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What You Need To Know When Planning Your Business Strategy

On Behalf of | Jun 1, 2022 | Business Formation |

What You Need To Know When Planning Your Business Strategy

Every single entrepreneur has heard of a business plan. This is a document designed to outline the short-term and midterm goals of your business and is often key when it comes to obtaining business loans. It can even help you find investors.

But only planning for the short term or the midterm is a recipe for disaster. Strategic planning is one of the most important yet also the most overlooked aspects of building a successful company. A strategic plan for your business must focus on the midterm to long-term goals of a business and outline the basic strategies for achieving them.

How to develop your company’s strategic plan

I’m Neil Fridman with the Fridman Law Firm PLLC. Today, I want to discuss how you should go about developing your company’s strategic plan. Let’s start with one of the most important factors: Who should you have in the room? Who should participate in your strategic planning?

Startup owners tend to make strategic planning a private event. They grab a notepad or a laptop, lock themselves up in their office, and record the things they believe are most important to their company’s long-term success.

Why you should involve family and company leadership

But here’s the problem with this approach: It’s hard to get buy-in from your family and company leadership when they aren’t involved in the process to begin with. Looping your spouse and your business partners and other potential leaders in on this kind of planning will increase buy-in and build more support as your company grows.

Involving the most important people in your personal and professional life in this process will also provide a layer of personal and professional accountability and help you stick to your plan over time.

Why many new businesses fail

Every year, people with great ideas start businesses, only to see them fail. The number one reason why they fail is that they build their business based on assumptions instead of data. This applies regardless of whether you are starting a product or service-based business.

Taking time to talk to your target market, host focus groups, and review statistics relevant to your industry and market will position you for success. On the other hand, making assumptions about what your customers may or may not want is the easiest way to fail in your business.

The importance of SWOT

SWOT stands for strengths, weaknesses, opportunities, and threats, and a SWOT analysis will help you determine where you should focus your company’s energy and efforts.

You should be objective when listing your strengths and weaknesses while involving your team and encouraging them to be honest too. As you probably guessed, the goal here is to leverage your strengths and improve your weaknesses. Your opportunities are simply your goals.

Questions to ask

What percentage of the market share do you want to take? How much customer feedback do you need to gather? What key positions do you need to hire for? Does your business need funding? Are there any key pieces of equipment to want or need to invest in over the coming year? These are all opportunities you can take advantage of to outperform your competition.

Threats to your company

The threats portion of the SWOT analysis doesn’t need too much explanation. A threat to your company can be a shortage of cash, dominant competitors, a lack of quality hires, or even failing to own proper equipment.

A SWOT analysis is a simple process, but is one you want to invest the proper amount of time in. I would encourage you to view this as a living document that should be updated on a quarterly basis.

Setting yourself up for success

Building a great strategy is one thing, executing it is another. The reason I encourage the business owners I work with to take these important steps is that it will put you in the best position to execute your strategic plan.

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