Strategic Planning/Objective Setting

If you were to read a book about business strategy or strategic planning, more likely than not marketing would be seen as a subset or element of business planning. So why does Artefact go the other way, and why bring it into the Strategic Marketing Model after the brand development process? The answer to that is that it is best to conceive of a business entirely as an exercise in marketing. No business is just about making – there’s no point in making unless you plan to market what you make. Equally, nobody will give much thought to marketing without first having some ideas about what he/she is capable of bringing to market. So the general process goes something like this:

* There’s a market for hand-knitted sweaters
* I can knit sweaters
* I’ll develop some designs I think might sell
* I’ll put a business plan in place

Now that might not be the textbook way, but it’s the way things develop for most people, so this is a good time to think about business planning. Let’s run through the essential things you need to know, but first let’s consider exactly why it is essential to know them.

Why Planning is Important

Your plan is your blueprint. By typing it out you force yourself to express in a way that should make sense to you and other people what may be an internalised and not necessarily well thought through business idea. You will normally have a general objective in mind (eg. make a lot of money selling that new software program you’ve written). Clearly, you have to get specific, so you might need to write specific objectives like ‘develop, package and sell 500 copies at €100 within 6 months’. That’s better. You will normally have a number of specific objectives, some of them operational, some of them marketing, some of them financial. Now you are really getting down to what has to be done. You also begin to see what is realistic. You also begin to see the need for some strategies – like, I’ll need to produce regular upgrades because the applications with which you use this software keep advancing. And since there’s competition out there, you may need to think about tactics. Your objectives, strategies and tactics can also be further informed if you take the trouble of doing a SWOT analysis. That means trying to fully:

* Analyse your Strengths, so as to build on them
* Analyse your Weaknesses, so as to address them
* Analyse your Opportunities, so as to grasp them
* Analyse your Threats, so as to defend against them

The exercise in setting objectives, strategies and tactics means nothing unless you translate them into specific action plans and then implement these actions. So having a plan brings visionary ideas down to earth, exposing flaws and suggesting fixes, bringing realism and breaking nebulous grand plans down into actionable bite-size chunks. It gives you a starting place and a sequence to follow. It focuses your effort and prevents you from being distracted and blown off course by every new thing that comes along. A business without a plan is like a boat without a rudder.

But don’t be a slave to your plan either. The plan is there to serve you, not the other way around. It should be flexible and you should be able to change and update it in the light of experience and in response to the changing environment

General Objectives

You may choose to set one or a few general objectives. Some like to begin with a Mission Statement. There’s not a lot of difference. What we are talking about is the most broadly stated description of what your business wants to achieve and how. By stating – “Our mission is to make and sell the world’s most advanced professional website analysis software to corporations everywhere” – already you have put some boundaries on what you are about so if Amazon wants you to be an affiliate, you’ll probably say no thanks – that would distract us from what we are about! You could break the mission statement down into a few general objectives. That would be most likely relevant where you are in a few distinct product/market situations, so you would have a general objective for your tax computation software and another for your Alaskan dog sled tour operation (speaking of which – only the lead dog gets to see what’s coming up next, so try to be a leader in whatever you do!)

Specific Objectives

To get towards an actionable plan, you will want to break your general objectives into a number of specific objectives. Specific objectives should be statements about the key things you want to achieve, You could group these under a few key headings such as

* development objectives (eg. have an upgrade for product X ready for market within 12 months)
* administration/operational objectives (e.g. install new accounting system by year end)
* sales and marketing objectives (20 new customers per month, €100,000 sales by December 31)
* financial objectives ( €50,000 profit this year and 20% growth for each succeeding year)

Try to be comprehensive. It is highly unlikely that you would have only one or two objectives under each heading.

Strategies/tactics

Objectives come before strategies. Objectives are about what you want to do; strategies are about how you are going to go about it. While you could skip straight from objectives to action plans, it’s often a good idea to spend some time thinking about strategies. Some environmental analysis, competitor analysis, SWOT analysis and the like means that rather than charging right in, you think about the best route to take. So give it some thought, but don’t get stuck in the mire. Paralysis by analysis is a danger and often people use endless analysis as an excuse not to do anything.

Action Plans

These are the nuts and bolts of the plan. They are detailed statements of exactly what actions you are going to take in pursuit of each specific objective. Where there is a cost involved, the budgeted cost of each planned action should be noted and reflected in your financial plan. Financial Planning and budgeting is also a very important part of running any business effectively. Suffice it to say that if you plan that your business should be anything more than rudimentary, you will need at least some business management /accounts software, and there are many alternatives available from very modest cost at the small business end of the scale to more expensive and sophisticated models at the top end.

Written by Gerry Manning
(co-founder of Artefact Ltd).