What is a Strategic Plan and How Can I Create One?

With 80% of new businesses failing within five years of starting, it may seem like more businesses need to focus on surviving before worrying about the future. But a strategic plan may be one of the factors that help businesses not only survive past the five-year mark but thrive into a long-lasting legacy. 

We’ll break down strategic plans and how to create one. We’ll also cover some ways a strategic plan enables companies to grow and scale intentionally– without unnecessarily sacrificing profitability. 

What Is Strategic Planning in Business?

A strategic plan is often confused with a business plan, but the two are critically different. A business plan focuses on the day-to-day operations for the next year, including funding and operation methods.

A strategic plan, on the other hand, focuses on three to five years in the future. It allows business owners to envision future operations and scale, then work backward to implement the necessary processes to achieve them.

You’ll identify key points like:

• The current owner’s role in day-to-day management.
• Identify gaps in needed leadership positions.
• Set goals for expansion (locations, products, services, and more).
• Determine the needed funding and processes required to scale to your goal.

Benefits of Having a Strategic Plan in Business

Strategic plans aren’t the most detailed but carry significant weight for your company’s momentum. Your strategic planning creates:

• Employee Buy-in through a Clear Vision: Employees are 87% more likely to stay with companies with a clear vision, allowing them to wade through uncertain economies and uncomfortable growth because they feel the future is worth it.
• Necessary Preparation: Avoid predictable dangers by keeping your eyes on the horizon. For example, companies that saw cloud-based technology as the future standard were prepared for a smooth transition when the pandemic hit.
• Reduce Missed Opportunities: Many businesses miss sales opportunities because they are overly focused on day-to-day tasks. Checking on company position, market shifts, and competitor offerings allow you to scoop up easy opportunities to earn more market share.

How To Create a Strategic Plan

While many business owners feel their time is best used working with present demands, regularly pausing to create and update your strategic plan can ensure you grow with intention. And it doesn’t have to be a complicated process!

We recommend using the following key steps when creating your strategic plan:

1. Invite Key Leaders

Company success depends on employee cooperation and participation. So involving key leaders will help create buy-in and expand your view. Include those in upper-level management, but consider involving lower-level managers or star employees too. 

This way, you’ll include the future company leaders as you build what they will someday manage.

2. Examine Your Current Business Standing

Use your financial, marketing, and sales reports to comprehensively view company performance. Consider questions like:

• What demographics do we perform best in? Which target markets are underperforming?
• How do our clients feel about the sales journey? Is any part of the sales experience lacking or unnecessary?
• Are we healthy financially? How much additional revenue or funding would we require to meet our goals?

This discussion will prepare you for the next step.

3. Analyze Strengths, Opportunities, and Obstacles

Your comprehensive review of your current business performance allows you to meaningfully analyze your potential. We recommend using a SWOT analysis (or something similar) to view your company through the lens of Strengths, Weaknesses, Opportunities, and Threats. 

This popular methodology allows you to determine what you are doing well, gaps you need to fill, new markets or expansion routes, and things to prepare against.

4. Define Desired Path with Objectives and Goals

Now you can create an informed plan to hone in on your company growth objectives, centered on the current company offerings and mission statement. Next, make goals to create checkpoints along the 3-5 year timeline, including revenue, hiring, and review points.

Your plan doesn’t need to be overly detailed– focus on principles and big-picture elements to allow for flexibility as the market shifts.

5. Leverage Company Leaders to Bring the Plan to Life

Company leaders can be a catalyst for company growth and performance. Lean on them to communicate these goals and hold their teams accountable. Review performance regularly with your leadership team and ensure that the entire organization knows when you meet significant goals.

Partner With a Trusted Strategic Planning Advisor

LeadershipOne partners with business owners to navigate the uncertainty of the future by understanding current business performance. We specialize in family-owned businesses– helping you maintain a family legacy through strategic planning.

Call us today for a compensation analysis consultation!

‍