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What Is Business Strategy & Why Is It Important?
- 20 Oct 2022
Every business leader wants their organization to succeed. Turning a profit and satisfying stakeholders are worthy objectives but aren’t feasible without an effective business strategy.
To attain success, leaders must hone their skills and set clear business goals by crafting a strategy that creates value for the firm, customers, suppliers, and employees. Here's an overview of business strategy and why it's essential to your company’s success.
Access your free e-book today.
What’s a Business Strategy?
Business strategy is the strategic initiatives a company pursues to create value for the organization and its stakeholders and gain a competitive advantage in the market. This strategy is crucial to a company's success and is needed before any goods or services are produced or delivered.
According to Harvard Business School Online's Business Strategy course, an effective strategy is built around three key questions:
- How can my business create value for customers?
- How can my business create value for employees?
- How can my business create value by collaborating with suppliers?
Many promising business initiatives don’t come to fruition because the company failed to build its strategy around value creation. Creativity is important in business , but a company won't last without prioritizing value.
The Importance of Business Strategy
A business strategy is foundational to a company's success. It helps leaders set organizational goals and gives companies a competitive edge. It determines various business factors, including:
- Price: How to price goods and services based on customer satisfaction and cost of raw materials
- Suppliers: Whether to source materials sustainably and from which suppliers
- Employee recruitment: How to attract and maintain talent
- Resource allocation: How to allocate resources effectively
Without a clear business strategy, a company can't create value and is unlikely to succeed.
To craft a successful business strategy, it's necessary to obtain a thorough understanding of value creation. In the online course Business Strategy , Harvard Business School Professor Felix Oberholzer-Gee explains that, at its core, value represents a difference. For example, the difference between a customer's willingness to pay for a good or service and its price represents the value the business has created for the customer. This difference can be visualized with a tool known as the value stick.
The value stick has four components, representing the value a strategy can bring different stakeholders.
- Willingness to pay (WTP) : The maximum amount a customer is willing to pay for a company's goods or services
- Price : The actual price of the goods or services
- Cost : The cost of the raw materials required to produce the goods or services
- Willingness to sell (WTS) : The lowest amount suppliers are willing to receive for raw materials, or the minimum employees are willing to earn for their work
The difference between each component represents the value created for each stakeholder. A business strategy seeks to widen these gaps, increasing the value created by the firm’s endeavors.
Increasing Customer Delight
The difference between a customer's WTP and the price is known as customer delight . An effective business strategy creates value for customers by raising their WTP or decreasing the price of the company’s goods or services. The larger the difference between the two, the more value is created for customers.
A company might focus on increasing WTP with its marketing strategy. Effective market research can help a company set its pricing strategy by determining target customers' WTP and finding ways to increase it. For example, a business might differentiate itself and increase customer loyalty by incorporating sustainability into its business strategy. By aligning its values with its target audiences', an organization can effectively raise consumers' WTP.
Increasing Firm Margin
The value created for the firm is the difference between the price of an item and its cost to produce. This difference is known as the firm’s margin and represents the strategy's financial success. One metric used to quantify this margin is return on invested capital (ROIC) . This metric compares a business's operating income with the capital necessary to generate it. The formula for ROIC is:
Return on Invested Capital = Net Operating Cost After Tax (NOCAT) / Invested Capital (IC)
ROIC tells investors how successful a company is at turning its investments into profit. By raising WTP, a company can risk increasing prices, thereby increasing firm margin. Business leaders can also increase this metric by decreasing their costs. For example, sustainability initiatives—in addition to raising WTP—can lower production costs by using fewer or more sustainable resources. By focusing on the triple bottom line , a firm can simultaneously increase customer delight and margin.
Increasing Supplier Surplus & Employee Satisfaction
By decreasing suppliers' WTS, or increasing costs, a company can create value for suppliers—or supplier surplus . Since increasing costs isn't sustainable, an effective business strategy seeks to create value for suppliers by decreasing WTS. How a company accomplishes this varies. For example, a brick-and-mortar company might partner with vendors to showcase its products in exchange for a discount. Suppliers may also be willing to offer a discount in exchange for a long-term contract.
In addition to supplier WTS, companies are also responsible for creating value for another key stakeholder: its employees. The difference between employee compensation and the minimum they're willing to receive is employee satisfaction . There are several ways companies can increase this difference, including:
- Increasing compensation: While most companies hesitate to raise salaries, some have found success in doing so. For example, Dan Price, CEO of Gravity Payments, increased his company's minimum wage to $80,000 per year and enjoyed substantial growth and publicity as a result.
- Increasing benefits: Companies can also decrease WTS by making working conditions more desirable to prospective employees. Some offer remote or hybrid working opportunities to give employees more flexibility. Several have also started offering four-day work weeks , often experiencing increased productivity as a result.
There are several ways to increase supplier surplus and employee satisfaction without hurting the company's bottom line. Unfortunately, most managers only devote seven percent of their time to developing employees and engaging stakeholders. Yet, a successful strategy creates value for every stakeholder—both internal and external.
Crafting a business strategy is just the first step in the process. Implementation takes a strategy from formulation to execution . Successful implementation includes the following steps :
- Establish clear goals and key performance indicators (KPIs)
- Set expectations and ensure employees are aware of their roles and responsibilities
- Delegate work and allocate resources effectively
- Put the plan into action and continuously monitor its progress
- Adjust your plan as necessary
- Ensure your team has what they need to succeed and agrees on the desired outcome
- Evaluate the results of the plan
Throughout the process, it's important to remember to adjust your plan throughout its execution but to avoid second-guessing your decisions. Striking this balance is challenging, but crucial to a business strategy's success.
Learn More About Creating a Successful Business Strategy
Business strategy constantly evolves with changing consumer expectations and market conditions. For this reason, business leaders should continuously educate themselves on creating and executing an effective strategy.
One of the best ways to stay up-to-date on best practices is to take an online course, such as HBS Online's Business Strategy program. The course will provide guidance on creating a value-driven strategy for your business.
Do you want to learn how to craft an effective business strategy and create value for your company's stakeholders? Explore our online course Business Strategy , or other strategy courses , to develop your strategic planning skills. To determine which strategy course is right for you, download our free flowchart .
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- What is strategic planning? 5 steps and ...
What is strategic planning? 5 steps and processes
A strategic plan helps you define and share the direction your company will take in the next three to five years. It includes your company’s vision and mission statements, goals, and the actions you’ll take to achieve those goals. In this article we describe how a strategic plan compares to other project and business tools, plus four steps to create a successful strategic plan for your company.
Strategic planning is when business leaders map out their vision for the organization’s growth and how they’re going to get there. Strategic plans inform your organization’s decisions, growth, and goals. So if you work for a small company or startup, you could likely benefit from creating a strategic plan. When you have a clear sense of where your organization is going, you’re able to ensure your teams are working on projects that make the most impact.
The strategic planning process doesn’t just help you identify where you need to go—during the process, you’ll also create a document you can share with employees and stakeholders so they stay informed. In this article, we’ll walk you through how to get started developing a strategic plan.
What is a strategic plan?
A strategic plan is a tool to define your organization’s goals and what actions you will take to achieve them. Typically, a strategic plan will include your company’s vision and mission statements, your long-term goals (as well as short-term, yearly objectives), and an action plan of the steps you’re going to take to move in the right direction.
Your strategic plan document should include:
Your company’s mission statement
Your company’s goals
A plan of action to achieve those goals
Your approach to achieving your goals
The tactics you’ll use to meet your goals
An effective strategic plan can give your organization clarity and focus. This level of clarity isn’t always a given—according to our research, only 16% of knowledge workers say their company is effective at setting and communicating company goals. By investing time into strategy formulation, you can build out a three- to five-year vision for the future of your company. This strategy will then inform your yearly and quarterly company goals.
Do I need a strategic plan?
A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics. Here’s how a strategic plan compares to other project management and business tools.
Strategic plan vs. business plan
A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.
You should create a business plan when you’re:
Just starting your business
Significantly restructuring your business
If your business is already established, consider creating a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.
Key takeaway: A business plan works for new businesses or large organizational overhauls. Strategic plans are better for established businesses.
Strategic plan vs. mission and vision statements
Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.
As a result, you should already have your mission and vision statements drafted before you create a strategic plan. Ideally, this is something you created during the business planning phase or shortly after your company started. If you don’t have a mission or vision statement, take some time to create those now. A mission statement states your company’s purpose and it addresses what problem your organization is trying to solve. A vision statement states, in very broad strokes, how you’re going to get there.
A mission statement summarizes your company’s purpose
A vision statement broadly explains how you’ll reach your company’s purpose
A strategic plan should include your mission and vision statements, but it should also be more specific than that. Your mission and vision statements could, theoretically, remain the same throughout your company’s entire lifespan. A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction.
For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:
Mission statement: “To ensure the safety of the world’s animals.”
Vision statement: “To create pet safety and tracking products that are effortless to use.”
Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners.
Key takeaway: A strategic plan draws inspiration from your mission and vision statements.
Strategic plan vs. company objectives
Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time.
Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.
Key takeaway: Company objectives are broad, evergreen goals, while a strategic plan is a specific plan of action.
Strategic plan vs. business case
A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business.
You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.
Key takeaway: A business case tackles one initiative or investment, while a strategic plan maps out years of overall growth for your company.
Strategic plan vs. project plan
A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan.
A project plan has seven parts:
Stakeholders and roles
Scope and budget
Milestones and deliverables
Timeline and schedule
Key takeaway: You may build project plans to map out parts of your strategic plan.
When should I create a strategic plan?
You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed. That being said, if your organization moves quickly, consider creating one every two to three years instead. Small businesses may need to create strategic plans more often, as their needs change.
Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets.
What are the 5 steps in strategic planning?
The strategic planning process should be run by a small team of key stakeholders who will be in charge of building your strategic plan.
Your group of strategic planners, sometimes called the management committee, should be a small team of five to 10 key stakeholders and decision-makers for the company. They won’t be the only people involved—but they will be the people driving the work.
Once you’ve established your management committee, you can get to work on the strategic planning process.
Step 1: Determine where you are
Before you can get started with strategy development and define where you’re going, you first need to define where you are. To do this, your management committee should collect a variety of information from additional stakeholders—like employees and customers. In particular, plan to gather:
Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future
Customer insights to understand what your customers want from your company—like product improvements or additional services
Employee feedback that needs to be addressed—whether in the product, business practices, or company culture
A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process).
To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:
What does your organization currently do well?
What separates you from your competitors?
What are your most valuable internal resources?
What tangible assets do you have?
What is your biggest strength?
What does your organization do poorly?
What do you currently lack (whether that’s a product, resource, or process)?
What do your competitors do better than you?
What, if any, limitations are holding your organization back?
What processes or products need improvement?
What opportunities does your organization have?
How can you leverage your unique company strengths?
Are there any trends that you can take advantage of?
How can you capitalize on marketing or press opportunities?
Is there an emerging need for your product or service?
What emerging competitors should you keep an eye on?
Are there any weaknesses that expose your organization to risk?
Have you or could you experience negative press that could reduce market share?
Is there a chance of changing customer attitudes towards your company?
Step 2: Identify your goals and objectives
This is where the magic happens. To develop your strategy, take into account your current position, which is where you are now. Then, draw inspiration from your original business documents—these are your final destination.
To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” This can help you figure out exactly which path you need to take.
During this phase of the planning process, take inspiration from important company documents to ensure your strategic plan is moving your company in the right direction like:
Your mission statement, to understand how you can continue moving towards your organization’s core purpose
Your vision statement, to clarify how your strategic plan fits into your long-term vision
Your company values, to guide you towards what matters most towards your company
Your competitive advantages, to understand what unique benefit you offer to the market
Your long-term goals, to track where you want to be in five or 10 years
Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in
Step 3: Develop your plan
Now that you understand where you are and where you want to go, it’s time to put pen to paper. Your plan will take your position and strategy into account to define your organization-wide plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your strategic plan should be created as the quarters and years go on.
As you build your strategic plan, you should define:
Your company priorities for the next three to five years, based on your SWOT analysis and strategy.
Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals .
Related key results and KPIs for that first year. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable.
Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.
A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.
Step 4: Execute your plan
After all that buildup, it’s time to put your plan into action. New strategy execution involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success.
Map your processes with key performance indicators, which will gauge the success of your plan. KPIs will establish which parts of your plan you want achieved in what time frame.
A few tips to make sure your plan will be executed without a hitch:
Align tasks with job descriptions to make sure people are equipped to get their jobs done
Communicate clearly to your entire organization throughout the implementation process
Fully commit to your plan
Step 5: Revise and restructure as needed
At this point, you should have created and implemented your new strategic framework. The final step of the planning process is to monitor and manage your plan.
Share your strategic plan —this isn’t a document to hide away. Make sure your team (especially senior leadership) has access to it so they can understand how their work contributes to company priorities and your overall strategic plan. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management tool .
Update your plan regularly (quarterly and annually). Make sure you’re using your strategic plan to inform your shorter-term goals. Your strategic plan also isn’t set in stone. You’ll likely need to update the plan if your company decides to change directions or make new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan to ensure you’re building your organization in the best direction possible for the next few years.
Keep in mind that your plan won’t last forever—even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.
The benefits of strategic planning
Strategic planning can help with goal-setting by allowing you to explain how your company will move towards your mission and vision statements in the next three to five years. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).
When you create and share a clear strategic plan with your team, you can:
Align everyone around a shared purpose
Proactively set objectives to help you get where you want to go
Define long-term goals, and then set shorter-term goals to support them
Assess your current situation and any opportunities—or threats
Help your business be more durable because you’re thinking long-term
Increase motivation and engagement
Sticking to the strategic plan
To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done.
With clear priorities, team members can focus on the initiatives that are making the biggest impact for the company—and they’ll likely be more engaged while doing so.
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How to Write a Business Plan, Step by Step
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1. Write an executive summary
2. describe your company, 3. state your business goals, 4. describe your products and services, 5. do your market research, 6. outline your marketing and sales plan, 7. perform a business financial analysis, 8. make financial projections, 9. add additional information to an appendix, business plan tips and resources.
A business plan is a document that outlines your business’s financial goals and explains how you’ll achieve them. A strong, detailed plan will provide a road map for the business’s next three to five years, and you can share it with potential investors, lenders or other important partners.
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This is the first page of your business plan. Think of it as your elevator pitch. It should include a mission statement, a brief description of the products or services offered, and a broad summary of your financial growth plans.
Though the executive summary is the first thing your investors will read, it can be easier to write it last. That way, you can highlight information you’ve identified while writing other sections that go into more detail.
» MORE: How to write an executive summary in 6 steps
Next up is your company description, which should contain information like:
Your business’s registered name.
Address of your business location .
Names of key people in the business. Make sure to highlight unique skills or technical expertise among members of your team.
Your company description should also define your business structure — such as a sole proprietorship, partnership or corporation — and include the percent ownership that each owner has and the extent of each owner’s involvement in the company.
Lastly, it should cover the history of your company and the nature of your business now. This prepares the reader to learn about your goals in the next section.
» MORE: How to write a company overview for a business plan
The third part of a business plan is an objective statement. This section spells out exactly what you’d like to accomplish, both in the near term and over the long term.
If you’re looking for a business loan or outside investment, you can use this section to explain why you have a clear need for the funds, how the financing will help your business grow, and how you plan to achieve your growth targets. The key is to provide a clear explanation of the opportunity presented and how the loan or investment will grow your company.
For example, if your business is launching a second product line, you might explain how the loan will help your company launch the new product and how much you think sales will increase over the next three years as a result.
In this section, go into detail about the products or services you offer or plan to offer.
You should include the following:
An explanation of how your product or service works.
The pricing model for your product or service.
The typical customers you serve.
Your supply chain and order fulfillment strategy.
Your sales strategy.
Your distribution strategy.
You can also discuss current or pending trademarks and patents associated with your product or service.
Lenders and investors will want to know what sets your product apart from your competition. In your market analysis section , explain who your competitors are. Discuss what they do well, and point out what you can do better. If you’re serving a different or underserved market, explain that.
