Many people start their first business because they have a skill and figure they can earn more if they perform that skill directly for clients rather than work for someone else. Some write business plans, but these usually don’t detail the steps needed to actually run or grow the business. The nitty-gritty is where a strategic management plan comes into play.
Today you’ll learn what a strategic management plan is and how to implement one for your business so that you can build the business you dream of.
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What is strategic management?
Let’s start by defining what a strategic management plan is and how it differs from a business plan.
A business plan is a high-level document that deals with the problem you’re going to solve, and some of the market factors along with the costs and revenue you can expect.
A strategic plan explains the logistics of achieving the things you’ve forecast in your business plan.
It identifies the customer needs that are not currently being met and describes what’s needed to meet them. It goes into the marketing strategies you’re going to use to let people know your business exists.
When you’re done with a business plan you’ll have an idea if your business is viable. When you’re involved with strategic management, you’ll know the exact steps you need to take to fulfill the potential of the business you’re planning.
How to use strategic management in your business
Building a good strategic management plan starts by asking yourself some questions:
- What are my business strengths and weaknesses?
- Who are my customers?
- Who am I competing against?
- Where do I want my business to be in one year, three years, five years?
- What are the best strategies and tactics to achieve those goals?
- Who can help me get there?
To make a plan, you need to have an understanding of the environment that your business is operating in. Then you need to select one or two of the most important goals in order to develop a detailed set of milestones for each.
Beyond the sales goal
In my experience, these milestones need to be more than simply an income goal for the end of the year. With yearly milestones, it’s far too easy to fool yourself into thinking that you’ll catch up later when you’re behind. By the time you admit you’re not going to make your goal, it’s too late to do anything about it.
I much prefer working toward business goals in 12-week sprints.
Sprints are a tactic used in agile project management, where big projects are broken down into well-defined parts — one part per sprint. And while they’re great for managing web development projects, sprints are also great for managing strategic goals.
I find that 12-week goals force you to focus on execution — in other words, actually make tangible progress.
In the words of Brian P. Moran and Michael Lennington, authors of The 12 Week Year:
“You can be smart and have access to lots of information and great ideas; you can be well connected, work hard, and have lots of natural talent, but in the end, you have to execute. Execution is the single greatest market differentiator. Great companies and successful individuals execute better than their competition. The barrier standing between you and the life you are capable of living is lack of consistent execution.”
Minding the gaps
As you focus on execution, you’ll need to be honest about any skills you don’t have that you’ll need to accomplish your goals. Maybe you’re a manufacturing firm and you need better search engine optimization, which is a skill you don’t have. That might mean hiring a firm that specializes in SEO for manufacturing firms.
Maybe you need content marketing and don’t have anyone on staff who can write as part of their job. That would mean you hire a content marketing professional to write for you, or manage a stable of authors who can write web pages, articles and infographics that carry you towards your marketing goals.
What does a strategic management plan include?
There are a few main parts of your strategic plan.
Executive summary
Although you write it last, the first part of your plan is the executive summary. This briefly explains where you want to be (and by when) and how you’re going to get there.
Mission statement
Next, you should include a statement about the mission of your company. For small businesses, I always think of this as a statement about the life you want to live that the company will help enable. You do this so that you can evaluate any business idea to see if it pushes you closer to that ideal you want to hit.
SWOT analysis
A good strategic management plan should also include a SWOT analysis (this is an acronym for strengths, weaknesses, opportunities, threats). If you don’t understand where your business is strong and weak, you’re not ready to build any type of plan to get where you want to go.
Strategies and timeline
The final two pieces are a list of the strategies and tactics you’re going to use to achieve your goals and a timeline for the completion of specific items on your list. Be sure to note who will be responsible for each step — accountability will help you hit your goals.
This is the part I like to see broken down into 12-week sprints so that you can’t fool yourself.
If you don’t know what steps are needed to achieve a goal, figure that part out so that you can continue moving forward.
Put it on your calendar now
If all of this seems daunting, don’t put it off. I sit down for a morning every year over the holidays and write down where I want to go for the year. Next I look at all the possible things I could do to get there and pick a few that should have the most impact on my life.
Then I plug those one or two into a broad year plan, breaking down the first 12 weeks into action steps that need to be hit. This helps ensure that I’m on the correct trajectory.
Building a strategic management plan isn’t hard, it just takes a bit of time and focus. But the rewards in terms of hitting your goals will be enormous.
