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Strategic Plans

3-page strategic plan based on the structure

used in this white paper. Use it to organize

your thoughts, structure your ideas and

compile a short but comprehensive strategic

plan for any size and type of organization.

·    Review the paper on this

page r 
 using the planner.

Click here to see feedback from past users of

this planning tool (opens in a new window)
and click here to see a sample plan (use back
button on browser to return to this page).

î  

    
 you don't know where your business is going, any road
will get you there.

0  
    

Ôntrepreneurs and business managers are often so

preoccupied with immediate issues that they lose sight of
their ultimate objectives. That's why a business review or
preparation of a strategic plan is a virtual necessity. This
may not be a recipe for success, but without it a business is
much more likely to fail. A sound plan should:

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-or inspiration (and a few smiles), have a look at some of

the quotations and e amples of bad advice included in
other pages!

A strategic plan should not be confused with a business

plan. The former is likely to be a (very) short document
whereas a business plan is usually a much more
substantial and detailed document. A strategic plan can
provide the foundation and frame work for a business plan.
-or more information about business plans, refer to Writing
a Business Plan, Insights into Business Planning and -ree-
Plan: Business Plan muide & Template.

A strategic plan is not the same thing as an operational

plan. The former should be visionary, conceptual and
directional in contrast to an operational plan which is likely
to be shorter term, tactical, focused, implementable and
measurable. As an e ample, compare the process of
planning a vacation (where, when, duration, budget, who
goes, how travel are all strategic issues) with the final
preparations (tasks, deadlines, funding, weather, packing,
transport and so on are all operational matters).

A satisfactory strategic plan must be realistic and attainable

so as to allow managers and entrepreneurs to think
strategically and act operationally - see `evising Business
Strategies for further insights.

met Strategic Planning Help:

Free Gnline Strategic Planner for creating a 3-page

 strategic plan.

 Ô pert tools for Assessing Business Ideas
(US$ 219.95)
and Ôvaluating Marketing Strategies (US$ 785.00).

See a sample strategic plan - use the back button on your

browser to return to this page.

eed More Help with your Strategic

Planning ? Have a look at:


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Π  
    

A critical review of past performance by the owners and

management of a business and the preparation of a plan
beyond normal budgetary horizons require a certain attitude
of mind and predisposition. Some essential points which
should to be observed during the review and planning
process include the following:

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As the precursor to developing a strategic plan, it is

desirable to clearly identify the current status, objectives and
 strategies of an e isting business or the latest thinking in
respect of a new venture. Correctly defined, these can be
used as the basis for a critical e amination to probe e isting
or perceived
  , 0   ,    and
G . This then leads to strategy development
covering the following issues discussed in more detail
below:

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The first step is to develop a realistic  for the

business. This should be presented as a pen picture of the
business in three or more years time in terms of its likely
physical appearance, size, activities etc. Answer the
question: "if someone from Mars visited the business, what
would they see (or sense)?" Consider its future products,
markets, customers, processes, location, staffing etc. Here
is a great e ample of a vision:

 will come to America, which is the country or me. Once

there,  will become the greatest bodybuilder in history..........
 will go into movies as an actor, producer and eventually
director. By the time  am 30  will have starred in irst movie
and  will be a millionaire......  will collect houses, art and
automobiles.  will marry a glamorous and intelligent wi e. By
32,  will have been invited to the White House. Attributed to
Arnold Schwarzenegger who was elected movernor of the
State of California in 2003.

 c
The nature of a business is often e pressed in terms of its
c which indicates the purpose and activities of the
business, for e ample, "to design, develop, manufacture
and market specific product lines for sale on the basis of
certain features to meet the identified needs of specified
customer groups via certain distribution channels in
particular geographic areas". A statement along these lines
indicates what the business is about and is infinitely clearer
than saying, for instance, "we're in electronics" or worse still,
"we are in business to make money" (assuming that the
business is not a mint !). Also, some people confuse mission
statements with value statements (see below) - the former
should be very hard-nosed while the latter can deal with
'softer' issues surrounding the business. The following table
contrasts hard and so t mission statements.

