A business strategic plan details the methods by which a business sets out to achieve its objectives. Typically a business strategy will cover a period of three to five years.
Developing the strategic plan is the most critical thing a business owner can do to improve their business. Unfortunately studies show ninety percent of businesses do not have a strategic plan and pay the price for that. In addition, most strategic plans are unnecessarily long, unclear, and fail to achieve their purpose. They are often prepared and forgotten.
An effective strategic plan will be made up of three basic components:
- Business objective – This clearly explains the five year business objective. This is the one main objective the business wants to have achieved in five years’ time. It could be $5m turnover, $1m profit, 10 offices, or a business value of $1m.
- Five key strategies – This is the five key strategies to achieve the business objective. So for example, strategy one could be an online store, strategy two could be a new product or service and so on.
The key with this strategic plan is to keep it simple. Limit it to only one page and only one five year objective. A business may have many objectives but it needs to clearly articulate the one main objective. The business owner should always be thinking about the strategic plan and ensuring all their daily activities are aligned to this.
The cliché ‘that if you fail to plan, you plan to fail’, is so true. Many businesses fall victim to this.