Running a business without a strategic plan is like driving across the country blindfolded without a map. This post will give you the step-by-step process to making sure your hands are clearly on the steering wheel with a clear road map in hand.
I have previously written about how to write a business plan, including the key components that are needed to attract investor attention. But this was more of an external document to use with third parties like venture capitalists or banks. Building an internal, long-term strategic plan for the business, that is going to guide management with its decision making, is different. It is a lot more detailed and can take months to create. Here are the top six key components for building a killer strategic plan for your business.
1. Assess Industry, Competitor & Customer Trends
The first step of any strategic planning starts with studying the overall market in which you are operating. How big is the industry? How quick is it growing? Who are the key competitors? How well funded are they? What moves are they making? What are pricing trends? What products or services are your customers asking for? Any macro-economic trends at play? Any government regulation issues? You cannot set an effective plan for your business unless you truly understand what you are up against from an industry and competition perspective. Think about this as an “external” evaluation of overall market trends that impact your business.
2. Complete a SWOT Analysis on Your Business
A SWOT analysis critically evaluates your company’s Strengths, Weaknesses, Opportunities and Threats. Strengths in your staff, customer base, market position, financial resources, sales channels, products, profitability, growth, etc. Weaknesses in your staff, market position, margins, financial resources, competitive vulnerability, missing products, customer complaints, missing sales channels, etc. Opportunities to enter complimentary markets, form alliances, raise funds, launch new products, pursue M&A activity, exploit customer weaknesses, etc. And Threats around the economy, losing key staff, lack of financial resources, limited cash flow, disintermediation, falling prices, etc. Think about this as an “internal” evaluation of your business.
3. Define Your Mission and Vision
Once the external and internal evaluation is done, you are in a good position to begin crafting your high-level mission statement and vision statement. Your mission statement speaks to “why do we exist?” Something like “our mission is to replace expensive offline market research with equal quality insights from social listening”. Your vision statement speaks to “what are we offering and where are we heading”. And all good vision statements should be quantifiable and timebound. Something like “We plan on driving $50MM in revenues from our industry-leading social listening platform within 3 years”. These are the “North Star” statements that will guide all detailed decisions from there.