Building a Strategic Business Plan

Building a Strategic Business Plan

                                   By: Tim Augustine Partner, Atwell, LLC

I was recently asked during a Zoom panel discussion "What do you feel are the critical steps to grow a company from start-up to established?” After thinking more about it, I decided to document a few thoughts. I hope you find this article interesting.

This question is very broad and can be approached from many different perspectives. The steps I outline in this article, apply to startup firms that want to identify an appropriate business model and become scalable. These strategies also apply to firms that need to make the transition from an entrepreneurially run company (few leaders make most of the decisions) to a professionally managed growing company. The strategic focus areas, I reference in this article, also apply to established firms that desire a plan to diversify and grow. 

Regardless of the size of your firm, considering the following strategic focus areas will provide a solid foundation for a strategic growth plan. These areas will help streamline the steps of growth and diversification and help you create a clear vision for measurable change.

I have framed each strategic focus area in a form of question. The order of each question is critical as each area builds on the next, creating a clear strategic plan for your firm.

Question 1: What Is Your Business Definition? What business are you in? What does your company provide? What does your company sell? What problem does your company solve? In one sentence, define what your company does. The business definition needs to be clear for your internal staff as well as your target market. This will provide clarity as your company begins to grow.

Question 2: What Markets Does Your Company Serve or Want to Serve? Markets can be defined as geographic markets or industries/market sectors. Where does your company want to grow geographically? What specific industries or market sectors does your company want to serve? Are there urgent industries (industries expected to significantly grow in next 10 years) that you would like to explore? Are there industries/market sectors that would help your company diversify?

Geographic strategies are straight forward. Identify a geographic market such as Atlanta or a broader area such as the Southeast. Research the market and identify areas of opportunity for your firm, specific growth sectors/areas or areas that are currently under served. 

Industries / Market Sector strategies can be a bit more complicated. Start with your core industry or industries you currently serve. Are there complementary industries that you could easily pivot into? Another perspective might include the identification of urgent industries, which can be defined as industries that are expected to grow significantly over a short period of time. Are there fast-growing industries that your current services could service?  

Question 3: What Services or Products Are Desired Within the Markets You Want to Pursue? Does your target market require services or products that differ from the services or products you currently provide? What specific services should you explore, create, develop or expand to better service your target market? Based on your market research within the target industry, can you identify potential expansion services or new services that would complement what you currently provide to the market?

Launching a new service or product can be challenging. The key to new product development is due diligence and forcing the question: “Should we create a new service or product?” If you notice, I am not asking “if we can create the product or service.” I have leveraged a few different models and found the following steps to be very useful when creating a new product or service. 

Market Research and Analysis: Research the market and the industries that you serve. Understand the geographic footprint of your business, the types of clients you currently serve and the problem(s) your current product(s) solve. Who are your competitors and how do you compare? What are your unique differentiators? What will your product provide the market that the competitors are not currently providing? This step allows you to research the market and identify those competitive advantages, opportunities and potential gaps in the market.

Market Size and ROI Analysis: How large is the market/industry? Who has the greatest market share? Understand the financial size of the market and your opportunity to make money. Should you build a new product to serve the industry? Study the financial position of your competition and understand their market share. Are the competitors able to charge a premium for their services? What type of price point does the market maintain for your type of service or product? What are the costs associated with creating your product and service and what is your break-even point once you have created the service?

Industry Influence / Thought Leadership: Who are the industry leaders or experts that could provide industry foresight? Do you have any subject matter experts in your network? Are there potential clients that you could connect with to learn more about the industry? Are there professionals in the target industry that could provide a Client’s perspective, provide ideas or market insight that could help you identify trends and/or opportunities? 

Gathering information from the market and learning from thought leaders is a critical factor that can determine the success of launching a new product or service. Maybe you have a contact in your network that could speak to the needs in the market. Maybe you have a peer that has expertise in this industry that can lend advice or a consultant or professor in the market that can provide trend analysis or market information.

Product / Service Creation: Now, armed with data, thought leader advice and a quantitative understanding of the market, you will begin the creation phase for the product / service. Will the service / product be complementary to an existing service? Will the product be a new product to the market? Are there any resources that could be leveraged to create the new service? What are the product / service requirements? What are the key deliverables for your service? What are the client expectations when purchasing the service? What resources will you need to build and deliver the service? This step should have a product / service road map that will help guide the development of the new services and leverage the market research that you previously gathered.

Product / Service Positioning. Once you have a product / service, strong market data based on your research, and an understanding of the market opportunities. The next step is to consider your product/service positioning strategy. What makes the product unique? Why would a client consider your product or service? How can you position the product or service against the competition? How can you create copy or messaging for the product or services that educates the market and encourages clients to consider your product? What words, phrases, or acronym’s will you leverage from your thought leadership advice? What are the key points within the message that clearly positions your product or services? Determine which channels best align with your markets’ buying preferences. What message channels will be most effective in positioning your product? Will your strategy include a sales force, digital marketing, partnership platforms or direct consumer market strategies?

