| 16 July 2009
Here’s the bad news…that Crystal Ball will never work or “Why You Need a Strategic Plan”
You know you need a strategic plan but the thought of taking the time to sit down and do it coupled with “where do I start” just seems to be too overwhelming.
Well, take heart. Writing a strategic plan does not have to be a chore. In fact, if you take the time to do it, you may be surprised at what you’ll find out about yourself. Additionally, studies have shown that while you may succeed in business without one, having a strategic plan and staying accountable to it increases your odds of success substantially.
So what exactly is strategic planning? Strategic planning is the art of figuring out where you want to go both personally and professionally, figuring out the challenges to getting there and then mapping out a plan for overcoming those challenges. It’s basically what you ask your clients to do…set goals, figure out how to overcome the challenges of reaching those goals and then help them reap the benefits of all that work.
Strategic planning is not just about marketing or defining your vision. Rather a strategic plan is the map that charts the route and steps you will take to reach your goals. It helps you focus your energy on activities that will help you reach these goals so you don’t waste your energy.
So, where do you start? I always have my clients start by identifying their goals, both personal and professional for one and five years (these time frames are completely arbitrary although I think one year is important so some short term goals can be established). In my opinion, this exercise, when done thoughtfully, helps you figure out what is truly important to you and your family. Talk to your spouse or significant other when preparing these goals. Make sure you have a good understanding of where you want to go both personally and professionally. You might be surprised at some of your partner’s answers as well as your own!
When you are identifying your goals for your firm, I recommend you identify them not based on the resources you have today but as if there were an infinite amount of resources available to you. Don’t limit your vision to what you think you can accomplish based on where you are today but again, list them as if there were no obstacles to achieving them.
Below are some questions to ask yourself as you identify your goals:
- How old will I be in five years?
- What will my role within the firm be five years from now (i.e., do I want to continue to do the things I’m doing now or are there things I need to outsource)?
- Do I want to be a sole practitioner or do I want others to assist me with the things I don’t necessarily do well or don’t go directly toward meeting my goals?
- How many hours a week do I want to work?
- How many clients will I serve?
- How much vacation time do I want?
- Where do I want to work from (will this necessitate a virtual office)?
- Your personal goals can relate to anything outside the firm i.e., family, health, other goals (i.e., I want to learn to sail, I want to lose 10 pounds, I want to hire a personal trainer, I want to bring home $1MM a year in income) – anything you perceive will bring you and your family happiness and peace of mind.
The next step is to identify your Strategic Vision.
Your firm’s strategic vision should identify what you want for your firm. Below are some examples of a Strategic Business Vision:
- “Our firm will be identified as the firm of choice for small business owners looking for help in selling their family-owned business.
- Our firm will operate with a Practice Policies Manual enhancing our operations and ensuring a quality experience for our clients each and every time (please see my white paper on my website entitled “Building Your Franchise with a Practice Policies Manual” for more information on this topic).
- We will develop a small staff of qualified, motivated, self-starting staff members.
- We will serve clients who are serious about their financial future and who value our services.
As you can see, this exercise will help you focus on what you want your firm to look like. It will also help you narrow in on those unique qualities you can bring to the table that will differentiate you from your competitors.
The next very important step is to identify your market segment. This will allow you to develop your marketing plan.
There are lots of buzz words flying around out there right now…core competency, niche, differentiation, market segmentation…but they all really mean one thing…What is it that you and your firm do better than anyone else? What’s important about identifying your market segment is that you are more than likely building on something you already do well. If you service a certain segment of the market, you have probably developed expertise for them. This is something that can differentiate you from your competition and allow you to be the firm of choice for this group. For example, some advisors have a lot of knowledge on how to serve divorced women or high net worth individuals or business owners or widows…you get the drift. Think about your current client base…chances are you will see a few trends and can classify most of them into one of two or three categories. This is your segment and your business will generally grow faster if you focus on these groups. This methodology is based on the premise that your best source of referrals is your current clients. Identify your best (or ideal) clients and then ask them for more clients just like them. Now that you’ve identified your market segment and your goals, it’s time to identify the challenges to reaching those goals.
The word “challenges” has really received a bum rap in my opinion because let’s face it, when we hear “challenges”, we think problems. But let’s try and retrain ourselves to think of “challenges” as simply opportunities for growth.
So what might some common challenges be?
- Hiring the right staff
- Having enough hours to get everything accomplished
- Technology
- How will I differentiate myself from the pack
- Balancing home and work life
- An exit strategy from the business (how do you get out one day?)
- Competition – you may not think you have competition but let’s face it, if you didn’t have competition, you’d have all the clients in your market segment
- What services do you want to offer and how to offer them?
Obviously, this is just an example of what they might be. You will need to think about what challenges you face based on your goals.
Based on everything you’ve done to this point, the next step is to develop a set of action steps. I would recommend going for things that can be accomplished quickly and have a large impact (go for the low hanging fruit first). If there are things that are creating problems in your home environment, try to work on these first because they will generally bring the most relief. However, there is no magic to the order…that’s why it’s so important that your plan be very personal…so it fits your needs and your family’s needs. If you already have key personnel, they should be included in the planning process and should also be expected to complete their goals, etc. Holding them accountable is extremely important because let’s face it, you’re probably not going to get where you want to go unless they are on board with your vision.
So what might an example of a challenge and the corresponding action steps be? Let’s say I’m faced with the challenge of finding more time to spend at home with my family. How might I overcome this challenge? I can hire new staff or retrain my current staff which will allow me to delegate time consuming items to them. I can acquire hardware and software that will allow me to work periodically from my home. This is just one example of a challenge and a couple of ways to overcome it. Yours will be individual to your specific challenges.
One note here…when you are developing action steps to overcome your challenges, make sure you put a “due date” on those action steps. This will let you know what needs to be accomplished by when and help you stay true to your plan. Additionally, it will help you prioritize which action steps need to be accomplished first, second and so on.
So now what happens? You’ve just written this incredible plan with lots of wonderful ways to make your dreams come true and then what happens? Life happens! It happens to all of us…it’s probably the most common thread we all have as entrepreneurs. However, you will NOT get where you’re going if you don’t monitor your plan, make changes as necessary and measure the results. How can you do this? In a few rare exceptions, with extremely organized and focused individuals, you MIGHT be able to do it yourself. But let’s face it the odds of that happening are just slim to none. The best way to do it is to have an outside party do it, someone who is not mired down in the day to day of your practice, who can keep their mind focused on the big picture. Because again, if you’re not working the plan, you’re right back where you were when you didn’t have the plan…trying to get that old crystal ball to work.
So here is a summary of the steps to writing and executing a strategic plan:
Step 1 – Identify your goals, business AND personal and your strategic vision for your firm
Step 2 – Identify your market segment
Step 3- Identify the challenges to meeting your goals Step 4 – Develop action steps Step 5 – Monitor and measure results
Again, while this may seem overwhelming at first glance, if you take it step by step, you can accomplish it with relative ease. And, it should give you great peace of mind to know that you are not relying on that old crystal ball but instead have a thoughtful plan for your firm’s future as well as your own!
Good luck and call or email me with any questions or if I can assist you in writing a strategic plan and help you execute it.