Here, you can address how you plan to persuade customers to buy your products or services, or how you will develop customer loyalty that will lead to repeat business.
» MORE: R e a d our complete guide to small business marketing
If you’re a startup, you may not have much information on your business financials yet. However, if you’re an existing business, you’ll want to include income or profit-and-loss statements, a balance sheet that lists your assets and debts, and a cash flow statement that shows how cash comes into and goes out of the company.
You may also include metrics such as:
Net profit margin: the percentage of revenue you keep as net income.
Current ratio: the measurement of your liquidity and ability to repay debts.
Accounts receivable turnover ratio: a measurement of how frequently you collect on receivables per year.
This is a great place to include charts and graphs that make it easy for those reading your plan to understand the financial health of your business.
» NerdWallet’s picks for setting up your business finances:
The best business checking accounts .
The best business credit cards .
The best accounting software .
This is a critical part of your business plan if you’re seeking financing or investors. It outlines how your business will generate enough profit to repay the loan or how you will earn a decent return for investors.
Here, you’ll provide your business’s monthly or quarterly sales, expenses and profit estimates over at least a three-year period — with the future numbers assuming you’ve obtained a new loan.
Accuracy is key, so carefully analyze your past financial statements before giving projections. Your goals may be aggressive, but they should also be realistic.
List any supporting information or additional materials that you couldn’t fit in elsewhere, such as resumes of key employees, licenses, equipment leases, permits, patents, receipts, bank statements, contracts and personal and business credit history. If the appendix is long, you may want to consider adding a table of contents at the beginning of this section.
Here are some tips to help your business plan stand out:
Avoid over-optimism: If you’re applying for a business loan at a local bank, the loan officer likely knows your market pretty well. Providing unreasonable sales estimates can hurt your chances of loan approval.
Proofread: Spelling, punctuation and grammatical errors can jump off the page and turn off lenders and prospective investors, taking their mind off your business and putting it on the mistakes you made. If writing and editing aren't your strong suit, you may want to hire a professional business plan writer, copy editor or proofreader.
Use free resources: SCORE is a nonprofit association that offers a large network of volunteer business mentors and experts who can help you write or edit your business plan. You can search for a mentor or find a local SCORE chapter for more guidance.
The U.S. Small Business Administration’s Small Business Development Centers , which provide free business consulting and help with business plan development, can also be a resource.
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Essential Guide to Strategic Planning
Strategic planning maps the initiatives and investments required to achieve long‑term strategic objectives. Here’s how to do it well.
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Strategic planning that works — even in volatile times
Just 29% of strategists say their organizations change plans fast enough to respond to disruption. What’s the problem? Most often, unclear objectives, poor strategic planning processes and disengaged business leaders.
Use this guide to:
Turn your strategy into action faster
Combat 7 mistakes common to strategic planning
Capture and communicate your plans with an exclusive one-page template
4 critical things to know about strategic planning
Especially in times of disruption, it’s key to understand what strategic planning is and does, what assumptions you need and how to leverage the value of adaptive strategy and scenario planning.
- What Is Strategic Planning?
- Strategic Assumptions
- Scenario Planning
- Adaptive Strategy
Strategy and strategic plans: How they are different and why it matters
Strategy creates a common understanding of what an organization wants to achieve and what it needs to do to meet its goals. Strategic plans bridge the gap from overall direction to specific projects and day-to-day actions that ultimately execute the strategy. Job No. 1 is to know the difference between strategy and strategic plans — and why it matters.
Strategy defines the long-term direction of the enterprise. It articulates what the enterprise will do to compete and succeed in its chosen markets or, for the public sector, what the agency will do to achieve its mission.
Strategic planning defines how the enterprise will realize its strategic ambitions in the midterm. Too often, strategic plans are created and then forgotten until the next planning cycle begins. A well-done strategic plan turns an enterprise strategy into a clear roadmap of initiatives, actions and investments required to execute the strategy and meet business goals.
Functional strategic plans document the choices and actions needed for the function to move from the current state to the desired end state, and contribute effectively to the enterprise business model and goals.
Business unit strategic plans define and finalize business unit goals, objectives and initiatives, while cognizant of enterprise priorities and external trends.
Operational plans deal with the short-term execution of specific projects and changes, as well as any operational tasks not contained in the strategic plan.
If you’re responsible for functional strategy, such as IT , create strategic frameworks focused only on what’s material — critical assumptions, relevant metrics and the key initiatives your function needs to contribute effectively to organizational goals, even as those goals shift.
Look out for key trends and disruptions, and test strategic assumptions
It’s critical to scan and respond to trends and disruptions that could impact your strategy and strategic plans — and change your strategic assumptions. Strategic planning cycles should incorporate some mechanism to vet assumptions for relevance (also see “Scenario Planning”).
Ignoring or devaluing trends and disruptions can leave critical gaps in both your strategic assumptions and your strategic planning process, because you may be overlooking both threats and opportunities for your value proposition and competitive positioning.
One Gartner survey found that only 38% of organizations have a formal process for this type of trendspotting. Gartner scopes the seven key areas of disruptive change as a “TPESTRE” of interconnected trend areas (see figure).
Executives across functions and teams can use the TPESTRE construct to identify key trends at any time — from augmented human experience to purpose-driven organizations and digitally enabled sustainability — and analyze their impact. From there, they can build strategic assumptions around the trends as they begin to map what actions might be needed in terms of business models, people/capabilities, IT systems and resources.
After sudden humanitarian or geopolitical disruptions like the COVID-19 pandemic or Russia’s invasion of Ukraine, a framework like TPESTRE can help you identify and monitor a range of risks that may affect your enterprise or function and that you may need to include in scenario planning.
Scenario planning as a strategic planning tool for functions
Scenario planning enables executives and their teams to explore and evaluate plausible alternative futures to make strategic plans more robust and resilient. Pandemic-related disruption and volatility showed the importance of leveraging a range of scenarios to reset business strategy and strategic plans.
Commonly used by strategists at the organizational level, scenario planning at the functional level is just as valuable. Many functional leaders have little experience with strategic scenario planning, even though they may regularly work with their CFO to build budget and forecast scenarios. Those who can learn and apply scenario planning in strategic planning can help their organization navigate volatile and dynamic conditions more effectively, especially in areas like supply chain , where disruption remains high.
Exploring scenarios enables you to determine suitable action plans or strategies for different possible futures. It reveals how to react to a specific future and which set of actions would make sense no matter what conditions ultimately unfold.
For leaders of functional teams, developing scenarios and their underlying assumptions is in itself a useful exercise to corroborate or challenge strategies and keep them current.
The objective of scenario planning is to secure the best immediate outcome while preparing suitable alternative action plans, depending on how a situation unfolds. Proactively agreeing on both near-term operational decisions and long-term strategic plans will reduce the time it takes you to respond to emerging risks and opportunities. This can help your function preempt, rather than reactively control for, the negative effects of a major event or disruption.
Guide to Scenario Planning for Functional Leaders
Scenario Planning for Supply Chain Leaders
Scenario Planning Ignition Guide for Marketing
Strengthen Your R&D Portfolio With Scenario Planning
Use adaptive strategic planning to enable a dynamic response
In an increasingly volatile and uncertain world, strategy can rapidly become out-of-date. To address this challenge, strategic planning must be adaptive. The faster the rate of change in operating conditions and the more disruptions you need to integrate into long-term strategy, the more adaptive your strategy models must be.
An adaptive strategy approach is what ensures your organization can spot new opportunities earlier and respond more quickly than your competitors, making you most likely to succeed in a dynamic digital world.
A truly adaptive strategy approach is consistent with four core practices (see figure) designed to move the enterprise from a rigid, top-down, calendar-based process to a more event-driven strategy approach. Functional strategy can incorporate the same principles. While a truly adaptive approach will be based on all four core practices, functional leaders can initially focus on the practices that address their immediate strategy challenges.
Rather than requiring perfect or complete information to execute, adaptive strategy uses available information to identify immediate actions required for an enterprise or function to be successful. These actions may range from focusing on high-priority areas to making foundational investments or conducting experiments to test ideas. You can use insights from these actions, along with any new information and analysis, to identify your next set of actions.
Adaptive strategy requires you to review strategy whenever new (and relevant) information becomes available, so it’s important to continually scan the business context to identify changes and review — and, where necessary, adjust — strategy in response to changes. (Also see “Strategic Assumptions.”)
Check out more strategic planning essentials for your function
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Frequently asked questions
What is strategic planning.
Strategic planning is the process through which enterprises, functions and business units identify the roadmap of initiatives and portfolio of investments that will be required in the medium term to achieve long-term strategic objectives.
What are the four types of strategic planning and the three levels of strategic planning?
Strategic planning starts with setting strategy at the enterprise level, but that strategy must then be turned into action. The three levels of strategic planning typically refer to corporate versus business unit and functional. The four types of plans are typically strategic, operational, tactical and contingency.
What steps are involved in the strategic planning process?
To build a successful strategic plan with a consistent and sequential process, functional leaders should:
Ensure consistent usage of terms to minimize confusion in strategic planning and set a baseline for collaboration
Build a strong foundation for more detailed planning by setting or pressure-testing mission, vision and goal statements first
Streamline stakeholder input by limiting mission, vision and goal setting to senior leadership, and leaving objective, action plan, and measure and metric development to managers with execution expertise
What are the key elements of strategic planning?
The key elements of a successful strategic plan include:
Mission and vision. The organization’s mission articulates its reasons for being, and the vision lays out where the organization hopes to be. The strategic plan, which links the two, must be adaptive enough to respond if the context changes during execution.
Strategic assumptions. To build a successful strategic plan, leadership should scope for trends and disruptions, and assess their potential impact on enterprise goals.
Strategic plan design. A rigorous strategic planning design effectively translates the strategy into plans that can and will be executed. Poor plans lead to poor execution.
What are the key terms in strategic planning?
Mission: Organization’s purpose
Vision: Desired future state
Objective: How to reach goals
Action plan: What’s needed to achieve objectives
Measures and metrics: To track progress toward goals
How do we design a strategic planning system?
Strategic planning “systems” refer to the tools used to document strategic plans. Gartner urges organizations not to focus on strategy in terms of the document they’re creating, but instead focus on turning strategy into an easily communicated action plan.
What is a strategic action plan?
The strategic action plan is a formal document that serves as the primary source of information for how objectives will be executed, monitored, controlled and closed. Many organizations also deploy an associated but separate “action plan” for achieving the operating model.
What are strategic measures and metrics?
Measures are observable outcomes that allow organizations to evaluate the efficacy of their action plans. Metrics quantify those observed changes to enable an organization to concretely quantify its progress and stay aligned to its chosen measures.
What are the 7 key success factors involved in strategic planning?
These seven success factors are key to producing high-quality strategic plans that will be successfully executed yet responsive to change:
Focus on designing a minimally viable strategy.
Customize planning efforts to meet participants where they are.
Sketch out initiative design before prioritizing strategic actions.
Be clear about who owns what.
Cascade plans side to side, not just top-down.
Focus performance measures on key assumptions.
Pressure-test plans against a narrow set of future scenarios.
Drive stronger performance on your mission-critical priorities.
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What Is a Business Plan?
Understanding business plans, how to write a business plan, elements of a business plan, special considerations.
- Business Plan FAQs
Business Plan: What It Is, What's Included, and How To Write One
Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.
A business plan is a document that defines in detail a company's objectives and how it plans to achieve its goals. A business plan lays out a written road map for the firm from marketing , financial, and operational standpoints. Both startups and established companies use business plans.
A business plan is an important document aimed at a company's external and internal audiences. For instance, a business plan is used to attract investment before a company has established a proven track record. It can also help to secure lending from financial institutions.
Furthermore, a business plan can serve to keep a company's executive team on the same page about strategic action items and on target for meeting established goals.
Although they're especially useful for new businesses, every company should have a business plan. Ideally, the plan is reviewed and updated periodically to reflect goals that have been met or have changed. Sometimes, a new business plan is created for an established business that has decided to move in a new direction.
- A business plan is a document describing a company's core business activities and how it plans to achieve its goals.
- Startup companies use business plans to get off the ground and attract outside investors.
- A business plan can also be used as an internal guide to keep an executive team focused on and working toward short- and long-term objectives.
- Businesses may create a lengthier traditional business plan or a shorter lean startup business plan.
- Good business plans should include an executive summary and sections on products and services, marketing strategy and analysis, financial planning, and a budget.
Investopedia / Ryan Oakley
A business plan is a fundamental document that any new business should have in place prior to beginning operations. Indeed, banks and venture capital firms often require a viable business plan before considering whether they'll provide capital to new businesses.
Operating without a business plan usually is not a good idea. In fact, very few companies are able to last very long without one. There are benefits to creating (and sticking to) a good business plan. These include being able to think through ideas before investing too much money in them and working through potential obstacles to success.
A good business plan should outline all the projected costs and possible pitfalls of each decision a company makes. Business plans, even among competitors in the same industry, are rarely identical. However, they can have the same basic elements, such as an executive summary of the business and detailed descriptions of its operations, products and services, and financial projections. A plan also states how the business intends to achieve its goals.
While it's a good idea to give as much detail as possible, it's also important that a plan be concise to keep a reader's attention to the end.
A well-considered and well-written business plan can be of enormous value to a company. While there are templates that you can use to write a business plan, try to avoid producing a generic result. The plan should include an overview and, if possible, details of the industry of which the business will be a part. It should explain how the business will distinguish itself from its competitors.
Start with the essential structure: an executive summary, company description, market analysis, product or service description, marketing strategy, financial projections, and appendix (which include documents and data that support the main sections). These sections or elements of a business plan are outlined below.
When you write your business plan, you don’t have to strictly follow a particular business plan outline or template. Use only those sections that make the most sense for your particular business and its needs.
Traditional business plans use some combination of the sections below. Your plan might also include any funding requests you're making. Regardless, try to keep the main body of your plan to around 15-25 pages.
The length of a business plan varies greatly from business to business. Consider fitting the basic information into a 15- to 25-page document. Then, other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and included as appendices.
As mentioned above, no two business plans are the same. Nonetheless, they tend to have the same elements. Below are some of the common and key parts of a business plan.
- Executive summary: This section outlines the company and includes the mission statement along with any information about the company's leadership, employees, operations, and location.
- Products and services: Here, the company can outline the products and services it will offer, and may also include pricing, product lifespan, and benefits to the consumer. Other factors that may go into this section include production and manufacturing processes, any patents the company may have, as well as proprietary technology . Information about research and development (R&D) can also be included here.
- Market analysis: A firm needs a good handle on its industry as well as its target market. This section of the plan will detail a company's competition and how the company fits in the industry, along with its relative strengths and weaknesses. It will also describe the expected consumer demand for a company's products or services and how easy or difficult it may be to grab market share from incumbents.
- Marketing strategy: This section describes how the company will attract and keep its customer base and how it intends to reach the consumer. A clear distribution channel must be outlined. The section also spells out advertising and marketing campaign plans and the types of media those campaigns will use.
- Financial planning: This section should include a company's financial planning and projections. Financial statements, balance sheets, and other financial information may be included for established businesses. New businesses will include targets and estimates for the first few years plus a description of potential investors.
- Budget: Every company needs to have a budget in place. This section should include costs related to staffing, development, manufacturing, marketing, and any other expenses related to the business.
Unique Business Plans Help
The best business plans aren't generic ones created from easily accessed templates. A company should entice readers with a plan that demonstrates its singularity and potential for success.
Types of Business Plans
Business plans help companies identify their objectives and remain on track to meet goals. They can help companies start, manage themselves, and grow once up and running. They also act as a means to attract lenders and investors.
Although there is no right or wrong business plan, they can fall into two different categories—traditional or lean startup. According to the Small Business Administration (SBA) , the traditional business plan is the most common. It contains a lot of detail in each section. These tend to be longer than the lean startup plan and require more work.
