How many of you have prepared formal business and/or strategic plans? Possibly, you have prepared business plans when you were seeking financing for their start-up, growth, or an acquisition. Some of you may have developed a business plan as a road map to follow, and measure their results against it.
But generally, surveys indicate that, unless it is done to acquire financing, business plans are not done. Business plans are generally prepared for a three-to-five year period.
The scope will define the start-up, expansion, or acquisition costs. Specific markets, products, marketing plans and organization for the company will be outlined. An implementation process will be outlined with dates and assigned responsibilities (milestones).
Sales projections are absolutely necessary, and will be the basis for the financial forecast which will include balance sheet and cash flow forecasts as well as the profit and loss forecast. Those financing the company will want to see how they are going to get paid back; investors will want to see what their return will be.
Your city/state economic development departments, SCORE (Service Corps of Retired Executives), the banks, and various resources on the web can give you formats that you can use to develop your business plan.
While business plan development can be done internally, I generally recommend using outside help. They will ask the tougher questions and will do a much more through job of market analysis because they have no "insider" bias. Strategic plans are significantly different than business plans, and I doubt very many companies have even attempted one.
Strategic plans are much broader in scope, as they start with defining the vision and goals of the company and can be developed for as long as 20 years, with adjustments being made as often as necessary as the business environment changes.
Strategic plans are much more visionary and are focused on ongoing improvements and building market share. Plans may be modified, but the vision should never change. Goals are always established before the company takes any action steps.
Strategic planning does yield success. Studies have proven that companies with plans are 12% more profitable, and 64% state that they do a better job of meeting their short term goals because these goals are fully aligned with the company vision.
Generally, annual budgets (if you do these) are too short term and are focused on the current situation, not the future vision. Approximately 80% of all INC 500 companies actively use strategic planning.
While there are many examples of business plans on the internet, there are not as many examples for strategic plans. The formats vary significantly, but the approaches are generally consistent. They can be anywhere from a one page plan to a complete document.
Generally, there are no financial schedules. Specific financial targets are important, but strategic plans are much broader in scope and are more sales or market focused. One of the most critical steps in developing a strategic plan is the SWOT analysis (strengths, weaknesses, opportunities, and threats).
Once that is done, keep it close by and refer to it often. Update it as conditions change. Next develop your core values; these should never change as long as the company exists. The core value defines the company's purpose - why it is in business - the heart of the company.
Then define the actions that must be taken to comply with these values. The next, and most important step, is to develop your BHAG (big hairy audacious goal) - the "why" of the company for the long term.
Once these longer term goals are established, the next step is to define the intermediate targets that will be required to meet those goals. These intermediate targets should cover three to five years and should use key performance indicators (KPI's) to measure progress on achieving the goals.
The intermediate goals are further broken down into more specifically-focused annual goals and measurements. The next step is to define quarterly goals and measurements. And keep the number of goals limited.
KPI's should be measured routinely to insure that the company is achieving its goals. The focus of strategic planning is to develop the base values and goals of the company. These are the foundation of the company, and should never change.
All additional goals and KPI's will be developed to define the shorter term steps that will support this base. The process is designed so that the quarterly and annual goals can be updated as the company progresses, and to adjust for environmental changes (which will happen).
The strategic planning process is a well-defined building block process that will result in a better focused and more profitable company.
But generally, surveys indicate that, unless it is done to acquire financing, business plans are not done. Business plans are generally prepared for a three-to-five year period.
The scope will define the start-up, expansion, or acquisition costs. Specific markets, products, marketing plans and organization for the company will be outlined. An implementation process will be outlined with dates and assigned responsibilities (milestones).
Sales projections are absolutely necessary, and will be the basis for the financial forecast which will include balance sheet and cash flow forecasts as well as the profit and loss forecast. Those financing the company will want to see how they are going to get paid back; investors will want to see what their return will be.
Your city/state economic development departments, SCORE (Service Corps of Retired Executives), the banks, and various resources on the web can give you formats that you can use to develop your business plan.
While business plan development can be done internally, I generally recommend using outside help. They will ask the tougher questions and will do a much more through job of market analysis because they have no "insider" bias. Strategic plans are significantly different than business plans, and I doubt very many companies have even attempted one.
Strategic plans are much broader in scope, as they start with defining the vision and goals of the company and can be developed for as long as 20 years, with adjustments being made as often as necessary as the business environment changes.
Strategic plans are much more visionary and are focused on ongoing improvements and building market share. Plans may be modified, but the vision should never change. Goals are always established before the company takes any action steps.
Strategic planning does yield success. Studies have proven that companies with plans are 12% more profitable, and 64% state that they do a better job of meeting their short term goals because these goals are fully aligned with the company vision.
Generally, annual budgets (if you do these) are too short term and are focused on the current situation, not the future vision. Approximately 80% of all INC 500 companies actively use strategic planning.
While there are many examples of business plans on the internet, there are not as many examples for strategic plans. The formats vary significantly, but the approaches are generally consistent. They can be anywhere from a one page plan to a complete document.
Generally, there are no financial schedules. Specific financial targets are important, but strategic plans are much broader in scope and are more sales or market focused. One of the most critical steps in developing a strategic plan is the SWOT analysis (strengths, weaknesses, opportunities, and threats).
Once that is done, keep it close by and refer to it often. Update it as conditions change. Next develop your core values; these should never change as long as the company exists. The core value defines the company's purpose - why it is in business - the heart of the company.
Then define the actions that must be taken to comply with these values. The next, and most important step, is to develop your BHAG (big hairy audacious goal) - the "why" of the company for the long term.
Once these longer term goals are established, the next step is to define the intermediate targets that will be required to meet those goals. These intermediate targets should cover three to five years and should use key performance indicators (KPI's) to measure progress on achieving the goals.
The intermediate goals are further broken down into more specifically-focused annual goals and measurements. The next step is to define quarterly goals and measurements. And keep the number of goals limited.
KPI's should be measured routinely to insure that the company is achieving its goals. The focus of strategic planning is to develop the base values and goals of the company. These are the foundation of the company, and should never change.
All additional goals and KPI's will be developed to define the shorter term steps that will support this base. The process is designed so that the quarterly and annual goals can be updated as the company progresses, and to adjust for environmental changes (which will happen).
The strategic planning process is a well-defined building block process that will result in a better focused and more profitable company.