Strategic Planner for
creating a 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.
Recommendation: Review the
paper on this page before using
Click here to
see feedback from past users of this planning tool (opens in
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see a sample plan (use back button on browser to return
to this page).
If you don't know where your business is going, any road will get
What is a Strategic Plan?
Entrepreneurs 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:
Serve as a framework for decisions or for securing support/approval.
Provide a basis for more detailed planning.
Explain the business to others in order to inform, motivate &
Assist benchmarking & performance monitoring.
Stimulate change and become building block for next plan.
For inspiration (and a few smiles), have a look at some of the quotations
and examples of bad advice included in other pages!
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 example, 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
A satisfactory strategic plan must be realistic and attainable so as to allow
managers and entrepreneurs to think strategically and act operationally - see
Devising Business Strategies
for further insights.
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:
Relate to the medium term i.e. 2/4 years
Be undertaken by owners/directors
Focus on matters of strategic importance
Be separated from day-to-day work
Be realistic, detached and critical
Distinguish between cause and effect
Be reviewed periodically
Be written down.
As the precursor to developing a strategic plan, it is desirable to clearly
identify the current status, objectives and strategies of an existing
business or the latest thinking in respect of a new venture. Correctly
defined, these can be used as the basis for a critical examination to
probe existing or perceived Strengths, Weaknesses, Threats
and Opportunities. This then leads to strategy development covering
the following issues discussed in more detail below:
The preparation of a strategic plan is a multi-step process covering vision, mission, objectives, values, strategies, goals and programs. These are discussed below.
The first step is to develop a realistic Vision
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, structure, scale offerings 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 example of a vision:
I will come to America, which is the country for me. Once there,
I will become the greatest bodybuilder in history.......... I will
go into movies as an actor, producer and eventually director. By the
time I am 30 I will have starred in first movie and I will be a millionaire......
I will collect houses, art and automobiles. I will marry a glamorous
and intelligent wife. By 32, I will have been invited to the White
House. Attributed to Arnold Schwarzenegger who was elected Governor
of the State of California in 2003.
The nature of a business is often expressed in terms of its Mission
which indicates in a factual way the purpose and activities of the
business in terms of operations, (unique) characteristics, functions,
customers, offerings, sectors/segments, scale/scope/penetration,
methodologies, technologies, resources etc. Just answer the questions
as to what the business really is
and does in qualitative terms. If planning for a startup, base the
mission statement on the business as it would be once operational
- be realistic and practical rather than aspirational.
For example, "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 soft mission
What business is/does
Key processes & technologies
Main customer groups
Reason for existence
Important philosophical/social issues
Image, quality, style, standards
Compare the following statements:
X Corp. designs, develops, assembles and markets systems for data
base management. These systems integrate its proprietary operating
system software with hardware supplied by major manufacturers, and
are sold to small, medium and large-sized companies for a range
of business applications. Its systems are distinguished by a sophisticated
operating system, which permits use without trained data-processing
Our mission is to enhance our customers' business by providing
the very highest quality products and services possible. Our customer
support strategy is based upon total, no-compromise customer satisfaction
and we continually strive to offer a complete package of up-to-date
value added solutions to meet our customers' needs. We value above
all our long term customer relations.
Intel's original plan, written on the back of a menu (view copy),
is an excellent example of a hard statement:
The company will engage in research, development, and manufacture
and sales of integrated electronic structures to fulfill the
needs of electronic systems manufacturers. This will include thin
films, thick films, semiconductor devices, and ......... A
variety of processes will be established, both at a laboratory and
production level ...... as well as the development and
manufacture of special processing and test equipment required
to carry out these processes. Products may include dioded transistors
....... Principal customers for these products are expected
to be the manufacturers of advanced electronic systems ..... It is
anticipated that many of these customers will be located outside
When drafting a mission statement, critically examine every noun,
adjective and verb to ensure that they are focused, realistic and
The next element is to address the Values
governing the operation of the business and its conduct or relationships
with society at large, customers, suppliers, employees, local community
and other stakeholders.