Lean startup business plans, on the other hand, use an abbreviated structure that highlights key elements. These business plans aren't as common in the business world because they're short—as short as one page—and lack detail. If a company uses this kind of plan, it should be prepared to provide more detail if an investor or lender requests it.
A complete business plan must include a set of financial projections for the business. These forward-looking financial statements are often called pro-forma financial statements or simply the " pro-formas ." They include an overall budget, current and projected financing needs, a market analysis, and the company's marketing strategy.
Other Considerations for a Business Plan
A major reason for a business plan is to give owners a clear picture of objectives, goals, resources, potential costs, and drawbacks of certain business decisions. A business plan should help them modify their structures before implementing their ideas. It also allows owners to project the type of financing required to get their businesses up and running.
If there are any especially interesting aspects of the business, they should be highlighted and used to attract financing, if needed. For example, Tesla Motors' electric car business essentially began only as a business plan.
Importantly, a business plan shouldn't be a static document. As a business grows and changes, so too should the business plan. An annual review of the company and its plan allows an entrepreneur or group of owners to update the plan, based on successes, setbacks, and other new information. It provides an opportunity to size up the plan's ability to help the company grow.
Think of the business plan as a living document that evolves with your business.
A business plan is a document created by a company that describes the company's goals, operations, industry standing, marketing objectives, and financial projections. The information it contains can be a helpful guide in running the company. What's more, it can be a valuable tool to attract investors and obtain financing from financial institutions.
Why Do Business Plans Fail?
Even if you have a good business plan, your company can still fail, especially if you do not stick to the plan! Having strong leadership with a focus on the plan is always a good strategy. Even when following the plan, if you had poor assumptions going into your projections, you can be caught with cash flow shortages and out-of-control budgets. Markets and the economy can also change. Without flexibility built into your business plan, you may be unable to pivot to a new course as needed.
What Does a Lean Startup Business Plan Include?
The lean startup business plan is an option when a company prefers a quick explanation of its business. The company may feel that it doesn't have a lot of information to provide since it's just getting started.
Sections can include: a value proposition, a company's major activities and advantages, resources such as staff, intellectual property, and capital, a list of partnerships, customer segments, and revenue sources.
Small Business Administration. " Write Your Business Plan ."
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The Complete Guide to Writing a Strategic Plan
By Joe Weller | April 12, 2019 (updated July 17, 2021)
Writing a strategic plan can be daunting, as the process includes many steps. In this article, you’ll learn the basics of writing a strategic plan, what to include, common challenges, and more.
Included on this page, you'll find details on what to include in a strategic plan , the importance of an executive summary , how to write a mission statement , how to write a vision statement , and more.
The Basics of Writing a Strategic Plan
The strategic planning process takes time, but the payoff is huge. If done correctly, your strategic plan will engage and align stakeholders around your company’s priorities.
Strategic planning, also called strategy development or analysis and assessment , requires attention to detail and should be performed by someone who can follow through on next steps and regular updates. Strategic plans are not static documents — they change as new circumstances arise, both internally and externally.
Before beginning the strategic planning process, it’s important to make sure you have buy-in from management, a board of directors, or other leaders. Without it, the process cannot succeed.
Next, gather your planning team. The group should include people from various departments at different levels, and the planning process should be an open, free discussion within the group. It’s important for leaders to get input from the group as a whole, but they don’t necessarily need approval from everyone — that will slow down the process.
The plan author is responsible for writing and putting the final plan together and should work with a smaller group of writers to establish and standardize the tone and style of the final document or presentation.
Sometimes, it’s a good idea to hire an external party to help facilitate the strategic planning process.
“It often can be helpful to have a really good facilitator to organize and pursue strategic conversations,” says Professor John M. Bryson, McKnight Presidential Professor of Planning and Public Affairs at the Hubert H. Humphrey School of Public Affairs, University of Minnesota and author of Strategic Planning for Public and Nonprofit Organizations: A Guide to Strengthening and Sustaining Organizational Achievement .
Byson says the facilitator can be in-house or external, but they need experience. “You need to make sure someone is good, so there needs to be a vetting process,” he says.
One way to gauge a facilitator’s experience is by asking how they conduct conversations. “It’s important for facilitators to lead by asking questions,” Bryson says.
Bryson says that strong facilitators often ask the following questions:
What is the situation we find ourselves in?
What do we do?
How do we do it?
How do we link our purposes to our capabilities?
The facilitators also need to be able to handle conflict and diffuse situations by separating idea generation from judgement. “Conflict is part of strategic planning,” Bryson admits. “[Facilitators] need to hold the conversations open long enough to get enough ideas out there to be able to make wise choices.”
These outside helpers are sometimes more effective than internal facilitators since they are not emotionally invested in the outcome of the process. Thus, they can concentrate on the process and ask difficult questions.
A strategic plan is a dynamic document or presentation that details your company’s present situation, outlines your future plans, and shows you how the company can get there. You can take many approaches to the process and consider differing ideas about what needs to go into it, but some general concepts stand.
“Strategic planning is a prompt or a facilitator for fostering strategic thinking, acting, and learning,” says Bryson. He explains that he often begins planning projects with three questions:
What do you want to do?
How are we going to do it?
What would happen if you did what you want to do?
The answers to these questions make up the meat of the planning document.
A strategic plan is only effective when the writing and thinking is clear, since the intent is to help an organization keep to its mission through programs and capacity, while also building stakeholder engagement.
Question 1: Where Are We Now?
The answer (or answers) to the first question — where are we now? — addresses the foundation of your organization, and it can serve as an outline for the following sections of your strategic plan:
Core values and guiding principles
Identification of competing organizations
Industry analysis (this can include a SWOT or PEST analysis)
Question 2: Where Are We Going?
The answers to this question help you identify your goals for the future of the business and assess whether your current trajectory is the future you want. These aspects of the plan outline a strategy for achieving success and can include the following:
Vision statement about what the company will look like in the future
What is happening (both internally and externally) and what needs to change
The factors necessary for success
Question 3: How Do We Get There?
The answers to this question help you outline the many routes you can take to achieve your vision and match your strengths with opportunities in the market. A Gantt chart can help you map out and keep track of these initiatives.
You should include the following sections:
Specific and measurable goals
An execution plan that identifies who manages and monitors the plan
An evaluation plan that shows how you plan to measure the successes and setbacks that come with implementation
What to Include in a Strategic Plan
Strategic planning terminology is not standardized throughout the industry, and this can lead to confusion. Instead, strategic planning experts use many names for the different sections of a strategic plan.
“The terms are all over the map. It’s really the concept of what the intention of the terms are [that is important],” says Denise McNerney, President and CEO of iBossWell, Inc. , and incoming president of the Association for Strategic Planning (ASP). She recommends coming up with a kind of glossary that defines the terms for your team. “One of the most important elements when you’re starting the strategic planning process is to get some clarity on the nomenclature. It’s just what works for your organization. Every organization is slightly different.”
No matter what terms you use, the general idea of a strategic plan is the same. “It’s like drawing a map for your company. One of the first steps is committing to a process, then determining how you’re going to do it,” McNerney explains.
She uses a basic diagram that she calls the strategic plan architecture . The areas above the red dotted line are the strategic parts of the plan. Below the red dotted line are the implementation pieces.
While the specific terminology varies, basic sections of a strategic plan include the following in roughly this order:
Elevator pitch or company description
Some plans will contain all the above sections, but others will not — what you include depends on your organization’s structure and culture.
“I want to keep it simple, so organizations can be successful in achieving [the strategic plan],” McNerney explains. “Your plan has to be aligned with your culture and your culture needs to be aligned with your plan if you’re going to be successful in implementing it.”
The following checklist will help you keep track of what you have done and what you still need to do.
Download Strategic Plan Sections Checklist
How to Write a Strategic Plan
Once you’ve assembled your team and defined your terms, it’s time to formalize your ideas by writing the strategic plan. The plan may be in the form of a document, a presentation, or another format.
You can use many models and formats to create your strategic plan (read more about them in this article ). However, you will likely need to include some basic sections, regardless of the particular method you choose (even if the order and way you present them vary). In many cases, the sections of a strategic plan build on each other, so you may have to write them in order.
One tip: Try to avoid jargon and generic terms; for example, words like maximize and succeed lose their punch. Additionally, remember that there are many terms for the same object in strategic planning.
The following sections walk you through how to write common sections of a strategic plan.
How to Write an Executive Summary
The key to writing a strong executive summary is being clear and concise. Don’t feel pressured to put anything and everything into this section — executive summaries should only be about one to two pages long and include the main points of the strategic plan.
The idea is to pique the reader’s interest and get them to read the rest of the plan. Because it functions as a review of the entire document, write the executive summary after you complete the rest of your strategic plan.
“If you have a plan that’s really lengthy, you should have a summary,” says Jim Stockmal, President of the Association for Strategic Planning (ASP). He always writes summaries last, after he has all the data and information he needs for the plan. He says it is easier to cut than to create something.
For more information about writing an effective executive summary, a checklist, and free templates, read this article .
If you want a one-page executive summary, this template can help you decide what information to include.
Download One-Page Executive Summary Template
Excel | Word | PDF
How to Write a Company Description
Also called an elevator pitch , the company description is a brief outline of your organization and what it does. It should be short enough that it can be read or heard during the average elevator ride.
The company description should include the history of your company, the major products and services you provide, and any highlights and accomplishments, and it should accomplish the following:
Define what you are as a company.
Describe what the company does.
Identify your ideal client and customer.
Highlight what makes your company unique.
While this may seem basic, the company description changes as your company grows and changes. For example, your ideal customer five years ago might not be the same as the current standard or the one you want in five years.
Share the company description with everyone in your organization. If employees cannot accurately articulate what you do to others, you might miss out on opportunities.
How to Write a Mission Statement
The mission statement explains what your business is trying to achieve. In addition to guiding your entire company, it also helps your employees make decisions that move them toward the company’s overall mission and goals.
“Ideally, [the mission statement is] something that describes what you’re about at the highest level,” McNerney says. “It’s the reason you exist or what you do.”
Strong mission statements can help differentiate your company from your competitors and keep you on track toward your goals. It can also function as a type of tagline for your organization.
Mission statements should do the following:
Define your company’s purpose. Say what you do, who you do it for, and why it is valuable.
Use specific and easy-to-understand language.
Be inspirational while remaining realistic.
Be short and succinct.
This is your chance to define the way your company will make decisions based on goals, culture, and ethics. Mission statements should not be vague or generic, and they should set your business apart from others. If your mission statement could define many companies in your line of work, it is not a good mission statement.
Mission statements don’t have to be only outward-facing for customers or partners. In fact, it is also possible to include what your company does for its employees in your mission statement.
Unlike other parts of your strategic plan that are designed to be reviewed and edited periodically, your company’s mission statement should live as is for a while.
That said, make the effort to edit and refine your mission statement. Take out jargon like world class, best possible, state of the art, maximize, succeed , and so on, and cut vague or unspecific phrasing. Then let your strategic planning committee review it.
How to Write a Vision Statement
Every action your company does contributes to its vision. The vision statement explains what your company wants to achieve in the long term and can help inspire and align your team.
“The vision is the highest-ordered statement of the desired future or state of what you want your business to achieve,” McNerney explains.
A clear vision statement can help all stakeholders understand the meaning and purpose of your company. It should encourage and inspire employees while setting your company’s direction. It also helps you rule out elements that might not align with your vision.
Vision statements should be short (a few sentences). They should also be memorable, specific, and ambitious. But there is a fine line between being ambitious and creating a fantasy. The vision should be clearly attainable if you follow the goals and objectives you outline later in your strategic planning plan.
Because you need to know your company’s goals and objectives to create an accurate vision statement, you might need to wait until you have more information about the company’s direction to write your vision statement.
Below are questions to ask your team as you craft your vision statement:
What impact do we want to have on our community and industry?
How will we interact with others as a company?
What is the culture of the business?
Avoid broad statements that could apply to any company or industry. For example, phrases like “delivering a wonderful experience” could apply to many industries. Write in the present tense, avoid jargon, and be clear and concise.
Vision statements should accomplish the following:
Focus on success.
Look at and project about five to 10 years ahead.
Stay in line with the goals and values of your organization.
Once you write your vision statement, communicate it to everyone in your company. Your team should be able to easily understand and repeat the company’s vision statement. Remember, the statements can change as the environment in and around your company changes.
The Difference Between Mission and Vision Statements
Mission and vision statements are both important, but they serve very different purposes.
Mission statements show why a business exists, while vision statements are meant to inspire and provide direction. Mission statements are about the present, and vision statements are about the future. The mission provides items to act upon, and the vision offers goals to aspire to.
For example, if a vision statement is “No child goes to bed hungry,” the accompanying mission would be to provide food banks within the city limits.
While many organizations have both mission and vision statements, it’s not imperative. “Not everyone has a vision statement,” McNerney says. “Some organizations just have one.”
If you choose to have only one statement, McNerney offers some advice: “Any statement you have, if you have just one, needs to include what [you do], how [you do it], why [you do it], and who you do it for.”
During the planning process, these key statements might change. “Early on in the process, you need to talk about what you are doing and why and how you are doing it. Sometimes you think you know where you want to go, but you’re not really sure,” McNerney says. “You need to have flexibility both on the plan content and in the process.”
How to Write Your Company’s Core Values
Company core values , sometimes called organizational values , help you understand what drives the company to do what it does. In this section, you’ll learn a lot about your company and the people who work with you. It should be relatively easy to write.
“The values are the core of how you operate [and] how you treat your people, both internally and externally. Values describe the behaviors you really want to advance,” McNerney says.
There are both internal and external values looking at your employees and coworkers, as well as customers and outside stakeholders. Pinpointing values will help you figure out the traits of the people you want to hire and promote, as well as the qualities you’re looking for in your customers.
Your values should align with your vision statement and highlight your strengths while mitigating weaknesses. McNerney says many organizations do not really consider or are not honest about their company’s values when working on strategic plans, which can lead to failure.
“Your strategies have to align with your values and vice versa,” she explains.
Many companies’ values sound like meaningless jargon, so take the time to figure out what matters to your company and push beyond generic language.
How to Write about Your Industry
When planning ahead for your business, it’s important to look around. How are matters inside your company? What are your competitors doing? Who are your target customers?
“[If you don’t do a thorough industry analysis], you’re doing your planning with your head in the sand. If you’re not looking at the world around you, you’re missing a whole dimension about what should inform your decision making,” McNerney advises.
Writing about your industry helps you identify new opportunities for growth and shows you how you need to change in order to take advantage of those opportunities. Identify your key competitors, and define what you see as their strengths and weaknesses. Performing this analysis will help you figure out what you do best and how you compare to your competition. Once you know what you do well, you can exploit your strengths to your advantage.
In this section, also include your SWOT (strengths, weaknesses, opportunities, and threats) analysis. You can choose from many templates to help you write this section.
Next, identify your target customers. Think about what they want and need, as well as how you can provide it. Do your competitors attract your target customers, or do you have a niche that sets you apart?
The industry analysis carries a price, but also provides many benefits. “It takes some time and money to do [a thorough industry analysis], but the lack of that understanding says a lot about the future of your organization. If you don’t know what is going on around you, how can you stay competitive?” explains McNerney.
How to Write Strategic Plan Goals and Objectives
This section is the bulk of your strategic plan. Many people confuse goals and objectives, thinking the terms are interchangeable, but many argue that the two are distinct. You can think of them this way:
Goals : Goals are broad statements about what you want to achieve as a company, and they’re usually qualitative. They function as a description of where you want to go, and they can address both the short and long term.
Objectives : Objectives support goals, and they’re usually quantitative and measurable. They describe how you will measure the progress needed to arrive at the destination you outlined in the goal. More than one objective can support one goal.
