Terhemen Johnpaul Kpenkaan is a trained business incubation manager with…
As a business owner, have you ever found yourself unsure of which direction to take your company? Do you feel like your business lacks focus or that your employees are confused about their purpose? If so, you may be missing a crucial element of success: a strategic plan!
I was reminded of the importance of strategic planning during a casual conversation over a cup of Arabian tea with my friend, a telecommunications entrepreneur named Terdoo. He narrated how he was in the process of launching his fibre optics company. When I asked him about his strategic plan, he had no idea what I was talking about and had no plans in place for getting one either. Unfortunately, this is a common problem many businesses face – the lack of a strategic plan.
The absence of this plan can lead to several consequences for businesses. Without a clear direction, businesses may struggle to make decisions that align with their goals and objectives. This could result in missed opportunities for growth, poor financial performance, and difficulty in attracting and retaining customers. Additionally, employees may lack a sense of purpose and direction, leading to low motivation and productivity levels.
In the case of Terdoo’s fibre optics company, the absence of a strategic plan could lead to significant challenges as the company grows. Without a clear road map, the company may struggle to identify and prioritise expansion opportunities or to effectively allocate resources. This could result in missed opportunities for growth, inefficient use of resources, and difficulty in attracting investors or partners.
What is a strategic plan?
A strategic plan is a long-term plan that outlines a company’s goals and objectives, and the tactics and actions needed to achieve them. It is a catalyst for growth and helps businesses to stay focused on their long-term vision.
This action plan is crucial for any business to achieve its goals and avoid pitfalls. Strategic planning can also help businesses establish their current position, create a competitive advantage, and define a clear vision for the future.
Imagine that without a strategic plan, Terdoo’s Fibre Optics Company may focus its efforts on short-term gains, such as increasing revenue or cutting costs, rather than on long-term goals, such as building a strong brand or expanding its operations. This short-term focus could lead to missed opportunities for growth, as the company fails to invest in key areas that are critical to its long-term success. Without a strategic plan, businesses can wander haphazardly with no priorities or sense of direction.
A strategic plan provides clarity and direction, helping businesses to prioritise their efforts and allocate resources effectively. It helps to ensure that everyone in the organisation is working towards the same goals. This reduces the risk of miscommunication or conflicting priorities. In today’s fast-paced business world, it’s more important than ever for companies to have this in place. With so many opportunities and challenges to navigate, a strategic plan provides a solid foundation for decision-making.
Here are five key reasons why your business needs a strategic plan:
1. To provide direction: A strategic plan provides a clear direction for your business. It works like a roadmap, clearly defining the best route for your organization to take in the years ahead.
Without a plan, your business may lack direction and purpose. Coffee ’n Bliss is a small coffee shop located in the heart of Abuja. To compete with larger chains and attract customers, Coffee ’n Bliss developed a strategic plan that focused on creating a unique customer experience, including personalized service and a cosy atmosphere.
The plan also emphasized partnerships with local suppliers to source high-quality beans and pastries. As a result, Coffee ’n Bliss has become a popular destination for coffee lovers in the area and has expanded to multiple locations across the city in a space of five years only.
2. To help you achieve your goals: A strategic plan is a great tool to have in your arsenal. It can help your business achieve great things, such as expanding to new business verticals, managing and controlling your finances more effectively, and winning and keeping customers by providing them with superior products or services. By setting clear goals and outlining the steps needed to achieve them, a strategic plan can help you stay focused and make progress towards your objectives.
3. To bring a sense of focus: A strategic plan establishes a direction for your business to take, which helps to sharpen its focus to get there. By developing the right goals and targets, everyone in your organization can focus their efforts on meeting them. This can lead to greater efficiency and productivity, as well as a stronger sense of purpose among employees.
Chioma’s Boutique is a small fashion boutique located in Aba. To compete with larger retailers and attract customers, Chioma’s Boutique developed a strategic plan that emphasized low prices, quality products, and personalized service. The plan also included a focus on social media marketing and community engagement. As a result, Bella’s Boutique has become a popular destination for fashion-forward customers in the area and has expanded to stocking assorted fabric.
4. To help you identify opportunities: By putting business challenges into perspective, a strategic plan gives you the foresight you need to tackle them in a coordinated way. You’ll have a better view of the ways your business is affected by any particular problem. This in turn makes it easier for you to take control of your destiny.
With a strategic action plan in place, you’ll be able to identify opportunities for growth amid challenges and take advantage of them. One example of a company that successfully implemented a strategic plan is Ola’s Organics, an organic food delivery service based in Lagos. Ola’s Organics recognized the growing demand for healthy food options in the city but also faced stiff competition from other food delivery services.
To stand out, Ola’s Organics developed a strategic plan that focused on providing customers with a unique experience through personalized service, high-quality products, and eco-friendly packaging. The business also emphasized partnerships with local farmers to source fresh, organic produce and focused on digital marketing to reach a wider audience. As a result, Ola’s Organics has become a popular choice for health-conscious consumers in Lagos and has expanded its delivery service to other cities in the South West region.
5. Essential for communicating your vision: Your strategic plan is more than just a lens to look through. It does more than just focus your attention. It’s also essential for communicating your vision to investors, managers, and employees. By illustrating the process by which that vision will be made real, you can inspire and motivate others to work towards a common goal.
In conclusion, a strategic plan is essential for any business that wants to grow and succeed. With a well-thought-out one, your business can reach new heights. To develop it, start by assessing your business’s current situation and defining your long-term vision. Identify your strengths, weaknesses, opportunities, and threats.
From there, set specific goals and objectives that align with your vision and develop strategies and tactics to achieve them. Make sure to involve key stakeholders like your employees or investors in the planning process and regularly review and update your plan as needed. The various examples I provided demonstrate how small businesses in Nigeria have successfully used strategic planning to overcome challenges and achieve their goals. By following their lead and developing your strategic plan, you can put your business on the path to success.