Strategic planning is a process that helps you focus on your business goals, and it's essential for any company that wants to be successful. But what exactly is strategic planning? It's not just about writing down a list of things you want to do in the future. It's also about looking at where your business is today and defining what you need to do in order to achieve certain goals.
What is strategic planning?
Strategic planning is a process for setting goals and creating a plan to achieve them. It's also called strategic thinking or strategic business planning. It helps you create a plan to achieve your goals, so that you don't have to worry about making decisions on the fly when it comes time to make them.
For example: Let's say you want to start your own business selling clothes online. Your goal would be "to open an online clothing store." But what are the steps? You could do research on how other people have started similar businesses, figure out how much money it will take, and make sure that there's enough demand for what you're selling before starting up yourself.
Why is strategic planning important?
Strategic planning helps you create and execute the best strategy for your business. It's a process that helps companies plan, prioritize and achieve their goals.
When it comes to planning, there are many benefits:
- Strategic planning helps you set goals. It enables you to think about your business in terms of what outcomes you want to achieve rather than focusing on the day-to-day tasks or projects. Once you have this big picture view of where the company is headed, it's easier to determine how best to get there by setting specific measurable objectives (or SMART goals).
- Strategic plans help companies define their vision—their long term purpose or mission—and set priorities based on that vision. The next step is knowing how each part of your business relates back toward achieving this goal so that everyone works together toward one common purpose instead of just working independently in silos or departments within an organization such as sales versus marketing versus IT support staff
How do I start?
Strategic planning involves a lot of steps, but it's not difficult to do if you break it into small steps.
Strategic planning involves identifying what your overall goals are, which in turn dictates what strategies you need to employ in order to achieve those goals. For example, if one of your overall goals is increasing profits by 10%, then one strategy would be cutting costs by 5%. You should also spend some time thinking about who else is involved with this process and what they need from it; this will help ensure that everyone has a say in guiding the company’s future direction
1) Assess where your business is today
Before you can begin planning for the future, it's important to assess where your business is today. This means identifying your strengths and weaknesses, as well as opportunities and threats (both internal and external). You should also analyze your business model, evaluate your strategic position against competitors and potential disruptors, and identify areas in which improvement is needed.
If you're having trouble completing this step on your own, consider hiring a consultant or coach to help guide you through this process.
2) Define your goals
The first step in effective strategic planning is to define your goals. As with any good process, SMART goals should be specific, measurable, achievable, results-oriented and time-bound:
- Specific
- Measurable
- Achievable (within reason)
- Result oriented/designed to create value for the business or organization as a whole
- Timed (you may have heard "thinking big" being discussed as an important part of strategic thinking. But if it's not realistic—like going from zero clients to 100 in one year—it won't happen.)
3) Look at your competition
For example, if you're in the business of selling baseball cards, you should look at other card sellers to see how they're doing and what their strategies are. If a competitor is doing something that's working well for them, figure out how to do it better (or not at all). If a competitor is not doing something that would benefit them, find out why and implement it yourself. By studying your competition, you can learn what works and what doesn't work in your industry.
4) Select metrics for benchmarking
Select metrics for benchmarking. Metrics are a way to measure your progress. They help you understand how you're doing and identify areas where you need improvement. Metrics should be specific, measurable and achievable (SMART). For example:
- A sales metric might be the number of sales calls made by a marketing team during a week
- An engagement metric could be the number of people who share posts from your social media channel each day
It's also important to choose metrics that are relevant to your business goals and industry. For instance, if you're an online retailer selling clothes, then "customer acquisition cost" may not be as valuable as "average order value."
When should I create a strategic plan?
You should create a strategic plan when you know that the organization will be making changes. The best time to set up a strategic plan is before any of these changes are going to happen, but if this isn't possible it's still important to get started on one as soon as possible.
What kind of changes are we talking about? You should think of anything that could significantly impact your company in the long term. Things like:
- Launching a new product or service line
- Taking on new competitors with better products/services than yours
- Changing market conditions (like an increase in demand for your product)
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