In last week’s webinar titled ‘5 Tactics For A 10X Growth Strategy’, we discussed the importance of innovating a product-market fit value proposition and scalable business model. Once you’ve done so, you’re well on your way to the establishment of a viable company. Following this, you need to tackle the development of your strategic plan. This being easier said than done.
Before we get into the ‘nitty gritty’ of building a strategic plan, let’s do a quick review of the somewhat confusing terminology.
What’s What: Business model vs Business plan vs Business strategy?
Determining the difference between the above key terms can be confusing – especially given that the phrases ‘business plan’ and ‘strategic plan’ are often used interchangeably. In fact, these terms are very different.
A business model provides the rationale or blueprint of how the distinct parts of a business come together to create value for customers and how the business generates revenue in exchange.
A business plan is a document that communicates where your business is at and what it needs in order to progress. It essentially communicates this to people outside of the business, like banks and potential investors. And because each audience can be different from the next, business plans always seem to change and evolve for each audience it is presented to.
In contrast, the business strategy guides people inside the business with a clear and commonly understood plan of action designed to achieve the company’s overall end goal and strategic vision.
Your business strategy must clearly articulate the objectives, key results and projects that will support the execution of the strategy. It must inform everyone in your company about what must be done, how and when, in order to ensure everyone is on the same page.
The 8-Steps To Creating A Strategic Plan
Before you even start thinking about developing a strategic plan, make sure you have your realism hat firmly on. Far too often, businesspeople allow themselves to drift into fantasy when working on their strategies. In fact, people often confuse strategic thinking with dreaming. The right way to do it is to be brutally realistic.
Can your ideas be implemented within the scope of where your business sits right now? If you’re confident that the answer is “yes”, move forward. If you’re not so sure, take a step back and ask yourself if you’re actually dreaming. If so, shake off the dream and start again. You need to be practical and that means thinking about what can be done today.
Once you have your head in the right place, follow this 8-step process. It can be completed quickly, but there’s nothing wrong with taking your time either.
Step 1: Shareholder Aspiration
A strategy is defined by the end goal. If you don’t have an end goal in mind, and a very clear one at that, there is little point in developing a strategy. And so the first step is to understand what your shareholders want to get from the business – their needs, wants and expectations.
You will need to establish your shareholders’ aspirations in order to state your end goal.
Step 2: Core Values
Define\refine your core values. Your core values are the principles and philosophies that determine how your business operates. They are the foundation of your company culture. Without the right culture and values in place within your business, clearly understood by all staff, the best strategic thinking will be useless. Hence the saying; “culture eats strategy for breakfast”.
Step 3: Core Purpose
What does your business actually do?
The third step is to determine your business’ core purpose – the ‘Why’ your business exists. Be careful not to define your core purpose too narrowly by focusing only on the product or service your business provides. Rather, it should define your customers’ greater societal needs and wants you aspire to resolve. Your core purpose is a constant. It is unchanging over the company’s existence and guides its direction beyond the company’s technical offering or profits.
Step 4: Strategic Vision
Step 4 encourages you to write a strategic vision statement. This statement frames the single goal that the company will pursue. Typically, it looks 3-5 years ahead and should be SMART;
S – Specific
M – Measurable
A – Attainable
R – Relevant
T – Time-based
Steps 5-6: Assessing the market
Step five takes you outside your company building to assess the market and your competition. Do an analysis of your company’s strengths and weaknesses. Having looked at the market and your competitors, analyse possible opportunities and determine possible threats – SWOT Analysis. Next, compare market opportunities and needs to your company’s strengths and competitive edge.
Step 7: Roles and Resources
Step seven reviews the roles and resources within your company. Determine what needs to be sourced, funded and added to your company in order to reach the 3-5 year goal outlined in your strategic vision statement.
Step 8: The next steps
The last step is to assess what needs to be done immediately next to finalise your business strategy before it can be completed and shared with others.
Working through and clearly defining these 8 critical components will provide you with a strategic plan that is:
- Clear, precise and easy to communicate,
- Practical to execute, and
- Determines your day-to-day activities,
For a more detailed look at the above 8-Steps, attend this week’s webinar titled: ‘How To Effectively Define And Execute Your Business Strategy’. Click here to register.