The third key element is to explicitly state the business's Objectives
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 (expressed as return on shareholders' funds), objectives should
relate to the expectations 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.
Next are the Strategies - 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 example:
The company's internal cash flow will fund all future growth.
New products will progressively replace existing ones over the
next 3 years.
All assembly work will be contracted out to lower the company's
Use SWOTs to help identify possible
strategies by building on strengths, resolving weaknesses, exploiting opportunities and avoiding threats.
Next come the Goals. These are
specific interim or ultimate time-based measurements to be achieved
by implementing strategies in pursuit of the company's objectives, for
example, to achieve sales of $3m in three years time. Goals should be
quantifiable, consistent, realistic and achievable. They can relate
to factors like market (sizes and shares), products, finances, profitability,
The final elements are the Programs
which set out the implementation plans for the key strategies. These
should cover resources, objectives, time-scales, deadlines, budgets
and performance targets.
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.
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 exceedingly difficult
to develop a future strategy for a business without knowing its current
strategies and measuring their success to date.
Assess Current Position
The starting point must be to determine a company's existing (implicit
or explicit) vision, mission, objectives and strategies. Then judge these
against actual performance along the following lines:
Is the current vision being realized?
How has the company's mission and objectives changed over the past
say, three years? Why have the changes occurred or why have no changes
occurred? Identify primary reasons and categorize them as either internal
Describe the actual strategies followed over the past few years in
respect of products/services, operations, finance, marketing, technology,
Critically examine each strategy statement by reference to activities
and actions in key functional areas covering such matters as:
How has the company been managed?
How has the company been funded?
How has the company sought to increase sales and market share?
How have productivity/costs moved?
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 exploring 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.
For example, return on shareholders' funds is a key measure of
profitability which can be expressed as:
Take each item in this formula, explore its contents and derive performance
measures or ratios. For example:
Sales break down into sales values, units, prices, discounts, commissions,
bad debts and so on.
Net income is derived by deducting costs (materials, labor, power
etc.), expenses, interest and depreciation from sales revenue.
Shareholders' funds are based on the value of fixed assets, current
assets, current liabilities, debt etc.
of cascading ratios is illustrated in this DuPont-type profitability
chart (click thumb opposite) which is automatically generated
by more powerful versions of Exl-Plan to
show the impact of specific changes in key variables and assumptions
on overall profitability.
Subject the resultant ratios to critical examination and attempt to
compare them with industry norms. The paper entitled Managing
Working Capital explains key working capital ratios.
Note that the Exl-Plan financial planners
generate extensive ratios based on projected P&Ls, cashflow forecasts
and balance sheets for 1-3-5-7 years ahead.
4. Effect not Equal to Cause when
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:
"What stopped the business from?"
"What caused the cause of?"
"Why didn't the business achieve a 25% return?"
By way of an example 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 of shortcomings in R & D
because of a lack of expertise and resource because R & D is not
an immediate priority because of a lack of profits because of 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
The objective is to build up a picture of the outstanding good and bad
points, achievements and failures and other critical features within the
Threats & Opportunities
The external threats and opportunities
confronting a company, can exist or develop in the following areas:
The company's own industry where structural changes may be occurring
(Size and segmentation; growth patterns and maturity; established patterns
and relationships, emergence/contraction of niches; international dimensions;
relative attractiveness of segments)
The marketplace which may be altering due to economic or social factors
(Customers; distribution channels; economic factors, social/demographic issues;
political & environmental factors)
Competition which may be creating new threats or opportunities
(Identities, performances, market shares, likely plans, aggressiveness,
strengths & weaknesses)
New technologies which may be causing fundamental changes in products,
(Substitute products, alternative solutions, shifting channels, cost
Against an uncertain and shifting background, the objective must be to
identify and prioritize the key SWOTs in a one-handed manner (Don't
say "on the one hand ...........but on the other hand.........").
Develop Business Strategies
Once the SWOT 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 SWOTs to help identify possible
strategies as follows:
Build on strengths
The resulting strategies can then be filtered and moulded to form the
basis of a realistic strategic plan - see also Devising
Business Strategies for further insights into the development
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.
