- 16th April 2018
- Posted by: Manolis
As a business owner, you need a well-thought out business plan to help you run your business. Without such a plan, you run the risk of running around in ways that have little to do with generating results. You can end up “spinning your wheels,” which suggests that you’re busy but not productive. A five-year strategic plan describes where you are now and how you plan to achieve your goals over a five-year period. When writing your plan, include subheads that are specific to your goals.
First, start with an executive summary. This is key because the executive summary should encapsulate — or summarize — the key concepts explained in the plan’s other sections. The executive summary is usually written after you have completed the other sections, but it appears at the top of your strategic plan. This enables you to extract key points from the other sections, which you will include in your summary. The executive summary gives the reader an overview of what the strategic plan contains. The topics discussed in the executive summary are elaborated on more fully in the sections of your strategic plan.
Mission Statements and Vision Statements
The mission statement is a concise summary of the overall objective of a business, and it states what the business hopes to achieve. Although the mission statement isn’t very long, take the time to ensure that it states clearly what your company is about, and why your company exists. For example, according to a January, 2018 article from Investopedia, Apple’s mission statement is the following: “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone, with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.”
A vision statement defines where the company wants to be in the future. Using a five-year strategic plan as an example, the vision defines the company success over five years. An example of a vision statement for an accountant’s office could be: “To become the number one accounting resource for medical professionals in the metro area.”
SWOT is an acronym that stands for Strengths, Weaknesses, Opportunities and Threats. Take an honest assessment of what your company and key team leaders are great at doing, and of what they need to improve upon. Look for opportunities in the market, and examine any threats that might prevent you from achieving your goal. A SWOT analysis helps identify areas that a business owner might take strategic actions on. For example, a business owner who determines that his weakness is in organizational skills, should hire someone who is strong in this area, so that he negates the weakness.
Strategic goals look at specific ways to accomplish something. For example, a company that wants to improve viable prospects might set goals for online ad funnels, networking activities or referral programs. It is important to review the goals and exactly how each potential solution might be able to achieve the goals. If networking provides fewer leads that have higher closing ratios compared to ad funnels, business owners need to evaluate the data and determine the next step toward success.
A strategy might involve more than one strategic action, varying budgets and personnel resource dedication. Strategic goals over five years involve a series of smaller goals and action plans. Start with the five-year goal and work backward to establish achievable goals over shorter time periods, such as one-year goals.
Business owners need to measure success, and they need to examine the goals and establish key performance indicators (KPI). Just as the goals are broken down into smaller achievements and action plans, KPIs need to start with the end result and work backward.
For example, a KPI for social media ads might evaluate how much is spent during a specific time period. A KPI also considers what the online ad open rate is compared to the ultimate sales conversion rate. An ad that’s opened but doesn’t convert suggests that something’s wrong with the ad. An ad that converts on one platform, but not on another, suggests that the demographic is better targeted toward one platform and not in the other. Business owners should use KPI data to scale up their successful strategies and to put more resources over a five-year period toward the most profitable strategies.
- The strategic plan is not set in stone. As the business grows, goals can change, which could ultimately change the mission and objective of the business. If this occurs, the strategic plan should be adjusted.
- Be as thorough as possible when creating the strategic plan.
- If the strategic plan is for an established business, use the business’s previous activity as a starting point. Ignoring prior business activities could mask issues the business has that could possibly be corrected with the plan.