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Why is Strategic Planning Important? & 4 Benefits

Discover why strategic planning is crucial for your business, the benefits it brings, and how it can drive growth, innovation, and long-term success.

Table of Contents

Strategic planning is the cornerstone of any successful business. It's the process that provides direction, outlines measurable goals, and can be a significant factor in the long-term success of an organization.

Keep reading to explore the importance and benefits of strategic planning, highlight a few companies that excel in the arena, and learn how ClearPoint Strategy sets itself apart in the industry.

ClearPoint Strategy enhances the strategic planning process by offering a comprehensive platform that simplifies the creation, tracking, and management of strategic plans. With ClearPoint , organizations can ensure alignment, improve decision-making, and increase operational efficiency.

See ClearPoint Strategy in action! Click here to watch a quick DEMO on the software

Why is strategic planning important.

Strategic planning is a systematic process that helps an organization set priorities, focus energy and resources, ensure that employees and other stakeholders are working toward common goals, and assess and adjust the organization's direction in response to a changing environment.

But why is it so crucial?

• Direction: Strategic planning offers a sense of direction and outlines measurable goals. It's a tool that's useful for guiding day-to-day decisions and also for evaluating progress and changing approaches when moving forward.
• Future Focus: Strategic planning allows organizations to anticipate and respond to changes in the business environment. It also helps to forecast potential opportunities and threats, which is crucial for surviving in today's dynamic business world.
• Operational Efficiency: Strategic planning provides the basis for all management decisions, reducing the potential for wasted resources, missteps, and inefficiencies.
• Competitive Advantage: A strategic plan allows organizations to foresee their future and to prepare accordingly. Organizations that plan strategically are better equipped to predict the market, anticipate changes, understand competitors, and make decisions that keep them ahead.

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The benefits of strategic planning.

Strategic planning offers a plethora of benefits that can significantly contribute to an organization's success.

• Improved Decision Making: Strategic planning helps organizations make decisions that align with their mission, vision, and strategic objectives . It ensures that all actions and initiatives are driving the organization towards its defined goals.
• Better Resource Management: Through strategic planning, organizations can better allocate their resources and prioritize their efforts, focusing on the activities that will have the most significant impact on achieving their strategic goals.
• Increased Operational Efficiency: Strategic planning improves operational efficiency by providing a roadmap for all activities. It reduces ambiguity, promotes alignment, and ensures that all efforts are coordinated and pointed in the same direction.
• Enhanced Market Responsiveness: Strategic planning allows organizations to be proactive rather than reactive. They can anticipate changes in the market, adapt quickly, and seize opportunities as they arise.

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3 companies that excel in strategic planning.

Companies like Apple, Amazon, and Google have long been recognized as leaders in strategic planning.

Apple consistently demonstrates the value of a robust strategic plan. With its focus on design and user experience, Apple has managed to create a unique position in the market that is hard for competitors to emulate.

Amazon has excelled through its strategic planning based on customer obsession, a long-term orientation, and a willingness to experiment and innovate. Amazon’s ability to foresee and capitalize on internet commerce has placed it as a dominant player in multiple markets.

Google stands out with its strategic planning, particularly in its ability to innovate, experiment, and rapidly adjust to changes. Google's strategic planning process allows it to stay ahead of market trends and maintain its position as a global technology leader.

ClearPoint Strategy Software is A Leader in Strategic Planning

ClearPoint Strategy , a leading performance management software, stands out in its ability to streamline and enhance the strategic planning process. ClearPoint provides a comprehensive solution that aids in the creation, tracking, and management of strategic plans, making it an invaluable tool for any organization.

ClearPoint's cutting-edge AI Assistant takes strategic planning to the next level. By leveraging the power of artificial intelligence, the AI Assistant can provide insights and automate tasks that would otherwise be time-consuming. This includes everything from monitoring performance metrics, sending reminders for updates, to providing data analysis for informed decision making.

Watch our video to learn about ClearPoint Strategy's proven Success Framework

However, the benefits of ClearPoint Strategy go beyond its AI Assistant. Here's how ClearPoint can help in the implementation and management of a strategic plan:

• Streamlined Management: ClearPoint allows for the easy management of strategic plans, projects, and key performance indicators (KPIs) all in one place. This centralization of information makes it easier to monitor and track progress against strategic objectives.
• Enhanced Collaboration: ClearPoint fosters collaboration by allowing team members to share updates, comment on progress, and communicate more effectively. This ensures everyone is aligned and working towards the same goals.
• Automated Reporting: One of ClearPoint's standout features is its ability to automate reporting. This not only saves significant time but also increases accuracy and allows for real-time updates.
• Integration Capabilities: ClearPoint seamlessly integrates with other software platforms, meaning data can be easily imported and exported, enhancing data accuracy and reducing the potential for errors.
• Customizable Dashboards: ClearPoint offers customizable dashboards that allow users to view the most relevant and critical information at a glance. This empowers decision-makers with the right information at the right time.

Strategic planning is an essential tool for any organization aiming to secure long-term success. It provides direction, enhances decision-making, improves resource management, and increases operational efficiency. Companies like Apple, Amazon, and Google stand as testaments to the power of effective strategic planning.

ClearPoint Strategy serves as a powerful ally in the strategic planning process. By streamlining the creation, management, and tracking of strategic plans, it allows organizations to focus more on execution and less on administration, ultimately leading to more effective strategy implementation and better results. ClearPoint Strategy is not just a tool; it's a strategic partner that can drive your organization towards success.

‍ Schedule a customized demo to see the software's comprehensive features and new AI Assistant in action!

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What are the different features of clearpoint strategy software.

ClearPoint Strategy software offers various features, including:

- Scorecard Management: Allows for the creation and management of balanced scorecards to track strategic performance. - Reporting Automation: Automates the generation of performance reports and dashboards. - Goal Setting and Tracking: Facilitates setting, tracking, and managing strategic goals and objectives. - Data Integration: Integrates with various data sources to streamline data collection and analysis. - Customizable Dashboards: Provides customizable dashboards for visualizing key performance indicators (KPIs) and metrics. - Collaboration Tools: Includes tools for team collaboration, such as shared comments, tasks, and notifications. - Strategic Alignment: Ensures alignment of projects and initiatives with organizational strategy. - Performance Analysis: Offers tools for in-depth analysis of performance data to support decision-making.

How can strategic planning improve decision-making?

Strategic planning improves decision-making by:

- Providing Clarity: Clarifies organizational goals and objectives, guiding decision-makers. - Offering a Framework: Provides a structured framework for evaluating options and making informed decisions. - Enhancing Focus: Ensures that decisions align with long-term strategic goals. -Enabling Data-Driven Decisions: Utilizes performance metrics and data analysis to inform decisions. - Identifying Risks and Opportunities: Helps identify potential risks and opportunities, allowing for proactive decision-making.

How can strategic planning be used to improve the performance of an organization?

Strategic planning can improve organizational performance by:

-Aligning Efforts: Ensures all organizational activities are aligned with strategic goals. - Setting Clear Objectives: Defines clear, measurable objectives to guide actions and measure success. - Optimizing Resource Allocation: Allocates resources efficiently to priority areas. - Monitoring Progress: Regularly tracks progress towards strategic goals and makes necessary adjustments. - Encouraging Continuous Improvement: Promotes a culture of continuous improvement through regular review and adaptation.

What are the different types of strategic planning?

Different types of strategic planning include:

- Corporate Strategy: Focuses on the overall scope and direction of the organization. - Business Strategy: Concentrates on how to compete successfully in specific markets. - Functional Strategy: Involves strategies for specific departments or functions within the organization. - Operational Strategy: Focuses on the day-to-day operations and processes that support functional and business strategies. - Growth Strategy: Aims at increasing the organization’s market share and expanding its operations.

What are the different tools and techniques that can be used for strategic planning?

Different tools and techniques for strategic planning include:

- SWOT Analysis: Identifies strengths, weaknesses, opportunities, and threats. - PEST Analysis: Analyzes political, economic, social, and technological factors affecting the organization. - Balanced Scorecard: Measures performance across multiple perspectives. - Porter’s Five Forces: Examines the competitive forces within an industry. - Scenario Planning: Develops and analyzes potential future scenarios to guide strategic decisions. - Gap Analysis : Compares current performance with desired performance to identify gaps. - Growth-Share Matrix: Assesses the potential of different business units or products.

Kate Gregory

Kate manages the BDR team to drive business growth and achieve personal & company quotas.

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14 Reasons Why You Need a Business Plan

10 min. read

Updated May 10, 2024

There’s no question that starting and running a business is hard work. But it’s also incredibly rewarding. And, one of the most important things you can do to increase your chances of success is to have a business plan.

A business plan is a foundational document that is essential for any company, no matter the size or age. From attracting potential investors to keeping your business on track—a business plan helps you achieve important milestones and grow in the right direction.

A business plan isn’t just a document you put together once when starting your business. It’s a living, breathing guide for existing businesses – one that business owners should revisit and update regularly.

Unfortunately, writing a business plan is often a daunting task for potential entrepreneurs. So, do you really need a business plan? Is it really worth the investment of time and resources? Can’t you just wing it and skip the whole planning process?

Good questions. Here’s every reason why you need a business plan.

• 1. Business planning is proven to help you grow 30 percent faster

Writing a business plan isn’t about producing a document that accurately predicts the future of your company. The  process  of writing your plan is what’s important. Writing your plan and reviewing it regularly gives you a better window into what you need to do to achieve your goals and succeed. 

You don’t have to just take our word for it. Studies have  proven that companies that plan  and review their results regularly grow 30 percent faster. Beyond faster growth, research also shows that companies that plan actually perform better. They’re less likely to become one of those woeful failure statistics, or experience  cash flow crises  that threaten to close them down. 

• 2. Planning is a necessary part of the fundraising process

One of the top reasons to have a business plan is to make it easier to raise money for your business. Without a business plan, it’s difficult to know how much money you need to raise, how you will spend the money once you raise it, and what your budget should be.

Investors want to know that you have a solid plan in place – that your business is headed in the right direction and that there is long-term potential in your venture. 

A business plan shows that your business is serious and that there are clearly defined steps on how it aims to become successful. It also demonstrates that you have the necessary competence to make that vision a reality. 

Investors, partners, and creditors will want to see detailed financial forecasts for your business that shows how you plan to grow and how you plan on spending their money. 

• 3. Having a business plan minimizes your risk

When you’re just starting out, there’s so much you don’t know—about your customers, your competition, and even about operations. 

As a business owner, you signed up for some of that uncertainty when you started your business, but there’s a lot you can  do to reduce your risk . Creating and reviewing your business plan regularly is a great way to uncover your weak spots—the flaws, gaps, and assumptions you’ve made—and develop contingency plans. 

Your business plan will also help you define budgets and revenue goals. And, if you’re not meeting your goals, you can quickly adjust spending plans and create more realistic budgets to keep your business healthy.

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• 4. Crafts a roadmap to achieve important milestones

A business plan is like a roadmap for your business. It helps you set, track and reach business milestones. 

For your plan to function in this way, your business plan should first outline your company’s short- and long-term goals. You can then fill in the specific steps necessary to reach those goals. This ensures that you measure your progress (or lack thereof) and make necessary adjustments along the way to stay on track while avoiding costly detours.

In fact, one of the top reasons why new businesses fail is due to bad business planning. Combine this with inflexibility and you have a recipe for disaster.

And planning is not just for startups. Established businesses benefit greatly from revisiting their business plan. It keeps them on track, even when the global market rapidly shifts as we’ve seen in recent years.

• 5. A plan helps you figure out if your idea can become a business

To turn your idea into reality, you need to accurately assess the feasibility of your business idea.

You need to verify:

• If there is a market for your product or service
• Who your target audience is
• How you will gain an edge over the current competition
• If your business can run profitably

A business plan forces you to take a step back and look at your business objectively, which makes it far easier to make tough decisions down the road. Additionally, a business plan helps you to identify risks and opportunities early on, providing you with the necessary time to come up with strategies to address them properly.

Finally, a business plan helps you work through the nuts and bolts of how your business will work financially and if it can become sustainable over time.

6. You’ll make big spending decisions with confidence

As your business grows, you’ll have to figure out when to hire new employees, when to expand to a new location, or whether you can afford a major purchase. 

These are always major spending decisions, and if you’re regularly reviewing the forecasts you mapped out in your business plan, you’re going to have better information to use to make your decisions.

7. You’re more likely to catch critical cash flow challenges early

The other side of those major spending decisions is understanding and monitoring your business’s cash flow. Your  cash flow statement  is one of the three key financial statements you’ll put together for your business plan. (The other two are your  balance sheet  and your  income statement  (P&L). 

Reviewing your cash flow statement regularly as part of your regular business plan review will help you see potential cash flow challenges earlier so you can take action to avoid a cash crisis where you can’t pay your bills. 

• 8. Position your brand against the competition

Competitors are one of the factors that you need to take into account when starting a business. Luckily, competitive research is an integral part of writing a business plan. It encourages you to ask questions like:

• What is your competition doing well? What are they doing poorly?
• What can you do to set yourself apart?
• What can you learn from them?
• How can you make your business stand out?
• What key business areas can you outcompete?
• How can you identify your target market?

Finding answers to these questions helps you solidify a strategic market position and identify ways to differentiate yourself. It also proves to potential investors that you’ve done your homework and understand how to compete. 

• 9. Determines financial needs and revenue models

A vital part of starting a business is understanding what your expenses will be and how you will generate revenue to cover those expenses. Creating a business plan helps you do just that while also defining ongoing financial needs to keep in mind. 

Without a business model, it’s difficult to know whether your business idea will generate revenue. By detailing how you plan to make money, you can effectively assess the viability and scalability of your business. 

Understanding this early on can help you avoid unnecessary risks and start with the confidence that your business is set up to succeed.

• 10. Helps you think through your marketing strategy

A business plan is a great way to document your marketing plan. This will ensure that all of your marketing activities are aligned with your overall goals. After all, a business can’t grow without customers and you’ll need a strategy for acquiring those customers. 

Your business plan should include information about your target market, your marketing strategy, and your marketing budget. Detail things like how you plan to attract and retain customers, acquire new leads, how the digital marketing funnel will work, etc. 

Having a documented marketing plan will help you to automate business operations, stay on track and ensure that you’re making the most of your marketing dollars.

• 11. Clarifies your vision and ensures everyone is on the same page

In order to create a successful business, you need a clear vision and a plan for how you’re going to achieve it. This is all detailed with your mission statement, which defines the purpose of your business, and your personnel plan, which outlines the roles and responsibilities of current and future employees. Together, they establish the long-term vision you have in mind and who will need to be involved to get there. 

Additionally, your business plan is a great tool for getting your team in sync. Through consistent plan reviews, you can easily get everyone in your company on the same page and direct your workforce toward tasks that truly move the needle.

• 12. Future-proof your business

A business plan helps you to evaluate your current situation and make realistic projections for the future.

This is an essential step in growing your business, and it’s one that’s often overlooked. When you have a business plan in place, it’s easier to identify opportunities and make informed decisions based on data.

Therefore, it requires you to outline goals, strategies, and tactics to help the organization stay focused on what’s important.

By regularly revisiting your business plan, especially when the global market changes, you’ll be better equipped to handle whatever challenges come your way, and pivot faster.

You’ll also be in a better position to seize opportunities as they arise.

Further Reading: 5 fundamental principles of business planning

• 13. Tracks your progress and measures success

An often overlooked purpose of a business plan is as a tool to define success metrics. A key part of writing your plan involves pulling together a viable financial plan. This includes financial statements such as your profit and loss, cash flow, balance sheet, and sales forecast.

By housing these financial metrics within your business plan, you suddenly have an easy way to relate your strategy to actual performance. You can track progress, measure results, and follow up on how the company is progressing. Without a plan, it’s almost impossible to gauge whether you’re on track or not.  