For example, if your goal is to achieve success as a strategic planner, your objective would be to write all sections of the strategic plan in one month.
iBossWell, Inc.’s McNerney reiterates that there are not hard and fast definitions for the terms goals and objectives , as well as many other strategic planning concepts. “I wouldn’t attempt to put a definition to the terms. You hear the terms goals and objectives a lot, but they mean different things to different people. What some people call a goal , others call an objective . What some people call an objective , others would call a KPI. ” They key, she explains, is to decide what the terms mean in your organization, explain the definitions to key stakeholders, and stick to those definitions.
How to Write Goals
Goals form the basis of your strategic plan. They set out your priorities and initiatives, and therefore are critical elements and define what your plan will accomplish. Some planning specialists use the term strategic objectives or strategic priorities when referring to goals, but for clarity, this article will use the term goals.
“[Goals] are the higher level that contain several statements about what your priorities are,” McNerney explains. They are often near the top of your plan’s hierarchy.
Each goal should reflect something you uncovered during the analysis phase of your strategic planning process. Goals should be precise and concise statements, not long narratives. For example, your goals might be the following:
Eliminate case backlog.
Lower production costs.
Increase total revenue.
Each goal should have a stated outcome and a deadline. Think of goal writing as a formula: Action + detail of the action + a measurable metric + a deadline = goal. For example, your goal might be: Increase total revenue by 5 percent in three product areas by the third quarter of 2020.
Another way to look at it: Verb (action) + adjective (description) = noun (result). An example goal: Increase website fundraising.
Your goals should strike a balance between being aspirational and tangible. You want to stretch your limits, but not make them too difficult to reach. Your entire organization and stakeholders should be able to remember and understand your goals.
Think about goals with varying lengths. Some should go out five to 10 years, others will be shorter — some significantly so. Some goals might even be quarterly, monthly, or weekly. But be careful to not create too many goals. Focus on the ones that allow you to zero in on what is critical for your company’s success. Remember, several objectives and action steps will likely come from each goal.
How to Write Objectives
Objectives are the turn-by-turn directions of how to achieve your goals. They are set in statement and purpose with no ambiguity about whether you achieve them or not.
Your goals are where you want to go. Next, you have to determine how to get there, via a few different objectives that support each goal. Note that objectives can cover several areas.
“You need implementation elements of the plan to be successful,” McNerney says, adding that some people refer to objectives as tactics , actions , and many other terms.
Objectives often begin with the words increase or decrease because they are quantifiable and measurable. You will know when you achieve an objective. They are action items, often with start and end dates.
Use the goal example from earlier: Increase total revenue by 5 percent in three product areas by the third quarter of 2020. In this example, your objectives could be:
Approach three new possible clients each month.
Promote the three key product areas on the website and in email newsletters.
Think of the acronym SMART when writing objectives: Make them specific, measurable, achievable, realistic/relevant, and time-bound.
Breaking down the process further, some strategic planners use the terms strategies and tactics to label ways to achieve objectives. Using these terms, strategies describe an approach or method you will use to achieve an objective. A tactic is a specific activity or project that achieves the strategy, which, in turn, helps achieve the objective.
How to Write about Capacity, Operations Plans, Marketing Plans, and Financial Plans
After you come up with your goals and objectives, you need to figure out who will do what, how you will market what they do, and how you will pay for what you need to do.
“If you choose to shortchange the process [and not talk about capacity and finances], you need to know what the consequences will be,” explains McNerney. “If you do not consider the additional costs or revenues your plan is going to drive, you may be creating a plan you cannot implement.”
To achieve all the goals outlined in your strategic plan, you need the right people in place. Include a section in your strategic plan where you talk about the capacity of your organization. Do you have the team members to accomplish the objectives you have outlined in order to reach your goals? If not, you may need to hire personnel.
The operations plan maps out your initiatives and shows you who is going to do what, when, and how. This helps transform your goals and objectives into a reality. A summary of it should go into your strategic plan. If you need assistance writing a comprehensive implementation plan for your organization, this article can guide you through the process.
A marketing plan describes how you attract prospects and convert them into customers. You don’t need to include the entire marketing plan in your strategic plan, but you might want to include a summary. For more information about writing marketing plans, this article can help.
Then there are finances. We would all like to accomplish every goal, but sometimes we do not have enough money to do so. A financial plan can help you set your priorities. Check out these templates to help you get started with a financial plan.
How to Write Performance Indicators
In order to know if you are reaching the goals you outline in your strategic plan, you need performance indicators. These indicators will show you what success looks like and ensure accountability. Sadly, strategic plans have a tendency to fail when nobody periodically assesses progress.
Key performance indicators (KPIs) can show you how your business is progressing. KPIs can be both financial and nonfinancial measures that help you chart your progress and take corrective measures if actions are not unfolding as they should. Other terms similar to KPIs include performance measures and performance indicators .
Performance indicators are not always financial, but they must be quantifiable. For example, tracking visitors to a website, customers completing a contact form, or the number of proposals that close with deals are all performance indicators that keep you on track toward achieving your goals.
When writing your performance indicators, pay attention to the following:
Define how often you need to report results.
Every KPI must have some sort of measure.
List a measure and a time period.
Note the data source where you will get your information to measure and track.
ASP’s Stockmal has some questions for you to ask yourself about picking performance indicators.
Are you in control of the performance measure?
Does the performance measure support the strategic outcomes?
Is it feasible?
Is data available?
Who is collecting that data, and how will they do it?
Is the data timely?
Is it cost-effective to collect that data?
ls the goal quantifiable, and can you measure it over time?
Are your targets realistic and time-bound?
Stockmal also says performance indicators cannot focus on only one thing at the detriment of another. “Don’t lose what makes you good,” he says. He adds that focusing on one KPI can hurt other areas of a company’s performance, so reaching a goal can be short-sided.
Some performance indicators can go into your strategic plan, but you might want to set other goals for your organization. A KPI dashboard can help you set up and track your performance and for more information about setting up a KPI dashboard, this article can help.
Communicating Your Strategic Plan
While writing your strategic plan, you should think about how to share it. A plan is no good if it sits on a shelf and nobody reads it.
“After the meetings are over, you have to turn your strategy into action,” says Stefan Hofmeyer, an experienced strategist and co-founder of Global PMI Partners . “Get in front of employees and present the plan [to get everyone involved].” Hofmeyer explains his research has shown that people stay with companies not always because of money, but often because they buy into the organization’s vision and want to play a part in helping it get where it wants to go. “These are the people you want to keep because they are invested,” he says.
Decide who should get a physical copy of the entire plan. This could include management, the board of directors, owners, and more. Do your best to keep it from your competitors. If you distribute it outside of your company, you might want to attach a confidentiality waiver.
You can communicate your plan to stakeholders in the following ways:
Hold a meeting to present the plan in person.
Highlight the plan in a company newsletter.
Include the plan in new employee onboarding.
Post the plan on the employee intranet, along with key highlights and a way to track progress.
If you hold a meeting, make sure you and other key planners are prepared to handle the feedback and discussion that will arise. You should be able to defend your plan and reinforce its key areas. The goal of the plan’s distribution is to make sure everyone understands their role in making the plan successful.
Remind people of your company’s mission, vision, and values to reinforce their importance. You can use posters or other visual methods to post around the office. The more that people feel they play an important part in the organization’s success, they more successful you will be in reaching your goals of your strategic plan.
Challenges in Writing a Strategic Plan
As mentioned, strategic planning is a process and involves a team. As with any team activity, there will be challenges.
Sometimes the consensus can take priority over what is clear. Peer pressure can be a strong force, especially if a boss or other manager is the one making suggestions and people feel pressured to conform. Some people might feel reluctant to give any input because they do not think it matters to the person who ultimately decides what goes into the plan.
Team troubles can also occur when one or more members does not think the plan is important or does not buy into the process. Team leaders need to take care of these troubles before they get out of hand.
Pay attention to your company culture and the readiness you have as a group, and adapt the planning process to fit accordingly. You need to find the balance between the process and the final product.
The planning process takes time. Many organizations do not give themselves enough time to plan properly, and once you finish planning, writing the document or presentation also takes time, as does implementation. Don’t plan so much that you ignore how you are going to put the plan into action. One symptom of this is not aligning the plan to fit the capacity or finances of the company.
Stockmal explains that many organizations often focus too much on the future and reaching their goals that they forget what made them a strong company in the first place. Business architecture is important, which Stockmal says is “building the capabilities the organization needs to fulfill its strategy.” He adds that nothing happens if there is no budget workers to do the work necessary to drive change.
Be careful with the information you gather. Do not take shortcuts in the research phase — that will lead to bad information coming out further in the process. Also, do not ignore negative information you may learn. Overcoming adversity is one way for companies to grow.
Be wary of cutting and pasting either from plans from past years or from other similar organizations. Every company is unique.
And while this may sound obvious, do not ignore what your planning process tells you. Your research might show you should not go in a direction you might want to.
Writing Different Types of Strategic Plans
The strategic planning process will differ based on your organization, but the basic concepts will stay the same. Whether you are a nonprofit, a school, or a for-profit entity, strategic plans will look at where you are and how you will get to where you want to go.
How to Write a Strategic Plan for a Nonprofit
For a nonprofit, the strategic plan’s purpose is mainly how to best advance the mission. It’s imperative to make sure the mission statement accurately fits the organization.
In addition to a SWOT analysis and other sections that go into any strategic plan, a nonprofit needs to keep an eye on changing factors, such as funding. Some funding sources have finite beginnings and endings. Strategic planning is often continuous for nonprofits.
A nonprofit has to make the community care about its cause. In a for-profit organization, the marketing department works to promote the company’s product or services to bring in new revenue. For a nonprofit, however, conveying that message needs to be part of the strategic plan.
Coming up with an evaluation method and KPIs can sometimes be difficult for a nonprofit, since they are often focused on goals other than financial gain. For example, a substance abuse prevention coalition is trying to keep teens from starting to drink or use drugs, and proving the coalition’s methods work is often difficult to quantify.
This template can help you visually outline your strategic plan for your nonprofit.
Download Nonprofit Strategic Plan Template
Excel | Smartsheet
How to Write a Strategic Plan for a School
Writing a strategic plan for a school can be difficult because of the variety of stakeholders involved, including students, teachers, other staff, and parents.
Strategic planning in a school is different from others because there are no markets to explore, products to produce, clients to woo, or adjustable timelines. Schools often have set boundaries, missions, and budgets.
Even with the differences, the same planning process and structure should be in place for schools as it is for other types of organizations.
This template can help your university or school outline your strategic plan.
Download University Strategic Plan Outline – Word
How to Write a 5-Year Strategic Plan
There is no set time period for a strategic plan, but five years can be a sweet spot. In some cases, yearly planning might keep you continually stuck in the planning process, while 10 years might be too far out.
In addition to the basic sections that go into any strategic plan, when forecasting five years into the future, put one- and three-year checkpoints into the plan so you can track progress intermittently.
How to Write a 3-Year Strategic Plan
While five years is often the strategic planning sweet spot, some organizations choose to create three-year plans. Looking too far ahead can be daunting, especially for a new or changing company.
In a three-year plan, the goals and objectives have a shorter timeframe and you need to monitor them more frequently. Build those checkpoints into the plan.
“Most organizations do a three- to five-year plan now because they recognize the technology and the changes in business that are pretty dynamic now,” Stockmal says.
How to Write a Departmental Strategic Plan
The first step in writing a strategic plan for your department is to pay attention to your company’s overall strategic plan. You want to make sure the plans align.
The steps in creating a plan for a department are the same as for an overall strategic plan, but the mission statement, vision, SWOT analysis, goals, objectives, and so on are specific to only the people in your department. Look at each person separately and consider their core competencies, strengths, capabilities, and weaknesses. Assign people who will be responsible for certain tasks and tactics necessary to achieve your goals.
If you have access to a plan from a previous year, see how your department did in meeting its goals. Adjust the new plan accordingly.
When you finish your departmental plan, make sure to submit it to whomever is responsible for your company’s overall plan. Expect to make changes.
How to Write a Strategic Plan for a Project
A strategic plan is for the big picture, not for a particular project for an organization. Instead of a strategic plan, this area would fall under project management.
If you have a failing project and need to turn it around, this article might help.
How to Write a Personal Strategic Plan
Creating a strategic plan isn’t only for businesses. You can also create a strategic plan to help guide both your professional and personal life. The key is to include what is important to you. This process takes time and reflection.
Be prepared for what you discover about yourself. Because you will be looking at your strengths and weaknesses, you might see things you do not like. It is important to be honest with yourself. A SWOT analysis on yourself will give you some honest feedback if you let it.
Begin with looking at your life as it is now. Are you satisfied? What do you want to do more or less? What do you value most in your life? Go deeper than saying family, happiness, and health. This exercise will help you clarify your values.
Once you know what is important to you, come up with a personal mission statement that reflects the values you cherish. As it does within a business, this statement will help guide you in making future decisions. If something does not fit within your personal mission, you shouldn’t do it.
Using the information you discovered during your SWOT and mission statement process, come up with goals that align with your values. The goals can be broad, but don’t forget to include action items and timeframes to help you reach your goals.
As for the evaluation portion, identify how you will keep yourself accountable and on track. You might involve a person to remind you about your plan, calendar reminders, small rewards when you achieve a goal, or another method that works for you.
Below is additional advice for personal strategic plans:
There are things you can control and things you cannot. Keep your focus on what you can act on.
Look at the positive instead of what you will give up. For example, instead of focusing on losing weight, concentrate on being healthier.
Do not overcommit, and do not ignore the little details that help you reach your goals.
No matter what, do not dwell on setbacks and remember to celebrate successes.
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Start, Stop, Continue: 5 Action Items for Creating a Business Strategy Plan
- Start defining your targets and goals
- Start making decisions based on facts and figures
- Stop comparing your business to others
- Continue thinking about the human factor
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Learn what you should start, stop, and continue doing when crafting a business strategy..
Whether you run a small family-owned bakery or an IT startup and want to become the next Google or Amazon, you need to develop a business strategy plan.
Without a business strategy , you'll find yourself at a loss sooner or later. Should you hire for a given role or not? Which product or service should you develop next? Where will you find the funding for an expansion?
Your business strategy makes answering these questions easier, but it isn't enough to simply have one. For any business strategy to work, it needs to be actionable, based on factual data and research, and SMART.
Let's take a look at five action items that you should either start, stop, or continue doing to help you develop a business strategy plan tailored to your unique business needs.
1. Start defining your targets and goals
Your first action should be defining your business goals and the targets you want to hit over time, both in the near future and long term.
Vague and unmeasurable goals can cause everything from misaligned marketing and sales strategies to hiring the wrong people for the wrong roles, and a range of other pitfalls. In the long term, these issues can hinder the growth of your business.
A great way to set concrete goals you are likely to achieve is by making them SMART , an acronym that describes what your business goals should look like:
Clear and well-defined goals that can be measured against specific criteria are the cornerstone of any business strategy. Your goals must also be possible to achieve, and align with your company's mission or be relevant to your company's purpose. You also need to clearly define a timeline for the achievement of each goal.
An example of a SMART goal is: "My company will sell X products within Y months." This goal is clearly defined ("sell x products"), time-based ("Y months"), and measurable (the metric is the number of products sold within a given time period).
Whether it is achievable or not will depend on the value of X and Y compared to your business's previous performance. For example, if your bakery sold 50,000 cupcakes in 2020, an unachievable goal is increasing to one million cupcakes sold the following year.
You should then break down your goals into milestones. If the timeline for achieving a goal is, say, one year, you can set monthly targets. This allows you to track your progress and adjust your strategy if necessary.
SMART goal framework ( Source )
2. Start making decisions based on facts and figures
For your decisions to have the highest possible chance of success, they need to be based on data. Guesswork simply won't cut it in a competitive marketplace.
Let's dive a bit deeper into how metrics can help you set realistic goals and be used to inform every business decision you make.
Start by conducting a SWOT analysis to determine the strengths, weaknesses, opportunities, and threats your business might encounter. Then, use your findings to determine what you can improve on and select your key performance indicators (KPIs).