For example, the business was completely over-borrowed; management was
weak; a major new product opportunity was identified; legislation changed;
a major competitor went bust or expanded; 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,
SWOTs etc. The compilation of a short report along these lines is likely
to prove much more difficult than a lengthy dissertation which mixes up
details and principles, and confuses the broad picture. See a sample
strategic plan - use the back button on your browser to return to
Independent advisers or non-executive directors can play a valuable role
in this process because they can readily adopt the role of devil's advocate
and also bring external knowledge and expertise to bear. The worksheet
presented below may also assist.
When using the Strategic Planning Worksheet below, note the following
Relate the planning exercise to a specific company or, if diversified,
to individual strategic business units.
Ideally the worksheet should be compiled by a multi-discipline management
group, or separately by 2/3 groups and then discussed in plenary session
if a large business unit is involved.
If working on your own, complete the worksheet and then return to
it a few times over the following few days and critically review what
you wrote - why, why, why etc. and ask yourself whether you have seen
the "wood for trees".
A completed worksheet should be edited down into a 1-2 page document
and reviewed by the group(s). The final form of the document need not
follow the worksheet's layout provided all the matters are covered.
All ideas, issues etc. should be internally consistent and realistic.
You need a very good understanding of the market, competitors etc.
in order to make a clear assessment of your SWOTs. If you haven't got
this insight, suspend work on your strategic plan until you have done
this basic research.
Allow enough time as you may find it much more difficult to write
a short plan than a long one !!!!
1. Assess the business's EXISTING strengths,
weaknesses, threats and opportunities:
(Strengths & Weaknesses are internal to the business and Opportunities
& Threats are external. All SWOTs should be 'one-handed' - something
is either a Strength or a Weakness but cannot be both. Enter up to six
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'
Take a moment to complete or view the results of this survey.
2. Vision of business in 3/4 years time:
(What will the business look like? If a visitor from Mars dropped in
what would be seen and evident. Write in future tense. Maximum of 150
3. Mission/purpose statement for business
to cover next 3/4 years:
(What will the business really, really be doing? What activities
will it perform, where, how etc.? What makes the business special/competitive?
Every noun, adjective and verb in the statement is important and must
be justified. Maximum of 150 words)
4. Statement of corporate values and beliefs:
(Covers employees, customers, environment etc. etc. Maximum of 150 words)
5. Set out key long-term objectives:
(These are the primary underlying reasons for being involved in the
business, and are not specific targets - these come later)
5b Management (If different from shareholders)
5c Business (Relative to competitors etc.)
6. Identify key strategies for business and
major functional areas:
(Build on strengths, resolve threats, exploit opportunities and avoid
threats. Add any new dimensions revealed by Vision and Mission. List
and prioritize up to ten or so major strategies. See Devising Business Strategies for further insights.)
7. Assess possible FUTURE strengths, weaknesses,
threats and opportunities:
(Do the foregoing strategies improve the initial SWOTs? If they don't,
then they should have done so)
8. Review your vision, mission, values and
(Refine and revise/restate key strategies to deal with the perceived
9. Specify major goals achievable over the
next 3/4 years:
(Quantify in terms of sales, market shares, finances, operations etc.)
10. Define strategic action programs:
(Indicate who, what, where, when, how etc. Set targets and prioritize)
If preparing a business plan, look at Free-Plan.
This is a freeBusiness
Plan Template for Word (48 pages) and a complementary Guide (supplied
as a 90+ topic Help file and as a 100+ page PDF 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
3. Strategic Overview of
If you need to produce financial projections as part of a strategic
plan or for use on their own, take a look at our extensive range of
Excel-based financial planners - Exl-Plan -
which can be used to prepare 3/5-year financial projections (P&Ls,
cashflows, balance sheets, ratio analyses and graphs). It incorporates
a Quik-Plan facility
for doing quick
and dirty projections. If you seek a very simple solution, look
Basic (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 Exl-Plan
range). Get the details and free trial downloads.
PlanWare develops and sells a range of
financial planning packages - Exl-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.
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