Why Strategic Planning Matters
We can all agree that planning in advance saves time, energy and money. This couldn’t be more true for your business. Strategic planning involves setting realistic expectations and goals for the future of your business. This not only gives your business clear direction, but it also ensures that you have tangible goals and ways to reach them in the near future.
Strategic planning involves setting up a vision, a mission, and core values for your business.
Your vision should be more than just the hope for eventual success in your industry. A company’s vision is a concrete idea of what your business hopes to achieve in terms of social impact, product/service quality, and industry changes. Take Amazon’s vision statement as a great example.
“Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”
This statement is realistic, detailed, and clear.
A mission statement might seem like a modified vision statement, but there are some key distinctions. Your mission statement is what sets you apart from other companies with similar visions to yours. Two businesses might share similar visions, like “ending homelessness.” What sets them apart is how they aim to achieve their vision. Company A could make it their mission to provide impoverished youth with specialised education so that they can eventually gain a steady income and afford accommodation. Company B could instead focus on providing affordable and sustainable housing to those who need it.
Your mission statement needs to provide a clear and durable path to achieve your vision.
These are the values and beliefs that your company holds above all else. These values cannot be negotiated or compromised due to a changing market or circumstances. Your business’s core values determine how you progress within an industry. Core values are also not subject to change, regardless of how successful or well-known a business becomes.
Strategic planning also gives you a way of monitoring and evaluating your business as the time goes by. If your business is not meeting your set goals or working towards your vision, then it’s time to re-evaluate and restructure.
Managing your daily or long-term risks are imperative for any business leader or owner. It forms part of strategic planning in the sense that it encourages a strong sense of direction for your team. There are three key elements of managing your business risks.
1. Identify and evaluate the possible risks.
Knowing more about the risks that your business faces will allow you to predict their outcomes and prevent them from becoming setbacks. By evaluating the possible risks, you can draw up a list of possible solutions.
2. Treat the risk.
Choose the best solution to manage the risk and apply it. Make sure you choose an option that not only neutralises the immediate risks, but any others that might follow. Your solution must be sustainable.
3. Evaluate the outcome.
After managing the risk, evaluate the effects of your chosen solution. Knowing whether or not it was effective will give you the insights you need to manage other risks in the future. This will not only save you countless hours on research, but it will also give your business a needed edge.
Risks are a natural part of any business’s lifespan and without them, you might not be reaching your business’s full potential. Learning and adapting are invaluable skills that will only benefit your business and employees in the long run.