The exact data you need to collect will, of course, depend on the nature of your business. Five common KPIs are:
Revenue per client
Client retention rate
To determine the values you should be aiming for, look at historical data for your company and your competitors. For example, if your revenue has increased 5% annually for the past three years, you could aim for a 7% increase and implement strategies to achieve this.
When evaluating your goals against your competitors, consider the age, size, and revenue of each competing business. Try to find competitors that are of similar size and age to your own company as your benchmarks.
Once you've set your goals, you need to keep track of your progress. Base every decision on this data, from your marketing and R&D budget to the colors used on your product's packaging.
Your KPIs are a good indicator of what your business needs to improve to reach your goals. If something isn't working, try implementing changes and see how your KPIs respond.
There is a wide range of strategic planning tools that can help with this task, and help you avoid the laborious process of manually collecting and interpreting large quantities of data.
A SWOT analysis looks at strengths, weaknesses, opportunities, and threats ( Source )
3. Stop comparing your business to others
Benchmarking is a crucial step in developing your business strategy. If you have no idea what your competitors are doing or what products they're offering, you will have a difficult time carving out space for yourself in the marketplace.
However, the habit of stalking your competition can hinder your company's progress. Every business is unique, and trying to replicate others often means taking your eyes off the ball for your business, which can lead to disaster.
Remember that from the outside, you can't really know what your competitors are doing. You can use metrics to gauge their success and set your own goals, you can explore their website and social media profiles to get an understanding of their marketing strategy, and you can test their products and services. However, these indicators can't show their processes, strategies, or how they come up with ideas.
Your competitors' resources, R&D, HR, sales, and staff expertise all differ from yours. Their processes and strategies are based on their own goals and biases, and while it's tempting to adjust to mirror others' apparent successes, pause and ask yourself whether you're willing to gamble your time and resources on untested ideas. If you are, it's usually safer to take a risk with your own ideas rather than someone else's.
Your business strategy should be your own, in line with your vision, brand, budget, product, marketing, and all other aspects that make your business unique. Your customers will recognize the originality of your brand and respect you for it.
4. Continue developing your brand’s vision
Companies that have a clear vision are often the ones that succeed. The sooner you define your vision, the sooner you will be able to start working toward it.
Your company's vision is the signpost that shows employees, customers, and yourself where your business is headed and what it wants to become.
Unlike your strategy (which shows you how to get to where you want to be), the vision describes the destination itself and includes the values your company promotes.
Here are a few examples of vision statements from successful enterprises:
IKEA: "Create better everyday lives for as many people as possible."
Amazon: "To be the world's most customer-centric company."
Google: "To organize the world's information and make it universally accessible and useful."
Sony: "To be the most comprehensive entertainment company in the world."
Your company's vision statement needs to be informed by what you are already successful at. Examine where your company is now, and where you want to be in the future.
Make sure all of your employees are aware of why the company exists. Employees who don't consider their company's vision to be meaningful are less likely to care about the company's future. As a result, they will be less engaged, less committed, and—ultimately—less productive.
Be sure to regularly review your vision statement. Outside influences such as inventions, marketplace shifts, or global pandemics can impact the timeline of your vision. They could accelerate your progress toward achieving your vision or stop you in your tracks.
Your vision needs to be a picture of the future, informed by the present. If present conditions change dramatically, review your vision to keep it relevant and attainable.
5. Continue thinking about the human factor
Whatever your staffing needs may be, it's essential to outline your hiring, delegating, and general operational strategies as soon as possible. Even if your company has only one employee at the moment, an HR strategy will ensure you choose and retain the right candidates in the future.
Ideally, you want to hire for fit over experience. A candidate hired for fit is one who will fit into your company's culture and is more likely to stay longer and be satisfied with the workplace in general.
That isn't saying you should dismiss a candidate's experience, merely that you should establish a baseline in terms of experience and make your final decision based on how well they would work in your team.
Your HR strategy should also include an internal communications strategy and an employee engagement strategy . Both can make a huge difference in how daily tasks are handled and help you avoid the pitfalls of poor workplace communication.
Reward employee performance and organize periodic team-building events to promote solidarity within your company. This can help decrease turnover rates, which means saving money on the training and hiring process.
Having a tight-knit team of dedicated, engaged workers is a sure way of increasing productivity across your entire business.
A good business strategy plans for the long term but is flexible enough to move with the times and combat the unforeseeable. Here are the essential points you need to remember when developing your business strategy:
SMART goals: Set goals that are concrete, quantifiable, attainable, relevant, and broken down into milestones.
Metrics, metrics, and more metrics: Track your progress regularly and use this data to inform every business decision you make.
Don't be a copycat: Your business strategy needs to be your own. What works for your competitors won't always work for you.
Periodically review your company's vision: As the marketplace changes, so should your business. If your vision statement no longer describes your company's direction, review it and adapt to new circumstances.
Your employees are people, too: Unless you run a one-person operation, it's likely that other people contribute to your company's success. Develop a strategy to keep your employees happy and productive.
About the Author
Samantha Clark - Guest Contributor
Samantha is a Warrington College of Business graduate and she works for the professional accounting firm, ThePayStubs . She handles all client relations with top-tier partners and found her passion in writing articles on various finance and business-related topics.
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Strategic Planning in Business
Table of Contents
What is business strategic planning, the strategic planning process in 3 steps, what is a business strategic plan, key components of a business strategic plan, business strategic plan example, strategic plan vs. business plan.
Strategic planning is key for success in business. By planning strategically for the future, a business can achieve its goals. It’s easier said than done, but the more you know about strategic planning, the better chance you have at succeeding.
Business strategic planning is the process of creating a business strategy and an accompanying business strategic plan to implement a company’s vision and achieve its goals over time. The main goal of strategic planning is to take a company from its current state to its desired state through a series of business actions.
The business strategic planning process usually consists of defining business goals, doing a SWOT analysis to assess the company’s business environment and developing a business strategy. The leadership team is in charge of business strategic planning, as it has a very important impact on the overall direction of a company.
To oversee the execution of a business strategic plan, managers need to manage time, costs and tasks. ProjectManager is a project planning tool that allows managers to plan, schedule and manage their team’s work. Plan your work with professional tools such as Gantt charts, kanban boards, task lists and calendars. Then track your progress in real time to stick to your strategic plan. Get started for free.
Strategic planning is very important, but it doesn’t need to be overly complex. Let’s simplify this process by breaking it down into three simple steps.
1. Set Business Goals
A business goal is simply an accomplishment that a company wants to achieve in the short, medium or long term. Business goals can take many forms such as increasing sales, revenue, customer satisfaction levels and brand positioning, among many other things.
2. Conduct a SWOT Analysis
The goal of a business strategy is to leverage the strengths of a business and minimize the impact of its weaknesses. Those two things are internal factors. The strengths of a company can become competitive advantages that can lead to business growth. There are many types of business strengths and weaknesses such as scale, speed, or R&D, just to name a few.
Threats and opportunities refer to external factors such as competitors or an untapped market. A successful business strategy considers all of these factors to define how a product or service will be created, marketed and sold, and a SWOT analysis is a great starting point.
3. Develop a Business Strategy & Strategic Plan
Once you’ve completed your SWOT analysis, you can create a business strategy that’s designed to help position your company in the market. Your business strategy guides how you produce, market and sell your product or service based on internal and external analysis.
Then, you’ll need a strategic plan to explain how you plan to execute that business strategy.
A business strategic plan is an implementation plan that’s meant to turn a business strategy into action items that can be executed over time. Business strategic plans are usually executed over the course of 3-5 years.
How to Develop a Strategic Plan
To develop a strategic plan, you should ask yourself the following three questions.
- Where Is the Business Now? Gather as much information on your business as possible including internal operations and what drives its profitability. Compare the business to competitors and note the similarities and differences in detail. This isn’t a day-to-day operational study, but a broader look at the business in context to itself and its environment. But don’t go crazy; stay realistic in terms of your business goals. Be detached and critical in your analysis.
- Where Do You Want to Go? Now it’s time to decide what your top-level objectives are for the future. Start with a vision statement , objectives, values, techniques and goals. Look forward to five years or more to forecast where you want the business to be at that time. This means figuring out what the focus of the business will be in the future. Will that focus differ from what it is now, and what competitive advantages do have you in the marketplace? This is where you build the foundation and initiate changes.
- How Can You Get There? Once you know where you are and where you want to go, it’s time to plan. What are the changes to the structure, financing, etc., necessary for the business to get there? Decide on the best way to implement those changes, the timeframe with deadlines and how to finance it. Remember, this is looking at the business at large, so consider major endeavors such as diversification, existing growth, acquisition and other functional matters. A gap analysis can be a big help here.
Once you’ve answered the above questions and have a way to achieve the long-term goals laid out in the strategic plan, the next step is making sure you have the right person to manage all of its moving parts. They must be analytical, a creative thinker and able to grasp operational detail.
That doesn’t mean the strategic plan is led by one person. It’s best to not do it alone; seek other opinions. The people in your organization, from bottom to top, are all great resources to offer perspectives from their standpoints. Don’t forget to take in the advice of stakeholders, including customers, clients, advisors and consultants.
To create a strong strategic plan, one must first have a strong understanding of the business that is to expand. How does the business work? Where does the business stand in relation to competitors in the marketplace? A strategic plan is built on the bones of the following foundational elements:
- Mission Statement: The mission statement describes what your company does.
- Vision Statement: The vision statement explains where your company expects to be in the future.
- Core Values: Guiding principles that shape your company’s organizational culture.
- Business Objectives: Consider using the SMART goal-setting technique . This simply means setting up specific, measurable, attainable, relevant and time-bound objectives that your company wants to achieve.
- SWOT Analysis: External and internal factors that make up your company’s business competitive environment.
- Action Plan: A plan outlining steps that will be taken to achieve the business objectives of your organization.
- Financials: A section that shows the financial performance expectations, the budget and the resources that will be required to implement the action plan.
- Performance Measurements: Performance indicators that will be used to measure the effectiveness of the action plan.
Never forget to check your strategic plan against reality. In addition to being achievable, it must be practical for your business environment, resources and marketplace.
Now let’s look at a simple business strategic plan example. This is a strategic plan for a small construction company.
1. Mission, Vision & Core Values
- Mission Statement: To build residential spaces that provide wellbeing for our clients.
- Vision Statement: To offer the best construction experience for our clients and expand our brand throughout the globe.
- Core Values: Sustainable innovation and respect for the environment.
2. Business Objectives
- Business Objective 1: Grow operating margin from 15% to 20% over the next year.
- Business Objective 2: Reduce operating costs by 5% over the next quarter
- Business Objective 3: Increase the number of new contracts generated by 10% over the next year
3. SWOT Analysis
- Strengths: Available financing, brand visibility and know-how.
- Weaknesses: Lack of PPE, human capital and expertise in construction areas such as plumbing, electrical work and masonry, which requires subcontractors.
- Opportunities: Lack of environmentally-friendly construction companies in the market.
- Threats: Larger construction companies compete for contracts in the area.
4. Action Plan
- Business Objective 1: To grow operating margin, new employees with plumbing, electrical work and masonry experience will be hired to cut down subcontractor costs. This must be done by the end of the first quarter.
- Business Objective 2: To reduce operating costs, the company will acquire property, plant and equipment. By doing this, the company will no longer rent equipment from third parties, which will reduce operating costs significantly in the medium and long term.
- Business Objective 3: To increase the number of new contracts generated, the leadership team will invest more in the PR, marketing and advertising departments. The company will also invest in key positions for the construction bidding process such as contract estimators.
- Financials: This section will explain in detail what are the costs associated with the work items in the action plan as well as the expected financial benefits for the company.
Strategic Plan Template
Our free strategic plan template helps leadership teams gather important information about their business strategy, which makes it the perfect tool to start shaping a strategic plan for your business or project.
A strategic plan is a type of business plan, but there are distinctions between the two. Whereas a strategic plan is for implementing and managing the strategic direction of a business, a business plan is more often the document that starts a business.
A business plan is used primarily to get funding for the venture or direct the operation, and the two plans target different timeframes in business history. A strategic plan is used to investigate a future period, usually between three-to-five years. A business plan is more routinely a year out.
A Different Intent
A strategic plan offers a business focus, direction and action to help the business grow from the point it presently resides to a greater market share in the future. A business plan, on the other hand, is more focused on offering a structure to capture and implement ideas that initially define a business.
With a strategic plan, existing resources are prioritized to increase revenue and return on investment. The business plan is different in that it’s seeking funding for a venture that doesn’t yet exist. Where a strategic plan is building a sustainable competitive advantage in the future, a business plan is designed to take advantage of a current business opportunity.
So, a strategic plan is communicating direction to teams and stakeholders in order to achieve future goals. A business plan isn’t talking to staff, which is likely nonexistent or minimal at this point. It’s speaking to banks and other financial supporters.
Strategic planning, like any planning, requires keeping a lot of balls in the air. That means having the right tool to plan, monitor and report on all the various tasks and resources. ProjectManager is online project management software that gives you control over every aspect of creating and implementing a strategic plan. Try it today with this free 30-day trial.
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How to Develop a Strategic Plan for Business Development [Free Template]
Published: May 01, 2023
Business development is usually confused with sales , often overlooked, and only sometimes given the strategic focus it deserves. Having a business development strategy, however, is crucial to long-term success. It ensures that everyone in your company is working toward a common goal.
But how do you develop a business development plan? Pull up a chair and stay awhile, I’m diving into that and more below.
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Business development is the practice of identifying, attracting, and acquiring new business to further your company’s revenue and growth goals. How you achieve these goals is sometimes referred to as a business development strategy — and it applies to and benefits everyone at your company.
It’s not unusual to mistake business development with sales, but there’s an important distinction between the two. Business development refers to many activities and functions inside and outside the traditional sales team structure. In some companies, business development is part of the larger sales operations team. In others, it’s part of the marketing team or sits on its own team altogether.
Because business development can look so different among industries and businesses, the strategy behind this function is expansive. Below, we outline each step in the strategy and how to apply it to your business development plan.
Business Development Strategy
- Understand your competitive landscape.
- Choose effective KPIs.
- Develop long-term customer relationships.
- Implement customer feedback.
- Keep your website content and user interface fresh.
- Speed up your response time.
- Leverage a sales plan to identify areas of growth.
- Implement a social listening strategy.
- Sponsor industry organizations, conferences, and events.
1. Understand your competitive landscape.
Before you can develop a strategic plan to drive business growth, you must have a solid understanding of the competitive landscape in your industry. When you know who your ideal customer is and what problem they are looking to solve with your product or service, research who else is providing a viable solution in your industry.
Identify other companies operating in your space. What features do their products have? How competitive is their pricing? Do their systems integrate with other third-party solutions? Get crystal-clear on what the competition is offering so you know how to differentiate your product to your customers.
Featured Resource: 10 Competitive Analysis Templates
2. Choose effective KPIs.
How will you know if your business development efforts are successful? Ensure you can measure your goals with relevant, meaningful key performance indicators (KPIs) that reflect the health of your business. The result of these metrics should give you a strong indication of how effective your business development efforts are.
Featured Resource: Sales Metrics Calculator Dashboard
3. Develop long-term customer relationships.
Do you engage with your customers even after the deal has been closed? If not, it’s time to develop a plan to keep your buyers engaged. Building long-term relationships with your customers pays off. A grand majority of a company's business comes from repeat customers, and returning customers are cheaper to convert. Indeed, it’s famously known that it costs five times more to convert new customers than it does to sell to returning customers.
Not only are repeat customers easier to sell to, they can also provide valuable feedback and insights to help you improve your business. Additionally, customer testimonials can be used for valuable content that can attract your next buyer.
4. Implement customer feedback.
If and when you have customers who are willing to provide feedback on your sales process and offerings, make sure you hear them out and implement it. Your customers offer a unique, valuable perspective because they chose your product over the competition — their insights can help shape your strategy to keep your business ahead of the curve.
5. Keep your website content and user interface fresh.
When was the last time your company had a website refresh? Can you ensure that all links are working, that your site is easy to navigate, and that it is laid out and intuitive for those who want to buy from you?
