While most business owners know how important it is to develop a strategic plan, they may not know where to start or may struggle to carve out the time required to develop one.
Put simply, strategic planning allows you to take your company vision and convert it into measurable priorities that your teams can easily and effectively action. It is your roadmap to the future success of your business.
The benefits of developing a strategic plan for your business are all-encompassing from improving revenue and profit margin, better managing cash flow and resource planning, to managing your customer relationships and building company culture.
At Trinity Advisory, we’ve seen many organisations struggle when it comes to crafting and executing their strategic plan. Here are our main tips to help you get started:
Gather Data and develop a SWOT Analysis
In order to correctly roadmap your strategy, it is essential that you have access to insightful reporting and financial data. You’ll need to have this information handy and share it with your key stakeholders before you meet. There are two types of data:
Once you've gathered this data, you'll need to develop a SWOT analysis – Strengths and Weaknesses are your internal factors; Opportunities and Threats are your external factors. Knowing these before you move forward will help to ensure you build a realistic strategy.
Define Your Business's Values, Mission, and Vision
Before delving into the tactical aspects of your strategic plan, it's crucial to establish the core elements that will guide your business's direction. This includes your business values, mission, and a 3-5 year vision. These elements are the bedrock of your strategic plan, providing guidance and motivation for your team.
Determine Your Business Goals
Now that you have all the relevant data at your fingertips, you've developed your SWOT Analysis and you have a clear understanding of your Business Values, Mission and Vision, you now need to determine your business goals. Goals are important because they provide your organisation with measurable targets so that everyone is working towards your business vision in a systematic way.
Your Business Goals must be SMART – Specific, Measurable, Attainable, Relevant & Time-bound. Some organisations call these Business Goals ‘rocks’, which is based on the metaphor that if you start by putting sand into the jar, you will not have room for rocks or pebbles. Your ‘rocks’ are the most important goals determined by the business so any activity in the organisation should be working towards one or all of these ‘rocks’.
A good way to organise your business goals is by using the Balanced Scorecard (BSC) method that groups goals into categories i.e. financial, customer, process, and people - and then helps to translate these goals into performance measures, which is essential for tracking and measuring your strategy going forward.
Develop a Gap Analysis
The aim of a Gap Analysis is to compare your business's current standing with its desired future state, as outlined in your vision and goals. This process will help identify the gaps or discrepancies between the present state and future objectives, offering a clear pathway for strategic actions.
Develop an Action Plan
Now that you have identified the gaps between where you are today and where you want your business to be in the future, you should now prioritise these gaps by determining a) their level of impact b) their level of ease and c) their level of cost. This will help you to identify the ‘low hanging fruit’ activities that can be done quickly and easily versus the longer-term projects that may require more time and resources. It will also help you to resource plan for these activities.
There are many templates available for organising your 3-year action plan, depending on how detailed you want your plan to be. At a minimum, you’ll want to include:
Launch your strategy
Now that you have your plan, you’ll need to communicate it throughout the organisation and ensure that all stakeholders and employees are aware of what they are required to do and by when.
You’ll need to work with internal and external parties to ensure that you have the resources required to successfully achieve your strategic plan. Will you need to hire more staff, find new suppliers for additional raw materials or organise support from external agencies? And of course, these things will all likely require more money.
So, before you launch your strategy, make sure you have all your ducks in a row.
Once you’ve launched your strategy, you’ll need to think about how you will be tracking and measuring your results.
Start by building a ‘Dashboard Report’ that includes all your Goal KPIs with the option to capture updates on major projects and milestones. Then set up regular meetings with the key stakeholders who can provide this information. This could be weekly, monthly or quarterly – depending on the regularity of the information you are reporting on.
Creating this regular reporting structure will help you identify if things are ‘On Track’ or ‘Off Track’, allowing you to take corrective action if need be.
Remember, while your Strategic Plan should be followed as closely as possible, it should also provide enough flexibility to allow you to pivot and innovate in response to your results and the changing market.
Of course, underpinning all of this is having access to accurate data and financial reporting. A good accountant can help you develop this reporting, and a good business coach can help you develop your strategy.
Trinity Advisory is more than just an ordinary accounting firm. We specialise in helping Small Businesses successfully scale their operations and grow their profits by offering tailored Accounting, Advisory and Coaching services. If you’re a small business owner who needs help developing your strategic plan, get in contact today to learn more about our Business Accounting, Advisory and Coaching Services.