Itâs no secret that many businesses fail within their first 10 years. Poor planning is often cited as a top reason for that failure. To improve your chances of thriving as a business, you need a well-designed plan that includes the elements of a strategic plan that have proven to be successful for other businesses.
4 Key Elements of an Effective Strategic Plan
What is strategic planning?
Strategic planning is the process by which business owners or those in company leadership roles identify end goals and outline a list of steps to meet those goals. Typically, a strategic plan allows you to identify potential challenges in meeting goals and provide methods to overcome them.
What is the difference between a strategic plan and a business plan?
The difference between a strategic plan and a business plan is that businesses usually use strategic plans to guide their business to accomplish future goals. Businesses use strategic plans at the start of their business or at any stage during their operations to drive success. In contrast, businesses use business plans, specifically when starting a business. They use it to outline funding needs, stakeholders, business objectives and other factors needed to successfully operate their business.
What is the difference between a strategic plan and an operational plan?
The difference between a strategic plan and an operational plan is that strategic plans focus on the broader organizations goals and achievement methods. In contrast, businesses usually use operational plans at the department level to guide department goals throughout the year.
What does a strategic plan tell you?
A strategic plan tells you and your employees the direction that your company needs to move in, in order to accomplish your business objectives. It also helps you define who you are as a business entity and what you want to become.
What are strategic plan elements?
The elements you include in your strategic plan can vary depending on your purpose for creating a strategic plan. An example of this would be starting a business versus expanding into a new industry or product line. Here is a list of standard strategic planning elements to help you structure your own plan:
The vision statement is an important part of a strategic plan as it provides a short summary highlighting what your business will look like in the future.
Example: To provide innovative technological solutions to businesses throughout the nation and the world.
The mission statement defines the purpose of your business within your industry or the world. The mission statement usually consists of your businesss main industries or target audiences, key products or services and what makes you different from your competitors.
Example: At our company, we are committed to helping low-income families find the resources they need to get healthcare loans with no credit checks and low-interest payments.
Every strategic plan should include a goals and objectives section. You can include both short- and long-term goals as they relate to your overall business vision.
A SWOT analysis allows you to identify and list your businesss strengths, weaknesses, opportunities and threats. This is important as it allows you to determine potential challenges to achieving your business goals and what you need to do to overcome them.
Example: A regional clothing retailers SWOT analysis:
Using what you learned from your SWOT analysis, you can create an action plan. Action plans consist of strategies for achieving short- and long-term goals or objectives and overcoming challenges.
Example: Here is an example of an action plan for a business looking to expand their brand awareness:
Goal: To increase brand awareness by 10%
Action 1: Create social media accounts
Action 2: Plan and host three promotional events
Action 3: Obtain additional funds for advertising and marketing budgets
KPIs or key performance indicators are measurable components that allow businesses to track the progress of particular initiatives in relation to business goals.
What are the characteristics of a good strategic plan?
In addition to strategic planning elements, a good strategic plan should have a variety of characteristics. Here are some examples of how to maximize your strategic plans value to your business initiatives:
What are the 7 elements of strategic planning?
What are the 3 elements of strategic planning?
- Vision. One’s vision for the business is where we imagine it will be at a future date. …
- Core competencies and market opportunities. …
- Effective execution.
What are the 5 essential components of strategic planning?
- Evaluate where you stand now: This is the information gathering stage of planning; it’s time to gather all your facts and figures. …
- Pinpoint your goals: This becomes the answer to a frequent interview question: Where do you see yourself in five years?