Expert Post | The importance of setting a strategy for your business
Welcome to the first Expert Guest post, and it seemed only fitting that we start with Lisa Johnson Coaching and setting a strategy for your business. This is particularly timely as we draw closer to the end of 2018 and see in 2019. Before you close down for Christmas festivities, make sure your 2019 plans and goals are set, and if you’re stuck on how to set a strategy, then read on…
Don’t be put off because a strategic plan sounds like something from a stuffy old boardroom!
The simple definition of a strategic plan is setting your overall goals for your business, whilst developing a plan to achieve them. This will need you to take a step back from the day-to-day stuff and ask yourself this question:
Where is my business headed and what should its priorities be?
So, when you make decision to actively to grow your business, you will definitely have to embrace the risks that go hand in hand with growth. You’ll need to spend some serious time identifying exactly where you want to take your business, and how you will get there. This will help you reduce and manage those risks.
Your strategy will need to get more sophisticated as your business grows. Otherwise your growth won’t last, and you’ll lost the opportunity to attract the leadership and resources you need to keep your business developing.
For this to successfully happen, you’ll also need to start looking at a wider range of information about your business. About how it works internally and about how external happenings in your current and potential markets will affect you.
The three key factors of setting a strategy for your business
Setting up your own strategy means you will have to learn more about how your business works and its position in relation to other businesses in your market.
To get cracking, ask yourself these three questions:
- Where is your business now? This means knowing and objectively analysing as much about your business as possible. How does it operate internally? What drives its profitability? How does it compare to competitors. Be realistic, detached and critical – write it down and review it regularly.
- Where do you want to take it? Set out your key objectives. Work out your vision, mission, objectives, values, techniques and goals. Where do you see your business in five or ten years? What do you want to be the focus of your business and what is your niche that makes you different?
- What do you need to do to get there? What changes will you need to make to hit these objectives? What is the best way of making these changes?
The second question is the biggie, but it can only be considered usefully in the context of the other two.
You have to make sure you balance your vision against the practical realities of your current position and changes. Your strategic plan must be realistically achievable, or you have failed before you have begun!
Getting started with your strategy
Build your plan on solid strategic analysis! This may all sound a bit “corporatey” but strategic planning is about making your business as effective as possible in your marketplace. So your analysis of what your business actually does, and the market you work in needs to be as thorough as possible.
There are loads of models that you can use to help you structure your analysis, they generally provide a simplified version of the business environment. SWOT is the most well know model, and is used by lots of smaller and larger businesses.
A SWOT analysis involves identifying an objective for your business and then identifying the internal and external factors that are favourable and unfavourable to reaching that target.
These factors are considered using four elements:
- Strengths – attributes of the business that can help in achieving the objective
- Weaknesses – attributes of the business that could be obstacles to achieving the objective
- Opportunities – external factors that could be helpful to achieving the objective
- Threats – external factors that could be obstacles to achieving the objective
What a written strategic plan should include
There is no “normal” way to structure a strategic plan, but it is a good idea to include the following elements:
- Look at internal drivers – often related to the strengths and weaknesses of a SWOT (strengths, weaknesses, opportunities and threats) analysis.
- Analyse external drivers – stuff like market structure, demand levels and cost pressures.
- Vision statement – this is a concise summary of where you see your business in five to ten years’ time.
- Top-level objectives – these are the major goals that need to be achieved in order for your vision for the business to be realised. Maybe, attracting a new type of customer, developing new products or, or securing new sources of finance.
- Implementation – this is setting out the key actions (with what you want from them, and by when) that will need to be completed to hit those top level objectives.
- Resourcing – you’ll need to think closely about what, if any, impact your proposed strategy will have for the resources your business needs.
Some important strategic planning issues to consider
Growing your business will without doubt bring some real challenges to you personally, as your role may well change dramatically as the business grows.
An effective strategy means thinking about options that could challenge the way your business has been run up to this point.
It will be tempting to hide from the options that are uncomfortable for you. But you must be objective here. Disregarding your options on these grounds can, and will, seriously damage your strategic plan and ultimately the growth of your business!
Implementing your strategy
So, you have your plan, but now it needs to be implemented and this implementation process requires (more!) planning.
Monitoring the progress of the implementation and reviewing your strategy against the implementation will be an ongoing process. The relationship between implementation and strategy may not be perfect to start with and you may well need to tweak your strategy as it “goes live”.
Monitoring implementation is really important though and don’t be afraid to use key performance indicators (KPIs) and set targets and deadlines. They are a really good way of keeping a handle on what’s happening while you introduce your strategy.
You’ll also want to have a business plan. Yes, another plan! is typically just a short-term and more document than the strategic plan, focussing more closely on operational stuff such as sales and cash flow. It’s important that you make sure your strategic plan helps to create your business plan though.
Always remember that strategic planning means making both organisational and cultural changes to how you works.
Remember – “Progress is impossible without change”.
Lisa has also signed up to The Seasonal Edit, so watch this space for more images as we work together over the next 12 months
Until next time,