Hard
Soft

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Compare the following statements:

Hard Statement
Soft Statement

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Intel's original plan, written on the back of a menu (view

copy), is an e cellent e ample of a hard statement:

^he company will engage in research, development, and

manu acture and sales o integrated electronic structures to
ul ill the needs o electronic systems manu acturers. ^his
will include thin ilms, thick ilms, semiconductor devices,
and ......... A variety o processes will be established, both at
a laboratory and production level ...... as well as the
development and manu acture o special processing and
test equipment required to carry out these processes.
Products may include dioded transistors ....... Principal
customers or these products are expected to be the
manu acturers o advanced electronic systems ..... t is
anticipated that many o these customers will be located
outside Cali ornia.

If you'd prefer a so t statement, use the `ilbert Mission

Statement menerator.

When drafting a mission statement, critically e amine every

noun, adjective and verb to ensure that they are focused,
realistic and justified.

   

The ne t element is to address the    governing the

operation of the business and its conduct or relationships
with society at large, customers, suppliers, employees, local
community and other stakeholders.

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The third key element is to e plicitly state the business's

G
 
 in terms of the results it needs/wants to achieve
in the medium/long term. Aside from presumably indicating
a necessity to achieve regular profits (e pressed as return
on shareholders' funds), objectives should relate to the
e pectations and requirements of all the major stakeholders,
including employees, and should reflect the underlying
reasons for running the business. These objectives could
cover growth, profitability, technology, offerings and
markets.

 
   

Ne t are the
    - the rules and guidelines by which
the mission, objectives etc. may be achieved. They can
cover the business as a whole including such matters as
diversification, organic growth, or acquisition plans, or they
can relate to primary matters in key functional areas, for
e ample:

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Use SWGTs to help identify possible strategies by


on strengths,  
 weaknesses, 
opportunities and
 threats.

-or further discussion on strategies, refer to the paper on

`evising Business Strategies as well as these items below:
Use Hindsight when Strategic Planning, Ôffect not Ôqual to
Cause when Planning Strategy and SWGTs - Keys to
Business Strategies.

  

Ne t come the  . These are specific interim or ultimate

time-based measurements to be achieved by implementing
strategies in pursuit of the company's objectives, for
e ample, to achieve sales of $3m in three years time. moals
should be quantifiable, consistent, realistic and achievable.
They can relate to factors like market (sizes and shares),
products, finances, profitability, utilization, efficiency.

  

The final elements are the   which set out the

implementation plans for the key strategies. These should
cover resources, objectives, time-scales, deadlines, budgets
 and performance targets.

met Strategic Planning Help:

Free Gnline Strategic Planner for creating a 3-page

strategic plan.

 Ô pert tools for Assessing Business Ideas
(US$ 219.95)
and Ôvaluating Marketing Strategies (US$ 785.00).

It goes without saying that the mission, objectives, values,

strategies and goals must be inter-linked and consistent with
each other. This is much easier said than done because
many businesses which are set up with the clear objective
of making their owners wealthy often lack strategies,
realistic goals or concise missions.

Top of Page

V   !  
    
Statements on vision, mission, objectives, values, strategies
and goals are not just elements of future planning. They
also provide benchmarks for a historic review. Most
managers will find it e ceedingly difficult to develop a future
strategy for a business without knowing its current strategies
and measuring their success to date.

 " 

The starting point must be to determine a company's

 (implicit or e plicit) vision, mission, objectives and
strategies. Then judge these against actual performance
along the following lines:



 
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Take each element and quantify by reference to actual

performance. Ask of each "why not"?, "why only"?, or "why
so"? and locate the reasons for differences between the
actual and desired performance.

``

A useful technique for e ploring performance shortfalls is to

review the business's financial return and to drill down
through the components of this return to locate and assess
the key determinants of performance. -or e ample, return
on shareholders' unds is a key measure of profitability
which can be e pressed as:

 

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Take each item in this formula, e plore its contents and

derive performance measures or ratios. -or e ample:

 
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se o cascading ratios

is illustrated in this DuPont-type pro itability chart
 åclick thumb opposite) which is automatically
generated by more power ul versions o Exl-Plan to
show the impact o speci ic changes in key variables
and assumptions on overall pro itability.