Additionally, by evaluating your successes and failures, you learn what works and what doesn’t and you can make necessary changes to your plan. In short, having a business plan gives you a framework for measuring your success. It also helps with building up a “lessons learned” knowledge database to avoid costly mistakes in the future.

• 14. Your business plan is an asset if you ever want to sell

Down the road, you might decide that you want to sell your business or position yourself for acquisition. Having a solid business plan is going to help you make the case for a higher valuation. Your business is likely to be worth more to a buyer if it’s easy for them to understand your business model, your target market, and your overall potential to grow and scale. 

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• Writing your business plan

By taking the time to create a business plan, you ensure that your business is heading in the right direction and that you have a roadmap to get there. We hope that this post has shown you just how important and valuable a business plan can be. While it may still seem daunting, the benefits far outweigh the time investment and learning curve for writing one. 

Luckily, you can write a plan in as little as 30 minutes. And there are plenty of excellent planning tools and business plan templates out there if you’re looking for more step-by-step guidance. Whatever it takes, write your plan and you’ll quickly see how useful it can be.

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

Table of Contents

• 6. You’ll make big spending decisions with confidence
• 7. You’re more likely to catch critical cash flow challenges early

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Strategic Planning Is Essential for Your Business to Succeed. Here's Why (and How to Do It Right). By following these simple tips, you can ensure that your strategic planning process is successful and that your business achieves its goals.

By Nick Mascari Edited by Chelsea Brown Jul 15, 2022

Opinions expressed by Entrepreneur contributors are their own.

Strategic planning is an organization's process of defining its strategy or direction and making decisions on allocating its resources to pursue this strategy. It may also extend to control mechanisms for guiding the implementation of the strategy.

Successful businesses need a strategic plan . Without a plan, your company will likely wander haphazardly with no priorities and employees confused about their purpose in this new landscape of yours! So, spend time developing an effective strategic plan for where you want things to go; even if the planning process takes time and resources, once implemented correctly, it can certainly make all the difference between success and failure in your business. Strategic planning is essential, especially for small and medium-sized enterprises (SMEs), because it helps them focus on their limited resources and how to use them best.

Related: How to Fall in Love With Strategic Planning

Strategic planning process

There is a three-dimensional structure for strategic planning. With its categorization, you can clearly understand how the aspects of your strategy fit together:

What's the situation now? Check in on your current strategic position and clarify your mission, vision and values.

What's next after this? Establish a competitive advantage and a clear vision for your business. Identify the direction your business is going.

What's the plan of action to get there? Lay out a clear roadmap of where you're at to where you're headed, outlining what you'll require to execute your plan.

Once the planning goals have been set, strategies are developed to achieve them. These strategies are then implemented, and the results are monitored to see if the objectives have been met. If they have not, the process is repeated until the desired results are achieved. Here are a few things to remember when creating a strategic plan :

Create a truly differentiated strategy

One of the most important aspects of any business is its strategy. Your strategy should be unique to your business and designed to give you a competitive advantage in your industry. Without a differentiated strategy , it won't be easy to scale your business and achieve sustained success.

There are many factors to consider when developing a strategy, but one of the most important is your target market . Who are you trying to reach? What needs do they have that your business can address? Once you have a clear understanding of your target market, you can begin to develop a strategy that will allow you to reach them effectively.

In addition to your target market, you'll also need to consider your competition. Who are your competitors? What are they doing that's working, and what's not working? And finally, what can you do differently to stand out from the crowd? Answering these questions will help you develop a truly differentiated strategy.

Related: How Strategic Planning Transforms Chaos Into Confidence

Align your team

Once you have a clear and actionable strategy, it's time to start aligning your team . This means creating a clear and concise vision for your business and ensuring that everyone on your team is aware of and committed to achieving it.

It's also critical to establish clear roles and responsibilities within your team. Everyone should know what they are responsible for and how their work fits into the larger picture. By aligning your team, you can ensure that everyone is working toward the same goals and that your business is running like a well-oiled machine.

Accelerate your results

Once you have a clear strategy and an aligned team, it's time to accelerate your results. This means setting tangible goals and putting systems and processes in place to help you achieve them. But it also means having the right people on your team — those who are passionate about your company's mission and have the skills and experience to help you achieve your goals.

One of the best ways to accelerate your results is to develop a strategic advantage over the competition. You need to position your company as a market leader to achieve this. One way to accomplish this is through marketing and sales initiatives, product development and exceptional customer service.

Another way to develop a strategic advantage is to differentiate your company from the competition. Start by offering unique products/services or providing an exceptional customer experience . Whatever your differentiation strategy is, make sure it is clear to your team, and communicate it to your customers.

Related: Keys to Business Growth in 2022: Lead Your Team, Manage Yourself and Execute Your Strategic Plan

Advance your plan

As your business grows and evolves, it's crucial to constantly revisit and update your strategic plan. Strategic planning is not a one-time event but rather an ongoing process that should be reviewed regularly to ensure that your business is on track to achieve its goals.

Here are a few tips for updating your strategic plan:

Set realistic goals: Be sure to set achievable goals that are aligned with your company's mission and values. As your business grows and changes, so too will your goals.

Be flexible: The business world is ever-changing, so it's vital to be flexible in your planning. Be prepared to correct course when necessary in order to stay on track.

Keep your team involved: Strategic planning is not something that should be done in a vacuum. Make sure to involve your team in the process, so that everyone is on the same page and working towards the same goals.

Communicate, communicate, communicate: Once your strategic plan is finalized, be sure to communicate it to all members of your team. Strategic planning is only successful if everyone knows and works towards the same goals.

A strategic plan is a great tool to have in your arsenal. It is capable of helping your business achieve great things. Here are a few examples:

Strategic planning can help you double the cash flow rate: Strategic planning can help you manage and control your finances more effectively. Having a clear plan in place gives you a roadmap to follow and helps you make better financial decisions.

Strategic planning can help you triple your industry average for profitability: A well-crafted strategic plan can help you focus on the most profitable areas of your business and make decisions that will increase your profitability.

Strategic planning can help you increase valuation relative to competitors: Strategic planning can help you create a sustainable competitive advantage and position your business for success in the long-term. By developing a clear plan, you can make decisions that will help you stand out from your competitors and make your business more valuable.

Strategic planning can help you grow shareholder, employee and customer value: Strategic planning can help you create shareholder value by growing your business and increasing your profitability. It can also help you attract and retain employees by providing them with a clear sense of purpose and direction. And finally, it can help you win and keep customers by providing them with a superior product or service.

Strategic planning is essential to any business and should be given the attention it deserves. With a well-thought-out strategic plan, your business can reach new heights. By following these simple tips, you can ensure that your strategic planning process is successful and that your business achieves its goals.

CEO of Mascari Strategy Group L.L.C.

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How to Develop a Business Strategy: 6 Steps

• 25 Oct 2022

Business strategy can seem daunting, and for good reason: It can make or break an organization. Yet, developing a strong strategy doesn’t need to be overwhelming.

In the online course Business Strategy , Harvard Business School Professor Felix Oberholzer-Gee posits that strategy is simple. His secret? Focus on your organization’s value creation.

“Strategy often sounds like a lofty concept that only the most senior executives can develop,” Oberholzer-Gee says. “But actually, anyone can think and act strategically. It doesn’t need to be difficult; all you need is a proven framework.”

Here’s a breakdown of why business strategy is important, the basics of value-based strategy, and six steps for developing your own.

Why Do You Need a Business Strategy?

Business strategy is the development, alignment, and integration of an organization’s strategic initiatives to give it a competitive edge in the market. Devising a business strategy can ensure you have a clear plan for reaching organizational goals and continue to survive and thrive.

According to a study by Bridges Business Consultancy , 48 percent of organizations fail to meet half of their strategic targets and 85 percent fail to meet two-thirds, highlighting why dedication to the business strategy process is crucial.

One type of business strategy is called value-based strategy, which simplifies the process by leveraging the value stick framework to focus on the advantage your business creates.

Access your free e-book today.

What Is Value-Based Strategy?

Value-based strategy , also called value-based pricing, is a pricing method in which an organization relies on the perceived value of its goods and services to determine its pricing structure and resource allocation.

The value stick framework can be used to visualize how various factors impact each other and determine which initiatives to pursue to increase value for all parties.

The value stick has four factors:

• Willingness to pay (WTP) : The highest price a customer is willing to pay for your product or service
• Price : The amount customers have to pay for goods or services
• Cost : The amount a company spends on producing goods or services
• Willingness to sell (WTS) : The lowest amount suppliers are willing to accept for the materials required to produce goods or services

To determine how to best create value, you can toggle each factor on the value stick to see how the others are affected. For instance, lowering price increases customer delight.

"As strategists, we really ask three questions,” Oberholzer-Gee says in Business Strategy. “How can my business best create value for customers? How can my business create value for employees? And how can my business create value by collaborating with suppliers? Think of a company's strategy as an answer to these three questions."

Related: 4 Business Strategy Skills Every Business Leader Needs

6 Steps to Develop a Value-Based Business Strategy

1. define your purpose.

When approaching business strategy, defining your organization’s purpose can be a useful starting point.

This is vital in creating customer and employee value, especially if your organization’s purpose is linked to a cause such as environmental protection or alleviating specific social issues.

A recent survey conducted by clean energy company Swytch found that nearly 75 percent of millennials would take a decrease in salary if it meant working for an environmentally responsible company. Nearly 40 percent selected one job over another because of an organization’s sustainability practices.

Additionally, research in the Harvard Business Review shows that consumers’ motivation to buy from sustainable brands is on the rise. Sales of products marked as sustainable grew more than five times faster than those that weren’t.

By starting with purpose, your organization can create more value down the line.

2. Assess Market Opportunity

Next, understand your market’s competitive landscape. Which companies own shares of the market? What differentiates your competitors’ products from yours? Are there any unmet needs your organization could take advantage of?

Conducting this research before planning a strategy is critical in identifying how your organization provides unique customer value and opportunities to create even more.

3. Create Value for Customers

With an understanding of the market and your company’s purpose, you can determine how your organization provides unique or greater value and strategize ways to improve.

On the value stick, the value captured by customers is called “customer delight.” It can be increased by raising their willingness to pay and decreasing the product’s price. If lowering the price isn’t an option, brainstorm how you could make the product more valuable to customers, thus increasing their willingness to pay.

Some ways to create customer value include:

• Lowering the product’s price
• Increasing the product’s physical quality and longevity
• Providing quick, high-quality customer service and a smooth shopping experience
• Leveraging network effects , if applicable, to create a community of users
• Incorporating an environmental or social cause into processes, packaging, and branding

4. Create Value for Suppliers

In addition to creating value for customers, you also need to provide value for suppliers. Suppliers can include any company that provides raw materials, labor, and transportation to help your organization produce goods or deliver services.

Supplier surplus, also called supplier delight, is created when the cost of materials increases or their willingness to sell decreases. The relationship between a firm and its suppliers can be contentious, given that both want to increase their margins. Yet, there are ways to create value for both parties.

Some ways to create value for suppliers include:

• Agreeing to pay more for higher quality materials : While this increases the supplier surplus, it may also increase customer delight by raising willingness to pay, or increase the firm’s margin by allowing you to raise prices.
• Working with the supplier to increase efficiency : This strategy can increase supplier surplus by lowering the overall cost of the supplier’s labor and their willingness to sell.

5. Create Value for Employees

Creating value for employees is a critical part of an effective business strategy and can be assessed using the value stick. Think of your employees as the “supplier” of labor and the supplier margin as employee satisfaction.

Employee satisfaction can be increased by raising wages or lowering the minimum salary they’re willing to receive by delivering value in other ways. Satisfied employees may provide a better customer experience, resulting in increased customer delight.

The value you provide employees ensures they’re motivated to do their best work, develop their skills, and stay with your company long-term.

Some examples of ways to create value for your employees include:

• Offering competitive salaries and bonuses
• Offering benefits like ample paid vacation and sick days, generous parental leave, and wellness budgets
• Providing flexibility of work location, whether your team is fully remote or hybrid
• Aiding in professional development
• Creating a workplace rich with a diversity of experiences, identities, and ideas
• Fostering a supportive organizational culture

One example from Business Strategy is that of a call center for a diagnostics company. The employees were being paid minimum wage and expressed that the analytical nature of their phone calls with customers warranted higher pay. They also expressed pain points about cumbersome tasks and work conditions.

When a pay increase was implemented for all employees, along with operational changes to make processes smoother, employee productivity increased to the point that it balanced out the higher cost of salaries.

Because the employees’ satisfaction increased, they also began providing better experiences on the phone with customers. This increased the customers’ willingness to pay, directly impacting customer delight.

6. Map Strategy to Actionable Tasks and KPIs

Amidst creating value for each of the three groups, don’t forget the fourth party that needs value: your company. By creating value for employees, suppliers, and customers, you’re creating value for your firm, too.

To ensure you’re tracking to goals, determine your key performance indicators, what metrics constitute success, and how you’ll report results over time. Then, break each of the above value-creation goals into action items. For instance, what steps can you take to increase your employees’ compensation? Who will be responsible for each task?

Having actionable assignments and clear metrics for success will allow for a smooth transition from strategy formulation to execution.

Building Your Strategic Skill Set

By leveraging the value stick, you can create a business strategy that provides value to employees, customers, suppliers, and your firm.

To develop your strategies further and dig deeper into how to navigate value creation, consider taking an online course like Business Strategy . Professor Oberholzer-Gee walks through real-world examples of business challenges, prompts you to consider how you’d create value, and then reveals what those business leaders did and how you can apply the lessons to your organization.

Want to learn more about how to craft a successful strategy for your organization? Explore Business Strategy , one of our online strategy courses , to learn how to create organizational value. Not sure which course is the right fit? Download our free flowchart .

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• What is strategic planning? A 5-step gu ...

What is strategic planning? A 5-step guide

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. In this article, we'll guide you through the strategic planning process, including why it's important, the benefits and best practices, and five steps to get you from beginning to end.

Strategic planning is a process through which business leaders map out their vision for their organization’s growth and how they’re going to get there. The strategic planning process informs your organization’s decisions, growth, and goals.

Strategic planning helps you clearly define your company’s long-term objectives—and maps how your short-term goals and work will help you achieve them. This, in turn, gives you a clear sense of where your organization is going and allows you to ensure your teams are working on projects that make the most impact. Think of it this way—if your goals and objectives are your destination on a map, your strategic plan is your navigation system.

In this article, we walk you through the 5-step strategic planning process and show you how to get started developing your own strategic plan.

How to build an organizational strategy

Get our free ebook and learn how to bridge the gap between mission, strategic goals, and work at your organization.

What is strategic planning?

Strategic planning is a business process that helps you define and share the direction your company will take in the next three to five years. During the strategic planning process, stakeholders review and define the organization’s mission and goals, conduct competitive assessments, and identify company goals and objectives. The product of the planning cycle is a strategic plan, which is shared throughout the company.

What is a strategic plan?

A strategic plan is the end result of the strategic planning process. At its most basic, it’s a tool used to define your organization’s goals and what actions you’ll take to achieve them.

Typically, your strategic plan should include: 

Your company’s mission statement

Your organizational goals, including your long-term goals and short-term, yearly objectives

Any plan of action, tactics, or approaches you plan to take to meet those goals

What are the benefits of strategic planning?

Strategic planning can help with goal setting and decision-making by allowing you to map out how your company will move toward your organization’s vision and mission statements in the next three to five years. Let’s circle back to our map metaphor. If you think of your company trajectory as a line on a map, a strategic plan can help you better quantify how you’ll get from point A (where you are now) to point B (where you want to be in a few years).

When you create and share a clear strategic plan with your team, you can:

Build a strong organizational culture by clearly defining and aligning on your organization’s mission, vision, and goals.

Align everyone around a shared purpose and ensure all departments and teams are working toward a common objective.

