It takes correct nurturing for a seed to turn into a tree. In the same manner, a business needs nurturing to expand and grow. For a business, strategic business planning plays this role. Strategizing directs your business to the right path and eliminates factors that cause a setback.
It helps you achieve the desired goal by breaking it down into smaller steps. In the long run, implementing such a process can yield maximized results and increase the growth potential of your business. It also helps you look at your business ideas and dreams in a different light and makes them look more realistic.
So, if you have big business ideas and want to make them real then strategic planning can help you. How? Well, read on to find out.
What is Strategic Planning?
The strategic planning process includes creating a step-by-step framework for your business keeping the long-term goals and visions in consideration. It is undertaken by high-level management and helps in strategically placing the business in a favorable market position.
It also includes different influencing factors affecting your business in the process. I.e. raw material, marketing, human resource, the technology used, etc. The main purpose of having such a plan for your business is to increase the bottom line sustainably.
Undertaking a SWOT analysis is a must for the process to work. It helps you recognize the Strengths, Weaknesses, Opportunities, and Threats of your business. As a result, you get to have a 360-degree view of your business and take steps for its development and growth.
What to Include in a Strategic Business Planning Process?
Planning is a long-term commitment for your business. You not only have to create a well-rounded plan but also update it frequently. Hence, it is essential to make it the right way.
A good plan consists of the following elements:
A Long-term Vision Statement: This statement consists of where and how you want to see your business in the next 5-10 years.
A Statement of Top Objectives: This element involves setting specific goals for your business such as increasing the market share by 15% or getting the big clients.
External Factors: This includes external factors or factors out of your control that are likely to affect your business such as demand of products, financing possibilities, etc.
An Implementation Plan: This includes creating an action plan that aligns with your business goals.
Arranging the Resources: Next up businesses arrange the resources they’ll need to carry out the task. This helps you ensure that you’ll have all the resources your business would require on time.
Timely Analysis and Evaluation of Business Outcomes: A strategic business plan needs to be evaluated for its performance and analyzed for any required modifications. Business conditions change frequently. To accommodate that, the strategies should also be modified regularly.
Understanding the current market position of your business, implementing SWOT analysis, setting clear goals for the future, and incorporating an action plan, are necessary procedures to help you achieve outcomes equivalent to your efforts.
Benefits of Implementing Strategic Business Planning
The strategic business planning process helps you make your business futuristic and ready for challenges. And although there are several things that a good strategy can help you with here are a few major ones for your reference:
Provides a Clear Picture of Business Goal
Clarity is crucial to business success. By planning and strategizing, you set your goals and actions to reach there. Strategic business planning also requires you to have a focus on your current business position and evaluate it regularly. As a result, you know where your business stands, what are the hindrances on the path, and what you need to do to climb the next level.
Enhances Business Efficiency
The goals and the action plan are the two pillars o creating strategies that work. Because these elements are already stated, employees can get clear communication on what needs to be done. Their roles and responsibilities are set specific to the desired output. Thus, any chaos is eliminated and the efficiency of business increases.
Increases the Employee Morale
As the tasks are communicated clearly to employees, they do it in a better and more efficient way. They know what they need to do and it gives them a sense of responsibility towards the business. Which in turn helps them feel like an integral part of the business and encourages them to perform using their full potential.
Multiplies the Business Growth
The process is set with a futuristic vision in mind. By taking logical and well-analyzed steps, business threats can be handled well, and opportunities can be magnified. In addition, the support from employees and the coordination between various departments of your business brings stability to the table. With such harmony in place, your business growth can multiply sooner than anticipated.
Strategic Business Plan Example
Often there seems to be confusion between a strategic business plan and a business plan. In reality, both have vast differences. A business plan sets the planning for short-term to medium-term visions and goals. While the latter includes medium-term to long-term vision and goals of your business.
Also, one planning strategy does not fit all businesses. Here are different strategic business plan examples. You can choose the one that suits your business the best.
A SOAR Analysis: This analysis is an updated version of the SWOT analysis as we discussed above. SOAR means Strengths, Opportunities, Aspirations, and Results. The two eliminations of SWOT - Weakness, and Threat are replaced with positive ones here. This gives SOAR analysis a more positive outlook compared to SWOT.
The Five Forces: This example is quite in-depth. It touches on the external factors that can affect your business. The Five Forces considered in this analysis are the power of suppliers, competitive rivalry, the power of buyers, the threat of a new entry, and lastly the threat of substitute products. It helps your business gauge the current scenario of the market, make changes and improve accordingly to succeed.
STEEPLE: It stands for the following.
- Social: Any change in demographic or lifestyle trends or patterns.
- Technological: New technological advancements that can help your business improve or grow.
- Economic: The inflation rate, rate of interest, etc. of the country you are conducting your business in.
- Environmental: Any change in the way regulators and consumers perceive sustainable development.
- Political: Change in government, regulations, taxation, etc.
- Legal: Changes in legal aspects and systems that can affect your business.
- Ethical: Implementation of ethical policies and moral standards.
NOISE: This analysis is the acronym for Needs, Opportunities, Improvements, Strengths, and Exceptions. NOISE is an improvement-based method. It has a futuristic view and helps your business identify the opportunities to become efficient and better.
CORE Analysis: A CORE analysis, as the name suggests, looks at the core of a business - finance. Your business’s capital raised, invested, ownership scenario, the risk involved, investor relation, etc. are crucial to this method. They are a foundational part of the CORE analysis. Performing this analysis helps you get a clear understanding of the financial health of your business.
Making a Strategic Business Plan
The strategic planning process can ask considerable effort, time, and resources, but investing in it will put you ahead of the competition. It can be intimidating at first as it involves a thorough analysis of different factors involved. But it also helps your business develop a clear vision and mitigate the risk factors.
The best part of this process is that even small and medium-scale businesses can implement it just like large ones. You just have to make sure that your strategies align your business goal with actionable steps to speed up the overall business growth.
- Business Plan
- Planning Strategy