Subject the resultant ratios to critical e amination and

attempt to compare them with industry norms. The paper
entitled Managing Working Capital e plains key working
capital ratios.

Note that the Ô l-Plan financial planners generate e tensive

ratios based on projected P&Ls, cashflow forecasts and
balance sheets for 1-3-5-7 years ahead.

Top of Page

½ # #$ "    

  
When reviewing a business it is essential to cut through the
symptoms of problems and reach the underlying causes.
Questions which can assist in revealing the real causes
include the following:

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By way of an e ample consider why this company may be

unable to increase its market share:

Because it cannot penetrate major customers because its

product range is too narrow because the company doesn't
have the capability to produce additional products because
o shortcomings in R & D because o a lack o expertise and
resource because R & D is not an immediate priority
because o a lack o pro its because o a high interest
burden because the company is over-reliant on borrowings
because the shareholders won't/can't raise additional
permanent capital.

The moral in this case is that there are no major customers

due to under-capitalization !

Also have a look at the discussion on causes of business

failure in `evising Business Strategies.

Top of Page

 
0G% Π
   
Having built up a picture of the company's past aims and
achievements, the all-important SWGT (strengths,
weaknesses, opportunities and threats) analysis can
commence.

  &0   

Strengths and weaknesses are essentially    to the

organization and relate to matters concerning resources,
programs and organization in key areas. These include:

 
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If a startup is being planned, the strengths and weaknesses

are related mainly to the promoter(s) - their e perience,
e pertise and management abilities - rather than to the
project.

^ake a moment to complete or

view the results o this survey.
Survey about Strength
& Weakne e of
Bu ine e

The objective is to build up a picture of the outstanding good

and bad points, achievements and failures and other critical
features within the company.

  &G 

The    threats and opportunities confronting a
company, can e ist or develop in the following areas:

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Against an uncertain and shifting background, the objective

must be to identify and prioritize the key SWGTs in a one-
handed manner (`on't say "on the one hand ...........but on
the other hand.........").

`
Π
   

Gnce the SWGT review is complete, the future strategy may

be readily apparent or, as is more likely the case, a series of
strategies or combinations of tactics will suggest
themselves. Use the SWGTs to help identify possible
strategies as follows:

Build

 

·e olve
 *  

Ô ploit
  

Vvoid
 

The resulting strategies can then be filtered and moulded to

form the basis of a realistic strategic plan - see also
`evising Business Strategies for further insights into the
development of strategies.

eed More Help with your Strategic

Planning ? Have a look at:

 
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£ 
 &

    
Notwithstanding that "battles are often lost for want of nails",
a company rarely succeeds or fails for minor or trivial
reasons. The causes are usually substantial and are often
self-evident, at least to an outsider. -or e ample, the
business was completely over-borrowed; management was
weak; a major new product opportunity was identified;
legislation changed; a major competitor went bust or
e panded; the company never reinvested.

It should be possible in the course of a few pages to set

down the main elements of a business's vision, mission,
values, objectives, goals, strategies, SWGTs etc. The
compilation of a short report along these lines is likely to
prove much more difficult than a lengthy dissertation which
mi es up details and principles, and confuses the broad
picture. See a sample strategic plan - use the back button
on your browser to return to this page.

met Strategic Planning Help:

Free Gnline Strategic Planner for creating a 3-page

strategic plan.

 Ô pert tools for Assessing Business Ideas
(US$ 219.95)
and Ôvaluating Marketing Strategies (US$ 785.00).
Independent advisers or non-e ecutive directors can play a
valuable role in this process because they can readily adopt
the role of devil's advocate and also bring e ternal
knowledge and e pertise to bear. The worksheet presented
below may also assist.

-or further information on business planning issues, refer to

other papers in this series which cover business ideas,
business strategies, financial planning, cashflow forecasting
and business planning.

-

 





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eed More V i tance? Have a look at:

Ô l-Plan Multi-year -inancial Projections (with Ô cel)

Cashflow Plan Short-term Cashflow -orecasts (with
Ô cel)
Plan Write Comprehensive Business Planner
Plan Write Marketing Planner
Plan Write Ô pert Business Planner
Quick Insight Business Idea Assessor
Business Insight Business Strategy Ôvaluator

Top of Page


Ñ   
    0 
When using the Strategic Planning Worksheet below, note
the following suggestions:

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è 
    0 
To start using the worksheet below, copy the headings
marked in red onto a blank sheet of paper (or page in a
word processor) and enter short statements about each item
as per the guidelines above.