Proactively set objectives to help you get where you want to go and achieve desired outcomes.

Promote a long-term vision for your company rather than focusing primarily on short-term gains.

Ensure resources are allocated around the most high-impact priorities.

Define long-term goals and set shorter-term goals to support them.

Assess your current situation and identify any opportunities—or threats—allowing your organization to mitigate potential risks.

Create a proactive business culture that enables your organization to respond more swiftly to emerging market changes and opportunities.

What are the 5 steps in strategic planning?

The strategic planning process involves a structured methodology that guides the organization from vision to implementation. The strategic planning process starts with assembling a small, dedicated team of key strategic planners—typically five to 10 members—who will form the strategic planning, or management, committee. This team is responsible for gathering crucial information, guiding the development of the plan, and overseeing strategy execution.

Once you’ve established your management committee, you can get to work on the planning process. 

Step 1: Assess your current business strategy and business environment

Before you can define where you’re going, you first need to define where you are. Understanding the external environment, including market trends and competitive landscape, is crucial in the initial assessment phase of strategic planning.

To do this, your management committee should collect a variety of information from additional stakeholders, like employees and customers. In particular, plan to gather:

Relevant industry and market data to inform any market opportunities, as well as any potential upcoming threats in the near future.

Customer insights to understand what your customers want from your company—like product improvements or additional services.

Employee feedback that needs to be addressed—whether about the product, business practices, or the day-to-day company culture.

Consider different types of strategic planning tools and analytical techniques to gather this information, such as:

A balanced scorecard to help you evaluate four major elements of a business: learning and growth, business processes, customer satisfaction, and financial performance.

A SWOT analysis to help you assess both current and future potential for the business (you’ll return to this analysis periodically during the strategic planning process). 

To fill out each letter in the SWOT acronym, your management committee will answer a series of questions:

What does your organization currently do well?

What separates you from your competitors?

What are your most valuable internal resources?

What tangible assets do you have?

What is your biggest strength? 

Weaknesses:

What does your organization do poorly?

What do you currently lack (whether that’s a product, resource, or process)?

What do your competitors do better than you?

What, if any, limitations are holding your organization back?

What processes or products need improvement? 

Opportunities:

What opportunities does your organization have?

How can you leverage your unique company strengths?

Are there any trends that you can take advantage of?

How can you capitalize on marketing or press opportunities?

Is there an emerging need for your product or service? 

What emerging competitors should you keep an eye on?

Are there any weaknesses that expose your organization to risk?

Have you or could you experience negative press that could reduce market share?

Is there a chance of changing customer attitudes towards your company? 

Step 2: Identify your company’s goals and objectives

To begin strategy development, take into account your current position, which is where you are now. Then, draw inspiration from your vision, mission, and current position to identify and define your goals—these are your final destination. 

To develop your strategy, you’re essentially pulling out your compass and asking, “Where are we going next?” “What’s the ideal future state of this company?” This can help you figure out which path you need to take to get there.

During this phase of the planning process, take inspiration from important company documents, such as:

Your mission statement, to understand how you can continue moving towards your organization’s core purpose.

Your vision statement, to clarify how your strategic plan fits into your long-term vision.

Your company values, to guide you towards what matters most towards your company.

Your competitive advantages, to understand what unique benefit you offer to the market.

Your long-term goals, to track where you want to be in five or 10 years.

Your financial forecast and projection, to understand where you expect your financials to be in the next three years, what your expected cash flow is, and what new opportunities you will likely be able to invest in.

Step 3: Develop your strategic plan and determine performance metrics

Now that you understand where you are and where you want to go, it’s time to put pen to paper. Take your current business position and strategy into account, as well as your organization’s goals and objectives, and build out a strategic plan for the next three to five years. Keep in mind that even though you’re creating a long-term plan, parts of your plan should be created or revisited as the quarters and years go on.

As you build your strategic plan, you should define:

Company priorities for the next three to five years, based on your SWOT analysis and strategy.

Yearly objectives for the first year. You don’t need to define your objectives for every year of the strategic plan. As the years go on, create new yearly objectives that connect back to your overall strategic goals . 

Related key results and KPIs. Some of these should be set by the management committee, and some should be set by specific teams that are closer to the work. Make sure your key results and KPIs are measurable and actionable. These KPIs will help you track progress and ensure you’re moving in the right direction.

Budget for the next year or few years. This should be based on your financial forecast as well as your direction. Do you need to spend aggressively to develop your product? Build your team? Make a dent with marketing? Clarify your most important initiatives and how you’ll budget for those.

A high-level project roadmap . A project roadmap is a tool in project management that helps you visualize the timeline of a complex initiative, but you can also create a very high-level project roadmap for your strategic plan. Outline what you expect to be working on in certain quarters or years to make the plan more actionable and understandable.

Step 4: Implement and share your plan

Now it’s time to put your plan into action. Strategy implementation involves clear communication across your entire organization to make sure everyone knows their responsibilities and how to measure the plan’s success. 

Make sure your team (especially senior leadership) has access to the strategic plan, so they can understand how their work contributes to company priorities and the overall strategy map. We recommend sharing your plan in the same tool you use to manage and track work, so you can more easily connect high-level objectives to daily work. If you don’t already, consider using a work management platform .  

A few tips to make sure your plan will be executed without a hitch: 

Communicate clearly to your entire organization throughout the implementation process, to ensure all team members understand the strategic plan and how to implement it effectively. 

Define what “success” looks like by mapping your strategic plan to key performance indicators.

Ensure that the actions outlined in the strategic plan are integrated into the daily operations of the organization, so that every team member's daily activities are aligned with the broader strategic objectives.

Utilize tools and software—like a work management platform—that can aid in implementing and tracking the progress of your plan.

Regularly monitor and share the progress of the strategic plan with the entire organization, to keep everyone informed and reinforce the importance of the plan.

Establish regular check-ins to monitor the progress of your strategic plan and make adjustments as needed. 

Step 5: Revise and restructure as needed

Once you’ve created and implemented your new strategic framework, the final step of the planning process is to monitor and manage your plan.

Remember, your strategic plan isn’t set in stone. You’ll need to revisit and update the plan if your company changes directions or makes new investments. As new market opportunities and threats come up, you’ll likely want to tweak your strategic plan. Make sure to review your plan regularly—meaning quarterly and annually—to ensure it’s still aligned with your organization’s vision and goals.

Keep in mind that your plan won’t last forever, even if you do update it frequently. A successful strategic plan evolves with your company’s long-term goals. When you’ve achieved most of your strategic goals, or if your strategy has evolved significantly since you first made your plan, it might be time to create a new one.

Build a smarter strategic plan with a work management platform

To turn your company strategy into a plan—and ultimately, impact—make sure you’re proactively connecting company objectives to daily work. When you can clarify this connection, you’re giving your team members the context they need to get their best work done. 

A work management platform plays a pivotal role in this process. It acts as a central hub for your strategic plan, ensuring that every task and project is directly tied to your broader company goals. This alignment is crucial for visibility and coordination, allowing team members to see how their individual efforts contribute to the company’s success. 

By leveraging such a platform, you not only streamline workflow and enhance team productivity but also align every action with your strategic objectives—allowing teams to drive greater impact and helping your company move toward goals more effectively. 

Strategic planning FAQs

Still have questions about strategic planning? We have answers.

Why do I need a strategic plan?

A strategic plan is one of many tools you can use to plan and hit your goals. It helps map out strategic objectives and growth metrics that will help your company be successful.

When should I create a strategic plan?

You should aim to create a strategic plan every three to five years, depending on your organization’s growth speed.

Since the point of a strategic plan is to map out your long-term goals and how you’ll get there, you should create a strategic plan when you’ve met most or all of them. You should also create a strategic plan any time you’re going to make a large pivot in your organization’s mission or enter new markets. 

What is a strategic planning template?

A strategic planning template is a tool organizations can use to map out their strategic plan and track progress. Typically, a strategic planning template houses all the components needed to build out a strategic plan, including your company’s vision and mission statements, information from any competitive analyses or SWOT assessments, and relevant KPIs.

What’s the difference between a strategic plan vs. business plan?

A business plan can help you document your strategy as you’re getting started so every team member is on the same page about your core business priorities and goals. This tool can help you document and share your strategy with key investors or stakeholders as you get your business up and running.

You should create a business plan when you’re: 

Just starting your business

Significantly restructuring your business

If your business is already established, you should create a strategic plan instead of a business plan. Even if you’re working at a relatively young company, your strategic plan can build on your business plan to help you move in the right direction. During the strategic planning process, you’ll draw from a lot of the fundamental business elements you built early on to establish your strategy for the next three to five years.

What’s the difference between a strategic plan vs. mission and vision statements?

Your strategic plan, mission statement, and vision statements are all closely connected. In fact, during the strategic planning process, you will take inspiration from your mission and vision statements in order to build out your strategic plan.

Simply put: 

A mission statement summarizes your company’s purpose.

A vision statement broadly explains how you’ll reach your company’s purpose.

A strategic plan pulls in inspiration from your mission and vision statements and outlines what actions you’re going to take to move in the right direction. 

For example, if your company produces pet safety equipment, here’s how your mission statement, vision statement, and strategic plan might shake out:

Mission statement: “To ensure the safety of the world’s animals.” 

Vision statement: “To create pet safety and tracking products that are effortless to use.” 

Your strategic plan would outline the steps you’re going to take in the next few years to bring your company closer to your mission and vision. For example, you develop a new pet tracking smart collar or improve the microchipping experience for pet owners. 

What’s the difference between a strategic plan vs. company objectives?

Company objectives are broad goals. You should set these on a yearly or quarterly basis (if your organization moves quickly). These objectives give your team a clear sense of what you intend to accomplish for a set period of time. 

Your strategic plan is more forward-thinking than your company goals, and it should cover more than one year of work. Think of it this way: your company objectives will move the needle towards your overall strategy—but your strategic plan should be bigger than company objectives because it spans multiple years.

What’s the difference between a strategic plan vs. a business case?

A business case is a document to help you pitch a significant investment or initiative for your company. When you create a business case, you’re outlining why this investment is a good idea, and how this large-scale project will positively impact the business. 

You might end up building business cases for things on your strategic plan’s roadmap—but your strategic plan should be bigger than that. This tool should encompass multiple years of your roadmap, across your entire company—not just one initiative.

What’s the difference between a strategic plan vs. a project plan?

A strategic plan is a company-wide, multi-year plan of what you want to accomplish in the next three to five years and how you plan to accomplish that. A project plan, on the other hand, outlines how you’re going to accomplish a specific project. This project could be one of many initiatives that contribute to a specific company objective which, in turn, is one of many objectives that contribute to your strategic plan. 

What’s the difference between strategic management vs. strategic planning?

A strategic plan is a tool to define where your organization wants to go and what actions you need to take to achieve those goals. Strategic planning is the process of creating a plan in order to hit your strategic objectives.

Strategic management includes the strategic planning process, but also goes beyond it. In addition to planning how you will achieve your big-picture goals, strategic management also helps you organize your resources and figure out the best action plans for success. 

Related resources

15 creative elevator pitch examples for every scenario

How Asana streamlines strategic planning with work management

How to create a CRM strategy: 6 steps (with examples)

What is management by objectives (MBO)?

How to make a business plan

Table of Contents

How to make a good business plan: step-by-step guide.

A business plan is a strategic roadmap used to navigate the challenging journey of entrepreneurship. It's the foundation upon which you build a successful business.

A well-crafted business plan can help you define your vision, clarify your goals, and identify potential problems before they arise.

But where do you start? How do you create a business plan that sets you up for success?

This article will explore the step-by-step process of creating a comprehensive business plan.

What is a business plan?

A business plan is a formal document that outlines a business's objectives, strategies, and operational procedures. It typically includes the following information about a company:

Products or services

Target market

Competitors

Marketing and sales strategies

Financial plan

Management team

A business plan serves as a roadmap for a company's success and provides a blueprint for its growth and development. It helps entrepreneurs and business owners organize their ideas, evaluate the feasibility, and identify potential challenges and opportunities.

As well as serving as a guide for business owners, a business plan can attract investors and secure funding. It demonstrates the company's understanding of the market, its ability to generate revenue and profits, and its strategy for managing risks and achieving success.

Business plan vs. business model canvas

A business plan may seem similar to a business model canvas, but each document serves a different purpose.

A business model canvas is a high-level overview that helps entrepreneurs and business owners quickly test and iterate their ideas. It is often a one-page document that briefly outlines the following:

Key partnerships

Key activities

Key propositions

Customer relationships

Customer segments

Key resources

Cost structure

Revenue streams

On the other hand, a Business Plan Template provides a more in-depth analysis of a company's strategy and operations. It is typically a lengthy document and requires significant time and effort to develop.

A business model shouldn’t replace a business plan, and vice versa. Business owners should lay the foundations and visually capture the most important information with a Business Model Canvas Template . Because this is a fast and efficient way to communicate a business idea, a business model canvas is a good starting point before developing a more comprehensive business plan.

A business plan can aim to secure funding from investors or lenders, while a business model canvas communicates a business idea to potential customers or partners.

Why is a business plan important?

A business plan is crucial for any entrepreneur or business owner wanting to increase their chances of success.

Here are some of the many benefits of having a thorough business plan.

Helps to define the business goals and objectives

A business plan encourages you to think critically about your goals and objectives. Doing so lets you clearly understand what you want to achieve and how you plan to get there.

A well-defined set of goals, objectives, and key results also provides a sense of direction and purpose, which helps keep business owners focused and motivated.

Guides decision-making

A business plan requires you to consider different scenarios and potential problems that may arise in your business. This awareness allows you to devise strategies to deal with these issues and avoid pitfalls.

With a clear plan, entrepreneurs can make informed decisions aligning with their overall business goals and objectives. This helps reduce the risk of making costly mistakes and ensures they make decisions with long-term success in mind.

Attracts investors and secures funding

Investors and lenders often require a business plan before considering investing in your business. A document that outlines the company's goals, objectives, and financial forecasts can help instill confidence in potential investors and lenders.

A well-written business plan demonstrates that you have thoroughly thought through your business idea and have a solid plan for success.

Identifies potential challenges and risks

A business plan requires entrepreneurs to consider potential challenges and risks that could impact their business. For example:

Is there enough demand for my product or service?

Will I have enough capital to start my business?

Is the market oversaturated with too many competitors?

What will happen if my marketing strategy is ineffective?

By identifying these potential challenges, entrepreneurs can develop strategies to mitigate risks and overcome challenges. This can reduce the likelihood of costly mistakes and ensure the business is well-positioned to take on any challenges.

Provides a basis for measuring success

A business plan serves as a framework for measuring success by providing clear goals and financial projections . Entrepreneurs can regularly refer to the original business plan as a benchmark to measure progress. By comparing the current business position to initial forecasts, business owners can answer questions such as:

Are we where we want to be at this point?

Did we achieve our goals?

If not, why not, and what do we need to do?

After assessing whether the business is meeting its objectives or falling short, business owners can adjust their strategies as needed.

How to make a business plan step by step

The steps below will guide you through the process of creating a business plan and what key components you need to include.

1. Create an executive summary

Start with a brief overview of your entire plan. The executive summary should cover your business plan's main points and key takeaways.

Keep your executive summary concise and clear with the Executive Summary Template . The simple design helps readers understand the crux of your business plan without reading the entire document.

2. Write your company description

Provide a detailed explanation of your company. Include information on what your company does, the mission statement, and your vision for the future.

Provide additional background information on the history of your company, the founders, and any notable achievements or milestones.

3. Conduct a market analysis

Conduct an in-depth analysis of your industry, competitors, and target market. This is best done with a SWOT analysis to identify your strengths, weaknesses, opportunities, and threats. Next, identify your target market's needs, demographics, and behaviors.

Use the Competitive Analysis Template to brainstorm answers to simple questions like:

What does the current market look like?

