If you know a fair amount about business operations and are planning to set up your own small business, you might be tempted to go with the flow and see how things unfold.
However, if you want to give your small business the biggest chance of success, you need to come up with a strategic business plan.
If you don’t know where to start with making a comprehensive, strategic plan for your small business, don’t worry.
We’re going to walk you through the process in this guide. By the end, you’ll be able to create a strategic plan to propel your business to success.
What Is A Strategic Plan?
First of all, what is a strategic plan? A strategic plan is not to be confused with a business plan, which is a common mistake made by entrepreneurs.
A strategic plan should outline your business goals, where you hope to be after a certain amount of time, and what you hope your business will look like in years to come.
Of course, your plan will need to go a little deeper than this.
You’ll also need to think about what obstacles you might face along your timeline and what your plan is for overcoming those obstacles successfully. That’s the ‘strategic’ part of your strategic plan.
Again, don’t get this confused with business planning, which is a different kind of planning that small businesses have to go through when it comes to providing services and products or applying for loans.
On the other hand, strategic planning is something you need to do at the start of your business venture to make sure you have a clear direction from the beginning.
With that being said, you should definitely have a business plan alongside your strategic plan since having a business plan in place will help you to create your strategic plan.
After all, your business plan will deal in your business’s finances, which is a key component of your strategic plan.
Why Are Strategic Plans Important For Small Businesses?
You might think that making an entire strategic plan as soon as you start the process of building your small business is overkill, but this is actually a really important part of starting your business on the right foot.
The bottom line is that in order for your business, however small, to grow and thrive, you need a plan made up of actionable steps.
It’s all well and good having a rough outline of how you want your business to progress, but saying ‘I want to have a revenue of $1 million and to have won X business award in 5 years’ without planning how you’ll get there isn’t actually a plan because you haven’t thought about how you’ll get there.
It’s the same as telling yourself you’re going to lose 15 lbs in 2 months and simply jumping into a random diet and exercise plan without having researched the best way to realistically reach that goal.
In the end, you’re making things more difficult for yourself, potentially wasting time, and setting yourself up for disappointment.
By creating a strategic plan for your small business, you have a clear road ahead and you can cut down on a lot of confusion, stress, panic, and re-thinking down the line.
To be clear, that’s not to say you’ll never need to re-work your plan. Life (including business) doesn’t always go the way we expect it to, so you have to be prepared to be flexible.
What Your Strategic Plan Should Include
So, now that we’re all clear on what a strategic business plan is and why these plans are so important, it’s time to think about what your strategic plan needs to cover.
First of all, you will need a mission statement. That’s just a concise summary of what your brand is about and what you hope to achieve and bring to the market through your business.
For example, if your business produces bamboo toothbrushes and dental floss, your mission statement might be ‘to provide customers with sustainable, affordable and durable alternatives to traditional oral care products’.
Along with your mission statement, you’ll need a statement of your business’s values. That means you need to outline what core values are important to your business.
For the above mission statement, your values statement might include the words ‘sustainability’, ‘accessibility’ and ‘transparency’, followed by a short description of what these values will look like in the context of your business
Next, you can write out your vision statement. This is the fun part where you contemplate where you’d like to be in the next few years. Many small businesses start with a 5 year plan, but you can also think up to 10 years ahead.
Your statement of competitive advantage will help to support your vision statement because it outlines where your business improves upon your competitor businesses.
If your goal is to be the leading bamboo toothbrush business in your area, for example, you’ll need to think about how you can surpass the competition with your business strategy. Will you offer products for lower prices, or will you provide better quality?
Here’s where you really need to get practical. To complete your strategic small business plan, you must devise an action plan and assess your finances.
You need a financial analysis in order to come up with a realistic action plan because a lot of the steps involved in reaching your goals will involve spending money, so you need to know what your budget is and how you’ll make enough profit to make your action plan sustainable.
Depending on how much you can afford to spend at the planning stage, it may be a good idea to consult with a financial advisor to make sure your action plan and finances line up.
After The Planning Stage
Creating a strategic business plan for your small business is an excellent first step, but your work isn’t done once you’ve got your plan on paper.
Once you have established your plan, you need to create a timeline for assessing your progress.
That might mean checking in with your financial advisor on a monthly basis to make sure your sales and expenses are on track, or it could mean sending out regular marketing surveys to see how your customers feel about your business.
You need to stick to your progress assessment timeline and, if it shows that something isn’t working or you’re not where you thought you would be by a certain point, you need to be prepared to revise your strategy or make changes to how your business operates.
Final Thoughts
Creating a strategic business plan is often thought of as something that only larger businesses need to do, but small businesses can really benefit from this kind of planning early on.
A strategic business plan that includes a mission and values statement, consideration of competitive advantage, an action plan, and a financial assessment can make it much easier to reach your goals as a small business.
Remember to assess your progress according to your action plan regularly and make any necessary changes to ensure you stay on track with your finances and growth over the next 5 or 10 years.