Note: This worksheet is available as a ree Gnline Strategic

Planner. See sample strategic plan - you may wish to print it
for reference purposes. (Use the back button on your
browser to return to this page.)

"  
    
î   
 '#(
)  *
   *    
(Strengths & Weaknesses are internal to the business and
Gpportunities & Threats are e ternal. All SWGTs should be
'one-handed' - something is either a Strength or a
Weakness but cannot be both. Ônter up to si items under
each heading and then rank them in order of importance. If
you are planning a new business, consider the project's and
its promoters' e isting SWGTs):

  
  

  0   

#    

#  G 

^ake a moment to complete or

view the results o this survey.
Survey about Strength
& Weakne e of
Bu ine e

a 
 V ½  

(What will the business look like? If a visitor from Mars
dropped in what would be seen and evident. Write in future
tense. Ma imum of 150 words)

V c     
  


 V ½ 
(What will the business really, really be doing? What
activities will it perform, where, how etc.? What makes the
business special/competitive? Ôvery noun, adjective and
verb in the statement is important and must be justified.
Ma imum of 150 words)

½ 
      
  
 
(Covers employees, customers, environment etc. etc.
Ma imum of 150 words)

 
 % 
 

(These are the primary underlying reasons for being
involved in the business, and are not specific targets - these
come later)

 
  


c    +     ,

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    ,

£      
   

    
(Build on strengths, resolve threats, e ploit opportunities
and avoid threats. Add any new dimensions revealed by
Vision and Mission. List and prioritize up to ten or so major
strategies. See `evising Business Strategies for further
insights.)

Ñ  
 -  ·#  *   *

    
(`o the foregoing strategies improve the initial SWGTs? If
they don't, then they should have done so)

  
  

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(Refine and revise/restate key strategies to deal with the
perceived -UTURÔ SWGTs)

? 
    

 
  V ½
 
(Quantify in terms of sales, market shares, finances,
operations etc.)

î `       

(Indicate who, what, where, when, how etc. Set targets and
prioritize)

Note: This worksheet is available as a ree Gnline Strategic

Planner.

) 
 `
 
    

If you have prepared a strategic plan along the lines

suggested above, you have several possible pathways.
These include the preparation of a full-blown business plan,
compilation of financial projections, undertaking market
research, product development, management team-building
etc. etc. You may also wish to refer to some other papers in
this series which cover business ideas, business strategies,
cashflow forecasting and managing working capital.

If preparing a business plan, look at -ree-Plan. This is a ree

Π    for Word (48 pages) and a
complementary  (supplied as a 90+ topic Help file and
as a 100+ page P`- file for printing. Note that a strategic
plan based on the structure in the Strategic Planning
Worksheet (above) is ideal for inclusion in edited form in
— —

 of this    .

If you need to produce financial projections as part of a

strategic plan or for use on their own, take a look at our
e tensive range of Ô cel-based financial planners - Ô l-Plan
- which can be used to prepare 3/5-year financial projections
(P&Ls, cashflows, balance sheets, ratio analyses and
graphs). It incorporates a 2 !  facility for doing quick
and dirty projections. If you seek a very simple solution, look
at Ô l-Plan Œ  (US$ 29) which generates comprehensive
"high-level" 5-year projections based on annual
assumptions (in contrast to the more detailed monthly and
quarterly assumptions used by other versions in the Ô l-
Plan range). met the details and free trial downloads.



 



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PlanWare develops and sells a range of financial planning
packages - Ô l-Plan and Cashflow Plan - for businesses of
all sizes & types. Trial versions of all products can be
downloaded from our PlanWare site and many other
sources on the 'Net.

We also offer an e tensive range of commercial software for

writing business plans, market planning, assessing business
ideas and evaluating strategies.

PlanWare also features:

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Business Ideas

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Strategic Plan
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Business Plans

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Insights

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Working Capital

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