Who are your competitors?

What are they offering?

What will give you a competitive advantage?

Who is your target market?

What are they looking for and why?

How will your product or service satisfy a need?

These questions should give you valuable insights into the current market and where your business stands.

4. Describe your products and services

Provide detailed information about your products and services. This includes pricing information, product features, and any unique selling points.

Use the Product/Market Fit Template to explain how your products meet the needs of your target market. Describe what sets them apart from the competition.

5. Design a marketing and sales strategy

Outline how you plan to promote and sell your products. Your marketing strategy and sales strategy should include information about your:

Pricing strategy

Advertising and promotional tactics

Sales channels

The Go to Market Strategy Template is a great way to visually map how you plan to launch your product or service in a new or existing market.

6. Determine budget and financial projections

Document detailed information on your business’ finances. Describe the current financial position of the company and how you expect the finances to play out.

Some details to include in this section are:

Startup costs

Revenue projections

Profit and loss statement

Funding you have received or plan to receive

Strategy for raising funds

7. Set the organization and management structure

Define how your company is structured and who will be responsible for each aspect of the business. Use the Business Organizational Chart Template to visually map the company’s teams, roles, and hierarchy.

As well as the organization and management structure, discuss the legal structure of your business. Clarify whether your business is a corporation, partnership, sole proprietorship, or LLC.

8. Make an action plan

At this point in your business plan, you’ve described what you’re aiming for. But how are you going to get there? The Action Plan Template describes the following steps to move your business plan forward. Outline the next steps you plan to take to bring your business plan to fruition.

Types of business plans

Several types of business plans cater to different purposes and stages of a company's lifecycle. Here are some of the most common types of business plans.

Startup business plan

A startup business plan is typically an entrepreneur's first business plan. This document helps entrepreneurs articulate their business idea when starting a new business.

Not sure how to make a business plan for a startup? It’s pretty similar to a regular business plan, except the primary purpose of a startup business plan is to convince investors to provide funding for the business. A startup business plan also outlines the potential target market, product/service offering, marketing plan, and financial projections.

Strategic business plan

A strategic business plan is a long-term plan that outlines a company's overall strategy, objectives, and tactics. This type of strategic plan focuses on the big picture and helps business owners set goals and priorities and measure progress.

The primary purpose of a strategic business plan is to provide direction and guidance to the company's management team and stakeholders. The plan typically covers a period of three to five years.

Operational business plan

An operational business plan is a detailed document that outlines the day-to-day operations of a business. It focuses on the specific activities and processes required to run the business, such as:

Organizational structure

Staffing plan

Production plan

Quality control

Inventory management

Supply chain

The primary purpose of an operational business plan is to ensure that the business runs efficiently and effectively. It helps business owners manage their resources, track their performance, and identify areas for improvement.

Growth-business plan

A growth-business plan is a strategic plan that outlines how a company plans to expand its business. It helps business owners identify new market opportunities and increase revenue and profitability. The primary purpose of a growth-business plan is to provide a roadmap for the company's expansion and growth.

The 3 Horizons of Growth Template is a great tool to identify new areas of growth. This framework categorizes growth opportunities into three categories: Horizon 1 (core business), Horizon 2 (emerging business), and Horizon 3 (potential business).

One-page business plan

A one-page business plan is a condensed version of a full business plan that focuses on the most critical aspects of a business. It’s a great tool for entrepreneurs who want to quickly communicate their business idea to potential investors, partners, or employees.

A one-page business plan typically includes sections such as business concept, value proposition, revenue streams, and cost structure.

Best practices for how to make a good business plan

Here are some additional tips for creating a business plan:

Use a template

A template can help you organize your thoughts and effectively communicate your business ideas and strategies. Starting with a template can also save you time and effort when formatting your plan.

Miro’s extensive library of customizable templates includes all the necessary sections for a comprehensive business plan. With our templates, you can confidently present your business plans to stakeholders and investors.

Be practical

Avoid overestimating revenue projections or underestimating expenses. Your business plan should be grounded in practical realities like your budget, resources, and capabilities.

Be specific

Provide as much detail as possible in your business plan. A specific plan is easier to execute because it provides clear guidance on what needs to be done and how. Without specific details, your plan may be too broad or vague, making it difficult to know where to start or how to measure success.

Be thorough with your research

Conduct thorough research to fully understand the market, your competitors, and your target audience . By conducting thorough research, you can identify potential risks and challenges your business may face and develop strategies to mitigate them.

Get input from others

It can be easy to become overly focused on your vision and ideas, leading to tunnel vision and a lack of objectivity. By seeking input from others, you can identify potential opportunities you may have overlooked.

Review and revise regularly

A business plan is a living document. You should update it regularly to reflect market, industry, and business changes. Set aside time for regular reviews and revisions to ensure your plan remains relevant and effective.

Create a winning business plan to chart your path to success

Starting or growing a business can be challenging, but it doesn't have to be. Whether you're a seasoned entrepreneur or just starting, a well-written business plan can make or break your business’ success.

The purpose of a business plan is more than just to secure funding and attract investors. It also serves as a roadmap for achieving your business goals and realizing your vision. With the right mindset, tools, and strategies, you can develop a visually appealing, persuasive business plan.

Ready to make an effective business plan that works for you? Check out our library of ready-made strategy and planning templates and chart your path to success.

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Strategic Plans for Long-Term Growth: Examples and Strategies

Small to midsize businesses (SMBs) make up the vast majority of businesses in the US, according to the US Chamber of Commerce, and they are widely considered to be engines of innovation in the overall economy. But for many founders of these organizations, creating and maintaining strategic plans to keep those ships sailing smoothly five, ten, or even twenty years into the future can be immensely difficult. Don’t worry, though: We’ve got you covered. In this article, we’ll guide you through strategic planning examples and approaches for small to midsize companies in all types of industries. With a little foresight, you can ensure the strategic planning process is an effective means of building a company you’ll love forever .

If you want to:

• Move your organization in the direction you intend for long-term success.
• Implement your plan smoothly for greater growth.
• Use a better platform for developing a truly effective strategic plan.

… then you’ll love this guide. Let’s get started.

What’s Covered in This Guide

Click on each to jump to that section.

What Is Strategic Planning?

How many types of business plans are there, what is the goal of strategic planning.

• How Do I Become a Strategic Leader?

4 Examples of Strategic Planning Strategies

The strategic planning process in 11 steps, what does strategic planning involve, how to implement your strategic plan, examples of strategic plans, get your strategic planning done on ninety.

Strategic planning is the process you use to:

• Establish and document a clear direction for your organization.
• Identify business goals and set priorities that create growth for your company.
• Formulate a long-term plan of action designed to achieve these objectives.
• Determine an internal system tracking and evaluating performance.

When organizations want to, they use a strategic plan to:

• Strengthen their operation.
• Focus on collective energy and resources.
• Enable leaders, teams, and other stakeholders to work toward common goals.
• Make agreements around desired results.
• Refresh direction and prevail over a changing or challenging environment.

Thinking strategically helps companies take the right action for more success and better outcomes. Some even call it an art.

Strategic plans are one of three essential business plans used to pursue important objectives for your company. When tackling challenges and determining action plans, you can think strategically, tactically, or operationally. These three thought processes often work in concert to help you create a framework that achieves your desired objectives.

• Strategic plans are designed for multilevel involvement throughout the entire organization. Leaders will look ahead to where they want to be in three, five, and ten years and develop a mission.
• Tactical plans support strategic plans. They outline the specific responsibilities and functionalities at the department level so team members know how to do their part to make the strategic plan successful.
• Operational plans focus on the highly detailed procedures, processes , and routine tasks that frontline team members must accomplish to achieve desired outcomes.

The goal of your strategic plan is to determine:

• Where your company stands in relation to the current business environment. Understand how your business operates, how you create value , and how you differentiate from your competitors.
• Where you want to take the business based on Focus Filters such as your company’s Vision, culture, Core Values, and goals . Envision how you see the company 5–10 years from now.
• What you need to do to get there. You come away from your planning sessions with a road map that helps deliver on your strategic objectives. Determine better ways to enable and implement change, schedule deadlines, and structure goals so they’re achievable .

The main purpose of your strategic plan is to create clearly defined goals for achieving the growth and success your organization needs. These goals are connected to your organization’s Vision .

How Do I Become a Strategic Leader? 

Strategic leadership, also known as strategy execution, is how you create, implement, and sustain your strategic plan so your organization moves in the direction you intend for long-term success. This usually involves establishing ongoing practices and benchmarks, allocating resources, and providing leadership that supports your Vision.

Strategic leadership can employ two different approaches:

• A prescriptive approach is analytical and focuses on how strategies are created to account for risks and opportunities.
• A descriptive approach is principle-driven and focuses on how strategies are implemented to account for risks and opportunities.

Most people agree that a strategic plan is only as good as the company’s ability to research, create, implement, evaluate, and adjust when needed. The benefits can be great when:

• Your entire organization supports the plan.
• Your business is set up to succeed.
• Your team members are more likely to stay on track without being distracted or derailed.
• You make better decisions based on metrics that facilitate course correction.
• Everyone in your company is involved and invested in better outcomes.
• Departments and teams are aligned across your company.
• People are committed to learning, leading, and coaching .
• Productivity increases, and performance improves.
• Creativity is encouraged and rewarded.

What are the four main points of strategic planning? You engage in strategic thinking so you can create effective company goals that are:

1. Purpose-driven

Align your strategic plan with the Vision as you understand it.

2. Actionable

Actionable strategic goals are worth spending your time and resources on to reach organizational objectives.

3. Measurable

It’s critical for you to track your strategy's progress and success, enabling your teams to take action and meet the goals more effectively.

4. Focused Long-term

A long-term focus distinguishes a strategic plan from operational goals, which involve daily activities and milestones required for success. When planning strategically, you’re looking ahead to the company’s future.

A strategic plan isn’t written in a day: Critical thinking evolves over several months. Those involved in the strategic planning are usually a Senior Leadership Team and team members from your company and possibly other stakeholders.

When should strategic planning be done?

You should plan strategically for startups and newer organizations from the start. But even if your company is a more established small or midsize business, it’s not too late to start working on strategy.

Flexible timing that’s tailored to the needs of your organization is smart. Although the frequency of strategy sessions is up to you, many leaders use these milestones as a guide:

• When the economy, your market, and industry trends change, or a global event occurs (like the onset of a pandemic)
• Following a change in senior leadership
• Before a product launch or when a new division is added to your business
• After your company merges with another organization
• During a convenient time frame such as a quarterly and annual review

Many organizations opt to schedule regular strategic reviews either quarterly or annually. Especially when crafting a plan, your strategic planning team should meet regularly. They will often follow predetermined steps in the development of your long-term plan.

What are the 11 steps of strategic planning?

1. identify your company’s strategic position in the marketplace..

Gather market data and research information from both internal and external sources. You may want to conduct a comprehensive SWOT analysis . Your strengths and weaknesses are directly related to your current competitive advantage within your industry. They're what you use to balance challenges to your success. They also influence the likelihood of increased market share in the future.

2. Define your unique Vision.

What would success look like for you in three years? Five years? Ten years? Articulate that in your Vision. Formulating purpose-driven strategic goals articulates why your company does what it does. Your organizational values inform your Vision and connect them to specific objectives.

3. Determine your company’s value.

Many companies use financial forecasting for this purpose. A forecast can assign anticipated measurable results, return on investment, or profits and cost of investment.

4. Set your organizational direction.

Defining the impact you want to have and the time frame for achieving it helps focus a too-broad or over-ambitious first draft. This way, your plan will have objectives that will have the most impact. 

5. Create specific strategic objectives.

Your strategic objectives identify the conditions for your success. For instance, they may cover:

• Value: Increasing revenue and shareholder value, budgeting cost, allocating resources aligned with the strategic plan, forecasting profitability, and ensuring financial stability. 
• Customer Experience: Identifying target audiences, solution-based products and services, value for the cost, better service, and increased market share.
• Operational Efficiency: Streamlining internal processes, investing in research and development, total quality and performance priorities, reducing cost, and improving workplace safety.
• Learning and Growth: Training leaders and teams to address change and sustain growth, improving employee productivity and retention, and building high-performing teams.

6. Set specific strategic initiatives.

Strategic initiatives are your company's actions to reach your strategic objectives, such as raising brand awareness, a commitment to product development, purpose-driven employee training, and more.

7. Develop cascading goals.

Cascading goals are like cascading messages : They filter your strategy throughout the company from top to bottom. The highest-level goals align with both mid-level goals and the individual goals team members must accomplish to achieve overall outcomes. This helps everyone see how their performance will influence overall success, which improves engagement and productivity.

8. Create alignment across the entire company.

The success of your strategy is directly impacted by your commitment to inform and engage your entire workforce in strategy implementation. This involves ensuring everyone is connected and working together to achieve your goals. Overall decision-making becomes easier and more aligned.

9. Consider strategy mapping.

A strategy map is an easy-to-understand diagram, graphic, or illustration that shows the logical, cause-and-effect relationship among various strategic objectives. They are used to quickly communicate how your organization creates value. It will help you communicate the details of your strategic plan better to people by tapping into their visual learning abilities.

10. Use metrics to measure performance.

When your strategy informs the creation of SMART organizational goals , benchmarks can be established and metrics can be assigned to evaluate performance within specific time frames. Key performance indicators align performance and productivity with long-term strategic objectives. 

11. Evaluate the performance of your plan regularly.

You write a strategic plan to improve your company’s overall performance. Evaluating your progress at regular intervals will tell you whether you’re on your way to achieving your objectives or whether your plan needs an adjustment.

Effective strategic planning involves creating a company culture of good communication and accountability. It involves creating and embracing the opportunity for positive change.

Consider these statistics:

• In many companies, only 42% of leaders and 27% of employees have access to a strategic plan.
• Even if they have access, 95% of employees do not understand their organization's strategy.
• 5.2% of a strategy’s potential is lost to poor communication.
• What leaders care about makes up at least 80% of the content of their communications. But those messages do not tap into around 80% of their employees’ primary motivators for putting extra energy into a change program.
• 28% of leaders say one of the main reasons strategic initiatives succeed is the ability to attract skilled personnel; 25% say it’s good communication; 25% say it’s the ability to manage organizational change.

Here’s what you can do to embrace a culture of good communication and accountability:

Make your strategic plan visible. Talk about what's working and what isn't. People want to know where and how they fit into the organization and why their contribution is valuable — even if they don't understand every element of the plan.

Build accountability. If you've agreed on a plan with clear objectives and priorities, your leaders have to take responsibility for what's in it. They must own the objectives and activities in your plan.

Create an environment for change. It’s much more difficult to implement a strategy if you think there will be no support or collaboration from your team members. Addressing their concerns will help build a culture that understands how to champion change.

• 98% of leaders think strategy implementation takes more time than strategy formulation.
• 61% of leaders acknowledge that their organizations often struggle to bridge the gap between strategy formulation and its day-to-day implementation.
• 45% of leaders say ensuring team members take different actions or demonstrate different behaviors is the toughest implementation challenge; 37% of leaders say it’s gaining support across the whole organization.
• 39% of leaders say one of the main reasons strategic plans succeed is skilled implementation.

The reality for so many is that it’s harder to implement a strategic plan than to craft one. Great strategic ideas and a clear direction are key to success, no matter what. But so is:

• Turning strategic ideas into an easy-to-implement framework that enables meaningful managing, tracking, and adapting
• Getting everyone in the organization on the same strategic page, from creation to execution

When your plan is structured to support implementation, you're more likely to get it done.

What are examples of good strategic planning? If you prefer a more traditional approach, there's lots of templates out there to help you create a plan document with pen and paper whether you're a for-profit or nonprofit entity .

But Ninety has a better way.

