Part II of II - I find many business owners confuse a strategy with a plan, and they are not the same. A plan focuses on action and tactical activities. A strategy focuses on vision, purpose, differentiation, advantage, goals, objectives and desired outcomes.It then includes the necessary plans to accomplish these outcomes.Too many businesses do not have the necessary strategy behind their plans.
The end result is either a plan that never gets implemented, is marginally successful or totally misses its mark. Every strategy should include these five sections:
1. Situation Analysis: Are you really looking at your business deep enough where it currently is to develop your strategy? To have a solid strategy, you need to look deep into your business from the inside out and the outside in. You need to flip it over and look at its underbelly, and get way up high and look at it from a bird's eye view. From its background and founding principles to its current state of existence, including the good, the bad and the ugly, you need to see the landscape of where you business currently is in order to effectively develop a strategy for where it needs to go. See the end of this column to find out how you can get a complete list of all the components of this section of the strategy.
2. Strategic Drivers: This section includes goals, marketing objectives, operational objectives, vision, mission, branding, competitive advantage, and targeted opportunities. Most important is that your goals should not just be a single goal around annual sales. Goals should be multifaceted including profitability, staffing, facility and operations, locations, geography, and customer base. I believe goals should project what is desired in the next one year, three years and five years. However, your vision should be envisioning how you desire your company to be perceived in 10 to 20 years.
3. Marketing Action Plan: Over several years of documenting and validating what works most effectively for businesses, every marketing action plan should include these five Core Marketing Initiative areas: 1) Customer/Prospect Relations; 2) Referral Relations; 3) Internet Presence; 4) Strategic Involvements; and 5) Public Relations. You will define multiple tactics within each of these five core areas specific to your strategic drivers and target focuses. Your action plan will then consider Supplement Core Initiatives including advertising, direct mail, and direct marketing activities as deemed appropriate for your target focuses.
4. Operational Action Plan: It always amazes me how many strategies don't include an operational action plan. If you do an exceptional job marketing, and then don't have the plan in place to operate competently to fulfill demand, you will be in a heap of trouble. This plan should include delivery and production of your product or services, staffing requirements, outsourced requirements, management and administrative support, equipment and technology requirements, facility and operational requirements such as safety or maintenance, regulatory requirements and quality control protocols.
5. Financial Pro Forma: Most businesses that only develop plans and not strategy also severely miss the mark in what is presented in the financial portion. If you are looking to get investors interested in your business, you have better be including more than just a projected budget of expenditures. Also included should be current financials, financial projections based on reaching goals, cash flow statements, investment requirements, owner investment and in start-up cases, a personal financial statement.
While reading through all that goes into a strategy may make your head spin, developing one will keep you head on straight moving forward. Use this year-end time to put REAL strategy into growing your business.
BONUS TO BUSINESS TODAY READERS: Email me at firstname.lastname@example.org and state that you read my column in Business Today to request my comprehensive Business Strategy Outline free.
Sherré DeMao is author of the nationally acclaimed books, 50 Marketing Secrets of Growth Companies in Down Economic Times, www.50marketingsecrets.com, and Me, Myself & Inc., www.memyselfandinc.com, Her column seeks to help business owners build and grow sustainable enterprises and businesses with economic value and preference in the marketplace.