How many businesses actually have a strategic plan? Do you have a one? Do you need a strategic plan? Of what use would a strategic plan be for your business? Can a well thought out strategic plan add new life and direction for your business? Is there a particular methodology that you should use when you create your strategic plan?
According to a 2007 American Family Business Survey, only 36.6% of family-owned businesses in the U.S. have a written strategic plan. Of the 36.6% who have written plans, only 31.1% used a formal process. According to the survey, the data has not changed much in the last 20 years.
Since these facts also apply to our industry, only 37% of family businesses have buy-sell agreements. According to the survey, 20% of CEOs or heads of business planned to retire within 5 years, and an additional 40% planned to retire in 10 years. Of the total number of businesses responding to the survey and planning to retire within 5 to 10 years only 24% had identified potential successors. The survey also showed that 40% of first generation family-owned businesses pass on to the next generation, 13% pass to the third generation, and 3% pass to the fourth generation. Do you think you should develop a strategic plan?
There’s an easy way to develop a strategic plan for your business. Gather your senior management team to create a strategic plan for your company. Any time I develop a marketing plan, or a business plan, I like to start with a SWOT analysis. A good strategic plan should be no different; we need to be aware of our strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors and these pertain to your business, they can be processes, product knowledge, experience, customer service, etc. The best place to gather this information is from external data, customer, and employee surveys if you have them, and your own evaluation of your strengths and weaknesses. Next move on to opportunities, and threats, these are external factors, and on the opportunities side could include new technologies, niche markets, or poor competitors. On the threat side it could be government regulations, interest rates, economic conditions, etc.
Try to get five to ten items in each category and then rank them in order of importance. Where you have strengths you want to capitalize on them, where you have weaknesses you want to find ways to prop them up to improve your standing and mitigate their effect. You will want to find ways to invest in your opportunities, identify and quantify what threats could mean to your business, and if possible, find ways to turn threats into opportunities. Ultimately, you want to develop a list of ideas that you turn into action items and goal statements.
Restate your mission and vision for your company; discuss why you are in business, and the company’s values. Your mission and vision statements along with company values, establish the framework from which your company makes ethical decisions regarding what your business will or will not do to generate income. As you move forward in the process, this will help you focus on areas of the business in which you want to work.
Polish your crystal ball and make predictions and assumptions about the future of your industry and your business based on the opportunities or threats that you identified during your SWOT analysis. What could new government regulations mean to your industry, and how can you position your business to take best advantage of them. Also, recognize and discuss any emerging trends that could affect your business in the coming years.
If it looks like a portion of your business could go away due to economic conditions or lack of government rebates in the future, think about what you can do to prepare your company to replace what you might lose. The important part of strategic planning is to know there’s no perfect plan. General George S. Patton said, “A good battle plan that you can act on today can be better than a perfect one tomorrow.”
Identify measurable objectives, combine them with the action items and goal statements that you developed during your SWOT analysis and rank them in order of importance. Evaluate your resources, including, personnel, financial, and external. Then set dates to your goals. Goals without a date and a plan are just wishes. If your strategic plan is going to succeed, you must back it up with a plan of attack and a date when you intend to achieve your goal.
Develop tactics that support your goals and strategies. Dictionary.com defines tactics as any mode of procedure for gaining advantage or success. Your tactics will support your strategic goals and help you obtain them. One tactic might be sending every member of your staff to customer service training if you identified this as a weak area, another could be to hire more employees because you identified being short-staffed as a weakness.
Assign the tasks to employees, implement your plans, and evaluate your results. Set measurable milestones to gauge progress and review on a monthly basis to ensure that you are on target to reach your goals. Measure your results, if you are off target then stop and make a course correction and continue to move forward.
Ultimately, strategic plans are fluid and you may need to amend them as the business climate changes. From time to time, goals will change, strategies become outdated, and your business must adjust to changes in technology, customers, and availability of equipment. Do you need a strategic plan? Yes. Can a well thought out strategic plan add new life and direction for your business? Yes. Operating without a strategic plan to guide you is like trying to drive a boat without a rudder, you’re at the mercy of the current, and you will never get where you want to go.
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Andy Fracica is president and CEO of Fracica Enterprises, Inc., a consulting firm specializing in marketing, PR, social media, and lead generation strategy. He has over 30 years of sales, marketing, and product management experience in the heating ventilating and air conditioning (HVAC) industry. He concentrates on helping companies deliver their message in an ever increasingly crowded market by teaching businesses to do more with less ($). Contact him at 260-338-4554, firstname.lastname@example.org or visit the Fracica Enterprises, Inc. website.