What is a Strategic Plan?

A document used by an organization to align its organization and budget structure with organizational priorities, missions, and objectives.

What does that mean?

It is a way to communicate to anyone working within the business where they should be focusing their efforts.

What is the purpose?

To help an organization make decisions about how to allocate its resources - both capital and people - to achieve the goals identified in the plan.

What type of goals should be included?

Revenue or income goals, spending goals, gaps in knowledge to be filled through strategic hires or training, your desired position in the market, what type of customers you want to serve, what reputation you want your company to have. The list is limited only by your imagination.

How do I build one?

By answering some basic questions about your business now and where you would like your business to be in the future.

At a minimum, you need to define the following:

What do we do?
For whom do we do it?
How do we excel?

and build your plan around the answers to those questions.

Let's look at an example:

McDonald’s and The Waring House are both competing for your “dining out dollar” but each provides a distinctly different dining experience. They both want to convince you to eat at their establishment, but they will have vastly different strategic plans.

McDonald’s plan will be based on low price and fast turnaround. The Waring House plan will focus on quality and a dining "experience".

The hiring policies for each will match their plan. Front-line employees at The Waring House will not be teenagers. The level and quality of advertising will be very distinctive. The advertising for each will be specifically aimed at their identified demographic.

Sound easy?

Well, it really isn’t. Building a solid strategic plan takes a lot of time and effort. But it is not insurmountable either. The time spent developing a strategic plan is time well spent. At the very least, it will give you greater clarity about where your business is now and where you want it to go.

We have a plan!

So, you have put in the time and effort and you’ve now got a plan. Now what? The first step is to communicate the plan to others. If it is not clear to others, then you need to do some more work until it is very clear to anyone who will be working in the business. The last thing you want in a high-end business is a staff member who thinks bargain-basement displays will get your message across.

Implementation

After communication, implementation. You need to break the plan down into objectives and then drill the objectives down to the people working in the business.

If you want to increase revenues, for example, an objective could be to increase sales in a related market - like adding accessories (jewelry or purses) to your inventory in a women’s clothing store.

In this example, the objective is to increase total sales by selling related merchandise. The objective for the salesperson will be to become familiar with the new inventory and to regularly ask shoppers if they need a necklace or purse to go with the new dress they are purchasing.