If you’re a business owner looking to optimize your growth potential, you have probably already heard a bit about strategic planning at some point. Even if you already understand the basic premise, learning everything you need to know about strategic planning — what it is, why you need it, and how to implement it — can set your company up for success.
According to a 2018 Constant Contact Survey, 63% of small business owners surveyed said they plan only a year, or less, in advance. Strategic planning takes a long-term approach to growth by examining not only where your business currently is, but how to get from where you are to where you want to be.
What is strategic planning?
At its core, strategic planning involves examining data and using that data to transform work processes and procedures to improve successful outcomes. It isn’t necessarily about problem-solving, but rather how shifting certain business processes can translate into success.
Think of it as the ultimate practice in goal-setting. After examining data from your company’s Basically, a strategic plan says “We looked at where we’ve been, nowhere is where we want to go and how we intend to get there.”
But, it’s not just about hard numbers and how to change them.
Sure, looking at a company’s financials like projections and earnings is helpful in determining the next steps, but true strategic planning also involves a deeper understanding of company culture. Paying close attention to personal relationships and employee attitudes can shed light on how well a potential plan might be implemented.
It might sound easy enough, but there are plenty of strategic planning mistakes you can make along the way, so it’s imperative to learn everything you can about the practice and how to properly implement it within your business.
Why do you need strategic planning?
Simply put, strategic planning can help a company become more successful. When properly executed, a strategic plan sets the tone for how your entire business can run more efficiently and be more effective overall. This typically leads to growth in the form of financial gain from increased sales and resource optimization.
Think of your business as a flower that has been planted. Sure, you can water it daily and give it some sunlight, and it will probably grow some. But, if you examine the flower closely, research the specific type of flower you’ve planted, learn how to best fertilize the soil, and figure out exactly how much sunlight and water is needed, your flower’s growth is likely to be exponentially greater. It takes time, sure, but the end result will yield a flourishing bloom instead of just a meager bud — just like your business when you engage in strategic planning.
How to implement strategic planning
First and foremost, there are multiple ways to approach strategic planning. The idea is to tailor your approach to your particular business in order to address your specific needs.
Select a model
Different models for strategic planning exist to guide business owners through the process, but the main three models used are goals-based planning, issues based planning, and organic strategic planning.
Goals-based: Likely the most common form of strategic planning, this method starts with developing and defining a business’ mission. Then, once clearly defined, setting goals that will lead to successfully carrying out that mission and deciding how the goals will be reached and by whom.
Issues-based: This form of strategic planning involves identifying and examining any issues that exist within a company, discussing why the issues exist, and developing solutions to execute which will eliminate the issues found.
Organic planning: This type of strategic planning model starts by defining a company’s values and vision. Then, a plan is developed to determine how to best execute the mission while staying true to the company’s values.
Gather a team
Your team should have the insight to provide you with information about how your employees may adapt to any changes, as well as give feedback on what is currently working or not when executing your company’s current processes.
It is important to note that strategic planning can look at your business as a whole or it can look at one aspect of your business depending on your unique needs.
You may decide it is best to focus specifically on strategic planning for marketing or strategic planning for productivity. This is truly dependent on what approach you want to take. Either way, the steps you take to create a strategic plan will be similar.
Step 1: Discuss
The discussion phase of strategic planning can be done over the course of several meetings with your strategic planning team. Have an agenda and a set of expectations for your topics of discussion and how ideas will be presented. This will help keep you on topic and prevent team members from spitting out a mass of new ideas all at once.
Your discussions should be used to gather information about where your business is at — who your competitors are, what your sales are, what morale is like, your strengths, weaknesses, and more. In this phase, utilizing an array of information gathering techniques like employee surveys, getting investor feedback, and learning more about industry projections is key to learning as much about your business as possible.
Write everything you learn during this phase down. This is the data that will be used to develop your business’s strategic plan.
Step 2: Develop
Once your information is gathered, it’s time to put a plan on paper. This step involves creating the actual document which will serve as your company’s strategic plan.
Your document should include all of the necessary elements to execute the strategic plan. Depending on the model you choose to follow, your document will include the following information:
-Mission and/or vision statements
-A list of goals and objectives
-Actionable steps for how you will implement the plan
-Who will do what
-How goals will be measured and tracked
-How often the plan will be reviewed
To create your strategic plan document, you might use existing software specifically developed for creating such plans, but can also develop your own written outline to be shared with employees.
Step 3: Review
It may be easier to walk away from strategic planning after developing a strong plan and executing it. However, true strategic planning is a process that can be honed in on overtime to ensure you’re getting the results you want.
For example, if the main objective for your company in your initial strategic plan was to increase sales by 3% in the third quarter, once the third quarter wraps, set a meeting to evaluate whether or not your goal was met.
If your goal was met, you can still assess what your team can do to further improve for the following quarter and continue to set new targets. The review period is also a helpful time to check in with employees to see how implementing these processes have impacted morale, relationships, and make changes as needed.
Over time, your strategic plan may need to change, but once you have the process established for how to create and execute a strategic plan, your business will have the opportunity to thrive.