In order for any company to grow and succeed, it must develop a thorough and strategic business plan. These types of plans help businesses monitor growth, set a budget, and plan for different types of obstacles they may face.
A strong strategic business plan is about more than simply devising ways to earn higher sales and profits and return on investment. A business plan should also be consistent with a company’s mission and vision and outline specific ways in which it hopes to achieve both short-term and long-term goals that reflect said purpose.
Companies must often conduct in-depth research to adequately understand industry trends and determine what funding approaches are necessary to gain an edge over competitor firms. Identifying how all employees — from back office personnel to mid-level managers and top executives — can each contribute to a company’s mission and vision should also be a key aspect when developing a strategic business plan.
Why is Having a Business Plan Important?
A proper strategic business plan uses company objectives to capitalize on different types of business opportunities. The process of developing those objectives often involves analyzing your company’s strengths and weaknesses and coming up with tactics to leverage the former and minimize the latter. Developing a business plan can also help you maximize market share for your company. Zeroing in on a specific target audience can also help increase sales and improve advertising and customer management. A comprehensive plan will also include ways to discover, analyze, and cater to the specific needs and interests of customers or a client base.
A Harvard Business Review report from 2017 found that 95% of employees are either unaware of their organization’s strategy or don’t understand it. This failure of employees to understand the business strategy contributes to the poor organization and use of resources. According to Envisio.com, some research has shown that as much as 70% of effective strategies fail due to poor execution of a business plan.
Characteristics of a Strategic Business Plan
Although an executive summary, an analysis of financial statements, and a review of marketing strategies are all key components of a strategic business plan, a clear outline of how a company hopes to reach its objectives should also be included as part of this plan. This includes things such as implementing tactics for targeting certain demographic groups.
Benefits of Implementing a Business Plan
One of the main benefits of developing a strategic business plan is that it can serve as a model for the successful achievement of company goals. This can help business owners gain a greater capacity to not just understand their company but also turn into experts in their industries. A business plan can help top executives obtain a more complete sense of a company’s direction by evaluating previous progress.
Misconceptions of a Business Plan
Despite what many people are led to believe, it’s not simply large companies that should develop strategic business plans. Small companies should also strive to implement such a plan, as this could potentially help them attract and retain customers they need to grow and become successful in their industry.
Key Steps to Developing a Strategic Business Plan
Key steps to executing a proper business strategy include identifying your organization’s capabilities, evaluating those capacities, determining gaps and inconsistencies in performance, prioritizing investment decisions — to maximize ROI and efficiency —, and monitoring progress by using metrics like monthly and quarterly Key Performance Indicators (KPIs).
Another key thing to include in your business plan is a SWOT analysis. This is an evaluation of your company’s Strengths, Weaknesses, Opportunities and Threats and should inform the strategic business plan your develop to reach your business’s objectives. Examples of opportunities and threats include prices of raw materials, competitors, and customer shopping trends.
A proper strategic business plan should also clearly articulate the capital required to begin the business and expand it. It should outline how said capital will be sourced (debt, equity) and how it will be put to work to deliver the business’s goals.
Speak to The Eastham Group for More Information
Speak to the business strategy consultants at The Eastham Group in Fairfax, Virginia to learn more about how to create an effective strategy and business plan. The Eastham Group assists business owners and executives in the private and nonprofit sectors. The Eastham Group will also help with the implementation and operational aspects of your strategic business plan, which will help you monitor, measure and evaluate your company’s progress against its strategic objectives.
The Eastham Group’s professionals also have knowledge of disruptive technologies such as the Internet of Things (IoT), Digital Identity and Blockchain and can help you understand how these technologies can influence your company’s strategic business plan.