Keeping your website up-to-date and easy to use can make or break the sale for customers who know they are ready to buy. Don’t make it too difficult for potential customers to get in touch with you or purchase your product directly (if that suits your business model).
6. Speed up your response time.
How fast your sales team responds to your leads can make or break your ability to close the deal. If you notice your sales process has some lag time that prevents you from responding to prospects as soon as possible, these could be areas to prioritize improvement.
7. Leverage a sales plan to identify areas of growth.
No business development strategy is complete without a sales plan . If you’ve already established a plan, make sure to unify it with your business development efforts. Your plan should outline your target audience, identify potential obstacles, provide a “game plan” for sales reps, outline responsibilities for team members, and define market conditions.
While a sales plan primarily affects your sales team, it can inform the activities of your business development reps. A sales plan can help them understand where the business needs growth — whether it’s in a new vertical, a new audience, or a new need that’s recently come to light in the industry.
Not sure how to create a sales plan? Download the following template to get started.
Featured Resource: Sales Plan Template
8. Implement a social listening strategy.
While social listening is mainly used in a marketing and customer service context, it’s also an essential practice for business development. There are more than 4 billion social media users worldwide. Naturally, social media is one of the best places to hear directly from consumers and businesses — without needing to reach out to them first.
In business development, you can use social listening to track what the general public is saying about your brand, industry, product offerings, product category, and more. It can help you identify key weaknesses in the industry, making it a prime opportunity to be the first to address those pitfalls.
Use a social listening tool to pick up on trends before they gain traction.
9. Sponsor industry organizations, conferences, and events.
A key facet of business development is reaching potential customers where they are. One of the easiest ways to do that is by sponsoring industry organizations, conferences, and events. This strategy will guarantee that your business development reps get valuable face-to-face time with your business’ target audience. The additional visibility can also help establish your business as a leader in the field.
Now that you understand what business development entails, it's time to create a plan to set your strategy in motion.
How to Develop a Strategic Plan
When we refer to a business development strategic plan, we’re referring to a roadmap that guides the whole company and requires everyone’s assistance to execute successfully and move your customer through the flywheel . With a plan, you’ll close more deals and quantify success.
Let’s go over the steps you should take to create a strategic plan.
1. Download our strategic plan template .
First, download our free growth strategy template to create a rock-solid strategic plan. With this template, you can map a growth plan for increasing sales, revenue, and customer acquisition rates. You can also create action plans for adding new locations, creating new product lines, and expanding into new regions.
Featured Resource: Strategic Plan Template
2. Craft your elevator pitch.
What is your company’s mission and how do you explain it to potential clients in 30 seconds or less? Keeping your elevator pitch at the forefront of all strategic planning will remind everyone what you’re working toward and why.
Some people believe the best pitch isn’t a pitch at all , but a story. Others have their favorite types of pitches , from a one-word pitch to a Twitter pitch that forces you to boil down your elevator pitch to just 280 characters.
Find the elevator pitch that works best for your reps, company, and offer, and document it in your business development strategy.
3. Include an executive summary.
You’ll share your strategic plan with executives and maybe even board members, so it’s important they have a high-level overview to skim. Pick the most salient points from your strategic plan and list or summarize them here.
You might already have an executive summary for your company if you’ve written a business proposal or value proposition . Use this as a jumping off point but create one that’s unique to your business development goals and priorities.
Once your executives have read your summary, they should have a pretty good idea of your direction for growing the business — without having to read the rest of your strategy.
3. Set SMART goals.
What are your goals for this strategy? If you don’t know, it will be difficult for your company and team to align behind your plan. So, set SMART goals . Remember, SMART stands for:
Featured Resource: SMART Goal Setting Template
Download the template now.
If one of your goals is for 5% of monthly revenue to come from upsells or cross-sells, make this goal specific by identifying what types of clients you’ll target.
Identify how you’ll measure success. Is success when reps conduct upsell outreach to 30 clients every month, or is it when they successfully upsell a customer and close the deal? To make your goal attainable, ensure everyone on your team understands who is responsible for this goal: in this case, sales or business development reps.
This goal is relevant because it will help your company grow, and likely contributes to larger company-wide goals. To make it time-based, set a timeline for success and action. In this case, your sales team must achieve that 5% upsell/cross-sell number by the end of the quarter.
4. Conduct SWOT analysis.
SWOT is a strategic planning technique used to identify a company’s strengths, weaknesses, opportunities, and threats.
Before conducting a SWOT, identify what your goal is. For example, “We’d like to use SWOT to learn how best to conduct outreach to prospective buyers.”
Once you’ve identified what you’re working toward, conduct market research by talking with your staff, business partners, and customers.
Next, identify your business’ strengths. Perhaps you have low employee turnover, a central location that makes it easy to visit with prospects in person, or an in-demand feature your competitors haven’t been able to mimic.
Featured Resource: Market Research Kit with SWOT Analysis Template
Your business’ weaknesses are next. Has your product recently glitched? Have you been unable to successfully build out a customer service team that can meet the demands of your customers?
Then, switch to opportunities. For example, have you made a new business partnership that will transition you into a previously untapped market segment?
What are the threats? Is your physical space getting crowded? What about your market space? Is increasing competition an issue?
Use SWOT results to identify a better way forward for your company.
5. Determine how you’ll measure success.
You’ve identified strengths and weaknesses and set SMART goals , but how will you measure it all ? It’s important for your team to know just how they will be measured, goaled, and rewarded. Common key performance indicators (KPIs) for business development include:
- Company growth
- Lead conversion rate
- Leads generated per month
- Client satisfaction
- Pipeline value
6. Set a budget.
What will your budget be for achieving your goals? Review financial documents, historical budgets, and operational estimates to set a budget that’s realistic.
Once you have a “draft” budget, check it against other businesses in your industry and region to make sure you’re not overlooking or misjudging any numbers. Don’t forget to factor in payroll, facilities costs, insurance, and other operational line items that tend to add up.
7. Identify your target customer.
Who will your business development team pursue? Your target market is the group of customers your product/service was built for. For example, if you sell a suite of products for facilities teams at enterprise-level companies, your target market might be facilities or janitorial coordinators at companies with 1000+ employees. To identify your target market:
- Analyze your product or service
- Check out the competition
- Choose criteria to segment by
- Perform research
Your target customer is the person most likely to buy your product. Do your homework and make sure your business development plan addresses the right people. Only then will you be able to grow your business.
8. Choose an outreach strategy.
What tactics will you use to attract new business for your sales team to close? You might focus on a single tactic or a blend of a few. Once you know who your target market is and where they “hang out,” then you can choose an appropriate outreach strategy.
Will your business development plan rely heavily on thought leadership such as speaking at or attending conferences? Will you host a local meetup for others in your industry? Or will your reps network heavily on LinkedIn and social media?
If referrals will be pivotal to your business’ growth, consider at which stage of the buying process your BDRs will ask for referrals. Will you ask for a referral even if a prospect decides they like your product/service but aren’t a good fit? Or will you wait until a customer has been using your solution for a few months? Define these parameters in your strategy.
Upselling and Cross-Selling
Upselling and cross-selling are a cost-effective way of growing your business. But it’s important that this tactic is used with guardrails. Only upsell clients on features that will benefit them as well as your bottom line. Don’t bloat client accounts with features or services they really don’t need — that’s when turnover and churn start to happen.
Sponsorship and Advertising
Will your BDR work with or be on the marketing team to develop paid advertising campaigns? If so, how will your BDRs support these campaigns? And which channels will your strategy include? If you sell a product, you might want to feature heavily on Instagram or Facebook. If you’re selling a SaaS platform, LinkedIn or Twitter might be more appropriate.
What’s your outreach strategy? Will your BDRs be held to a quota to make 25 calls a week and send 15 emails? Will your outreach strategy be inbound , outbound , or a healthy combination of both? Identify the outreach guardrails that best match your company values for doing business.
Strategic Plan Example
Let’s put all of these moving parts in action with a strategic plan example featuring good ol’ Dunder Mifflin Paper Company.
Elevator Pitch Example for Strategic Plan
Dunder Mifflin is a local paper company dedicated to providing excellent customer support and the paper your business needs to excel today and grow tomorrow.
Here are some additional resources for inspiration:
- Elevator Pitch Examples to Inspire Your Own
- Components of an Elevator Pitch
Executive Summary Example for Strategic Plan
At Dunder Mifflin, our strengths are our customer service, speed of delivery, and our local appeal. Our weakness is that our sales cycle is too long.
To shorten the sales cycle 5% by the end of Q4, we need to ask for more referrals (which already enjoy a 15% faster sales cycle), sponsor local professional events, and outreach to big box store customers who suffer from poor customer support and are more likely to exit their contract. These tactics should allow us to meet our goal in the agreed-upon timeline.
- How to Write an Incredibly Well-Written Executive Summary [+ Example]
- Executive Summary Template
SMART Goals Example for Strategic Plan
Dunder Mifflin’s goal is to decrease our sales cycle 5% by the end of Q4. We will do this by more proactively scheduling follow-up meetings, sourcing more qualified, ready-to-buy leads, and asking for 25% more referrals (which have a 15% shorter sales cycle already). We will measure success by looking at the sales pipeline and calculating the average length of time it takes a prospect to become closed won or closed lost.
- 5 Dos and Don'ts When Making a SMART Goal [Examples]
- How to Write a SMART Goal
- SMART Marketing Goals Template
SWOT Analysis Example for Strategic Plan
Strengths: Our strengths are our reputation in the greater Scranton area, our customer service team (led by Kelly Kapoor), and our warehouse team, who ship same-day reams to our customers — something the big box stores cannot offer.
Weaknesses: Our greatest weakness is that our sales team has been unable to successfully counter prospects who choose big box stores for their paper supply. This results in a longer-than-average sales cycle, which costs money and time.
Opportunities: Our greatest business opportunity is to conduct better-targeted outreach to prospects who are ready to buy, ask for more referrals from existing customers, and follow up with closed lost business that’s likely coming up on the end of an annual contract with a big box store.
Threats: Our biggest threat is large box stores offering lower prices to our prospects and customers and a sales cycle that is too long, resulting in low revenue and slow growth.
- How to Conduct Competitive Analysis
- How to Run a SWOT Analysis for Your Business [+ Template]
- SWOT Analysis Template and Market Research Kit
Measurement of Success Example for Strategic Plan
We will measure success by looking at the sales pipeline and calculating the average length of time it takes a prospect to become closed won or closed lost.
Budget Example for Strategic Plan
You've laid out the SMART goals and the way you'll measure for success. The budget section's goal is to estimate how much investment it will take to achieve those goals. This will likely end up being a big-picture overview, broken down into a budget by a program or a summary of key investments. Consider laying it out in a table format like so:
- Budgeting Templates
- How to Write an Incredible Startup Marketing Budget
Target Customer Example for Strategic Plan
Our target customer is office managers at small- to medium-sized companies in the greater Scranton, PA area. They are buying paper for the entire office, primarily for use in office printers, custom letterhead, fax machines. They are busy managing the office and value good customer service and a fast solution for their paper needs.
- How to Create Detailed Buyer Personas for Your Business
- Make My Persona Tool
Outreach Strategy Example for Strategic Plan
Networking, sponsorships, and referrals will be our primary mode of outreach. We will focus on networking at regional paper conferences, HR conferences, and local office manager meetups. We will sponsor local professional events. And we will increase the volume of referrals we request from existing customers.
Create a Strategic Plan for Business Development
Without a strategic plan, you can invest resources, time, and funds into business development initiatives that won't grow your business. A strategic plan is crucial as it aligns your business development and sales teams. With a solid business development strategic plan, everyone will be working toward the greater good of your company.
Editor's note: This post was originally published in January 2020 and has been updated for comprehensiveness.
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What Is a Strategic Business Plan?
- Small Business
- Business Planning & Strategy
- Strategic Business Plans
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Objectives in Workforce Planning
Projected profit and loss statement, rationales for marketing strategies.
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Long-term strategic business planning is necessary for company growth and success, explains Entrepreneur magazine . Business plans provide companies with the tools to track growth, establish a budget and prepare for unforeseen changes in the market place. A strategic business plan focuses on long-term growth objectives, rather than near-term operating goals and addresses different business strategy types.
A strategic plan includes many elements a business can utilize to attract financing and manage company objectives. To optimize strategic business planning, businesses must clearly define company goals and conduct extensive research to properly understand industry trends. Looking at different strategic planning models will help you decide how to set long-term goals for your small business.
What is a Strategic Business Plan?
A strategic business plan is a written document that pairs the objectives of a company with the needs of the market place. Although a strategic business plan contains similar elements of a traditional plan, a strategic plan takes planning a step further by not only defining company goals but utilizing those goals to take advantage of available business opportunities.
This is achieved by carefully analyzing a particular business industry and being honest about your company's strength and weakness in meeting the needs of the industry. A strategic business plan is followed by tactical plans to help achieve the strategic goals.
Reasons for Strategics Plans
A strategic business plan is necessary to optimize market research and to attain optimum market share for your business. The plan allows businesses to focus on a particular niche in the marketplace, which makes sales, advertising and customer management more effective. The plan allows a company to know as much as possible about the needs of its customers and gaps in the marketplace that need to be filled. A strategic business plan helps a company provide better, more targeted service to its clients.
Strategy vs. Tactics
A strategic business plan might set a goal of diversification for the business. Tactics for achieving this strategic goal might include acquiring a business with different product lines, or adding new products to the company's line. For example, a tennis racquet manufacturer might decided to add strings to its product line, either acquiring a string maker or sourcing its own strings.
A strategic business plan includes extensive market research, industry trends and competitor analyses. A strategic plan will include the components of a traditional plan, such as an executive summary, marketing analysis and financial statements, but a strategic plan will be more specific on how the company will go about achieving company goals.
For example, a strategic business plan will attempt to identify a target market, narrow it down to a manageable size, and establish a strategy for acquiring those customers.
Benefits of Strategic Business Plans
Writing a strategic business plan has many advantages. The plan can serve as an outline for successful completion of company milestones. Company owners are in a better position to not only understand their business but become experts in their industries.
A strategic plan helps executives understand the direction in which their company is headed by reviewing past progress and making changes to improve and grow. The plan is an organizational tool that helps to keep a company on track to meet growth and financial objectives.
Misconceptions About These Plans
Many small business owners feel that strategic business plans are for large companies and big businesses. However, according to the U.S. Small Business Administration, a strategic business plan can benefit companies of all sizes and can be a great advantage to small businesses. Small businesses may utilize different types of planning activities to develop the strategies necessary to attract and retain the customers it needs to succeed.
- Entrepreneur.com: Building a Strategy Pyramid
Sherrie Scott is a freelance writer in Las Vegas with articles appearing on various websites. She studied political science at Arizona State University and her education has inspired her to write with integrity and seek precision in all that she does.
Why create a business plan, business planning & analysis, the importance of a business plan, what is the meaning of corporate planning, differences between strategy, plans and tactics, difference between business plan & strategic plan, tactical and operational planning, how does a business strategy differ from strategic marketing management, business enterprise planning, most popular.
- 1 Why Create a Business Plan?
- 2 Business Planning & Analysis
- 3 The Importance of a Business Plan
- 4 What Is the Meaning of Corporate Planning?
A little red tape never hurt anybody, but after you’ve wrapped up your corporate bylaws, your business entity and all the other business startup nuts and bolts, you’re probably itching to get back into the fun stuff.
A business plan is more than just words on paper. It’s a way to stay focused on how your business works, and it’s also a calling card when you need financing.
So what exactly goes in a business plan, first step is the executive summary..
Here’s where you describe what your business does and where you want to take it. This is a great opportunity to list your goals, projections and strategies for success. It also serves as a kind of hook to win over investors. Because it needs to summarize the highlights of your entire business plan, you might want to consider writing the executive summary after you’ve tackled everything else.
Next comes a market analysis section where you explain your industry and the particular market you want to target.
