Increasing your company’s profits involves making decisions about how to expand operations. A key part of this growth involves creating a strategic plan. This lets you develop a realistic vision of what your company will look like in the future and how you will create this reality. Focusing on your mid- and long-term goals and strategies to reach them clarifies how you will increase your organization’s profits.
Follow these guidelines to develop a strategic plan to increase your company’s profitability.
1. Clarify Your Purpose
Share your company’s purpose in your mission statement. This explains why your business exists, what it’s focused on, and it accomplishes for customers. Your mission statement guides your day-to-day operations and serves as a foundation for making business decisions. It lets customers know how your products/services fill their needs.
2. Demonstrate Your Competitive Advantage
Focus your strategic plan on what your company does better than any other company. Your competitive advantage is the reason customers turn to you for products/services instead of a competitor. Demonstrate how your organization makes deliberate choices to stand out from the rest. You may include this in your mission statement and/or vision statement.
3. Plan Your Future
Use your strategic plan to visualize where your company is headed. Determine what you want your business to look like in 5 to 10 years. Include your business’s focus on customers, the market position you want to occupy, activities to pursue, and capabilities to develop. Focusing on these areas provides your organization with a sense of purposeful action.
4. Determine Your Strengths and Weaknesses
Create a SWOT analysis to analyze your company’s strengths, weaknesses, opportunities, and threats. Write down what your business does and does not do best. Include your organization’s resources, assets, intellectual property, and people. Add in external events that will affect your company and your competitors’ strengths and weaknesses. Include driving forces behind sales trends, important markets, and the world that may affect your business. Use this analysis to find a fit with your organization’s strengths and opportunities.
5. Develop Customer Profiles
Examine customer needs, motivations, and characteristics to develop customer profiles. Use this information to find ways to meet customer needs better than your competitors do. Uniquely providing value encourages customers to remain loyal to your business. Determine how you can improve business performance to expand your customer base.
6. Set Your Goals
Use your SWOT analysis and customer profiles to create company goals in line with your mission and values. Include two to five objectives to carry out your mission and vision in the next few years. Make sure your goals are measurable, attainable within a year, and support your objectives. Ensure your goals and objectives emphasize your strengths, recognize your threats, and capitalize on opportunities.