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Understanding a Strategic Plan
A strategic plan is a document that outlines your business’s vision, mission, goals, and the strategies you’ll use to achieve them. Think of it as the game plan for your business’s future. It covers various aspects, including market analysis, competitive positioning, operational plans, and financial projections. The former coach of the Nigerian Super Eagles, Finidi George, in his last days in charge, came under heavy attack from Nigerian football lovers because of his alleged view that formation doesn’t matter as long as the players can defend and attack. Why was he criticized? You don’t need to be a football coach to know that winning a football match requires a winning strategy or formation. This is true in football and it is true in business also. According to Michael Porter, a prominent academic known for his theories on economics and business strategy, “The essence of strategy is choosing what not to do.” This means that a strategic plan helps you focus on what’s important and avoid distractions.Why Your Business Needs a Strategic Plan
- A strategic plan gives your business a clear direction. It helps you stay focused on your long-term goals rather than getting bogged down by day-to-day operations.
- It helps you to allocate your resources—time, money, and manpower—more efficiently.
- With a strategic plan, you can anticipate challenges and opportunities, allowing you to be proactive rather than reactive.
- It provides benchmarks to measure your progress, helping you stay on track and make adjustments as needed.
Steps to Develop a Strategic Plan
Define Your Vision and Mission
To develop a Strategic Plan for your business, start by clearly defining your vision and mission statements. Your vision statement describes what you want your business to become in the long run and why it exists. It’s your ultimate goal. On the other hand, your mission statement goes further to why your business exists, what it aims to achieve in the present, and how it will achieve it. For example, assuming your business is into renewable energy, your vision statement could read, “To be the leading provider of renewable energy solutions in Africa.” Your mission will be “To provide affordable and sustainable energy solutions to under-served communities.” So, your vision statement answers the question of “why?” While your mission statement answers the question of “how?”Conduct a SWOT Analysis
A SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is a tool that helps you understand your business’s current situation. Strengths and weaknesses are internal factors, while opportunities and threats are external. By evaluating these aspects, you can identify areas where your business excels and areas that need improvement. For example, if you run a tech startup, a strength might be your innovative product, while a weakness could be limited financial resources.Sign up for the Connect Nigeria daily newsletter
Set Long-Term Goals
Once you have a clear understanding of your business’s position through a carefully executed SWOT analysis, set your long-term goals. Remember to ensure your goals agree to the SMART framework, that is, specific, measurable, achievable, relevant, and time-bound. For example, your goal could be to increase your share of the market by 20% within the next three years.Develop Strategies to Achieve The Goals
It is not enough to set goals, you also need to put in place strategies to achieve them. Strategies are broad approaches that outline how you will reach your objectives. For example, still using the last example of increasing market share, a strategy might be to enhance your marketing efforts through social media campaigns and influencer partnerships.Create an Execution Plan
An execution plan breaks down your strategies into specific tasks and assigns them to team members. It includes deadlines, resources needed, and parties responsible for each task. For example, if one of your tactics is to launch a marketing campaign, include steps like “Hire a marketing agency,” “Develop marketing materials,” and “Launch campaign by Q3.”Allocate Resources
When you have developed your execution plan, you will need to determine the resources required to implement it. This will include financial resources, human resources, and physical assets. For example, if your action plan involves a new marketing campaign, you’ll need to budget for advertising costs, hire a marketing specialist, and maybe invest in new software tools.Monitor and Review Progress
As I will always say, a plan is a living thing. So, your Strategic Plan must be regularly reviewed. This is to ensure that you are on track to achieving your goals. To do this effectively, you will need to first of all set out key performance indicators (KPIs) that will help you measure success. Now, when you have done this, you’ll need to define how you will monitor or track your performance in this area. Review these from time to time to ensure you are on track with your business goals. For example, if your goal is to increase market share, a KPI might be the number of new customers acquired each month. By monitoring the progress with this, you will be able to identify any deviations from your plan and make necessary adjustments.Additional Tips for Developing Your Strategic Plan
Involve Your Team
The execution of your strategic plan will require the cooperation of everyone on your team, so, it is wise to involve them in the planning process. This will go a long way in fostering a sense of ownership and accountability. It will also help ensure that everyone is aligned and committed to the goals.Be Realistic
One of the mistakes entrepreneurs make when it comes to strategic planning is that their plans are often not in touch with the realities on the ground. While it’s important to be ambitious, your goals and strategies should also be realistic and achievable given your resources and constraints.Stay Flexible
The business environment is constantly changing. Be prepared to adapt your strategic plan as needed. Flexibility allows you to respond to new opportunities and challenges effectively. Don’t be so in love with your plan that you fail to adjust when necessary.Seek External Input
Sometimes, an outside perspective can provide valuable insights. Consider hiring a business consultant, a mentor, an advisor, or an industry expert, to get their perspectives.Register to attend the CN Business Mixer
Concluding Thoughts
Creating a strategic plan might seem unimportant at the start of a business and may appear to be a daunting task, but it’s a critical step for any business aiming for long-term success. As Steve Jobs famously said, “Deciding what not to do is as important as deciding what to do.” A strategic plan helps you make those crucial decisions, ensuring that you stay focused on what truly matters. This article has provided you with the steps to take, so take the time to develop a comprehensive strategic plan for your business.Got a suggestion? Contact us: editor@connectnigeria.com