If you do any studies or documented research, you’ll want to include those here. A company description section of your business plan pitches what your business does and the market that’s going to benefit from it.
Investors also want to know about the people behind the business--the organization and management.
Here you’ll highlight your company’s structure and who’s doing what behind the scenes. If one of your partners has a long history of industry success, this is where you can brag about it. And then the $20,000 question: Who are your customers? Your overall marketing strategy section explains how you’ll build a loyal customer base, and your sales strategy will make it clear how your products and services get sold.
Speaking of products and services, what are they?
A business plan should describe what you’re selling, why your customers need it and how it beats the competition. If you have any existing patents or other products in the pipeline, you can throw those in the mix too.
If you need funding, this next section is where you talk about how much money you need and how you’d like to use it.
Following that you’ll outline your financial past, present and future--how much money you’ve made already and what you’re thinking your business can bring in during the next five years.
Some business plans take the “kitchen sink” approach, adding an appendix to include any extra credentials, property leases or assets. But a streamlined business plan is just as good. Overall, this document is going to serve two purposes. It’s going to keep you focused on making your business as successful as possible, and it’s going to help present your bang-up idea to people who can help you achieve that success.
One Page Business Plans: Simple and Highly Effective Learn how to write a complete business plan in the equivalent of 29 tweets (or less) on a single page using keywords and short phrases.
Business Plan Template for a Startup Business To increase your odds of a successful business startup, download this step-by-step business plan template you can use to plan for your new business.
Copyright © 2023 SCORE Association, SCORE.org
Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.
10 Marketing Plan Examples to Inspire Your Campaigns
What do hiking a trail, driving to a friend’s house, and executing marketing campaigns all have in common? Each requires you to closely follow directions.
Directions are a critical part of our daily life. Used correctly, they can guide decision-making processes, make labor more efficient, and get where you want to go as quickly as possible.
But failing to keep track of directions could cost you — and not just gas money. When it comes to marketing strategies, not having a clear goal tanks web traffic, dissipates brand interest, and costs companies across the United States a whopping $400 billion a year.
Designing a marketing plan is certainly no easy task, but it can be made easier with best practices, strategic tips, and concrete examples from successful businesses all over the world.
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What is a marketing plan?
A marketing plan is a strategic document that acts as a guide for marketing campaigns and strategies. These critical road maps detail where you are, where you’re going, and how you plan to get there.
The average marketing plan consists of seven major sections:
- Writing an executive summary
- Discussing the mission statement
- Listing marketing objectives
- Performing a SWOT analysis
- Completing market research
- Designing a market strategy
- Determining a budget
The more detailed a marketing plan is, the more efficient it will be at accomplishing its goals.
As you might imagine, marketers who bother to write a concrete marketing plan enjoy several benefits :
- Organized marketers have a 674% higher chance of reporting success
- Marketers who set goals are 377% more successful than those who don’t
It’s clear that a successful marketing plan opens pathways to other forms of business success — although the process is underutilized at best. More than three out of four small business owners lack an overarching marketing plan if they don’t have a clear path of growth. Creating a holistic marketing plan is absolutely necessary to scale brands at any level of development.
10 marketing plan examples from every industry
It’s much simpler to design a plan of action when the groundwork already exists. Below are 10 marketing plans sourced from real companies and brands around the world, highlighting unique approaches to researching, crafting and implementing a marketing strategy .
Popular SaaS Contently developed a visual marketing plan for developing future campaigns. The strategy depicts its plan in a “waterfall” format, with goals blending into methods of application that eventually lead to success metrics. Although far more casual than other examples on this list, the work provides an excellent overview of a marketing plan’s necessary components.
2. Visit Baton Rouge
The Baton Rouge area of Louisiana generates millions of dollars every year from tourism alone. The Visit Baton Rouge marketing plan was born from a need to better position the area and create long-term strategies for generating interest. This 38-page document goes into detail describing different destinations, events, and calendars, including recommended measurements for success.
Created by SaaS company HubSpot , this template includes a business summary, SWOT matrix, market strategy, budget, and other important aspects of a marketing plan. By filling it out, you can make informed decisions about your company’s positioning and your marketing in general.
Evernote provides a comprehensive marketing plan template for businesses of any size. Create a plan that walks through overviews, timelines, research, personas, and all other elements of an airtight campaign. If desired, you can also implement this template into your Evernote account to start developing a marketing plan almost immediately.
5. University of Illinois
Even educational institutes need marketing plans. The University of Illinois created a very straightforward document that encapsulates its market context, research efforts, and current campaigns. Objectives and success metrics are completed in the third section, with about 40 pages overall.
Monday.com is a project management platform providing in-house templates to all active users. This marketing plan offers various categories and subcategories that track project progress with data visualizations. Detailed objectives and KPIs can be identified in-app, including columns for a projected cost range.
Popular health and hygiene brand Lush released a comprehensive marketing plan walking through some products, positioning, and a marketing calendar for upcoming product releases. One of the highlights includes a detailed SWOT analysis with easy to read graphics. This is particularly helpful for brands in the personal care industry, among others.
Industry titan Coca-Cola released a strategy video that encompasses all seven elements of a holistic marketing plan. The proposal primarily explains the major content initiatives for the coming year, and focuses on how the brand’s initial ideas can be practically implemented into the existing strategy.
9. Naperville Park District
Publicly funded recreational parks often have limited access to resources, which is why the Naperville Park District created a strategic marketing plan right at the beginning. This extremely detailed document walks through the company’s mission, situational analysis, strategy, and budget, on a micro-level.
Unlike the longform documents we’ve seen already, Starbucks takes a more concise approach. This six-page release details a strategy to elevate CX and brand ambassadors around the world. The marketing plan touches on individual strategies and tactics, as well as the methods used to ensure success. It’s important to note the detailed customer journey profiles that fit into a five-year strategy.
How to approach a marketing plan
Now that you know what a marketing plan looks like, it’s time to explore the initial stages of drafting and publishing your very first plan. Once you establish some basic starting points, a little research is all you need to get started.
Determine your goals
Directions simply don’t matter without an endpoint in mind. Craft some meaningful goals for your marketing campaign that envelop your brand’s values, objectives, and year-end plans. It’s best to use the SMART goal framework:
The more specific your goals are, the more effective your marketing plan will be.
Check your competitors
Staying abreast of your competitors and market share is critical in the early stages of a marketing plan. Using competitive analysis tools or an internal process, take some time to evaluate the approach that others are using — and how you can do better.
You might want to:
- Perform a competitive analysis
- Keep a close eye on industry news
- Browse competitor social media content
Keep in mind that it’s possible to hire freelancers to perform competitive analysis for you, depending on your needs and time constraints.
Identify your audience
Understanding your target market — including their goals, ages, values, and demographics — is the golden rule of marketing. This can be done several ways, either by using data, creating personas, or outlying features in a document.
It’s best to consider everything that may be relevant to your audience in the marketing plan, including how products can be positioned in a way that makes them relevant. For example, a customer with a degree in IT would be more interested in ads that speak to their experience and industry pain points.
If you don’t have a target audience in mind yet, consider using programs like Google Analytics or in-platform insights from Facebook to identify specific segments.
Craft final KPIs
The difference between a good marketing plan and a great marketing plan starts with key performance metrics (KPIs). These will be used to measure the effectiveness of your campaign and provide detailed information about what worked, what didn’t, and what you can change in the future.
Every marketing plan should rely on its own unique set of metrics, all fitted to individual needs. If you’re looking for specific examples, you might want to try:
- Raising the number of followers on a social media account
- Generating a certain amount of website leads
- Achieving higher email open rates
Keep in mind that your final metrics should adhere to the SMART method for best results.
Perform your revisions
The marketing plan is a living document and must be updated regularly to remain current. The average plan only has a shelf life of one to five years , on average, and should receive regular revisions in the meantime.
Take a closer look at your past goals, competitors, audience, and KPIs. Are any of these outdated or ill-aligned? What has changed for the company since its initial publication date? Make these adjustments accordingly (and hopefully with members of a team or committee).
Create marketing plans that guide your business well
It’s not enough to just write a marketing plan. In an increasingly competitive world of iron-clad strategies, marketing pros should take their time developing a plan that lasts. The above examples are a great place to start, especially as you craft an approach that is catered to your industry.
Keep an eye on the growth of your business once your marketing plan hits the shelves. Continue to find new ways to optimize, refine, and otherwise make what you have even better than before. With an airtight marketing plan by your side, the possibilities are virtually limitless.
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The Difference Between a Plan and a Strategy
Setting strategy should push your organization outside its comfort zone.
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Planning is comforting but it’s a terrible way to make strategy, says Roger Martin , former dean of the Rotman School of Management at the University of Toronto. In contrast, setting strategy should push your organization outside its comfort zone – if you’re doing it right.
“Plans typically have to do with the resources you’re going to spend. Those are more comfortable because you control them,” Martin explains. “A strategy, on the other hand, specifies a competitive outcome that you wish to achieve, which involves customers wanting your product or service. The tricky thing about that is that you don’t control them.”
Key topics include: strategic planning, competitive strategy, risk management, innovation, and travel and tourism industry.
HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.
- Watch the original HBR Quick Study episode: A Plan Is Not a Strategy (June 2022)
- Find more episodes of the HBR Quick Study series on YouTube .
- Discover 100 years of Harvard Business Review articles, case studies, podcasts, and more at HBR.org
ANNOUNCER: HBR On Strategy .
HANNAH BATES: Welcome to HBR On Strategy , case studies and conversations with the world’s top business and management experts, hand-selected to help you unlock new ways of doing business. Today, we bring you a conversation with one of the world’s leading thinkers on strategy – Roger Martin, former dean of the Rotman School of Management at the University of Toronto. In this episode, you’ll learn the difference between strategy and planning AND how to escape the common traps of strategic planning. Martin says starting with a plan is comforting to many of us, but it’s a terrible way to make strategy. His episode, called “A Plan is Not A Strategy,” originally aired as part of the HBR Quick Study video series in June 2022. Here it is.
ROGER MARTIN: This thing called planning has been around for a long, long time. People would plan out the activities they’re going to engage in. More recently, has been a discipline called strategy. People have put those two things together to call something strategic planning. Unfortunately, those things are not the same, strategy and planning. So, just putting them together and calling it strategic planning doesn’t help. What most strategic planning is in the world of business has nothing to do with strategy. It’s got the word, but it’s not. It’s a set of activities that the company says it’s going to do.
We’re going to improve customer experience. We’re going to open this new plant. We’re going to start a new talent development program. A whole list of them, and they all sound good, but the results of all of those are not going to make the company happy because they didn’t have a strategy. So, what’s a strategy? A strategy is an integrative set of choices that positions you on a playing field of your choice in a way that you win. So, there’s a theory. Strategy has a theory. Here’s why we should be on this playing field, not this other one, and here’s how, on that playing field, we’re going to be better than anybody else at serving the customers on that playing field. That theory has to be coherent. It has to be doable. You have to be able to translate that into actions for it to be a great strategy. Planning does not have to have any such coherence, and it typically is what people in manufacturing want– the few things they want, to build a new plant, and the marketing people want to launch a new brand, and the talent people want to hire more people– that tends to be a list that has no internal coherence to it and no specification of a way that that is going to accomplish collectively some goal for the company.
See, planning is quite comforting. Plans typically have to do with the resources you’re going to spend. So we’re going to build a plan. We’re going to hire some people. We’re going to launch a new product. Those are all things that are on the cost side of businesses. Who controls your costs? Who’s the customer of your costs? The answer is, you are. You decide how many square feet to lease, how many raw materials to buy, how many people to hire. Those are more comfortable because you control them. A strategy, on the other hand, specifies an outcome, a competitive outcome that you wish to achieve, which involves customers wanting your product or service enough that they will buy enough of it to make the profitability that you’d like to make. The tricky thing about that is that you don’t control them. You might wish you could, but you can’t. They decide, not you. That’s a harder trick. So that means putting yourself out and saying, here’s what we believe will happen. We can’t prove it in advance, we can’t guarantee it, but this is what we want to have happen and that we believe will happen. It’s much easier to say, I’ll build a factory, I will hire more people, et cetera, than I will have customers end up liking our offering more than those of competitors.
The tricky thing about planning is that while you’re planning, chances are at least one competitor is figuring out how to win. When US air carriers were busily planning what routes to fly and da-da-da, there was this little company in Texas called Southwest that had a strategy for winning. And at first, that looked largely irrelevant because it was tiny. What Southwest Airlines was aiming for was an outcome.
What they wanted to be is a substitute for Greyhound, a way more convenient way to get around at a price that wasn’t extraordinarily much greater than a Greyhound bus. Southwest said, everybody else is flying hub and spoke. They have hubs, and they fly hub and spoke. We’re going to fly point to point so that we don’t have aircraft waiting on the ground because you only make money when you’re in the air.
We’re going to only fly 737s, one kind of aircraft, so that our gates are set up for those, our systems are set up for those, our training, our simulations are set up. We’re not going to offer meals on the flights because we’re going to specialize in short flights. We’re not going to book through travel agents. We’re going to encourage people to book online because that’s less expensive for everybody and more convenient. So, their strategy ended up having a substantially lower cost than any of the major carriers so that they could offer substantially lower prices.
Because it had a way of winning, it got bigger and then bigger and then bigger and then bigger and bigger and bigger and bigger until it flies the most passenger seat miles in America. The major carriers were not trying to win against one another. They were all playing to play, as I say. They were playing to participate, maybe buy more planes, get more gates, maybe grow some, not having a theory of here’s how we could be better than our competitors.
And that was fine until somebody came along and said, here’s a way to be better than everybody else for this segment. And so that segment then goes. It’s gone. And the main playing to play players have to share a smaller pie that’s left over after Southwest takes whatever share it wants.
If you’re trying to escape this planning trap, this comfort trap of doing something that’s comfortable but not good for you, how do you start? The most important thing to recognize is that strategy will have angst associated with it. It’ll make you feel somewhat nervous because as a manager, chances are you’ve been taught you should do things that you can prove in advance.
You can’t prove in advance that your strategy will succeed. You can look at a plan and say, well, all of these things are doable. Let’s just do those because they’re within our control. But they won’t add up to much. In strategy, you have to say, if our theory is right about what we can do and how the market will react, this will position us in an excellent way.
Just accept the fact that you can’t be perfect on that, and you can’t know for sure. And that is not being a bad manager. That is being a great leader because you’re giving your organization the chance to do something great. The second thing I do is say, lay out the logic of your strategy clearly. What would have to be true about ourselves, about the industry, about competition, about customers for this strategy to work?
Why do you do that? It’s because you can then watch the world unfold. And if something that you say is in the logic that would have to be true for this to work is not working out quite the way you hoped, it’ll allow you to tweak your strategy. And strategy is a journey, what you want to have as a mechanism for tweaking it, honing it, and refining it so it gets better and better as you go along.
Another thing that helps with strategy is not letting it get overcomplicated. It’s great if you can write your strategy on a single page. Here’s where we’re choosing to play. Here’s how we’re choosing to win. Here are the capabilities we need to have in place.
Here are the management systems. And that’s why it’s going to achieve this goal, this aspiration that we have. Then you lay out the logic, what must be true for that all to work out the way we hope. Go do it, and watch and tweak as you go along.
That may feel somewhat more worry-making, angst-making than planning, but I would tell you that if you plan, that’s a way to guarantee losing. If you do strategy, it gives you the best possible chance of winning.
HANNAH BATES: That was Roger Martin — Professor Emeritus and former Dean of the Rotman School of Management at the University of Toronto. That video is part of the HBR Quick Study YouTube series – short takes on big topics in business and work. It was edited and produced by Scott LaPierre, with video and animation by Dave Di Iulio, Elie Honein, and Alex Belser. More HBR Quick Study videos can be found on YouTube or HBR.org. HBR On Strategy will be back next Wednesday with another hand-picked conversation about business strategy from the Harvard Business Review. In the meantime, we have another curated feed that you should check out: HBR On Leadership . And visit us any time at HBR.org, where you can subscribe to Harvard Business Review and explore articles, videos, case studies, books, and of course, podcasts, that will help you manage yourself, your teams, and your career. This episode of HBR On Strategy was produced by Anne Saini, and me, Hannah Bates. The show was created by Anne Saini, Ian Fox, and me. Special thanks to Maureen Hoch, Adi Ignatius, Karen Player, Anne Bartholomew, and you – our listener. See you next week.
