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Key Elements of a Strategic Business Plan

24 Feb
Two coworkers working on the key elements of a strategic business plan.

A strategic business plan is a well-crafted, easy-to-follow document that conveys to you and your employees “the direction that your company needs to move in to accomplish your business objectives.”1 Everyone from startup entrepreneurs to Fortune 500 CEOs needs strategic business plans to guide their businesses to the next level.

No matter your work setting or what your exact work objectives happen to be, to be effective, all strategic business plans should cover the following topics:

  1. The current state of the business
  2. A description of where the business needs to go
  3. An explanation of how the business can get there

Read on to learn what the key elements of a strategic business plan are that support these three topics and learn how to write a strategic business plan that can help boost your company’s success.

How to Write a Strategic Business Plan

Writing a winning business plan is easy when you know which key elements to include and why they are important to any well-written business plan. The most impactful—and actionable—plans tend to include the following sections:

  1. Executive Summary
  2. Mission Statement
  3. SWOT Analysis
  4. Goals and KPIs
  5. Initiatives2

Now let’s take a closer look at these essential business plan elements and their purpose.

The Executive Summary

An effective executive summary “provides an overview of the most essential information in a business document.”3 Well-written executive summaries quickly convey the main points of your plan but should be crafted to attract the attention of viewers in a way that helps convince them your plan is worth following and/or investing in.

While the function of the executive summary is universal, each summary can vary in length, depending on the industry and the audience you’re targeting; some summaries are merely memos; others are a paragraph or a whole page in length. Additionally, you may choose to have your summary appear in your table of contents or be a stand-alone front page to the rest of your plan with no formal introduction. As long as you make sure to choose the layout and length for your summary based on what works best for your audience, your summary will make the proper impact.

When writing this opening element of your plan, keep in mind traditional audiences of executive summaries tend to be busy business professionals who may not have time to read an entire strategic business plan document, no matter how well-composed. Having a short, precise summary at the beginning of your plan that’s easily digestible, even for the busiest stakeholders, is the best way to guarantee your plan will be understood by senior executives, investors, and lenders.2

The Mission Statement

A mission statement lays out what your company stands for. By sharing this information in your business plan, you provide your audience with a better understanding of why your plan is important to the overall success of your company.

Great mission statements address:

  • What your company does
  • Who your company serves
  • How your company serves them4

Your mission statement should be written in a way that helps motivate each employee to work together towards the common goal listed in the mission statement.

When adding this part to your strategic business plan, you may choose to write a combined vision statement and mission statement to define what your company does and what you want to achieve. Vision statements express the “goals the company has for the future, what the company wants to become and how it will achieve those goals.”3

Don’t forget that mission statements, whether combined with a vision statement or on their own, should be kept current with your company’s present situation. Be sure to update your statement as often as is needed to keep pace with any evolutions or changes the company has undergone.

The SWOT Analysis

Another key element of a successful business plan is the SWOT analysis. SWOT is an abbreviation for:

  • S: Strengths
  • W: Weaknesses
  • O: Opportunities
  • T: Threats5

This analysis portion of your strategic business plan is essential because it delivers a quick visual framework that evaluates your company's competitiveness and can, in turn, be leveraged for strategic plans.4

Strengths and weaknesses are considered internal factors, affected by what is taking place within the company and changeable by the company itself. Threats and opportunities are external factors like market trends and industry regulations. While not directly controlled by your company, being aware of how external factors may impact your odds for success is critical to any business plan.

Use internal and external data for your SWOT data points. Consulting multiple sources and voices inside and outside of your organization creates a holistic SWOT analysis that will help you and your company see the bigger picture to follow for success.

Once your SWOT analysis is done, you will have new ideas, informed by a well-researched fact list, about your company’s position and state of preparedness for the future.

The Goals and KPIs

Next, you’ll want to craft a clear list of goals that you want your business to achieve. With any goal, be sure to define it as best as you can using qualitative, not just qualitative metrics, so that plan stakeholders know what they are striving for, what actions to take to get there, and how to measure progress and achievement.6

Example goals include:

  • Raising revenue 10% year-over-year
  • Hiring more sales personnel by a certain date
  • Reduce production expenses by 8% over the next five years

Example goal measurements, or KPIs (also known as key performance indicators), include:

  • Sales revenue
  • Number of new business partnerships
  • Sales call volume
  • Website orders
  • Newsletter sign-ups

No matter what KPIs your company settles on for goal measurement, be sure to share them in the business plan. You should also include how you plan to put an effective KPI tracking and progress sharing system in place and which stakeholders are vital to each goal.

Make sure to write goals that are realistic enough for your team to attain but lofty enough to motivate the change you want stakeholders to bring about. Goals that inspire employees to work in a new direction, while promoting “buy-in,” will keep motivation high and help your company reach its goals.

The Initiatives

Once you’ve added your company mission statement, SWOT analysis, and your top goals and relevant KPIs, it’s time to create your plan’s initiatives. Business strategy initiatives are the planned actions your company employees will take to bring your overall strategic business plan to fruition.7

To be achievable, initiatives should align with your goals, KPIs, and of course, your plan’s budget.

Example initiatives include:

  • Launch a new homepage that is easier for customers to navigate
  • Have all salespeople undergo new training for your newest product
  • Eliminate a costly, redundant supply chain quality control step

Make sure your initiatives support your goals, bring you closer to achieving your overall business plan, and have assigned stakeholders and reasonable deadlines.

With all of the key elements in place, your strategic business plan will be well understood, well-received, and more easily acted upon leading to better business outcomes for you and your company.

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Sources
  1. Retrieved on February 2, 2022, from indeed.com/career-advice/career-development/elements-of-strategic-planning
  2. Retrieved on February 2, 2022, from miro.com/aq/ps/templates/strategic-planning/
  3. Retrieved on February 2, 2022, from indeed.com/career-advice/resumes-cover-letters/executive-summary-templates
  4. Retrieved on February 2, 2022, from indeed.com/career-advice/career-development/vision-vs-mission-statement
  5. Retrieved on February 2, 2022, from investopedia.com/terms/s/swot.asp
  6. Retrieved on February 2, 2022, from indeed.com/career-advice/career-development/business-goals
  7. Retrieved on February 2, 2022, from indeed.com/hire/c/info/creating-tactical-plans
  8. Retrieved on February 2, 2022, from usnews.com/education/online-education/university-of-kansas-OBUS0696/mba