, it could also identify unmet customer needs and pain points that our products could address.

Business Goals and Objectives

The business goals and objectives section of the strategy document outlines the specific targets that the organisation aims to achieve within a defined period.

It should be specific, measurable, achievable, relevant, and time-bound, environmentally aware and resourced (SMARTER).

The goals and objectives should align with the organisation’s vision and mission and be realistic based on the market analysis.

For our software company, as an example, the business goals and objectives section could include:

• Goal 1: Develop a product portfolio that meets market demands
  Objective 1.1: Launch two new software products per year for the next three years
  Objective 1.2: Achieve a 20% market share for each product within the first year of launch
• Goal 2: Optimize Operations
  Objective 2.1: Reduce operational costs by 10% within the next two years
  Objective 2.2: Improve customer satisfaction ratings by 15% within the next year
• Goal 3: Create a strong brand
  Objective 3.1: Increase brand awareness by 30% within the next year
  Objective 3.2: Develop a loyal customer base with a repeat purchase rate of 20% within the next year

Marketing and Sales Strategy

The marketing and sales strategy section of the business strategy document outlines the tactics that the organisation will use to promote its products and services and generate revenue.

It should align with the business goals and objectives and address the target customers identified in the market analysis.

For our software company, the marketing and sales strategy could include:

• Product Positioning
  This section could provide an overview of how our products are positioned in the market and how they differentiate from competitors. It could highlight the unique selling proposition (USP) of each product and the target customer segments.
• Pricing Strategy
  This section could outline the pricing strategy for our products, including the pricing models, pricing tiers, and pricing optimization tactics. It could also provide insights into how the pricing strategy aligns with the target customer segments and the competitive landscape.
• Promotion Strategy
  This section could outline the tactics that the organization will use to promote its products, including advertising, public relations, social media, and content marketing. It could also include the budget allocated for each tactic and the expected return on investment (ROI).
• Sales Strategy
  This section could outline the sales process for our products, including the sales channels, sales team structure, and sales enablement tools. It could also include the sales quotas, commissions, and incentives for the sales team.

Operational Strategy

The operational strategy section of the business strategy document outlines the tactics that the organisation will use to optimize its operations and deliver products and services efficiently.

It should address the operational challenges identified in the market analysis and align with the business goals and objectives.

For our software company, the operational strategy could include:

• Technology Strategy
  This section could outline the technology stack that the organization will use to develop, deploy, and maintain its software products. It could also include the infrastructure requirements, data security measures, and disaster recovery plans.
• Talent Strategy
  This section could outline the talent management strategy for the organization, including the recruitment, retention, and development of employees. It could also include the organizational structure, job descriptions, and performance management system.
• Process Strategy
  This section could outline the processes that the organization will use to manage its operations, including product development, quality control, and customer service. It could also include the process improvement initiatives and the key performance indicators (KPIs) used to measure process effectiveness.

Financial Strategy

The financial strategy section of the business strategy document outlines the financial projections and metrics that the organization aims to achieve.

It should align with the business goals and objectives and address the financial risks and opportunities identified in the market analysis.

For our software company, the financial strategy could include:

• Revenue Projections
  This section could provide the revenue projections for the next three to five years, including the expected revenue growth rate, revenue sources, and revenue distribution by product and geography.
• Cost Projections
  This section could provide the cost projections for the next three to five years, including the cost drivers, cost reduction initiatives, and cost distribution by department and activity.
• Profitability Metrics
  This section could provide the profitability metrics for the next three to five years, including the gross margin, operating margin, and net income margin. It could also include the profitability benchmarks compared to industry peers.

FAQs

Summary

A business plan is a document that outlines your objectives, plans, projects, and processes.

A strategic plan is a more comprehensive plan that identifies specific ways your business will achieve its objectives.

The link between a business plan with specific business objectives, and specific projects and business processes is critical for any company looking to achieve success.

A useful business strategy document is a critical tool for any organization that aims to succeed in a market.

It should be well-crafted and cover the essential elements, including market analysis, business goals and objectives, marketing and sales strategy, operational strategy, and financial strategy.

By following this framework, a business can create a roadmap that guides its day-to-day activities and decisions and enables it to achieve success.

By aligning your business plan with your day-to-day operations and developing a strategy or strategies, you can ensure that everyone in your organisation is working towards the same goals and increase your chances of success.

If you have anything to add, please do so in the comments.
😉
Richard