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Tax governance- becoming a large business in the uk – uk tax strategy requirements.
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This article focuses on another tax governance obligation for large businesses in the UK; the requirement to publish their tax strategy. It is a follow-up to a previous article about Senior Accounting Officer (SAO) requirements.
The publication of a tax strategy is a legal requirement in the UK for some organisations.
As well as businesses that fall within the SAO regime, it is a legal requirement for all qualifying groups, companies, partnerships and permanent establishments to publish their UK tax strategy online.
Whilst the rules most obviously apply to large UK corporate groups, they also need to be considered in situations where there is a UK company which is part of a large overseas headquartered group too.
Although businesses may find public scrutiny of their tax strategy unnerving, one could also view this as an opportunity to demonstrate responsible tax behaviours and a commitment to manage tax risks. In economically tight times, taxation will attract significant public interest and the publication of the tax strategy may provide an opportunity to help shape corporate reputation.
Which businesses are affected?
The requirement applies to UK companies or partnerships where, in the preceding financial year, either the entity alone or its group exceeded one of the following:
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- A turnover of £200 million; or
- A balance sheet total of £2 billion.
For groups and sub-groups, the aggregate results of the UK companies (including UK permanent establishment) are used to assess whether the thresholds are met.
UK companies or groups that do not meet the threshold in their own right, may still be required to publish their tax strategy if they are part of a group with global turnover in excess of €750m and are subject to country-by-country reporting requirements in the UK (or would be if their head of group were tax resident in the UK).
What are the deadlines for publishing tax strategy?
When the business first meets the conditions in the previous financial year, a tax strategy must be published before the end of the current financial year. For example, if the business first met the qualifying conditions in the year ended 31 March 2023, the first tax strategy would need to be published before 31 March 2024.
Once a strategy has been published there is also a requirement for it to be reviewed to ensure it remains up to date.
What are the penalties for non-compliance?
Financial penalties can be imposed if a business meets the requirements to publish a strategy and:
- Does not publish tax strategy; or
- Publishes a tax strategy that does not include all the relevant information; or
- Does not ensure that the published strategy remains freely available for the appropriate period.
Penalties for falling to publish a compliant strategy run from the first day after the date by which the strategy should have been published and the following may be charged:
- A penalty of £7,500 for not publishing a tax strategy;
- A second penalty of £7,500 if the tax strategy has not been published 6 months after it should have been;
- Further penalties of £7,500 for each subsequent month until the tax strategy is published.
Perhaps of equal, or even greater concern, is the fact that the organisation can expect to be subject to increased HMRC scrutiny as a failure to comply with the tax strategy requirements could suggest that there are other tax compliance or tax governance failings. The organisation could also expect its Business Risk Rating to be higher.
Where to publish the tax strategy
The Tax Strategy is a legal requirement and must be published on a website and be available free of charge. The document can be part of a section of a wider document, such as an annual report or in a separate document.
If the relevant UK business does not have a website, the tax strategy should still be available for free on the internet on the foreign parent company’s website or any other subsidiary website or another website, as agreed by the business’s Customer Compliance Manager.
What must be included in the tax strategy
The tax strategy must be approved by the board of directors and in line with the overall strategy and operation of the business. This is a high-level document.
The strategy should include the following information:
- How does the business manage UK tax risks – this includes information that demonstrates the business approach to risk management and governance. For example, this may include things like how the business identifies and reduces inherent tax risk due to the size, complexity and extent of change in business, the governance framework used to manage tax risk, high level descriptions of any key roles, responsibilities, systems and controls in place to manage tax risk.
- The attitude of the business towards UK tax planning – the strategy should outline business attitude towards tax planning and provide details relating to UK taxation. This may include information regarding the approach the business has towards tax planning, or structuring tax planning, an outline of what influences the business’s tax planning and how this affects the business’s tax strategy.
- The level of risk that the business is prepared to accept for UK taxation – the business will need to provide guidance on the level of risk the business is prepared to accept, provide details of the internal governance process of measuring this and to explain the influence that relevant stakeholders have.
- How the business works with HMRC – the business will need to explain how it deals with HMRC. This may include information as to how the business co-operates and works to be transparent with HMRC on current, future and past tax risks across all relevant taxes and duties, and how the business works with HMRC to meet statutory tax requirements.
- Any other relevant information relating to taxation such as tax compliance and reporting
Businesses do not need to include the amounts of taxes and duties paid or any information that might be commercially sensitive.
Businesses need to ensure that the statements they make in the tax strategy are reflected in actual business operations. They should have sufficient documented tax procedure and policies to support the statement. This can provide an opportunity to improve the tax processes and also demonstrate the interrelationship with the SAO and CCO regimes, both of which focus on tax governance.
HMRC may review the group’s corporation tax returns alongside the tax strategy to try and ascertain whether the strategy is being applied. HMRC may take inconsistencies into account when carrying out its regular risk reviews.
Action to take
Affected businesses should allow plenty of time for preparation of a tax strategy (or build in timely reviews of existing ones). The strategy document needs to not only satisfy compliance requirements but may require consideration of business operations as well as an assessment of what level of business information should be disclosed. This may require multiple areas of the business to contribute or sign-off on relevant statements in the tax strategy, which should be factored into timelines for publication.
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A financially independent, 32-year-old options trader who started investing in high school shares 2 strategies that helped him return 25% a year on average for the past 5 years — and 52% in his best year
This story is available exclusively to insider subscribers. become an insider and start reading now..
- Encouraged by a high school teacher, Erik Smolinski started investing in the stock market as a teen.
- He's been actively trading since and today, at 32, is a financially independent multimillionaire.
- He shared strategies he's used over his trading career that have helped create outsized returns.
Erik Smolinski started working odd jobs, anything from splitting wood to selling Christmas trees, as early as 12.
Raised by a single mother in a cash-strapped household, "I was doing it so that I could try to create a different financial outcome going forward," he said.
Smolinski saved every dollar he earned. Thanks to a junior ROTC instructor, he eventually started putting his savings to work.
"He saw that I was working a bunch and was like, 'What are you doing with the money that you're making?'" recalled Smolinski, who told his teacher that he was putting it in a savings account. "He's like, 'Well, you should look into investing.' It was the first time I ever heard that term. I never heard anybody talk about investing in my family before. I had no idea what it was."
He went to the school library, picked up a couple of books, and started learning about basic investing concepts.
From there, he started buying stocks. Specifically, he bought what he knew and liked. For example, he thought the iPod was "really cool," so he bought Apple. He also remembers buying shares of Netflix and Amazon.
"It was like one share or three shares or five shares," noted Smolinski. This was in 2007, when he was still a teenager. "The account was super small, less than $5,000, when I started."
He graduated high school in 2009 and, thanks to a Marine Corps scholarship, got a full ride to college, where he had even more time to trade and hone his strategy.
Today, at 32, Smolinski is a Marine veteran — he completed six years of active duty between 2014 and 2019 — and a financially independent multimillionaire, thanks to his investment portfolio. He and his wife Mel reside in San Diego.
"In a broad sense, I invest," he said when asked to describe what he does.
He also owns residential and commercial real estate and is getting into angel investing, but trading derivatives is his bread-and-butter.
Since he started trading as a teen in 2007, he's only posted two negative years: his first two years.
"I lost about 1.1% in 2007 and then I lost 4.2% in 2008," said Smolinski, who estimates that he spends just four hours a week actively trading. "Since then, my lowest return has been 13.78% in 2018."
Between 2018 and 2022, he returned 24.6% on average, which Insider verified by looking at screenshots of his summary statements. The S&P 500 index averaged nearly 12% over the same period. His strongest year was 2013, when he returned 52%. Insider also verified that he has a seven-figure account balance, as of September 2023.
Active trading isn't for everyone, and experts agree that the everyday investor should stick with passive investing as a long-term, wealth-building strategy.
Smolinski also agrees: "I genuinely believe for the vast majority of people that's probably the right answer. But I started to realize how much better I could do so, for me, it was kind of a no brainer."
He shared two strategies he's implemented over the last 16 years of his trading career that have helped create consistent outsized returns.
1. He set a specific but attainable goal and stuck to a plan
When Smolinski got more serious about investing in college, he set a return goal for himself based on typical market returns.
"I did a ton of homework on what normal returns are for the market: What are normal returns for hedge funds? For mutual funds?" he said. "So I created this understanding of what probabilistic outcomes existed and then I created a road map for myself."
His goal was to return at least 15% per year. It was a number that felt achievable and replicable, he said.
Plus, if he continued saving and investing as aggressively as he was, hitting that number year after year would set him up to hit another one of his goals: becoming a millionaire before 30.
Having a specific goal with a plan on how to get there gave him "ultimate clarity," he said. "So when my friends were going out to bars, I was okay going, but I wasn't drinking because I didn't want to spend the money. It sounds lame. But guess what? Sometimes that was the right decision for me. Every single time I could put a little bit more money into my account, it accelerated my road map: Instead of it taking X number of years, now it will take one year less. That mattered to me."
Setting a specific return goal also helps keep him focused during his red-hot years.
"I value the plan over everything, so in any of these years where I exceed 15%, which honestly is most of them, I am only seeking opportunities that are just so good that I don't want to pass them up," he said. "What that means is, even in my best year, I'm not trying to redline my performance."
He's okay knowing that he'll likely never be an investor who earns triple-digit returns. He'd rather generate consistent, slightly outsized returns and maintain a low annual return variance, a measurement of risk.
2. He created detailed trading logs and plans
As an active trader, Smolinski believes that having both a trading plan and a trading log are essential.
"In the stock market, there are truly an infinite number of variables, the vast majority of which we cannot control," he explained. "In order to successfully make money long-term, in my opinion, we need to figure out what actions make sense when. It's very difficult to do that if, on top of all of the market variables, you yourself as the trader making the decisions are another variable."
That's where a trading plan and log come into play. They're meant to control for variables and eliminate some of the guesswork.
Smolinski's plan is a 388-page Word document filled with over 100,000 words, and constantly evolving. It's titled "Wealth Development and Trading Plan" and is broken out into various sections, including "strategy outlines." This section details all the strategies he uses, how they make money, how they lose money, and what risks are involved.
He supplements his plan with a trading log, which is where he collects data that is pertinent to the individual strategies, he explained: "This is how I get to the specific details of: If I'm trading the covered strangle, which is an option strategy, if volatility is above 20 I know I'm going to follow path A, which includes certain qualities that I would structure the trade with. Whereas, if volatility is at 40 I might follow path B."
By referring to the trade log, where he's tested different scenarios and captured the outcomes, "it's not a guessing game anymore," he said. "It's not like, 'Oh, I think this might work better.' It's, 'I know what works better based on my data.' So it gives me an objective reality to base decisions off of."
An organized trader will be able to see what works and what doesn't work.
"If I look at most traders that are struggling, it's because they're trying 50 different things but there's no real organization so they can't really track it that effectively — and markets are streaky," said Smolinski. "Sometimes something will work for two years straight and then it stops working entirely. You have to be prepared to pivot, and that comes from having a really robust data set and tracking things effectively."
Watch: The founder and CIO of $12 billion Ariel Investments breaks down how his top-ranked flagship fund has crushed its peers over the past 10 years
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UAW says it is prepared to strike for ‘months’ in leaked messages
The United Auto Workers Union is prepared to strike automakers for “months,” according to leaked messages obtained by CNN.
The messages, between Jonah Furman, Communications Director at the United Auto Workers Union, and other members of the labor community detail personal thoughts about the union’s strategy against the Big Three. The comments broadly confirm what the UAW has publicly said already, and they lay out the union’s willingness to use innovative measures to obtain the best possible deal for its workers.
In one message, Furman wrote “if we can keep them wounded for months, they don’t know what to do… this is recurring reputations damage and operation chaos.”
In another, he writes “The beauty is we’ve laid it all out in public and they’re still helpless to stop it.”
Neither Jonah Furman, nor the UAW responded to requests for comment. Furman is not directly involved in negotiations with the Big Three.
CNN reviewed a series of eight screen shots. The messages were part of a closed messaging group on X, formerly Twitter. The full context of the conversation is unknown, but the participants, who are in the labor community appear to be messaging about general union issues and strategy.
The Detroit Free Press was the first to report the leaked messages.
This is the UAW’s first strike against all of the traditional “Big Three” automakers simultaneously. So far, the strike, which started early last Friday, has targeted only one final assembly plant at each automaker. But UAW President Shawn Fain announced Monday night that it would pick other plants if there is no “substantial progress” in the offers from the automakers.
The union has consistently spoken publicly about its use of new tactics, referring to the ongoing strike as a “ Stand-Up Strike ,” which hearkens back to the original “Sit-Down Strike” that was formative in the early years of the UAW. Whereas in years past, the UAW would only strike on automaker at a time, shutting it down entirely, during this negotiation the UAW is looking for maximum flexibility, with the ability to call local union leaders and shut down or re-start individual plants at a moment’s notice.
Unions also typically make plans and preparations for long strikes, even ones lasting months.
One advantage for the union of a targeted strike is the potential to save resources and extend a possible strike. The union members who are on strike are eligible for $500 a week in strike benefits from the union’s strike fund.
If all 145,000 UAW members among the three automakers were to strike at the same time, it could cost the fund more than $70 million a week, draining the $825 million fund.
With targeted strikes, it’s possible that the companies will shut down operations and lay off members who are not technically on strike. That could make them eligible to receive state unemployment benefits rather than strike benefits, which could preserve the union’s resources. But there are legal questions about qualifying for unemployment.
Before the strike began, Fain told members that it would be important for members to stay on the job if their plant is not chosen for a strike to give union negotiators the greatest possible power at the bargaining table.
“This is going to create confusion for the companies. It’s going to turbo charge the power of our negotiators,” he told members. “I know there’s a hunger to [have all members] go on strike. That may still happen. This was not done on a whim.”
Stellantis, which made an additional offer to the UAW this week said in a statement; “These reported comments made by the UAW Communications Director are incredibly disturbing and strongly indicate that the UAW’s approach to these talks is not in the best interest of the workforce. We are disappointed that it appears our employees are being used as pawns in an agenda that is not intended to meet their needs.”
“We will not be distracted from our goal, to negotiate an agreement that rewards our employees for their contributions while creating a sustainable future for the company. We strongly encourage our employees to ask their union negotiators to share the details of our offer with them.
John Hatline, who has worked at General Motors for 49 years and has seen his fair share of strikes, told CNN before the strikes began that he thought targeted strikes can work.
“We have used targeted strategies in the past. They have proven effective in helping resolve our contract disputes,” said Hatline, who works at GM’s Factory Zero in Detroit, which builds all electric vehicles. “It saves depletion of our strike fund. Without a substantial strike fund our bargaining power is reduced. When you enter a contract dispute you have to be willing to last one day longer than the company. Or all our sacrificing is for naught.”
General Motors, which put a fifth offer on the table yesterday said in a statement: “It’s now clear that the UAW leadership has always intended to cause months-long disruption, regardless of the harm it causes to its members and their communities. The leaked information calls into question who is actually in charge of UAW strategy and shows a callous disregard for the seriousness of what is at stake.”
“It’s disappointing, to say the least, given what is at stake for our employees, the companies and this region,” said Mark Truby, Chief Communications Officer at Ford. “For our part, we will continue to work, day and night, bargaining in good faith, to reach an agreement that rewards our workforce and allows Ford to invest in a vibrant and growing future.”
Despite this, talks continue this morning with Stellantis, Genal Motors, and Ford, according to a source with knowledge.
The union has said they will expand the strike if solid progress is not made by noon today.