The Vision planner is essentially a strategic planning template on Ninety’s cloud-based platform that allows you to:

• Set goals, establish how you will meet them, and share them with those who need to know.
• Gain visibility around your company's Core Values .
• Create Core Values, a niche, and long-term goals that are accessible to everyone in your company.
• Create a Vision that lets you know what needs to happen now.
• Easily update and track changes.
• Bring alignment to your entire organization.

And you can do all this with only two digitized pages.

In your Vision tool inside Ninety, you can easily access all the things that make strategic plans effective by either using our default categories or making custom ones that meet your company’s specific needs. While you can include information about your Vision, goals, SWOT analysis, and key performance indicators from the start, here are some examples of custom options you could add to help more effectively implement your strategic plan: 

• Executive Summary
• Elevator Pitch
• Compelling Why
• Industry Analysis
• Marketing Strategy
• Operations Plan
• Financial Projections

Your Vision and goals are also completely integrated with all other features on Ninety, such as Scorecards, Rocks, To-Dos, Issues, Org Chart , Meetings, 1-on-1s, and more:

• Create a clear game plan for each team.
• Determine one- and three-year goals.
• Reference past versions in a Vision archive.
• Share your Vision with all teams, or keep it private if it's still in progress.

Now that you’ve learned how to grow your company using strategic planning, it’s time to put your knowledge into practice:

Build your strategic plan on Ninety now .

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Strategic Planning

The art of formulating business strategies, implementing them, and evaluating their impact based on organizational objectives

What is Strategic Planning?

Strategic planning is the art of creating specific business strategies, implementing them, and evaluating the results of executing the plan, in regard to a company’s overall long-term goals or desires. It is a concept that focuses on integrating various departments (such as accounting and finance, marketing, and human resources) within a company to accomplish its strategic goals. The term strategic planning is essentially synonymous with strategic management.

The concept of strategic planning originally became popular in the 1950s and 1960s, and enjoyed favor in the corporate world up until the 1980s, when it somewhat fell out of favor. However, enthusiasm for strategic business planning was revived in the 1990s and strategic planning remains relevant in modern business.

CFI’s Course on Corporate & Business Strategy is an elective course for the FMVA Program.

Strategic Planning Process

The strategic planning process requires considerable thought and planning on the part of a company’s upper-level management. Before settling on a plan of action and then determining how to strategically implement it, executives may consider many possible options. In the end, a company’s management will, hopefully, settle on a strategy that is most likely to produce positive results (usually defined as improving the company’s bottom line) and that can be executed in a cost-efficient manner with a high likelihood of success, while avoiding undue financial risk.

The development and execution of strategic planning are typically viewed as consisting of being performed in three critical steps:

1. Strategy Formulation

In the process of formulating a strategy, a company will first assess its current situation by performing an internal and external audit. The purpose of this is to help identify the organization’s strengths and weaknesses, as well as opportunities and threats ( SWOT Analysis ). As a result of the analysis, managers decide on which plans or markets they should focus on or abandon, how to best allocate the company’s resources, and whether to take actions such as expanding operations through a joint venture or merger.

Business strategies have long-term effects on organizational success. Only upper management executives are usually authorized to assign the resources necessary for their implementation.

2. Strategy Implementation

After a strategy is formulated, the company needs to establish specific targets or goals related to putting the strategy into action, and allocate resources for the strategy’s execution. The success of the implementation stage is often determined by how good a job upper management does in regard to clearly communicating the chosen strategy throughout the company and getting all of its employees to “buy into” the desire to put the strategy into action.

Effective strategy implementation involves developing a solid structure, or framework, for implementing the strategy, maximizing the utilization of relevant resources, and redirecting marketing efforts in line with the strategy’s goals and objectives.

3. Strategy Evaluation

Any savvy business person knows that success today does not guarantee success tomorrow. As such, it is important for managers to evaluate the performance of a chosen strategy after the implementation phase.

Strategy evaluation involves three crucial activities: reviewing the internal and external factors affecting the implementation of the strategy, measuring performance, and taking corrective steps to make the strategy more effective. For example, after implementing a strategy to improve customer service, a company may discover that it needs to adopt a new customer relationship management (CRM) software program in order to attain the desired improvements in customer relations.

All three steps in strategic planning occur within three hierarchical levels: upper management, middle management, and operational levels. Thus, it is imperative to foster communication and interaction among employees and managers at all levels, so as to help the firm to operate as a more functional and effective team.

Benefits of Strategic Planning

The volatility of the business environment causes many firms to adopt reactive strategies rather than proactive ones. However, reactive strategies are typically only viable for the short-term, even though they may require spending a significant amount of resources and time to execute. Strategic planning helps firms prepare proactively and address issues with a more long-term view. They enable a company to initiate influence instead of just responding to situations.

Among the primary benefits derived from strategic planning are the following:

1. Helps formulate better strategies using a logical, systematic approach

This is often the most important benefit. Some studies show that the strategic planning process itself makes a significant contribution to improving a company’s overall performance, regardless of the success of a specific strategy.

2. Enhanced communication between employers and employees

Communication is crucial to the success of the strategic planning process. It is initiated through participation and dialogue among the managers and employees, which shows their commitment to achieving organizational goals.

Strategic planning also helps managers and employees show commitment to the organization’s goals. This is because they know what the company is doing and the reasons behind it. Strategic planning makes organizational goals and objectives real, and employees can more readily understand the relationship between their performance, the company’s success, and compensation. As a result, both employees and managers tend to become more innovative and creative, which fosters further growth of the company.

3. Empowers individuals working in the organization

The increased dialogue and communication across all stages of the process strengthens employees’ sense of effectiveness and importance in the company’s overall success. For this reason, it is important for companies to decentralize the strategic planning process by involving lower-level managers and employees throughout the organization. A good example is that of the Walt Disney Co., which dissolved its separate strategic planning department, in favor of assigning the planning roles to individual Disney business divisions.

An increasing number of companies use strategic planning to formulate and implement effective decisions. While planning requires a significant amount of time, effort, and money, a well-thought-out strategic plan efficiently fosters company growth, goal achievement, and employee satisfaction.

Additional Resources

Thank you for reading CFI’s guide to Strategic Planning. To keep learning and advancing your career, the additional CFI resources below will be useful:

• Broad Factors Analysis
• Scalability
• Systems Thinking
• See all management & strategy resources
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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.

Key Takeaways

• A business plan is a document detailing a company's business activities and strategies for achieving its goals.
• Startup companies use business plans to launch their venture and to attract outside investors.
• For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
• There's no single required format for a business plan, but certain key elements are essential for most companies.

Investopedia / Ryan Oakley

Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.

Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.

A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.

While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.

A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.

Common elements in many business plans include:

• Executive summary : This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
• Products and services : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
• Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
• Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
• Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.

Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.

2 Types of Business Plans

Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

• Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
• Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.

Why Do Business Plans Fail?

A business plan isn't a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections. Markets and the economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All this calls for building flexibility into your plan, so you can pivot to a new course if needed.

How Often Should a Business Plan Be Updated?

How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.

A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.

As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.

University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.

Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

Harvard Business Review. " How to Write a Winning Business Plan ."

U.S. Small Business Administration. " Write Your Business Plan ."

SCORE. " When and Why Should You Review Your Business Plan? "

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20 Reasons Why You Need a Business Plan in 2024

Written by Dave Lavinsky

What is a Business Plan?

A business plan is a document that details your business concept and strategy for growth. It provides details about your company, a competitive analysis, a market analysis, a marketing strategy to reach potential customers, and a financial plan so that you make the best possible decisions to start or grow your company. A good business plan will help you take your business idea and turn it into a tangible action plan for success.

What is the Purpose of a Business Plan?

A business plan serves as an essential tool for guiding a company’s direction and decision-making processes. Its core purpose is to provide a detailed roadmap that communicates the company’s mission and vision, long-term objectives, and tailored strategies intended to steer the business towards success. This living document plays a pivotal role in streamlining operations, achieving goals, and setting a foundation for sustained growth. The purposes of a business plan include:

• Creating an Effective Growth Strategy : It outlines a comprehensive plan that identifies clear steps and strategies for expanding the market presence and ideal customer base for the business.
• Determining Future Financial Needs : By creating financial projections, a business plan helps in understanding the capital requirements to fuel growth initiatives and sustain operations.
• Attracting Investors and Lenders : A well-crafted business plan is instrumental in drawing attention from potential investors, including angel investors and venture capitalists, by showcasing the growth potential and profitability prospects of the business.

By leveraging a business plan template , entrepreneurs can significantly enhance their ability to communicate their vision, attract necessary funding, and ensure that all stakeholders are aligned with the company’s strategic direction.

20 Reasons Why You Need a Business Plan

There are countless reasons why having a well-crafted business plan is essential to the success of any company. Here are top 20 reasons why a business plan is important:

1. To Prove That You’re Serious About Your Business

A formal business plan is necessary to show all interested parties — employees, investors, partners and yourself — that you are committed to building the business. Creating your plan forces you to think through and select the strategies that will propel your growth.

2. To Establish Business Milestones

The business plan should clearly lay out the long-term milestones that are most important to the success of your business. To paraphrase Guy Kawasaki, a milestone is something significant enough to come home and tell your spouse about (without boring him or her to death). Would you tell your spouse that you tweaked the company brochure? Probably not. But you’d certainly share the news that you launched your new website or reached $1M in annual revenues.

3. To Better Understand Your Competition

Creating the business plan forces you to analyze the competition. All companies have competition in the form of either direct or indirect competitors, and it is critical to understand your company’s competitive advantages or unique value proposition. And if you don’t currently have competitive advantages, to figure out what you must do to gain them.

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4. To Better Understand Your Customer

Why do they buy when they buy? Why don’t they when they don’t? An in-depth customer analysis is essential to a great business plan and to a successful business. Understanding your customers will not only allow you to create better products and services for them, but will allow you to more cost-effectively reach them via advertising and promotions.

5. To Enunciate Previously Unstated Assumptions

The process of actually writing a business plan helps to bring previously “hidden” assumptions to the foreground. By writing them down and assessing them, you can test them and analyze their validity. For example, you might have assumed that local retailers would carry your product; in your business plan, you could assess the results of the scenario in which this didn’t occur.

6. To Assess the Feasibility of Your Venture

How good is this opportunity? The business plan process involves researching your target market, as well as the competitive landscape, and serves as a feasibility study for the success of your venture. In some cases, the result of your business planning will be to table the venture. And it might be to go forward with a different venture that may have a better chance of long-term success.

7. To Document Your Revenue Model

How exactly will your business make money? This is a critical question to answer in writing, for yourself and your investors. Documenting the revenue model helps to address challenges and assumptions associated with the model. And upon reading your plan, others may suggest additional revenue streams to consider.

8. To Determine Your Financial Needs

Does your business need to raise funds? How much? One of the purposes of a business plan is to help you to determine exactly how much capital you need and what you will use it for. This process is essential for raising capital for business and for effectively employing the capital. It will also enable you to plan ahead, particularly if you need to raise additional funding in the future.

9. To Attract Investors

A formal business plan is the basis for financing proposals. The business plan answers investors’ questions such as: Is there a need for this product/service? What are the financial projections? What is the company’s exit strategy? While investors will generally want to meet you in person before writing you a check, in nearly all cases, they will also thoroughly review your business plan.

10. To Reduce the Risk of Pursuing the Wrong Opportunity

The process of creating the business plan helps to minimize opportunity costs. Writing the business plan helps you assess the attractiveness of this particular opportunity, versus other opportunities. So you make the best decisions.

11. To Force You to Conduct Market Research and Really Know Your Market

What are the most important trends in your industry? What are the greatest threats to your industry? Is the market growing or shrinking? What is the size of the target audience for your product/service? Creating the business plan will help you to gain a wider, deeper, and more nuanced understanding of your marketplace. And it will allow you to use this knowledge to make decisions to improve your company’s success.

12. To Attract Employees and a Management Team

To attract and retain top quality talent, a business plan is necessary. The business plan inspires employees and management that your great idea is sound and that the business is poised to achieve its strategic goals. Importantly, as you grow your company, your employees and not you will do most of the work. So getting them aligned and motivated will be key to your success.

13. To Plot Your Course and Focus Your Efforts

The business plan provides a roadmap from which to operate, and to look to for direction in times of doubt. Without a business plan, you may shift your short-term strategies constantly without a view to your long-term milestones. You wouldn’t go on a long driving trip without a map; think of your business plan as your map.

14. To Attract Partners

Partners also want to see a business plan, in order to determine whether it is worth partnering with your business. Establishing partnerships often requires time and capital, and companies will be more likely to partner with your venture if they can read a detailed information about your company.

15. To Position Your Brand

Creating the business plan helps to define your company’s role in the marketplace. This definition allows you to succinctly describe the business and position the brand to customers, investors, and partners. With the industry, customer and competitive insight you gain during the business planning process, you can best determine how to position your brand.

16. To Judge the Success of Your Business

A formal business plan allows you to compare actual operational results versus the business plan itself. In this way, it allows you to clearly see whether you have achieved your strategic, financing, and operational goals (and why you have or have not).

17. To Reposition Your Business to Deal with Changing Conditions

For example, during difficult economic conditions, if your current sales and operational models aren’t working, you can rewrite your business plan to define, try, and validate new business ideas and strategies.

18. To Document Your Marketing Plan

How are you going to reach your customers? How will you retain them? What is your advertising budget? What price will you charge? A well-documented marketing plan is essential to the growth of a business. And the marketing strategies and tactics you use will evolve each year, so revisiting your marketing plan at least annually is critical.

19. To Understand and Forecast Your Company’s Staffing Needs

After completing your business plan, you will not be surprised when you are suddenly short-handed. Rather, your business plan provides a roadmap for your staffing needs, and thus helps to ensure smoother expansion. Importantly your plan can not only help you understand your staffing needs, but ensure your timing is right as it is time consuming to recruit and train great employees.

20. To Uncover New Opportunities

Through the process of brainstorming, white-boarding and creative interviewing, you will likely see your business in a different light. As a result, you will often come up with new ideas for marketing your product/service and running your business. It’s coming up with these ideas and executing on them which is often the difference between a business that fails or just survives and one that thrives.

Make Your Business Planning Count

One of the most common reasons businesses fail is the lack of a clear, strategic plan that addresses key components of running a business. Business plans help in identifying and navigating the challenges that can derail a business’s success, including poor market analysis, inadequate financial planning, and an unclear business model. By taking the time to write a business plan, entrepreneurs can clarify their business strategy, identify potential obstacles before they arise, and establish company goals that will set you up for success.

About Growthink Since 1999, Growthink’s business plan experts have assisted thousands of clients in launching and growing their businesses, and raising more than $2.5 billion in growth financing.

Need help with your business plan? 

• Speak with a professional business plan consultant from our team.
• Use our simple business plan template .
• Check out our business plan examples .
• Or, if you’re creating your own PPM, you can save time and money with Growthink’s private placement memorandum template .
• Learn more about us via our Growthink Business Plan Review page

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Business plan vs Strategic Plan - What You Must Know

Like everything else in life, the nature of business needs a plan in place to follow and measure. Crafting a strategic roadmap isn't just a suggestion—it's a necessity.

This is one of the key elements of a startup or even a business division within an organization that is expanding or diversifying. It has every resource element and needs to be mapped out for the business, including projected milestones for the future.

However, every business strategist needs to know that there are some subtle differences between what constitutes a business plan, and the several differences it has with a strategic plan. Let’s walk through the different elements that comprise each and understand the outcome each aims to achieve.

Introducing The Business Plan

A business plan is exactly what the name suggests— a plan to start and run a business or a new entity of an existing business; usually either an expansion in a newer region or a diversification into a new market. Business plans are mainly created for internal reference purposes or external funding purposes, with the latter being the common usage. They form the basis of all business strategies and decisions made at the ownership level in an organization. The most essential components of a business plan include:

Organizational Plan - This is the core of a business plan, and it includes the mission and vision statement, along with the market in which the company plans to operate. This plan also encompasses thorough market research to gauge the potential of the business, crucial for securing funding or sponsorship. It articulates the rationale behind the business's growth trajectory, outlining clear timelines for achieving milestones along the way.

