As this year is coming to a close and the new one is just around the corner, this is the perfect time to take inventory of your business. Now is the time to review your goals for 2010. What did you want to accomplish? If you did not reach your goals, why not? Did the marketplace shift requiring you to shift your goals and focus? Did internal or external obstacles prevent you from success and what lessons did they teach you? And what did 2010 provide that will serve as the basis for 2011?
This process of review may be difficult for you, especially if you did not take the time last year to develop your business plan and goals for 2010. So kick this new year off to a good start by creating a solid plan for 2011. A well-conceived plan allows you to be focused in all your efforts, provides you with a measurement and accountability tool as you move forward, and provides the framework for your business success.
Many business books talk of complicated and lengthy business and strategic plan models. Often times these models are overwhelming and dissuade companies from creating them. Luckily you do not need to have an MBA or a 20-page presentation to have a strong strategy. A strong business strategy can be created on two pages if they include the right elements. Below is the simplified business strategy I use to help businesses get started. There are three (3) aspects to the overall business strategy; the Business Description, Strategic Plan, and Annual Plan.
This is the what, how, where, and why of the business’ existence. The Business Description is the foundation for the company. The added benefit from this section is defining a clear purpose and differentiation which is the basis for strong branding and marketing.
Better known as the Five P’s, the core elements of the description detail the what, how, and where of the business. These include People or your target market, Product or service the company provides, Price including expenses and sales fees, Place which is how or where your product is sold, and Promotion which includes how your product will be branded and marketed.
The second section of the Business Description focuses on the why the business exists. First is the Vision Statement. This is a simple sentence or two that encapsulates the ultimate goal of the company, what the company is striving to be. The Mission Statement supports the Vision by explaining why the company exists and why they have chosen to serve their market.
The Strategic Plan is where you want the business to go. It is the big picture, ten (10) to twenty (20) year vision of what the company can become. This Plan begins with the Business Objective or the financial goal for the company within the given time period. Then it details how the company plans to reach that goal. As the Strategic Plan is visionary, the details in this plan are broad.
This plan starts out with Objectives or the goals the company wants to reach. For each Objective, there are three (3) to five (5) Strategies. The Strategies are how the Objectives will be completed.
The Annual Plan is based off of the Strategic Plan. It is the slice of the Strategic Plan that will be focused on in the current year. Here the Objectives and Strategies are more tangible, actionable, and quantifiable. The selected Strategic Plan Strategies become Annual Plan Objectives. Each of these Objectives then receives three (3) to five (5) Strategies on how to accomplish these Objectives. Then one more layer is added. For each Annual Plan Strategy, usually three (3) Tactics are outlined to show how the Strategy can be accomplished. It is very important that these Tactics be specific, measurable, actionable, relevant, and timebound. These become the must-do’s of the business this year. The Tactics are really the work plan for the business.
Often times when creating a plan, Tactics are mistaken for an Objective or a Strategy. “Creating a Website” is a Tactic not an Objective. “Growing awareness” is the Objective, “Online Presence” is the Strategy, and “Creating a Website” is the Tactic. The goal is not to have a pretty website; the true goal and desired outcome is to grow awareness so more potential customers can learn about and purchase the product. Using Objectives, Strategies, and Tactics properly keeps you focused on what you are truly trying to achieve.
I hope this overview of business planning will provide you with the framework and incentive to make the plans you need for a successful new year!