Skip to main content

Developing Strategic Plan in Business (Part 1)


If you don't know where your business is going, any road will get you there. Entrepreneurs and business managers are often so preoccupied with the immediate issues that they lose sight of their ultimate objectives. That's why a business review or preparation of a strategic plan is a virtual necessity. This may not be a recipe for success, but without it a business is much more likely to fail. A sound plan should:
  • Serve as a framework for decisions or for securing support/approval.
  • Provide a basis for more detailed planning.
  • Explain the business to others in order to inform, motivate & involve.
  • Assist benchmarking & performance monitoring.
  • Stimulate change and become building block for next plan.
A strategic plan should not be confused with a business plan. The former is likely to be a (very) short document whereas a business plan is usually a much more substantial and detailed document. A strategic plan can provide the foundation and frame work for a business plan.
A strategic plan is not the same thing as an operational plan. The former should be visionary, conceptual and directional in contrast to an operational plan which is likely to be shorter term, tactical, focused, implementable and measurable. As an example, compare the process of planning a vacation (where, when, duration, budget, who goes, are all strategic issues) with the final preparations (tasks, deadlines, funding, weather, packing, transport and so on are all operational matters).
A satisfactory strategic plan must be realistic and attainable so as to allow managers and entrepreneurs to think strategically and act operationally.








Basic Approach to Strategic Planning

A critical review of past performance by the owners and management of a business and the preparation of a plan beyond normal budgetary horizons require a certain attitude of mind and predisposition. Some essential points which should be observed during the review and planning process should:
·   Relate to the medium term i.e. 2 - 4 years
·   Be undertaken by owners/directors
·   Focus on matters of strategic importance
·   Be separated from day-to-day work
·   Be realistic, detached and critical
·   Distinguish between cause and effect
·   Be reviewed periodically
·   Be written down.
As the precursor to developing a strategic plan, it is desirable to clearly identify the current status, objectives and strategies of an existing business or the latest thinking in respect of a new venture. Correctly defined, these can be used as the basis for a critical examination to probe existing or perceived Strengths, Weaknesses, Threats and Opportunities. This then leads to strategy development covering the vision, mission, values, objectives, strategies, goals and programmes.

Comments

Post a Comment

Popular posts from this blog

How to Become a Business Consultant

The business world is full of ups and downs. It is like unstable waters that you never know the direction of its flow. Many people the world over depend on business activities for survival. In fact the economies of all nations depend largely on the activities of businesses. Without business, there will be no economy, without economy there will be no nation, without nations, there will be no existence, without the existence of all of us, there will be no world! Business is life! Business begat money that the entire world depends on. There is no human being under the sun that has never use money or will never use money, which largely accrue as a result of business activities. Becoming a business consultant is a huge money making venture to be in. This is because, everybody as well as businesses needs you to survive or make informed decision. This is an exciting area to be, don’t you think so? You are look upon like a semi-god, you are envied by your peers, you are appreciated by the peop...
2 comments
Read more

Simple Steps in taking a leap in your business

The desire of every business person is to achieve success and make profit. But few actually achieve that feat. So how can you get the need leap needed to spur your business to the next level? Below are important tips for running a successful business: ·          Be open to new and innovative ideas. If you find yourself saying the dreaded words “that’s the way we have always done it and that’s the way we are going to keep doing it”, perhaps you are not as flexible and open as you could be.   And idea that could earn you a lot of money may be in the head of a friend or your employee who feels that you would not be receptive if he/she voiced his suggestion.   Encourage innovative and open thinking. ·          Be completely honest and ethical in every dealing that you have. It is important that you are able to walk down the street with your head held high. Being completely honest and et...
1 comment
Read more

Reasons for most Business Failures

There has been rampant cases of business failures both in the past and at present.  One wondered what is behind this.  Some even make assertions that the business world has collapsed, some says businessmen has joined the political wagon that they have failed to differentiate between business capital and profit. All these assertions have no basis.  You may ask what then has been behind most business failures?  The answer to this question is simple “poor customer relations”. One of the single greatest key to long-term business success can be summed up in three simple words: Quality customer service. Yet as customers, you and I are aware that quality customer service is far too rare these days in spite that many business organisations have invested heavily in this unit but few actually make any headway.  Why is excellent service so rare? There are three reasons for this.             Employees don’t know t...
1 comment
Read more