Importance of Strategic Planning,
Strategic business planning is necessary for every business that wants to grow successful. If you devise a plan after having a purpose statement, goals, and deadlines for achieving them, it would be much easier to start the business. Business owners that routinely take the time to review the current and forecasted performance do it because they acknowledge the importance of strategic planning. They understand that this step gives them a path to follow.
Most businesses tend to fail without having a strategic business plan in place. It defines where your business stands today and where it needs to go in the future. The importance of strategic planning is that you get to see what your goals are, which ones are high-priority, how to achieve them, the mistakes you need to avoid, and the banter you need to overlook. This post discusses the importance of strategic planning for a large company and how to implement a plan.
The Importance of Strategic Planning
In an earlier post, we discussed how strategic business planning mattered to a small business. This one will focus on the importance of strategic planning for a large company.
Create a Business Plan First
Most businesses start the process by making a business plan. At the time you start your company, you define mission and vision statements, the budget you have, as well as a plan for marketing and promotional activities. As the first step, this is a good thing to do. However, as your business starts expanding, you will have to revisit and revise the plan to align it with the business’s changing needs. A strategic business plan locked up in a cupboard gathering dust is no good, as it is not being reviewed. This way, it wouldn’t serve the purpose it was made for.
Focus Your Strategic Business Planning on Goals
Several variables impact the way you do strategic business planning for your company, including your personal preferences, the time frame it is being made for, and the size of your business. While there are many strategic plan styles out there, it helps to make one that is goal-based; this type of strategic plan has well-defined financial and other goals, along with the actions required to achieve each one.
For instance, if you intend to earn $200,000 in revenues in the coming year, you need to start off by bringing in ten new clients every month and attending five trade shows. The goals you set for your company may vary, but each needs to be measurable and concrete.
Some companies also make a mission-based strategic plan. In this plan, each part of the strategic plan gets woven into the mission statement of your company. This is done to make sure that your organization is staying true to that mission, preventing unintended deviations.
For instance, if your corporate mission is “to be identified as a financial services sector leader and help people become financially independent”, your strategic business planning needs to address the “how” aspect of achieving these objectives.
Make the Time for Strategic Business Planning
Making time to plan your business could be daunting. There are so many pressing priorities such as the need to make more money. However, if you routinely take time to revisit your strategic plan, it will pay off by keeping you one step ahead of the competition.
Part of your business operations should be dedicating your undivided attention – a couple of hours per week, for starters – to strategic business planning. When you get to it, check the financial performance since the last assessment time, and make changes to the market initiatives you are taking to ensure your business is on track with the initial strategic plan. If you feel there is a deviation, you will need to make changes to stay on course.
Whenever you do the planning, you need to document it somewhere, such as in a day planner. Take care not to let anything get in the way – you will have to intentionally block off the time
for it. If required, turn off your smartphone and choose a less noisy space than your busy office to avoid getting distracted.
When business owners make a strategic plan, they also need to share it with their employees. This is necessary to ensure everyone is on the same page, working to achieve a shared goal. This will also motivate them by making them feel they aren’t doing dead-end, meaningless jobs, but instead have a shared purpose to fulfill, and targets to achieve to get there.
For instance, if your strategic plan is to bring in six new clients every month, but your sales executives are unaware of this, they would fall back on presumption. This could be drastic, as if they end up bringing three new clients every month, that would be just 50% of your target. The importance of strategic planning also lies in communicating it.
Don’t Forget to Follow Up
Reviewing your plan is just as important as making it in the first place. You need to compare the delivered results with the set targets, checking whether you were able to bring in six new clients every month. If you weren’t, then you need to figure out why. There may be some adjustments you need to make going forward to cater to the changing economy or strategy. As you experiment with strategic business planning and business operations, your future planning will get perfected. With time, you will be able to see the strengths and weaknesses of your business. This will help you deal with them strategically.
All in all, business owners who realize the importance of strategic planning know the mistakes they should avoid. They understand that a plan meant for a small business won’t suit a large-sized organization. However, regardless of the size of your company, professional strategic business planning requires you to revisit and revise the plan as and when needed to respond to internal corporate as well as external market changes. This will help you move ahead in the right direction.