7 Strategic Planning Tactics

There are seven questions that you must ask regularly as a part of your strategic planning process.

Number one. What business are you in? What business are you really in? Define your business in terms of what it does for your customer, rather than what it is your actual product or service. The fact is that customers do not care about your product or service. All they care about is what your product or service does to improve their life or work in some way. You must always define your business in terms of the positive change that your product or service brings about for the customer, because that is all that the customer buys.

Number two in strategic planning. Who is your customer? Who is your ideal customer? Who is your perfect customer? If you were to run an ad in the paper for perfect customers, how would you describe them? Your ability to determine the perfect customer for what you sell is critical to your business. A mistake in this area can be fatal. Define your perfect customer, your target market in terms of age, income, education, family status, industry position, geographical location, and the specific attitudes, beliefs, and desires he or she would have had this moment to become a customer for what you sell.

Number three question is why does your customer buy your product or service? What is valued as he or she seeks? What benefits does he or she desire to enjoy? What improvement or change in his or her life does he or she seek? What is the actual reason that would cause a customer to buy from you immediately rather than to delay the decision?

Number four question is strategic planning. What is your competitive advantage? Your competitive advantage consists of one or more benefits that you offer your customers that no other competitor can offer. This is often called your area of excellence or area of uniqueness. Perhaps the most important question of all is what is your unique selling proposition (USP)? This is the one thing that you and your company can offer a customer that no other competitor anywhere can offer to that same customer. This is also something that your customer wants, needs, desires, and will pay for immediately at the price you charge. What is yours?

“Jack Welch once said, If you don\’t have a competitive advantage, don\’t compete.”

“Peter Drucker said if you don\’t have a competitive advantage, you must immediately go to work to develop one.”

What will your competitive advantage be in the future? Assuming that you have won today, your business continues as it does. What could your competitive advantage be if you made changes or improvements in your product or service offerings? What should your competitive advantage be? If you want to be the best in your field, these are the key questions that determine your business’s success.

Number five question in strategic planning is Who is your competitor? Whom is your ideal target customer buying from rather than buying from you? What advantages or benefits does your customer perceive that he or she receives in buying from your competitor that he or she does not feel that you provide? Most important of all, what could you do immediately to be equal or superior to your best competitor? What could you do to neutralize the perception of added value that your customer sees in buying from your competitor? It is only when you can defeat your competitor in the heart and mind of your customer that you can survive and thrive in business.

Number six Strategic question. What are the constraints that hold you back? If your goal is to double your sales and profits over the next two or three years, what is holding you back from achieving that goal? Why aren\’t your sales already twice as high in every business situation and business strategy? There is a major constraint that sets the speed at how rapidly you achieve your goal. Your ability to identify this constraint accurately and then to focus your time, energy, and intelligence on alleviating this constraint can make all the difference between business success and failure.

Number seven question in strategic planning is what are the RTO percent of activities that you can engage in that could account for 80 percent of your results? Who are the 20 percent of your customers who account for 80 percent of your business? What is the RTO percent of your products that account for 80 percent of your sales? What are the 20 percent of your product services and customers that account for 80 percent of your profits? Sometimes you can transform your business results by simply eliminating all low-value, no-value activities. The natural tendency of businesses is to offer too many products to too many customers at too many price points in too many markets. As a result, they disperse their energies and end up spending most of their time on low-value, low-profit activities. If you were starting your business over again today and you had to focus all your energies on selling just one or a few products or services, which ones would you choose? Which customers would you dedicate yourself to serving better and better? Which sales and marketing activities yield the best results? Which people and processes are the most efficient and effective in your business? Where and how can you focus your time and attention to get better business results? These are the key questions in planning. The answers change continually as your business evolves and grows. But you must keep on asking the questions.

Finally, based on your answers to the questions above, what actions should you take immediately to build a more profitable business? What is the first action you should take? When are you going to take it? Who is going to be responsible? Whatever you decide to do. Remember that action orientation is the hallmark of successful entrepreneurs. Once they make a decision, they move fast without procrastination or delay. You must do the same.

Developing a business plan before you begin forces you to think through each critical number and issue in your business. When you begin the process of developing a business plan. Imagine that you are a management consultant and you\’ve been hired at a high hourly rate to come in and develop this business plan for your company as your own management consultant. You must be fastidiously correct, objective, and honest about each number. The major benefit of a business plan is that it forces you to think through every business element in advance. A business plan is quite simple, however, if you had it difficult to get started you can sign up for the Building A Business Plan Course from the store on this website or purchase software that will help you put a business plan together far more easily than my hand or hiring a professional. Perhaps the very best business planning software available in the world today is Business Plan Pro from Palo Alto Software. This fill-in-the-blanks software guides and prompts you to put every critical number in its proper place. It enables you to change numbers as you get better information and to immediately incorporate these numbers throughout the business plan. Now, with a miracle of this world-class software, you can save yourself countless hours and thousands of dollars producing a business plan that is more accurate and easier to use than ever before.

A group of business researchers did a study a few years ago. They interviewed the president and executives of fast-growing businesses about their uses of the business planning process. They selected two groups of 50 companies, each one group of companies that had developed a complete business plan before beginning operations, and one group of companies that had begun business operations without a written plan and then simply reacted and responded as they went along. After two years, they went back and interviewed these companies again. Companies in the first group, which had developed complete business plans before operations, had been successful overall and some extraordinarily successful. Only one company that had started with the business plan had gone out of business in the two-year period. Of the companies that started without a business plan, fully 49 had gone broke over the last two years, like starting off across a foreign country with no road signs or roadmaps. They had become hopelessly lost, bogged down, and eventually went out of business.