Financial Plan - A robust financial plan is the bedrock of any successful business venture, where cash flow reigns supreme, and a meticulously crafted balance sheet serves as the ultimate scorecard. A financial plan includes some of the most important elements of the entire business plan and includes elements like projected cash flow statements, capital requirements, a summary of projected overheads, a projected balance sheet including assets and liabilities, and income and expense statements.

Remember to regard this as the central nervous system, for it permeates and influences almost every aspiration the enterprise hopes to attain.

Sales and Marketing Plan - We mentioned “almost” everything above for this very reason. Sales and marketing form the other significant component of the business plan. These include sales forecasts and overheads, marketing and brand management summaries, and market share projections that the business hopes to achieve within a time frame.

Business plans are indeed comprehensive and all-encompassing. They form the basis of the business's existence or the rationale for investments in it. But what about translating these plans into action? How do we ensure that the sky-high goals set forth are actually achievable?

The Actionables- A Strategic Plan

Strategic plans constitute the basis of operations and responsibilities within the business. These plans lay the paths out for each member of the organization to follow and define the functional outline and the key outcomes for every project and process within the business. A strategic plan goes on to define the operations and their outcomes within the organization, its departments, and its employees. The single thread connecting strategic planning with the business plan is the vision of the organization, and for obvious reasons— vision serves as the guiding light for strategy formation, which, in turn, directs the day-to-day operations of the business.

Why A Strategic Plan is Crucial to The Organization

In a word— synchronization. A robust and well-laid-out strategic plan establishes the much-needed sync between teams and their objectives. Not only that, it also provides a guide for daily operations alongside the focus and direction that teams often need to get the job done, on time and within budget. When all these components are integrated into a cohesive network, the true value of a strategic plan emerges—a seamless and grand orchestration of departments, teams, and individuals using the resources allocated to them to achieve the key performance indicator that they are responsible for.

Elements to Consider in a Strategic Plan

When tasked with creating a strategic plan for your business, you will need to incorporate certain components that will ensure that the stakeholders are aligned completely with the organization’s goals and objectives. These include:

Vision and Values - The vision statement is the most important component of the strategic plan and the most overarching. It propels the organization towards established goals and the values that every employee and stakeholder must incorporate.

Goals - These are short, medium, or long-term, depending on the scope of the strategic plan. They provide the much-needed context for the organization to undertake initiatives that meet the vision while maintaining the values.

Guiding Principles - Often, organizations face crossroads where they must decide which steps to take next, to reach their vision. Principles are included in strategic plans to align teams towards the vision when faced with a dilemma and form a critical part of strategic planning.

Action Plans - A sum of key initiatives, processes, and projects that are required to be performed on a pre-determined periodic basis for the goal to be accomplished. These also include the time frames for each stakeholder responsible for each option. They usually follow the DACI format for each action (Driver, Approver, Contributor, Informed)

SWOT Analysis - The quintessential component, the Strength, Weaknesses, Opportunities, and Threats analysis of the strategic plan lends context to all business actions vis-a-vis the external environment. This includes competitors, market forces and conditions, identification of internal and external threats, and several other factors.

Read This - SWOT Analysis: How to Strengthen Your Business Plan

Here’s a table highlighting the main differences between a Business Plan and a Strategic Plan with a focus on the key components of each—

Learning All About Strategic Planning

In all businesses, a strategic plan serves as the foundational blueprint, akin to a meticulously drawn map for a general. It provides the essential guidance and direction needed for the entire organization to navigate toward success. It is crucial, therefore, to acquire the necessary skills and certifications for employment as a business strategist who would be entrusted with creating it. Know more about how to become a successful and sought-after business strategist today!

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7 Reasons Why You Need a Strategic Plan

Strategic planning is a useful opportunity for businesses and organizations to take a look into the future and determine in which direction they want to go. It’s a great way to reinvigorate your team, get everyone on the same page and document your strategies. But many go without one. 

If you’re on the fence about creating a strategic plan for your company, here are 7 reasons why you definitely want to do so:

1. Defines and clarifies the mission .

Your mission is the driver of your organization or business. The mission gives the overall purpose of who you are and why you exist. It’s the key that helps to direct all decisions within your organization, laying the foundation for everything that you do. Wow, right?! It’s pretty significant. Businesses and organizations can often lose sight of the mission especially if the company has been around for a while. Things like expansion, change of leadership, difference in direction, etc. can make the mission seem a bit cloudy, especially for new comers. Devising your strategic plan helps you put the mission back into perspective, redefine who you are and make sure your goals and objectives are in line.

2.   Establishes realistic goals and objectives.

Setting goals and objectives are one thing, but that only matters if the goals and objectives are within the organization’s capacity to implement them. Developing your strategic plan allows you to look at key issues of capacity and then develop goals and objectives based on the resources you have allocated.

3. Aids with efficiency and focus.

As organizations and businesses grow and expand, its easy to lose focus. Efficiency can also become compromised if everyone is not clear on the direction in which the organization is headed. The strategic plan defines the base for what the organization or business is looking to achieve in the long term. This helps everyone stay clear on what needs to get done in the shorter term.

4. Builds and increases team spirit.

Teams work together more effectively when everyone is clear on their role as it relates to the bigger picture. Teams can become disruptive, unresponsive and lose momentum when there is no defined focus and direction. The strategic plan becomes a source for connectivity, team cohesion and excitement.

5. Provides a tool for effective communication. 

Communication is key to any project, organization or venture. The strategic plan communicates easily the intent of the organization over the long term. For those participating in the process, it provides an environment for brainstorming, creative thinking, an array of ideas and exploration, opening up doors of open communication and dialogue. For those coming afterwards, it gives a comprehensive view of where the organization wants to go stimulating both internal and external conversations around each individual’s role in progressing the plan forward.

6. Puts assumptions in writing, reducing organizational frustration.

A documented plan becomes a reference point for those within the organization. When a plan is in place that is utilized and available, it ensures that everyone from leadership and management on down are clear on the goals and objectives. This minimizes guessing and making incorrect assumptions. The plan is a reference point from which everyone can meet and come together on the next immediate steps.

7. Builds consensus about where an organization is going.

If you have two or more people coming together you’re going to have a variety of ideas as to the direction of the business or organization. The strategic plan and the planning process provides an opportunity for ideas to be brought to the table, discussed and agreed upon. Everyone will have a vision for the organization. The key is to take a look at what opportunities are available, strengths and weaknesses and to collaboratively set a course for moving forward.

The strategic plan is a valuable tool that can help businesses and organizations at almost any level. It’s purpose is to define a clear direction for where the company wants to go, how to move forward and what resources are needed to do so.

__________________________________________

The Business Practitioner offers strategic planning facilitation as well as Strategy Saturday for smaller organizations and businesses. ____________________________________________

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4 Common Reasons Strategies Fail

• Andrea Belk Olson

Stop blaming execution, and start identifying the underlying flaws.

Just because a strategy is formulated, doesn’t mean it’s ready for hand-off to the front-line for execution. Instead of reactively addressing failures during implementation, leaders need to examine whether the strategy was on solid footing in the first place. This requires stripping away assumptions to avoid four core errors, which often plague a strategy’s feasibility for being put in practice: 1) not understanding the problem; 2) not understanding the organization’s capabilities; 3) not understanding the immovable pressures; and 4) not understanding the cultural landscape. Examine whether the strategy considers the context in which it must be executed, as this is where uncertainty proliferates, and address potential pitfalls preemptively. This will ensure the team has the tools to deliver the hoped-for results. Successful strategy execution is a product of the fastidiousness of the plan itself.

Business strategies often fail. This is well-know by now: According to studies , some 60–90% of strategic plans never fully launch . The causes of derailment vary widely, but execution consistently bears the blame. While that can be — and perhaps often is — a fair diagnosis, it isn’t the whole story. The strategy design itself can be the real problem, however difficult that might be to admit.

• Andrea Belk Olson is a differentiation strategist , speaker, author, and customer-centricity expert. She is the CEO of Pragmadik, a behavioral science driven change agency, and has served as an outside consultant for EY and McKinsey. She is the author of 3 books, a 4-time ADDY® award winner, and contributing author for Entrepreneur Magazine , Rotman Management Magazine, Chief Executive Magazine , and Customer Experience Magazine .

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7 reasons strategic plans fail (and how you can avoid them)

Benjamin Franklin said: “By failing to prepare, you prepare to fail. ” This holds especially true in project management and business.

Consider setting out on a drive without first planning your trip. Without an ultimate destination, a map, weather forecasts, traffic updates, or knowledge of the route, you can’t expect to get anywhere fast. With unexpected issues and delays added into the mix, you might not get anywhere at all.

If you want your project to arrive in scope, on time, with all stakeholders happy, and a team that’s still intact, you need to plan ahead. Our planning best practices can help you do that.

Why plans fail

With so many factors in play, it will always be somewhat difficult to estimate plans accurately. However, many of the issues that cause plans to fail can be addressed preemptively with effective project management tools.

Here are some reasons why strategic initiatives and plans fail.

1. Unrealistic / unfocused goals

Strategic plans must be focused, including a manageable set of goals, objectives, and programs.

According to a study of project communication in industry , implementing effective communication methodologies as part of the planning process is crucial. Scope must be comprehensive, detailed, and crystal clear to all relevant stakeholders. Implementing a holistic planning process, building a realistic business direction for the future, and employing effective communication channels among teams greatly improves the chances for successful implementation of your overall business strategy.

2. Unnecessary complexity

Knowledge is power, and it can be tempting to provide exhaustive detail at every opportunity. However, excessive complexity creates more questions than it answers.

If you can’t effectively communicate strategic initiatives because of their complexity, team members can’t be expected to carry them out as intended. When constructing an overview, trust that less is more and provide only what is needed. Prioritize alignment over omniscience.

3. Inaccurate cost estimates

Accurately estimating costs is difficult, for good reason. It’s important. Unfortunately, projects often begin with only a vague (or hopeful) general cost estimate in place. The further a project is allowed to progress without adequate financial controls and checks in place, the higher the ultimate cost is likely to be. This extends beyond bottom-line financial costs to customer satisfaction and even your perceived reliability as a business.

Allow enough time to fine-tune your forecasting . It will save you time and money when it really matters.

4. Insufficient data

Relevant project data is often scarce in the initial planning phase – particularly in the software development realm. Poor data begets plans that are vague and misguided. Teams need a proper tool in place to help teams flexibly modify plans as a project evolves and more information becomes available.

If plans are made based on insufficient or misunderstood data, they are unlikely to succeed. This is especially true without contingency plans in place to mitigate issues encountered along the way.

5. Inflexible / undefined roles and responsibilities

Performance of project managers and team members is measured against how well a project delivers according to its designated plan. Problems arise when there is confusion over who is responsible for which aspects of that plan, or obstacles in the way of adjusting those responsibilities.

It is imperative that – from the outset – everyone involved in a project understands what their work will be, how it fits into the project as a whole, and to whom they will be reporting. It’s also important to have mechanisms by which their feedback can impact planning and project processes, particularly when changes in circumstances require it.

Projects change. Teams need room to adapt alongside them.

6. Poor resource planning

Resource planning is a crucial part of the project planning process. After all, plans depend on the people who deliver them. Project timelines and overall costs can be gravely affected by incorrect assumptions and estimates regarding human resource requirements. Resource planning needs to factor in team numbers, roles, skill levels, and capacity. Data and information is crucial throughout the project process to monitor availability and project status, and to inform any necessary course corrections.

Learn how to unlock your team’s potential with data-driven resource planning.

7. Rigid scope

Implementing a plan does not guarantee that all will go as expected. It’s never ideal when the scope of a project changes, and that can often be avoided through proper planning, but flexibility is an important fail-safe. Being adaptable and having a “Plan B” in place makes overall project success more attainable.

How can you keep your plans from failing?

Creating a robust plan before beginning its implementation has plenty of benefits. It enables betterorganization. It allows for a better understanding of objectives. It ensures project alignment with broader organizational goals. It illuminates potential issues. It reduces uncertainty. It empowers project teams to succeed.

Organizations that adopt project portfolio management (PPM) solutions , and conduct ongoing reviews of these projects, see a marked increase in success.

Well-defined project planning also provides a basis for monitoring and controlling work on the project, which is crucial to staying on top of schedules, milestones, costs, risks, and issues. Employing effective software measurement tools is therefore essential in both the immediate and long term – for early forecasting and estimates as well as measuring compliance and identifying trends or deviations along the way.

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More From Forbes

Two analyses that are key to strategic planning in business.

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José Luís González Rodriguez is a Partner of ActionCOACH Spain.

In my previous article , I noted that strategic planning continues to be an essential tool for the success and survival of companies. The ability to anticipate, adapt and direct resources toward specific goals is crucial in a competitive environment where changes are exponentially rapid.

In that article, I highlighted the numerous advantages of strategic planning supported by information from a survey involving 576 entrepreneurs and executives from various industries. We concluded that many companies see the need for a strategic plan, although in most cases, this plan isn't actioned out. Today, I want to present key tools for actually implementing strategic planning.

Strategic planning is a continuous process that allows organizations to establish long-term goals, identify their vision and mission, and analyze both internal and external environments. This approach encompasses the formulation of strategies, the implementation of actions and constant evaluation and adaptation.

To conduct effective planning, it can be wise to involve external advisors who can provide fresh perspectives and innovative proposals that respond to market changes. These strategic sessions, ideally held in a relaxed environment away from daily pressures, enable the executive team to develop a more realistic plan aligned with the company's needs. And it prevents the process from being improvised.

Strategic planning improves decision-making by providing a solid framework that facilitates the evaluation of options and the making of well-informed choices aligned with corporate objectives. Defining and clearly communicating goals and objectives enhances team alignment, fostering collaboration and ensuring a unified approach toward common goals.

Additionally, flexibility in planning is essential in a volatile business environment because it allows the company to quickly adapt to new challenges and maintain its competitiveness and innovation.

Conduct A SWOT Analysis

The first basic tool that should be incorporated into your strategic planning process is the SWOT analysis. SWOT is an acronym for strengths, weaknesses, opportunities and threats, and it's an indispensable tool.

This comprehensive analysis is divided into four key components, each of which provides a unique perspective on your company's position.

• Strengths: These are the internal advantages and assets that your company possesses. They may include highly skilled human resources, cutting-edge technology, a strong financial base or a recognized brand. Identifying your company's strengths helps maximize your competitive advantage.
• Weaknesses: Weaknesses are internal limitations or deficiencies that may hinder business performance. They may include poor management, lack of staff training or inefficient processes. Identifying weaknesses allows your company to work on ways to improve and become more efficient.
• Opportunities: Opportunities are positive external factors that your company can leverage. They may arise from market changes, technological advances, changes in regulation or emerging trends. Recognizing and capitalizing on opportunities is essential for growth and expansion.
• Threats: Threats are negative external factors that can affect your company. They may include aggressive competitors, unfavorable economic changes or unexpected events like pandemics. Identifying threats allows your company to take proactive steps to mitigate risks.

Conduct An Environmental Analysis

The second tool or activity key to strategic planning is to conduct an environmental analysis.

The business environment is dynamic and ever-changing. Factors such as global economic conditions, disruptive technological advances, changes in government regulations and changing consumer preferences can have a significant impact on your company. An environmental analysis is a key method for better anticipating challenges and capitalizing on opportunities, which are crucial for survival and growth.

AI tools can be helpful here, as they can synthesize information into a comprehensive presentation that you can continuously update with new content.

