The creation of an efficient and effective business plan can mean the difference between working 70+ hours a week all year long – only to find out that your business is only just breaking even (or even worse, losing money) or being wildly successful. Your business plan is your road map to success!
Many successful business owners and entrepreneurs who have created and implemented a business strategy generally work for less hours, and produce a more sizable income and profit margins. You will also find, that in general, those who are successful with their own business, attribute their success to having a strategic plan.
You might be asking, what really is “strategic business management”? In its most basic form, it is the process by which the goals and objectives for your business are defined, and an action plan is then created so you may reach your goals and objectives. At this point you might be wondering what the difference is between goals and objectives. Here's a good way to tell the difference:
Goals are broad; objectives are narrow.
Goals are general intentions; objectives are precise.
Goals are intangible; objectives are tangible.
Goals are abstract; objectives are concrete.
Goals can't be validated as is; objectives can be validated.
A good strategic plan will include both goals and objectives.
You now know what it is. So how do you go about creating a strategic plan for your business?
Any business owner should know, and be able to describe in detail, the vision for his or her business. A company's mission statement is a constant reminder to its employees of why the company exists and what the founders envisioned when they started. So, what is the image that you want your business to have?
Any operating business should have clear mission statement with concise company values and guiding principles. For instance, what are the reasons you are in business? The mission of LinkSky Hosting is to provide affordable, reliable, secure, and user-friendly web hosting services that aid our members in a successful online experience. If you don't have a clear idea of your core values, you can end up trying to be all things to all people, and we know that does not work very well!
Your business plan is developed from your mission statement. It might be be a good idea to create a short-term and a long-term plan. A short term plan might be 2 to 3 years and a long term plan might be 5 years or longer. The long-term plan contains broad objectives that will get your business to where you want it to be.
For the short-term plan, you should create, define, and plan specific objectives that when accomplished, will help you on the road to achieving your long-term goals. It is also worth noting that when setting and planning your annual goals, is pays to be “SMART.” Make sure your planning incorporates the following points:
S - Be very Specific
M - Show Measure
A - Make the goals Attainable
R - Make your goals Realistic
T - Make sure they are Time-oriented
Include a list of obstacles and barriers which might impede your success. Create and define a list of resources you’ve already got, and the other resources which you'll need to obtain. Here you should consider things like your budget, regulations or permits, weather conditions, competing events, training requirements, vendors and distributors, etc. For example, if you're counting on parts from a supplier, make sure they can deliver.
Now you're ready to create a concise action plan that clearly defines how you will actually achieve your stated goals. If your business has any employees, you should consider involving them with this part of the business planning process. When they have input on the plan, they'll have a stake in the outcome. They'll appreciate being included and they may provide some valuable insights for you. Including your employees is a great way to build a winning team.
In your business plan, you should create simple and concise milestones or benchmarks that will define when you have actually reached a goal or objective. This is an essential part of the planning, as it will enable you to measure your progress.
After you have created your strategic business plan, it is of paramount importance that it is shared with anyone who will be involved in the process. Your annual business plan is the road map which will lead your business and those involved, to your stated goals — but to be effective, everyone must have the same goals and objectives, the “destination,” if you will. And to do so, everyone requires the same map. Make sure everyone knows their role in the process. This is another way to help build a successful team.
It's no use having a well thought-out and planned strategic business plan, if you don’t put it into action. You now have a means to begin your business journey; its time to start it. Be sure to regularly check and compare the progress of your business, to the benchmarks defined in your business plan.
If something should go wrong with your business, the sooner you figure out what went wrong, or what is "happening" wrong, the sooner you can fix the problem. Sometimes things happen that are beyond your control. In any case, make the necessary adjustments and get your business back on track. Bad news: A snow storm stopped deliveries for seven days, make note of it and adjust your benchmarks. And, if something goes unexpectedly well make note of that too. Good news: The parade got re-routed to go right in front of our store! We might need to schedule more staff.
And finally, ensure that each year you follow the exact same cycle to create your strategic business plan. Vision, Plan, Implement, Review. That's all there is to it
Creating a business strategy and ensuring that you follow it, is not just about achieving specific goals and objectives. Its purpose is to also make sure that the journey taken to these goals is a safe and enjoyable adventure. Good luck to you and may you have many years of success ahead of you!