The number of businesses that have suffered, even folded, since the pandemic started is absolutely mindblowing. Even the largest corporations have suffered severe declines in profits, putting their current strategic business plan under the magnifying glass and into question.
However, it is the small and medium businesses (SMBs) that are the ones who have taken the strongest hit as a result of this global health crisis. Each day, as one company opens due to the small opportunities from this worldwide challenge, several SMBs continue to fight for their survival. Unfortunately, there are those who’ve already had to resort to shutting down, contributing to the continuous increase in unemployment.
This leads us to ask, how are we going to survive and emerge victorious after all this? How long can we hold it together?
Not only does cash flow contribute to the outcome, but the strategy also plays a very large part. You may argue, “but nobody could have ever predicted that such a catastrophe would occur.” The truth is, such events are impossible to predict. But it is during uncertainty where your company strategy plays a much important role as it comes into action.
So, what is your organization’s strategy?
Almost all businesses start with the aim of making profits and pushing towards growth and business expansion. In less than five years, most of them collapse for various reasons that normally come down to service, people, management, and leadership. Creating a strategic business plan is, in essence, forging a business roadmap that establishes where you are, where you’re going, and how you will get there.
Research tells us that though companies recognize the important role of strategy in company success, 85 percent of their leaders put as little as an hour into discussing it, and what’s troubling is 50 percent do not spend time on it at all.
A well-considered strategic business plan will steer your company in the direction of your goals, by focusing your time and attention where it needs to be, and by chunking out the different steps that need to be taken along the way in order to succeed. It ensures that your entire organization is working towards that goal as you regularly check and adjust your company’s direction depending on progress and everything else that crops up along the way.
There are numerous different approaches when it comes to formulating a strategic business plan. We have summarized
5 simple steps for you to jump-start a strategic business plan
Evaluate the industry trends, competitors’ offerings, and customer needs
Contrary to preconceptions on how a business strategy should be approached, the initial step to a strategic business plan should be environmental scanning. If we liken an approach to creating a business strategy to going for a drive, first we take a look around to get a feel for the
conditions. It is crucial to first assess how the overall market is operating and the size of the industry you’re penetrating.
What are the needs of the customer you’re servicing? Who are the key players in serving the specific products or services? What are the government regulations that you must be aware of and their impact on your business? These are just of few of the questions up for consideration.
Getting an external perspective allows you to think of the bigger picture before dwelling on the nitty-gritty details. Understanding who you are up against gives you an indication of the effort you’ll need to put in and the competition you’ll face
Perform a SWOT Analysis of your company
SWOT analysis in a different light and by doing it backward. SWOT analysis is a tried and true framework that has been used in the strategic business plan since Albert Humphrey developed it around the late ’60s.
Perform an inventory of the environmental conditions where you’ll be operating by checking the opportunities and threats. Opportunities may range from the gaps or unfulfilled areas of the current key players in the industry that urges you to launch new products or services, alliances that can be formed, or additional ways of raising funds for your organization.
Threats are obstacles that you have to face like the economic constraints, financial institutions that could hinder your service or product expansion, or falling product prices based on national or global conditions.
Now, evaluate the internal aspects of your business by looking at its current strengths and weaknesses. Your strengths may range from what you do well or what you have, such as knowledgeable and experienced staff, financial resources, sales channels, quality products, or technology. Finally, weaknesses are the areas you need to improve on or general limitations such as a limited customer base, lack of sales channels, or untrained personnel.
Doing the reversed SWOT analysis will allow you to get a clearer perspective to make more strategic and actionable suggestions. Answering this statement,
“With the following conditions (external factors), our capacity to (internal factor) points to take the following (recommendations)”.
Lay down your Vision, Mission, and Company Goals
From the start of its inception, you should know why it was that you actually decide to go into business. Reassess your “why”, performing minor tweaks to ensure it’s high-level and clear enough that your people and others can relate to it.
Your vision must answer the question, “Where do you I to go?”, while your mission leads you to it by answering, “How will I get there?” and “Why do I exist?”.
A key element of a strategic business plan is being quantifiable and timebound. To make your vision more attainable, it would work best by quantifying and putting a timeframe to it, something along the lines of: “We would have a national presence by building 200 stores nationwide in five years”. This would be your “North Star” as your thoughts and actions are geared to reach it.
In the same way, the more specific company goals must also be SMART or Simple, Measurable, Attainable, Realistic, and Timebound. Each team must prepare a set of goals that they will strive for, ensuring that they are guided with your company “North Star”.
Identify your staff, budget, and financial requirement
Identifying the number and quality of staff to enact the goals for each team is vital as it sets how fast you will achieve your vision. It continues to be a challenge for SMBs as several tasks are often assigned to one team member.
Staying within your budget is a major consideration with staffing. However, be conscious that multitasking has the ability to reduce a team member’s productivity due to the time concerned in task switching. As you carefully plan your staffing needs, considering alternatives to conventional approaches could help you stay within your budget, while at the same time, be able to achieve your company goals and be profitable at the same time.
Create timelines for your strategic implementation, monitor, and evaluate progress
To ensure that your strategies stay on track, create timelines to implement the company strategies. Benchmarks must be established to measure the team’s performance and the Key Performance Indicators (KPIs), or Objectives and Key Results (OKRs).
Establishing 30 day and quarterly checks to monitor the progress brought by strategic planning will guide everyone in the team on their performance and productivity as you fulfill your goals and reach them.
An assessment of the strategic business plan that has achieved its objectives is also essential as strategic planning is not a one-way street. After achieving your desired goals in each period, the company should again reconvene to recreate the strategic plan.
The strategic business plan facilitates those daily decisions that will follow the established company vision. It provides strategies on how to counteract the weaknesses and threats by leveraging your strengths and opportunities. Strategic planning must be given time, effort, and continuous evaluation to be effective, as the business environment shifts.
Aron, D. & Minsky, L. (2021, February 23). Are You Doing the SWOT Analysis Backwards? Harvard Business Review. Retrieved from https://hbr.org/2021/02/are-you-doing-the-swot-analysis-backwards
Betz, Meredith. (2021, September 15). Strategic Planning: Read this before it’s that time again. BetterUp. Retrieved from https://www.betterup.com/blog/strategic-planning
Deeb, George. (2018, December 4). The Top 6 Steps of Strategic Planning. Forbes. Retrieved from https://www.forbes.com/sites/georgedeeb/2018/12/04/the-top-6-steps-of-strategic-planning/?sh=483dd0c135b2
Kaplan, Robert & Norton, David. (2005, October). The Office of Strategy Management. Harvard Business Review. Retrieved from https://hbr.org/2005/10/the-office-of-strategy-management