Here are some examples of factors to consider:

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• Government efficiency, transparency and accountability

Companies House business plan 2024 to 2025

• Companies House

Published 12 August 2024

© Crown copyright 2024

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Chair and chief executive’s foreword

As we begin the fifth and final year of delivering our 2020 to 2025 strategy, we are hugely excited to embark on the first stages of implementing the landmark Economic Crime and Corporate Transparency Act 2023. It is without doubt one of the most significant moments for Companies House in our long history.

We have known for some time that UK companies have been misused by criminals to commit fraud, money laundering, and other forms of economic crime, and our thoughts have always been with those affected. With the legislation in place that has given the registrars new and enhanced powers, we will now be able to take unprecedented steps to crack down on fraudulent activities, help victims of identity fraud more quickly, and clean up the register by removing information we know to be incorrect or misleading.

These new and enhanced powers enable us to prevent further abuse of the register and to play an even greater role in the cross government approach in identifying, disrupting and preventing economic crime.

This will underpin our efforts to drive up the accuracy of the information held on the registers – improving the quality and reliability of our data which, in turn, will increase the value of the registers for businesses across the UK and beyond.

We will be focusing our attention this year on the highest priority areas of legislative reform and will be further ramping up our work in implementing the significant changes to our processes and systems. Our teams will be bringing in new ways of working and we will be testing, learning and evolving our skills and practices at pace to deliver on our new role.

Our ambition is clear – to act as quickly as possible in implementing the legislation and start to make a real difference. However, we have also been clear that we will continue to take a phased and prioritised approach to introducing these changes. Some changes will need a significant amount of secondary legislation, and some will require comprehensive change to our systems and processes – all of which will take time to achieve.

We also must ensure that while we’re implementing such a significant programme of change, we need to maintain our existing services for our customers, and continue to use our resources efficiently and effectively.

We are proud to be driving confidence in the economy by creating a transparent and accountable business environment. And that the use of our data informs business and consumer decisions, supports growth and helps disrupt economic crime. We remain confident that we can, and will continue to, balance the ease of doing business in the UK and effective regulation.

We are pleased to present Companies House’s corporate business plan for April 2024 to March 2025.

John Clarke - Chair of Companies House.

Louise Smyth - Chief Executive and Registrar of Companies for England and Wales.

About Companies House

Companies House is an executive agency of the UK Government, sponsored by the Department for Business and Trade (DBT). We hold the UK’s register of companies and the Register of Overseas Entities.

Through the accuracy and transparency of the information we make freely available about companies on the registers, we support and promote confidence and growth in the UK economy.

Over 1,400 people work for Companies House. We have offices in Cardiff, Edinburgh and Belfast. 

Louise Smyth is the Chief Executive of Companies House, the Registrar of Companies for England and Wales and the Regulator for Community Interest Companies. The Registrar of Companies for Scotland is Lisa Davis and Lynn Cooper is the Registrar of Companies for Northern Ireland.

Our main board consists of the chair, chief executive, executive directors and non-executive board members. The main board oversees all aspects of our organisation including performance, finances and strategic direction. The main board reports to the Department for Business and Trade on our governance, strategy, priorities and progress. 

Companies House is the home of company information. We:

• incorporate, maintain and dissolve companies
• publish company information to promote transparency and growth in the UK
• work in a cross government approach to disrupt and tackle economic crime

More than 5 million limited companies are registered in the UK, with over 500,000 new companies incorporated each year. We enable these businesses to fulfil their statutory obligations throughout a company’s ‘lifetime’ – from incorporation to dissolution.

We aim to make it as smooth as possible for legitimate businesses to set up and run a company. In exchange for granting limited liability, we publish valuable information about companies. This provides corporate transparency and deters those who would use the registers for fraudulent purposes.   

We publish company information which is easily accessible and available free of charge. There were over 14 billion searches of our information last year by a wide range of people including businesses, researchers, government and many public bodies, as well as the general public.

Companies House also holds and maintains the Register of Overseas Entities. Owners of land or property in the UK who are based overseas must register their beneficial owners or managing officers with Companies House.

We set up the Register of Overseas Entities in August 2022. Over 30,000 overseas entities are now registered, providing transparency about who owns land or property in the UK. This makes it more difficult for those thinking of using UK property to hide illicit wealth. The information on this register has been searched just under 1 million times so far.

We play a key role in the cross government approach to identifying and disrupting economic crime. This means we:

• carry out intelligence and analysis on the data we hold
• proactively share information with trusted external partners to aid investigations
• where appropriate, provide crucial evidence to tackle economic crime and other criminal activity

Companies House also has a good reputation globally. We collaborate and share best practice with many other business registries around the world. We continue to play an active role in the Corporate Registers Forum (CRF) and European Business Registry Association (EBRA), two of the leading international associations of business registries.

Our purpose, vision and strategy

In 2020 we set out an ambitious 5 year corporate strategy with a clear purpose and vision for Companies House.

Our purpose

Our purpose is to drive confidence in the UK economy.

Our vision is to be the most innovative, open and trusted register in the world – with brilliant services delivered by brilliant people.

Our strategy

Our strategy contains 6 strategic goals that reflect our vision for Companies House. Each goal has a set of strategic outcome statements that describe what we aim to achieve by the end of March 2025.

Strategic goal 1: Registers and data that inspire trust and confidence

The strategic outcomes for this goal are that:

• we are clear with our customers about their statutory duties
• using our new powers has improved the quality of the data on our registers
• trust in the value of the data on our registers has increased

Strategic goal 2: Maximising the value of our registers to the UK economy

The strategic outcome for this goal is that the value of our registers to the UK economy has increased.

Strategic goal 3: Combatting economic crime through active use of analysis and intelligence

The strategic outcomes for this goal are that we:

• have an intelligence hub and are proactively identifying and investigating suspicious activity and misuse of our registers
• pursue those who misuse our registers
• authorise corporate service providers and proactively investigate and report those who facilitate the misuse of the registers

Strategic goal 4: Brilliant services that give a great user experience

• external user satisfaction with our digital services is high
• we will commence digital communications with companies, as first choice
• our digital services are easy to use and accessible, enabling users to file and get information right first time, and minimising avoidable contact and complaints

Strategic goal 5: Our culture enables our brilliant people to flourish

• our people embrace and facilitate our organisational changes and focus on building an inclusive positive culture to ensure a great user experience and service delivery for our customers
• our leaders and managers are equipped with the skills to build the culture and commitment we need to deliver our strategic goals and outcomes
• our diversity and inclusion activity is data driven, evidence led, and delivery focused
• our roles are aligned to civil service professions resulting in clearly defined career paths and development opportunities
• hybrid ways of working to support our strategy and transformation have been embedded​​​​​​​
• our strategic workforce plans ensure we have the right people in place at the right time, with the right skills to support our future strategic outcomes and objectives

Strategic goal 6: Delivering value through efficient use of resources

• a financial funding and fees model is established to deliver our services and strategy
• our investments deliver realised benefits and public value
• our functional standards are managed and maintained
• we have met our efficiency target
• internal controls and budgetary discipline are in place and are effective in enabling us to operate services within our budget allocation

Implementing new legislation to improve corporate transparency and tackle economic crime

The Economic Crime and Corporate Transparency Act (ECCT Act 2023) received Royal Assent in October 2023. The act introduces the biggest changes to Companies House since corporate registrations were established in 1844. We’ll have the power to play a far more significant role in tackling economic crime, supporting economic growth, and making sure the UK is one of the best places in the world to start and grow a business. 

The ECCT Act 2023 builds on the Economic Crime (Transparency and Enforcement) Act 2022, which introduced the Register of Overseas Entities. Together, they are a major step forward in strengthening Companies House’s role as outlined in the economic crime plans 1 and 2, to work across government on tackling economic crime and improving corporate transparency. 

The ECCT Act 2023 sets out 4 new objectives for the registrars to promote:

• ensure any person who is required to deliver a document to the register does so (and that the requirements for proper delivery are complied with)
• ensure information on the register is accurate and that the register contains everything it ought to contain
• ensure records kept by the registrar do not create a false or misleading impression to members of the public
• prevent companies and others from carrying out unlawful activities or facilitating the carrying out by others of unlawful activities

Delivering to these new objectives underpins our implementation of the ECCT Act 2023.

We have already begun to inform companies, and those submitting information on their behalf, of the changes to UK company law and their legal obligations. Throughout this year, as changes are rolled out, we will be continuing our information campaigns to ensure that the requirements for proper delivery are complied with. Alongside this we are making our systems and services easy to use and digital first, ensuring that our customers can do the right thing independently and easily.

We have already begun using our enhanced powers which came into effect on 4 March 2024. We are now able to query, remove and reject inaccurate information.  

Operating within our new compliance framework, we will make optimal use of our resources by adopting a targeted and proportionate approach.

We will also have a clear enforcement strategy in place and will be able to prosecute a number of new criminal offences. We will prosecute some of these offences directly. We’ll also work to investigate and prosecute in partnership with the Insolvency Service (INSS). These new criminal offences will result in a range of sanctions including imprisonment for the most severe of offences.

We will also have new sanctions specific to authorised corporate service providers (ACSPs). Under certain circumstances, the registrars will be able to suspend and de-authorise an ACSP from filing on the public register.

Through continued gathering and analysing of our own intelligence, and more proactive sharing across trusted partners across government and law enforcement agencies, we will now play a much more significant role in the fight against economic crime.

Our intelligence focus will align to our strategic intelligence assessment and support implementation of the registrars’ objectives. We will work closely with partners to tackle threats that apply to all of us, called ‘cross cutting threats’, ensuring that we prioritise those that cause significant harm to the public. Our intelligence function will also support our enforcement colleagues in dealing with non compliant companies. 

Having these new powers, combined with our intelligence and enforcement regime will help us:

• maintain the accuracy of the information on the register
• protect the public
• disrupt criminal activity

What we plan to deliver from April 2024 to March 2025

Strategic goal 1: our registers and data inspire trust and confidence.

Increasing the integrity and accuracy of information on the registers is central to our corporate vision and a fundamental part of the UK’s corporate transparency framework.

How we’ll progress towards strategic goal 1

We’ll prioritise cleaning up the existing information on the registers by identifying and removing information that we know to be inaccurate.

We’ll require companies to provide us with a registered email address and an appropriate registered office address. We’ll also issue a requirement for companies to confirm that they are forming the company for a lawful purpose when they incorporate and confirm that continued lawful purpose annually.

We’ll proactively use our new powers to ensure companies on the register have a legitimate address, in particular taking action against identity and address theft. We will stop the use of Royal Mail PO Boxes and equivalent services as an appropriate registered office address by the end of March 2025. We’ll take action against companies that do not have an appropriate office address or are using an address that has been hijacked, in line with the new legislation.

We’ll use our new and enhanced powers to query and reject information submitted to us, where it’s clear information is false, misleading or suspicious. In some cases, we will also annotate information on the register, at an individual and corporate level.

We’ll expedite the process of striking off companies so that we can act more quickly than we previously could, where we have evidence of fraudulent information. This is particularly important where personal information has been used without consent, and we will conduct appropriate investigations where this has happened.

We’ll introduce a registration process for third party agents to become authorised corporate service providers (ACSPs). This will be an early first stage of authorisation to become recognised to transact with us on behalf of a company and an important pre-cursor to completing an identity verification check. Setting up third party agents as ACSPs is a key measure to ensure only those who are authorised will be permitted to complete transactions with Companies House on behalf of registered companies.

We’ll get ready for the introduction of identity verification which will become mandatory for anyone setting up, running, owning or controlling a company in the UK, and those who file on behalf of companies. This year we will be developing the significant changes to our systems and service integrations required to release this major initiative. By the end of March 2025, we will have introduced the technical capability to verify an individual’s identity. This will begin a transition process for a phased roll out from Spring 2025 and beyond.

We’ll begin development of process changes to impose limits on the use of corporate directors, subject to certain exemptions, as set out under the Small Business Enterprise and Employment Act 2015.

We’ll develop processes that enable the suppression of personal information from the register, including suppression of the company’s registered office address, if it is a person’s residential address. We will also enable changes that will allow people who are personally at risk, rather than at risk due to the activities of the company, to apply for protection of their information.

We’ll scale up data governance processes within our new and existing services and data quality metrics, with measures in place for our most critical data points.

Informing companies and those affected by the new legislation is an important duty and the first of the registrars’ objectives. We’ll continue our external communications campaign to ensure that our customers, their agents and key stakeholders are fully aware of when and how they will be impacted by the changes and are confident about what they need do and by when.

Strategic goal 2: We maximise the value of our registers to the UK economy

The information we publish is used to support millions of business decisions, with its transparency contributing to the UK being regarded as a world leading place to do business. Research commissioned and published in 2019 estimated the value of the register to the UK economy to be worth over £1 to 3 billion per year.

We are confident that our work to improve the quality and availability of company information over the past 4 years of our strategy period, combined with the commitments we’re making this year, will:

• encourage greater confidence in the registers
• result in even greater use of the information on the registers
• contribute to maximising the value of our registers to the UK economy

As outlined throughout this business plan, the focus across the organisation this year will be on delivering the new legislation and enhanced powers and ensuring the promotion of the registrars’ new objectives.

All of the activities outlined under strategic goal 1 to clean up the register will improve the quality of the information we use and share, and as a result, will continue to increase confidence, trust and use of it.

In this way, we anticipate that the value of the information will continue to grow as we implement the reforms under the ECCT Act 2023. We plan to replicate the previous study we undertook to measure the value at a later date, when these changes have had time to embed.

We have also recently commissioned new research to understand the value of the information and intelligence we share with law enforcement partners and anti-money laundering regulated businesses. We will be working through and acting upon the findings and recommendations of this research throughout this financial year.

Strategic goal 3: We combat economic crime through active use of analysis and intelligence

With the ECCT Act 2023 in place, we can now:

• gather, analyse and proactively share more intelligence than ever before
• request data from other partners
• pursue collaborative working opportunities across government and with law enforcement organisations to disrupt and take action against criminal activity

We will develop a strategic intelligence assessment, alongside partners, to identify and assess strategic threats posed to the UK through misuse of corporate structures. We will also continually develop our understanding of how third party agents can be used to hide the identities of those seeking to abuse Companies House processes and the ways in which the true control of limited companies is obscured.  

Our strategic intelligence assessment will be followed by a control strategy and series of action plans to detail how we, working in collaboration with our partners, will focus our activities to take action related to each of those threats.

We have been onboarded to cross government intelligence sharing systems already.This, together with other data sets, will be used to take forward a multi agency disruption approach through proactive sharing of intelligence and analysis.

In addition, we have been receiving and scrutinising money laundering reports from entities required to carry out due diligence checks under the Money Laundering Regulations, called ‘obliged entities’ .

We already share data through European Union’s anti-money laundering regulations. We will continue building on this essential collaborative working this year and will pursue further partnerships that build on our cross working approach.

In addition, the economic crime plan 2 sets out an additional range of actions for us and our partners in this area. We will be taking these forward throughout the coming year.

To build our capability across all of our work in this new regulatory space we will be continually learning, testing and refining our approach, building in more checks to adapt to emerging integrity issues, and ensuring we continually make effective and consistent decisions that are proportionate to the problem.

How we’ll progress towards strategic goal 3

We’ll establish further relationships and memorandums of understanding (MOUs) with a range of law enforcement and intelligence agencies to share data and intelligence to enable a multi-agency disruption approach to tackling economic crime.

We’ll work with the Insolvency Service (INSS) to identify and take action in prosecution cases, with up to 250 cases referred to INSS each year.

We’ll increase data insights for intelligence and enforcement teams, required for identifying and analysing trends, taking action against non-compliance and pursuing enforcement action to tackle economic crime.

We’ll develop a strategic intelligence assessment, followed by a control strategy and series of action plans to take action, together with partners, against identified threats.

We’ll have an enforcement framework in place and take action in accordance with this for companies that are non-compliant We’ll ensure a process of continual learning, testing and refining our approach to compliance and enforcement.