Product / Service Launch and Measurement. How do you plan to launch the service? What channels will you use for sales and how will you deliver the marketing message into the hands of your clients or target market? How will you measure your success once you have launched the product / service? How do you plan to measure the success for each sales channel? Establish revenue targets, milestones and expected results. Ensure your goals are consistent with your findings in the quantitative analysis steps. What is your break-even point, expected margin, cost of goods, etc? Establish short term goals to better manage long term expectations, reduce loss and continually monitor improvement areas or channels that are not performing.

Question 4: What Resources Do You Need to Acquire or Add to Your Existing Organization That Will You Allow You to Provide the Services in the Industries In The Geographic Markets That You Want to Serve. This includes talent acquisition and recruiting activities to attract, identify, recruit and retain industry experts. This step also includes tools and resources that your company can use to be more productive. Do you need a CRM system? Do you have an adequate accounting and financial reporting system? Do you need an HRIS system or specific software to deliver the service? Are there specific equipment requirements that your company needs to purchase to grow?

The most common concern for growing companies is attracting, recruiting, selecting and hiring the right people. To be successful, you should think about your overall people strategy. I will briefly describe the components of an effective people strategy, but more articles will be published in the future focused on the importance of this step. 

A People Strategy is a detailed plan that will help you attract, hire, develop, retain and grow your workforce. A typical people strategy consists of five sections:

Culture Marketing: Understand the unique differentiators of your culture and incorporate these selling points in your talent marketing strategy.  To attract the type of professionals you need to grow your organization, you need to identify the attributes that make your organization unique and attractive to potential candidates. Following are a few questions you need to consider.

· Who are your best performers and why do they like working here?

· What attracts candidates to your firm?

· What words would you use to describe your firm? (i.e. entrepreneurial, energetic, professional, team-oriented)

Talent Acquisition: The key to a successful recruitment process is the ability to understand the overall recruitment steps which will consist of understanding the target position description, posting the job in the most effective platforms, sourcing the ideal candidates that match the criteria of the position, screening and interviewing for the best cultural fit, experience and education required for the position, selecting the candidate, presenting the position and closing the candidate

Training & Development: While the topic of Training and Development is broad, the basic needs in an effective T&D program includes documenting your expectations of a person or position, developing an effective on-boarding and integration plan, and a long-term platform for career development and growth which could involve mentors, external classes and conferences or additional education. 

Communication & Feedback: This section of the People Strategy focuses on the communication culture of the company. This ranges from encouraging staff meetings to one-on-one discussions; performance reviews, improvement plans and discipline process; recognition programs to promotional announcements. Does your staff understand the direction of the company and feel that they have a voice for their career and ability to make an impact in the company?

Compensation & Benefits: Compensation is also very broad. This section of the people strategy should include market analysis and compensation benchmark data. Effective leaders understand what motivates their team members and identifies rewards to show appreciation and increase retention. The team should understand market compensation, medical benefits, wellness benefits and company perks that your staff find motivating.  

Question 5: What Are the Repeatable Processes or Operational Systems That You Need to Create Today for You to Expedite Growth? This focus area is about creating process that will grease the skids and help you grow faster. You do not want to have to create the wheel, every time you want to make a hire, open an office, send an invoice or collect your AR. 

For example, do you need to create a recruiting process that would include detailed position descriptions, identify recruitment sources, screening and interview candidates that will help close and hire more candidates? Is there an accounting process that needs to be created for accounts payable or invoicing / collections? This is a critical step for a growing company. It allows you to create best practices and processes that will expedite growth. You won’t need to re-create the wheel for every milestone that your company hits. For example, hiring three people per year is much different than hiring 200 people a year. For you to hire 200 people a year, what steps are needed that will make the process easy and repeatable? 

Question 6: Who are Your Next Leaders and What is Your Succession Plan? What is your succession plan for your firm? Do you have a bench or a number two that can help lead the firm? Who’s your next generation of leaders? What skill sets, and competencies do your best performers possess? What is your organizational structure and what are the roles and responsibilities of each person, leader, and team? By considering your infrastructure now, you will have the ability to communicate a road map for opportunities within your current staff as well as a structure for new leaders and hires to understand.

Question 7: What is Your Company Culture? What are the cornerstones of your culture and how would you or your staff create or describe your culture? This is the final step of your growth strategy and is, arguably, the most important. Every question in this article, and every strategy you implement, must comply and be consistent with your company culture. When not aligned, initiatives fail. For instance, you might create a process for staff to clock-in and clock-out to track time-sheets and hours. However, if you have a culture of trust and honesty, this process might be viewed as counter-culture. Your culture impacts everything from performance to how your company is perceived in the job market. The company culture defines your company’s internal and external identity, operates consistent with your firm’s core values, supports talent acquisition and retention efforts, and supports business and client development efforts.   

I hope this article provide a framework for your firm to grow and evolve. Growth and evolution are critical in today’s marketplace if you want to thrive. Business is akin to a house plant. A house plant never stays constant. It is either dying or growing. If you do not water the plant, it will die. You must water and feed the plant, if you want it to thrive. The growth strategies outlined in this article should help provide a road map to success. Thanks for reading and good luck.