We’re going to play a word association game. When you...
Every company, large or small, franchisee or franchisor, should create a strategic plan every year. The reason is that without a plan too much of the day-to-day work ends up being dedicated to execution and not enough is dedicated to growth.
Simply put, the strategic plan is the blueprint for the business mission, the business goals, and the action steps necessary to get there.
So, what is in the strategic plan and what should it look like?
MISSION AND VISION
The mission is a statement of the business you are in. This requires more thought than may be obvious. In an article in Harvard Business Review called “Marketing Myopia”, Theodore Levitt famously stated that in 1960 the railroads thought their mission was being in the railroad business. Had their mission identified shipping as the core business, the railroad companies would have been first in the trucking and air freight business. These ended up as huge competitors.
The vision is the long term goal for the business. Do you have one? Is it a dollar in sales amount or a market share goal? Is it local or state or national or global? Is it to be the leader in your category?
Depending on the size of the business this can vary from information gleaned from industry trade magazines to fully funded consumer research. The main point is the importance of knowing where the economy, the industry, and your segment are headed. For example, in the restaurant business this year, all the growth is coming from off-premis sales. That information can be found in virtually every trade magazine in the industry. If you are in the restaurant business, that macro piece of information is vitally important.
If you are a franchisee, most of this information should be available from your franchisor. Just because you are a franchisee, however, does not mean that you do not need to plan. One of the most successful franchisees in the Golden Corral system has a strategic planning session and final plan for his growth every year.
This section highlights the things that make the company successful so far and those that need attention in the future to achieve the vision. The list above is the headline for each characteristic and a list of corresponding features should follow. Strengths might include “great franchisees” or “experienced operators”. Weaknesses could be “inconsistent execution” or “financing”. Opportunities might be “margin improvement” or “better training program”. Problems could be “turnover” or “inventory management”.
As should be the case, the forecast financial objectives should be the result of proper execution of the plan. So the financials need to be well thought out and a fundamental part of the process.
Most plans are built on a three year format which is updated every year. Therefore the financial plan should have two years of history, YTD actual, and a three year forecast.
The action plans are the list of actions that you plan on taking to grow the business, or fix the business, or whatever the process yields as the most important ways to move toward the vision and achieve the financial objectives.
This action plan list should be the result of the key people spending time together to review every aspect of the business as it relates to the mission and vision, the situation analysis and the financial objectives.
Strategic planning is a necessary exercise for any business. The process alone will motivate and invigorate your key tem members. But the result, if you follow and track it will create a score card that will clearly tell you where you stand.