We’ll build the systems, processes and capability to deliver a robust, joined up scrutiny process for onboarding ACSPs. We will undertake ongoing compliance, monitoring and enforcement where necessary, linking with anti-money laundering supervisors and the wider economic crime eco-system.

We’ll begin development of services that will enable the wide-ranging limited partnerships reforms which will bring legal requirements for limited partnerships in line with the requirements for limited companies. This will include the need for identify verification, increased transparency of data and invoking new powers to remove dormant partnerships.

Now that we have over 30,000 entities registered on the Register of Overseas Entities, our focus will switch to scrutinising the information on the register and understanding it’s impact. We will work with overseas company registers and UK Land Registry to identify those that have failed to comply with their obligations. We will actively follow up on information supplied and not updated, and use our querying powers to maintain and improve the accuracy of the information supplied, targeting individuals who attempt to avoid transparency.

We’ll work proactively, alongside our law enforcement colleagues, to disrupt the use of UK property to hide illicit wealth.

Strategic goal 4: Our brilliant services give a great user experience

Our corporate strategy set out our ambitions to become a digital first organisation where our digital services are designed to be easy to use and intuitive, so that our customers can do the right thing, first time.

We have achieved high levels of digital adoption of services already and are continuing to encourage customers to choose digital first. This is quicker for our customers, more efficient for us and saves costs for us all, while reducing our impact on the environment through reduced paper and post. 

We achieved consistently high digital service availability throughout 2023 to 2024 while managing a complex technology estate as well as innovating and responding rapidly to user needs. For example:

• 91% of over 14 million transactions per year are submitted and processed digitally
• 4.3 million advanced searches of the registers are made using advanced web functionality
• 99% of confirmation statements and incorporations are submitted digitally each year

This year we will maintain our existing infrastructure and aim to ensure that our digital services remain available for customers 99.5% of the time. 

Throughout this year we will be focusing on continuing the development and roll out of new services as we start to implement the changes brought about by the ECCT Act 2023. We will also be optimising our existing infrastructure to ensure we have reliable, secure and cost effective services that provide value for money.

How we’ll progress towards strategic goal 4

We’ll optimise our current IT services and infrastructure to ensure reliable, secure and cost-effective services that realise efficiencies and provide high performing, sustainable and accessible digital services for our customers and colleagues.

We’ll review and assess the future direction for an end to end service led model, consolidating our infrastructure, making it more flexible and adaptable to changing needs and leveraging new technologies including artificial intelligence (AI).

We are pleased with our audit report from the Welsh Language Commissioner in 2023 but are also committed to improving the bilingual services we offer from 2024.We’ll continue to build our Welsh language capability into our new digital services as they come on stream to comply with legal obligations. In addition we will take forward research with our service users, and prioritise our Welsh Language Scheme action plan.

We’ll continue to work with our customers and software vendors to help them prepare for future mandatory digital filing of financial accounts.

Strategic goal 5: Our culture enables our brilliant people to flourish and drives high performance

Our business plan could not be delivered without the commitment and dedication of our brilliant people. We continue to embrace and promote a positive and inclusive culture that supports everyone working at Companies House. We encourage everyone to bring their whole selves to work, celebrate diversity and provide opportunities for people at all levels to develop their skills. 

We are proud to have been recognised for the work we do to support our people through a Platinum Award by Investors in People (IIP). We’ve now received this award for the second time in a row, an accolade that only 5% of organisations across the world share.

This financial year brings huge opportunity and change to Companies House as we continue to transition to a more regulatory role, which is changing what we do and how we do it. Our fantastic people sit at the very heart of our transformation.

Over the year ahead our focus will be on ensuring we have the skills and capabilities we need to deliver on our new role. That will begin with phased recruitment, onboarding and training to new roles across the business.

As well as increasing our resource, we will ensure that we retain our excellent culture and build resilience at all levels by ensuring all our people feel involved, valued, engaged and heard. We will aim for our organisational behaviours and strong culture to be weaved through the fabric of our new role in society.

In 2023, our Edinburgh team moved to a new location within a Government Property Agency (GPA) hub. In 2024, our Northern Ireland office will change location. We will also be preparing for a potential move from our existing Cardiff office.

How we’ll progress towards strategic goal 5

We’ll continuously seek to innovate and improve our already strong employment brand and recruitment techniques. We will strengthen our outreach and employer brand campaigns to attract future talent and critical skills, particularly in digital and data. We will continue to build relationships with educational establishments and taking an innovative approach to attracting and developing our people by keeping abreast of the latest trends in industry.

We’ll continue to develop our workforce with a focus on building talent pipelines and career paths with the ongoing assessment and building of capability frameworks through Government Professions.

We’ll strive to build a true data culture at every level within the organisation through a commitment to delivering foundational data training to 90% of our people, new learning pathways for those roles responsible for data, and by growing our community of practice.

We’ll work collaboratively to drive high performance through increased levels of employee engagement and shared information. We’ll encourage an environment that embraces and facilitates change, celebrates success and is honest about our challenges. We’ll create opportunities for people’s voices to be heard and acted upon and championing our adaptable, bold and curious behaviours.

We’ll carry out the preparatory work for our confirmed and potential office moves. We’ll particularly focus on employee engagement and relations, maintaining our open and resilient culture, planning for effective use of space and place to enable new ways of working and high performance that is fit for the future.

Strategic goal 6: We deliver value through efficient use of resources

Companies House is committed to good governance and value for money.

Operating efficiently and effectively as part of central government is a core objective to achieve this strategic goal and underpins our work across Companies House. Working with others across government and more widely provides opportunities to be more efficient and effective within the resources available to us.

Throughout the coming year we focus on identifying and leveraging efficiencies through development and delivery of new and improved processes and systems that are needed to deliver our priorities.

We will continue to make evidence based decisions across all areas, including:

• how and when we prioritise our work
• identifying and implementing new ways of working that enable the most efficient use of our people
• looking for opportunities to invest to save where required
• outsourcing contracts where we can demonstrate it provides the best value for money

As technology continues to advance rapidly, we continue to explore opportunities and develop plans to achieve a digital infrastructure that is fit for the future. The government’s 2021 National AI Strategy highlighted the importance of using AI within the public sector and for the public good.

Following this, in March 2023 the Science and Technology Framework identified AI as one of the critical technologies for the UK to achieve its ambitions to be a science and technology superpower by 2030.

Throughout the coming year, we will continue to build our digital capabilities by seeking new and innovative ways to use technology to work smarter, increase automation, and gain efficiencies. This will include using machine learning and taking an incremental test and learn approach to the adoption of AI.

We will also continue to work across government to identify where shared services and joint working will support us to be able to deliver on our commitments and realise efficiencies.

How we’ll progress towards strategic goal 6

We’ll adopt the Government Efficiency Framework to support the delivery of efficiencies, by defining and categorising efficiency savings in line with government best practice.  

We’ll complete the move from our current office in Belfast to new premises and prepare for moving from our current Cardiff office, focusing on the efficient use of space and resource.

We’ll implement the Procurement Act 2023 which will involve updating our processes, guidance and documentation, and onboarding to the new central government portal for procurement, anticipated by autumn 2024.

We’ll achieve the Government Minimum Security Standards and reflect the expectations of the Government Security Group and National Technical Authorities in our policies and operations.

We’ll prepare a detailed AI adoption plan focused on improving productivity and delivery, and realising efficiencies.

Public targets

Our public targets for this year reflect the most significant commitments in our business plan for 2024 to 2025. These targets are agreed with the Minister of State, and published in both Houses of Parliament under their name.

Throughout the year we track and report progress against the delivery of these targets to our executive and main boards, and the Department for Business and Trade.

2024 public targets

1.Use our new powers to ensure companies on the register have a legitimate address - in particular, by taking action against identity and address theft:

• have been removed from the register;
• be pending removal; or,
• have been updated to an appropriate registered office address in accordance with the law
• eradicate the use of Royal Mail PO Boxes and equivalent services as a registered office address by companies on the register

2. Introduce the technical capability to verify an individual’s identity by March 2025: this will help ensure Companies House is prepared for the anticipated transition process whereby all new and existing company directors and persons of significant control will be required to verify their identity either directly through Companies House or through authorised third parties.

3. Develop a strategic intelligence assessment to identify the priority areas for action in the fight against economic crime, and act upon it.

4. Digital services are available for a minimum of 99.5% of the time.

5. All incoming calls into our contact centre are answered within an average of 4 minutes.

6. 80% of customers are satisfied with Companies House.

7. Manage expenditure within budgetary limits and utilise central government funding.

Monitoring and reporting

Companies House regularly monitors and reports progress against the commitments in this business plan throughout the year. In addition, Parliament and the public can review how Companies House is performing in our annual report and accounts .

More information can be found in Companies House official statistics and other public data sets.

Reports on the implementation and operation of parts 1 to 3 of the ECCT Act 2023 will be laid in Parliament in line with the statutory requirements.

Funding the plan

Companies House is funded through the Department for Business and Trade and through fees which are charged for services, as set out in legislation.

Fees are set on a cost recovery basis. This means that our fees must cover the cost of the services we deliver. We do not make a profit on our fees.  

In May 2024 we will increase our fees to cover the cost of the services we deliver and take future expenditure into account as we deliver the new powers and the wider package of reforms in the ECCT Act 2023. We will continue to review our fees every year to make sure they are set at the right level. 

Our transformation programme activity has benefited from financial support from the Department for Business and Trade following approval of our full business case in 2023 through to 31 March 2025.

Following a successful bid, we have secured additional funding via the Economic Crime (anti-money laundering) Levy (ECL) for a 3-year period, ending in March 2026. This funding will support our contribution to vision set out in the economic crime plan 2.

This table shows the Companies House budget delegations for 2024 to 2025.

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https://www.nist.gov/mep/successstories/2024/west-rivers-strategic-planning-leadership-transition-genedge

Manufacturing Extension Partnership (MEP)

West river's strategic planning / leadership transition with genedge, with the help of: genedge.

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The Challenge

West River faced a challenge as they were planning their future long term growth strategies and recognized a need for a plan to transition leadership to ensure sustainability and business continuity over the long term. The objectives were to visualize strategic execution deliverables, define the total level of effort, schedule, and costs over the strategic execution period, and unify leadership by communicating essential organizational dependencies in a quantitative, fact based, and logical manner. To achieve these goals, West River partnered with GENEDGE, part of the MEP National Network™, for facilitation of business growth planning and strategic transformation.

Working with GENEDGE helped our management group reinforce our commitment to sustainability and long-term growth. Bringing everyone together to develop a plan helped us mitigate our risks and work towards the identified necessary activities that must be done in order to grow our business. Sam and Mike were wonderful in helping facilitate the difficult conversations and we are appreciative of our time with, and knowledge gained from GENEDGE. — Jessica Savage , Chief Strategic Officer

MEP's Role

Over a two-day period, a GENEDGE subject matter expert engaged with West River's leadership team to dissect and refine their strategic objectives. The process involved extracting actionable blocks of activity necessary to achieve the company's goals, distinguishing operational tasks from strategic investments, and challenging leadership to pinpoint where resources should be invested or divested to focus on strategic endeavors over operational activities. This effort resulted in the development of a strategic roadmap to ensure organizational alignment and long-term viability.

Throughout the facilitation, a running risk register documented market, technical, schedule, cost, and quality gaps, while a resource allocation table and cost estimates were calculated quarterly for financial planning purposes. Despite the inherent uncertainty in strategy, the content was created with a 70 to 80% confidence level, acknowledging an acceptable error rate in cost and revenue forecasting. As successive projects unfolded, the error rate diminished as facts became clearer. The project successfully helped to establish West River plans for future growth and enabled confidence to execute transition from one leadership structure to another, enabling the owner to begin the retirement process.

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What Caused a Plane to Fall From the Sky in Brazil?

Officials are investigating potential causes of a plane crash that killed 62 people near São Paulo. Using videos and other clues, aviation experts have formed theories.

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By Jack Nicas and Ana Ionova

Jack Nicas, the correspondent in Brazil, previously reported on aviation and has covered multiple plane crashes. He and Ana Ionova reported from Rio de Janeiro.

Brazilian investigators on Saturday began analyzing the black boxes from a São Paulo-bound flight to try to understand why the passenger plane fell from 17,000 feet on Friday , in a crash that killed all 62 on board.

But to aviation experts around the world who watched the videos showing the 89-foot plane spinning slowly as it plummeted before crashing almost directly on its belly, the question of what had happened was simple to answer: The plane had stalled.

In other words, the plane’s wings had lost the lift needed to keep the aircraft aloft, causing it to stop flying and start falling.

“You can’t get into a spin without stalling,” said John Cox, an airline pilot for 25 years who now aids plane crash investigations. “It’s A plus B equals C.”

The question of why VoePass Flight 2283 might have stalled, however, remained a mystery.

Did it lose significant speed? Did its nose pitch up too high? Did ice build up on its wings? Did an engine fail? Was its stall-warning system working? Were the two pilots tired or distracted?

“The main thing we know is that it’s never one thing,” said Thomas Anthony, director of the aviation safety program at the University of Southern California.

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The global 'carry trade' is unwinding. Here's why it's a brutal force crushing stocks worldwide.

• The unwind of the global yen "carry trade" is a force battering stocks.
• Investors in recent years borrowed at low rates in Japan to invest in higher-yielding assets.
• The Bank of Japan's rate hike and potential Fed rate cuts triggered margin calls as the yen strengthened.

Stocks plunged on Monday, and market pros say a lot of it has to do with the global unwind of the yen "carry trade."

The carry trade refers to investors borrowing money at near-zero interest rates in Japan, and then redeploying that cash into higher-yielding assets around the world, such as stocks and bonds.

"The selloff here is to a large extent attributable to the unwind of the so-called carry trade," Ed Yardeni told Yahoo Finance on Monday.

Typically, the cheap cash raised in Japan is redirected into higher-yielding US Treasurys, with investors collecting the difference between the interest rates set by the Bank of Japan and the Federal Reserve.

But in times of strong risk-on sentiment, like the long period of bullishness that's fueled the stock market since the rally began in November 2022, the yen carry trade has spilled over into other assets like stocks.

"They took that money in and invested it in assets around the world including the Magnificent 7, Mexican assets, Brazillian assets, and some of that didn't go that far, they went into the Japanese stock market," Yardeni said.

But after the Bank of Japan unexpectedly raised interest rates 15 basis points last week amid the prospect of rate cuts by the Federal Reserve, the yen has strengthened. That's sparked a wave of margin calls, leading to speculators unwinding their positions and selling stocks.

"I think the proof of that is that it's a global sell-off, which suggests a lot of money was raised in Japan at 0% interest rates and used to speculate in other parts of the world, so I think that's all coming unglued and I think it's a lot of margin calls and I think it's going to happen pretty quick and the unwind should be over by the end of the week," Yardeni explained.

The unwind in the yen carry trade will go down as the biggest ever, according to a Monday note from Societe Generale.

SocGen's chief global currency strategist Kit Juckes said that while he is treating Monday's plunge in stock prices with suspicion, as big moves on Monday tend to "happen in a vacuum," there is still room for downside in the stock market and economy.

The risk going forward for markets isn't what the Japanese yen does, but rather what US tech stocks do, according to Juckes.

"The rally was huge, the valuations were stretched and Warren Buffett's liking for cash is making headlines again. If that market keeps falling, it will affect the economy and the Fed," Juckes said.

Juckes added: "The labour market remains tight, the economy is still growing. That would change if equities fell too far/fast, and it would change if the August jobs report at the start of September was very weak."

Yardeni maintained his positive outlook on stocks despite the sharp rise in market volatility.

"It's too late to panic is sort of my attitude towards this sell-off," Yardeni said. "I think the economy is doing better, and I'm blaming the weather for a lot of the weakness in July's employment report… and I still don't think we're going to get a recession out of all of this."

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