Strategic management might sound scary, but it’s really just a fancy term for doing lots of planning, observing, analysing and evaluating your processes. It’s a systematic approach to running your business. Strategic management is based on your business plan and enables you to make intelligent decisions and achieve your overall business goals.
Let’s unpack what strategic management is and how it could help your business in this article, including:
- Benefits of strategic management
- Stages of strategic management
- How Countingup can help
Benefits of strategic management
With research and planning, strategic management can help you understand the current position of your business and where it’s headed in the future. Learn about how to create a long term business strategy here. Strategic planning can help you figure out how to reach your business goals. