Why Your Business Needs Strategic Planning

Strategic planning is essential to a company’s success because it helps identify, evaluate, and control key areas of growth. Growth management involves allocating resources across the business to achieve ongoing objectives, such as increasing sales and profitability. While there are often concurrent attempts at strategic planning for each new area of growth, it is frequently best to establish a unified, multi-year vision for the business. This vision often serves as the basis for establishing a growth plan.

Here are some key benefits of having a strategic plan in place:

It allows organizations to be proactive rather than reactive
It sets up a sense of direction
It increases operational efficiency
It helps to increase market share and profitability
It can make a business more durable

Mission and Vision Statement

A mission is what the company is assigned to accomplish—be it lowering employee turnover or increasing sales. In contrast, a vision statement expresses what the company’s leaders believe it will achieve. It defines the mission and purpose of the company, and it emphasizes long-term goals and strategic directions without defining specific actions towards those goals.

Goals and Objectives

A strategic plan for a business will include its goals and objectives and the action plans to achieve them. Objectives are important because without them you’ll never know if you’re achieving them or not. They give you clarity about progress and show you when things are moving in the right direction. Without objectives, every achievement or setback will seem like a surprise. On the other hand, goals help you know whether or not you’re moving in the right direction because they give you a definite goal to work towards. You won’t have to wonder if something is or isn’t possible. Your overall goal, of course, is to create an organization that is successful by creating long-term customer value without expecting everything to snap into place right away.

Make Better Use of Existing Resources

A strategic plan outlines the strategy for growth and success by using existing resources. Your strategic plan is like the skeleton of your company. It provides the framework that will tie all the pieces together. It outlines what you hope to accomplish, where you will put your resources, and how they will contribute to reaching your goals.

Plan to Determine Direction
The process of strategic planning determines the direction in which you want to take your business. Strategic planning is an important part of any business plan, whether your initial focus is on growing your current business or starting a new one. Keep ahead of competitors and suppliers by staying on track. Also, detailed plans can prevent you from taking mis-steps and moving in the wrong direction. A company’s growth and success are heavily influenced by time, as well as its decision-making process. You should plan and re-plan your steps every year based on current and forecasted market conditions. Establish clear guidelines for decision-making and planning. Also, track your progress against these conditions to make relevant changes.

In summary, strategic thinking contributes to the growth of a business. Your business could suffer serious damage without it. It is easy to get stuck in a rut if you don’t have a strategic plan—trapped by past setbacks that create an irrational fear of new ideas as well as trapped by a fear of failure.