Imagine trying to scale a mountain without a plan. How would you know what route to take, what supplies to bring, or what kind of weather to expect? You wouldn’t, and if you tried to, you would almost certainly guarantee failure. The same is true of business.
Without a strategic plan, it can be nearly impossible to know what actions to take, what directions to go, how to prepare, and where to devote your efforts. A strategic plan (often called a business plan) assesses the current internal and external environment of a business. Then it lays out future goals and targets and describes strategies and timelines for achieving them.
Of course, with any plan whether it's for a hike or a business, it’s impossible to predict the future. But that doesn’t mean you can’t make a plan to achieve your vision. So, in this blog, we are going to look at the ins and outs of strategic planning, including how to write a strategic plan and a strategic plan example for a small business.
How Do You Make a 5 Year Plan?
To make a helpful five year strategic plan, you will want to include the key components and follow the key steps. Generally speaking, there are five essential components and seven critical steps. Let’s look at each in more detail.
What Are the Seven Steps in the Strategic Planning Process?
When coming up with your strategic plan, it’s important to follow these steps in order.
- Understand your company’s mission and vision. These should be your “why” and the driving forces of your strategic plan. As much as possible, try to relate everything in your plan back to your mission and vision.
- Establish your starting point. Before you can understand where you are going, you must first truly understand where you are beginning. To truly grasp your current situation, it might be useful to employ an analysis model, such as SWOT. With SWOT you will assess:
These can include both internal and external factors or contributors. Once you have done a thorough assessment of your current standing, you can move to step three.
- Identify where you want to go. Set goals for where you want the business to go. In particular, set measurable and specific goals. Goals should also be time-sensitive, so you know that you want to achieve “goal X” by “date Y.”
- Determine what matters the most…right now. Look at your goals and prioritize them based on importance and time sensitivity. This will allow you to determine where you need to spend your biggest efforts and at what time. This step is also a good time to consider how each of your goals will impact the customers, business, and other goals. Does one task need to be done in order to complete another?
- Layout how and when you can realistically achieve your goals. Having goals is great, but having a plan to achieve them is even more important. In this step you will lay out the roadmap for how and when each objective will be addressed and ultimately achieved. You should have a granular view of what your business is going to do after completing this step.
- Implement the plan. You did it, you created a plan. Now it’s time to roll it out. If handled improperly, this step can be harder than the first five combined. To implement the plan, you will want to:
- Establish clear communication with everyone involved in the company and the plan
- Use strategic mapping to outline the people, steps, and resources required for each project
- Measure and report using KPIs for each stage of the plan
- Review the plan. Once you implement your plan, you can and should continue to review, revise and amend it as needed. Be ready to pivot. Listen to feedback. Understand that you will learn all sorts of things along the way that you didn’t know as you were planning.
What are the 5 Essential Components of Strategic Planning?
To formulate your strategic plan you will need to consider the five following components.
- Your Vision: What is the company’s mission and vision? Why does it exist? What do you strive to achieve or create? Where do you want to be in a month, a year, a decade? How will this vision and mission guide your plan?
- Your Values: What does the company value? What traits do you care about? How will these values impact what you do and how you do it?
- Outcomes: What outcomes are the highest priority right now? What about a year from now? Or in five years? Where do we need to spend our efforts?
- Accountability: Who is responsible for the strategic plan? Who will be responsible for executing the plan? What will the consequences be if the plan and outcomes are not achieved?
- Key Performance Indicators (KPIs): How will we measure success, goals, objectives, and outcomes? What data points are we trying to impact? How can we measure those?
It’s important to keep these components in mind as you write your five-year plan. Without these considerations, it may prove difficult to get a comprehensive plan on paper.
Elate…Empowering Your Plan
Strategic planning can be stressful and high-stakes. Don’t let it be more complicated than it needs to be. With our platform, Elate simplifies and streamlines the strategic planning process. As an all-in-one solution for high-growth companies, Elate makes strategic planning simple. You can set up your unified view of objectives and KPIs in a matter of minutes and stay on top of things with transparent reporting, easy collaboration, and one-click integrations with other tools like Salesforce or Hubspot.