5 Key Components of a Powerful Strategic Plan

5 Key Components of a Powerful Strategic Plan

New entrepreneurs have a lot of details to think about, including crafting a strategic plan. Experienced business leaders frequently stress the importance of a strong, well-designed strategic plan. Without an appropriate plan in place, you can miss out on new opportunities, and may even stand in the way of your own growth.

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Your strategic plan is the document that shapes the specific activities you?ll undertake to overcome the challenges you face on the way to your goals. It spells out the logical steps you will take to lead you from the start to the finish of your endeavor.

The word ?strategy? originated on the literal battlefield. It derives from an ancient Greek word referring to the art of setting up military resources in preparation for war. In addition, more than a few business experts have compared strategic planning to a chess match, in that it usually requires you to concentrate not only on the field of play before you, but on numerous moves ahead.

Ask yourself a few key questions as you formulate your strategic plan. These include questions regarding the current state and position of your company, where you want to be in a specified time frame, how you see yourself getting there, and the resources of people, tools, and finances that are best capable of helping you arrive there.

The major parts of a standard strategic plan include the following:

1. Mission, vision, and aspirations

A mission statement is your overall, lasting formulation of why your company exists and what it hopes to be. It includes the goals you want to accomplish and an outline of how you intend to fulfill them. A strategic plan needs a clear statement of your company?s purpose, its reason for existing in the first place. Why did you form this company, and what are you hoping to accomplish by developing it and offering its products or services to the public?

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Your vision statement will be briefer and more concise, and will paint a picture of what your business should look like in five years, or in a decade or two. These components of your strategic plan may take time to work through, but they are the necessary foundations for building the plan out further.

By making your ideas about your company?s purpose and values concrete, you will be taking a big first step toward the creation of a plan that can lead you to success.

When creating these aspects of your strategic plan, it can help to consider your organization?s biggest and boldest major goal. Some business writers have followed authors Jim Collins and Jerry Porras, who memorably called these kinds of aspirations ?Big, Hairy, Audacious Goals? in their 1994 book Built to Last.

Identifying these BHAGs can help you avoid the tendency to think too small, although in order to be effective, these goals need to be measurable and achievable. Just remember that BHAGs will typically take a decade or two to bring to fruition. That?s exactly why they can help galvanize you into action with an increased sense of urgency, motivating you to make smart and strategic decisions over the long term in order to fulfill them.

2. Core values

With your mission and vision statements in place, you will next typically focus on crafting statements of core values.

Your core values state the central ?musts? and ?must nots? of your company ? the vital principles that need to guide leaders and employees in their day-to-day and long-range decision-making.

Experts generally don?t recommend imposing these values from the top downward onto a company. Instead, seek to hone the values that already exist as part of your company?s culture. You probably already know what these core values are. Adding the important component of articulating them on paper helps to solidify them in the minds of all stakeholders.

3. Strengths, weaknesses, opportunities, and threats

A SWOT analysis of strengths, weaknesses, opportunities, and threats is a rundown of your company?s current situation, from these four key perspectives. It represents a snapshot of the pathways open to you and the pitfalls you may encounter, as well as the assets you can draw on to help you along the way.

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Your plan should also include an examination of your competitive advantage ? your unique selling point ? that puts you at the front of the field in your market.

4. Objectives, strategies, and operational tactics

Your long-range objectives represent what you need to concentrate on in order to make your vision a reality. These objectives typically have time horizons of several years or more.

Under ?general strategies,? you will group the overall means you will employ in order to achieve your objectives, and thus, your vision. With these in place, you can then organize the shorter-term priorities and performance initiatives that detail the ?who, what, and when? resources you will leverage to accomplish them. And to get even more specific with operational matters, you will need to drill down and answer the question of how you intend to accomplish your objectives.

5. Measurements and funding streams

You will need to incorporate a means of tracking your company?s output and performance against regularly scheduled targets. You will also need financial analysis that takes into account past and projected performance. The numbers in your strategic plan don?t need to be elaborate, but they do need to help you ? and potential investors ? get an overview of your financial resources.

You don?t necessarily need a complex, many-page plan, either. Some entrepreneurs have done well with a short, but thoughtfully crafted document whose conciseness actually helps keep everyone in the company focused on the same goals. This type of shorter plan will allow an entrepreneur and his or her team to distill the basic identity and goals of their company down to their most easily understood, actionable elements.

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