The SLIF organisational and entrepreneurial strategies programmes set to the purpose of strategic planning is to set your overall goals for your business and to develop a plan to achieve them. It involves stepping back from your day-to-day operations and asking where your business is headed and what its priorities should be.
Taking the decision actively to grow a business means embracing the risks that come with growth. Spending time on identifying exactly where you want to take your business – and how you will get there – should help you reduce and manage those risks.
As your business becomes larger and more complex, so strategy formulation will need to become more sophisticated, both to sustain growth and to help you muster the leadership and resources you need to keep your business developing.
To do this, you will also need to start collecting and analysing a wider range of information about your business – both about how it operates internally and about how conditions are developing in your current and potential markets.
The process of strategic planning is about determining the direction in which you want to take your business. It involves setting out your overall goals for your business. By contrast, the purpose of the business plan is to provide a detailed roadmap that will take you in your desired direction.
You’re strategic planning and your business planning should be complementary, but effective strategy development requires you to shift your focus from the day-to-day concerns of your business and to consider your broader and longer-term options.
Where is your business now? This involves understanding as much about your business as possible, including how it operates internally, what drives its profitability, and how it compares with competitors. Keep your review separate from day-to-day work and be realistic, detached and critical in distinguishing between the cause and effect of how your business operates. You should also write it down and review it periodically.
Where do you want to take it? Here you need to set out your top-level objectives. Work out your vision, mission, objectives, values, techniques and goals. Where do you see your business in five or ten years? What do you want to be the focus of your business and your source of competitive advantage over your rivals in the marketplace? This step should be the foundation for the final plan and motivate change.
What do you need to do to get there? What changes will you need to make to deliver on your strategic objectives? What is the best way of implementing those changes – what changes to the structure and financing of your business will be required and what goals and deadlines will you need to set for yourself and others in the business? Think about the business as a whole, for example, consider diversification, existing growth, acquisition plans, as well as functional matters in key areas.