If you’re a new entrepreneur, all of these necessary documents and write ups might start to seem pretty overwhelming. And we understand why, they all demand lots of research, creativity, and patience to complete. Luckily though, we’re here to help you navigate all of these hurdles. Because not even the best businessman or businesswoman is born knowing exactly what these documents mean or how to create them.
Therefore, today we’ll be discussing strategic business plans specifically. Not to be confused with a traditional business plan, which is written up when a company is initially starting out, a strategic business plan is a document that should be written when an established business is ready to establish and commit to new long term goals. Or, more specifically, targets they would like to hit within the next 3 to 5 years.
So what is the point of a Strategic Business Plan, anyway?
Similar to a traditional business plan, a strategic business plan is meant to outline your measurable goals for your business. Dissimilar to a traditional business plan, however, a strategic business plan is meant to establish strategies and tangible tasks to complete so that your business can actually hit those goals for the next few years. Additionally, many understand a traditional business plan to be important because it’s the document that convinces partners, lenders, and/or investors to get involved in a new company and provide monetary support. A strategic business plan, however, is really more for the current staff members and stakeholders to better understand where the business currently stands, and how it plans to improve over the next few years.
Basically, if your business is just starting out, you’ll want to draft a traditional, comprehensive, or lean business plan to establish your brand and company’s purpose, not a strategic business plan. But, if you have already been in business for a year or more, then a strategic business plan is what you’ll want to write up to keep your business on track for steady growth.
In simpler terms, some business professionals like to think of a strategic business plan as a thorough answer to these three key questions: Where are we now as a business? Where are we going? And how do we get there?
Of course a strategic business plan is going to need a lot more than three sentences to fully and completely answer these three big questions, however these are good guiding statements to keep in mind as you conduct research, craft specific and measurable goals, and craft tactics to make your business’ goals a reality.
But what do I put in a Strategic Business Plan?
Just like a traditional business plan, a strategic business plan has many parts, and all are expected to be included. A strategic business plan has a formula that you won’t want to stray from, because any experienced businessman or businesswoman that reviews the document will be looking for each one.
For your convenience, below we’ve constructed a chart of what should be included in your strategic business plan, a description of each part, and what parts are shared by a traditional business plan. You might find this helpful as these parts of the document can be borrowed from your original business plan and tweaked/updated as you see fit. Remember: it is normal and expected for aspects of your business to change as your company grows and finds its own identity/place in the market. So if you feel as though your strategic business plan should be written from scratch to reflect this, as opposed to partially copy and pasted from your initial business plan, all the more power to you!
But without further ado, here’s what should be included in a strategic business plan:
|Sections in a Strategic Business Plan||Description of Each Section||Also in a traditional business plan?|
|Executive Summary||Clarity and conciseness are the two words to keep in mind when writing this portion of your strategic business plan. Because many think of this as a hook that previews the rest of the document, many suggest writing it last, so you know exactly what to include. More specifically though, an Executive Summary should have: your company’s information such as address; contact information; opening date; elevator pitch; the consumer problem you resolve and how you do that; your target audience; competitive analysis; launch budget; profit forecast; marketing strategy; support plan; management team; and partners, if any.||Y|
|Company Description||In a Company Description you can summarize your company, your intended customers, and what sets you apart from your competitors.And, although this section was included in your traditional business plan, remember that it’s very possible your ideal customer today might look very different from your ideal customer when your business first started. Reflect on this and update this section as you see fit.||Y|
|Company Vision||A company vision statement is a great time to ask for employee and partner input. Not just for concise, precise wording, but also to brainstorm viable ideas. Your Company Vision should be shared by everyone in your business, after all, so the more everyone agrees on it, the better.Additionally, as it pertains to your strategic business plan, your Company Vision is very important, possibly the most important section of this document because it lays out exactly what your company plans to accomplish in the next few years. It pledges that you plan to forge ahead successfully and ambitiously, as opposed to coasting along and fizzling out.||Y|
|Mission Statement||While it’s likely that your established business already has a Mission Statement, consider this an opportunity to reconsider what you already have. Does your current Mission Statement still reflect who you are as a brand? Does it encompass new goals, products, or services that your company now pursues or offers? Is it still how you want your audience to interpret you?||Y|
|Main Objectives||Main Objectives should be measurable tasks that your company can complete. As always, a strategic business plan is no time to make bold, unspecific claims like: “We’re the next Amazon.” Instead, Main Objectives should be easy to track and comprehend, like “We will reduce employee turnover by ___% by implementing ____.”||Y|
|Keys to Success||A business’ three keys to success are as follows: A) It’s Key Partnerships – or the other businesses that help your business’ success; B) It’s Key Activities – Or what your business does specifically to increase profit; and C) It’s Key Resources – Or what your business has that makes it more desirable or valuable for the customer, like a unique design patent or a groundbreaking creative team.||N – but if you wrote a lean business plan, these 3 Keys would have been included there|
|Market Analysis||A qualitative and quantitative analysis of your customer and customer demographic. If you’ve already written up a lean business plan, you can pull from the following sections: Value Proposition and Customer Relationships.||Y|
|Management Summary||Here you’ll be expected to explain who is in leadership positions in your company, and what qualifies them to be there. You can also describe the organization of your company as it pertains to the chain of command.||Y|
|Products and Services||Perhaps one of the easier sections to write up, here you will explain what product(s) and/or service(s) you offer, and how they are unique to the competitors. Oftentimes, this is in a bullet point list, especially for those companies who offer multiple product(s) or service(s).||Y|
|Marketing Strategy||Another opportunity to pull from your lean business plan, if you have one, this section combines your: Channels, Cost Structure, and Revenue Streams.||Y|
|SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats as it relates to your business’ success)||This section of your strategic business plan is a great time to get multiple perspectives. Poll different departments in your company and ask what they see as your company’s strengths, weaknesses, opportunities, and threats. Remember that this section should answer the “Where are we now?” key question, meaning it’s important to be honest with yourself and see your strategic business plan as your commitment to remedy any weaknesses or threats that are of major concern to you and your business.||N|
|Financial Statements and Projections||This section is where the past, present, and future come together to prove how your strategic plan will pay off. Use past profitability data to show what increases or decreases profit. Then, apply the actions you’ve laid out in your strategic business plan to project and prove that your financial goals are reachable in the provided timeline.While all sections will likely include graphics, this one should certainly have graphs and financial charts that show and prove where you are and where you’re going.||N – Unlike a traditional business plan, these must show the most current profit and loss statements, as well as projected profit for the next 3 to 5 years.|
|Exit Plan||Last, but not least, in this section you will detail any plans to pay off funding/loans. Additionally, you should include any end goals for your business i.e. to sell it or pass it down to the next generation.||Y|
We hope you feel more comfortable with what a strategic business plan is, what to include, and why it’s all so important. While this document may be time-consuming to write up, we hope you see the benefit in doing so. After all, companies with a well-thought out and researched vision for the future are much more likely to be successful and profitable in the long term.
But, before you go off to write up your strategic business plan, make sure you’re signed up for our Business Plan King newsletter below – the only way to make sure you’re getting our most up to date information on a consistent basis.