What is Strategic Planning?
Strategic planning is vital for the growth of any business. Much like a great recipe is a guide to making a delicious meal, a strong strategic plan provides a business with a clear path to achieving its goals.
Businesses use strategic planning to identify their goals and plan for growth, generally over a five-year period. This plan is often laid out using a straightforward “what and how” approach – what are the five-year goals and what steps will be taken to achieve them?
In addition to goal setting, strategic planning gives a business the opportunity to assess its current operations and explore future possibilities. After setting a “where we are” benchmark, the strategic planning process will assist the management in looking outside of daily operations to identify possible new opportunities for expansion.
There are several common methods businesses use to determine attainable goals, SWOT Analysis (Strengths, Weaknesses, Opportunities and Threats) being one example. After identifying the SWOT elements, the company’s strategic planning team can use its strengths to capture opportunities and mitigate threats, and overcome weaknesses by changing its path.
Why is Strategic Planning Important?
Once a strategic plan has been written, its value will be clear. Primarily, having a clearly stated mission enables a company to filter out distractions and move efficiently towards key business goals. Clearly understanding opportunities and threats allows personnel to effectively seek new outlets for products or services. When resources and tasks are clearly allocated, employees can focus on their individual contributions to the company’s overall success.
A precise and carefully researched strategic plan is the blueprint for business growth. Businesses that function smoothly and avoid – or neutralize – competition, are able to expand without limit. This could include expansion of existing facilities, growth of human resources, or the addition of new locations.
The Best Time for a Strategic Plan
Strategic planning is most important when a business is growing, but it is also critical at other stages. When a company is anticipating a significant change such as succession, strategic planning can mean the difference between a smooth transition and a complete loss of direction that alienates employees and negatively affects production, ultimately leading to financial losses.
Strategic planning for business growth initiatives is essential. By creating an organized workflow that eliminates confusion and minimizes losses, these plans will keep a company on track as they evolve along with their market and work towards their future goals.