By Sherry Lutz Herrington
Setting yourself up for success starts with outlining where you’ve been and where you want to go. Although there are numerous models that can be used for strategic business planning, I’m going to suggest you pare it down to the simplest version possible.
Simplifying the process has two objectives:
- To make it easy to create so you’ll actually do it
- To make it easy to implement so you’ll reap the benefits of using it
Strategic business planning in its most pure form means:
Strategic planning is the process of documenting and establishing a direction of your small business—by assessing both where you are and where you’re going. The strategic plan gives you a place to record your mission, vision, and values, as well as your long-term goals and the action plans you’ll use to reach them.
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STEP 1 – SWOT
Most strategic business plans start with a SWOT analysis. If you aren’t familiar with SWOT, it’s the acronym for Strengths, Weaknesses, Opportunities and Threats.
Your whole team should complete this exercise together. Everyone has their own unique perspective of how things are going, and each is critical to understanding the unit’s success as a whole. Sit down and discuss each aspect of the analysis relating to your business. We like to do this once a year after we get through our busy season.
Once you have this analysis completed, you can use the information to help you complete the next steps.
STEP 2 – Vision and Mission
If you don’t already have a clear vision and mission, then you need to create one so that everyone understands what the purpose is and how you accomplish it.
Definition of vision and mission:
- A vision statement focuses on tomorrow and what an organization wants to ultimately become.
- A mission statement focuses on today and what an organization does to achieve it.
Both are vital in directing goals.
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If you already have one, this is a good time to review it and make sure it still aligns with where you want the organization to go and how you want to get there. Don’t be afraid to update your vision and mission if they no longer fit the company. If not, it’s time to create them.
Looking back on your SWOT, can you identify areas that need to be addressed so that your strengths are highlights and your weaknesses, opportunities, and threats are mitigated?
STEP 3 – Goals
Set your goals for the next year. If you have time and feel you can handle it, set 3 and 5-year goals as well. Sometimes, for simplicity sake, if your vision and mission are clear, then focusing your strategic business plan and supporting goals on the upcoming year is enough.
Make sure your goals are SMART goals. This means they need to by:
Specific: very targeted and clear
Measurable: quantifiable by dollars, percentage increase or some other measurement
Attainable: within reach of where you are now given the time frame allocated
Relevant: in alignment with your vision and values
Time-Based: set a specific time period within which to accomplish your goals
For more information on SMART goals , please click here.
Once again, reviewing your SWOT to determine what your company needs to focus on to use your strengths to overcome your weaknesses and threats, and to focus on your opportunities.
STEP 4 – Budget
Next, it’s time to create your budget. Based on everything you’ve already done it should be fairly simple to set your budget. For our clients, we start by using the actual numbers from the previous year, then we adjust as needed to align them with their goals and vision.
If you don’t have clean accounting, this is impossible to accomplish, so one of your first goals should be to clean up your books. Call in an expert if you need to. Running a successful company and setting and reaching your goals depends on having accurate, up-to-date financials to utilize to drive your organization.
STEP 5 – Implementation
Writing everything out is well and good, but if you don’t have a plan to implement the action needed, it will stay just a plan. Lay out steps to accomplishing your goals, specifying who will need to do what by when.
Next, you will need to follow up on your progress periodically. Setting dates for either monthly or quarterly check-ins with the whole team will help you stay on course. If things aren’t moving along as planned, or you hit a roadblock, then figuring out a way to pivot will help you redirect and move forward once again.
Taking the time to set up a strategic business plan will ensure greater success than just letting nature take its course. In business, setting and following a plan is the key success.
Sherry Lutz Herrington is the owner of Sherrington Financial Fitness, a business consulting and accounting firm specializing in strategic business planning and solid financial accounting for businesses. She has also recently launched Strong Women Thriving, which focuses on empowering women to be financially savvy, particularly after experiencing financial abuse. She can be reached at email@example.com.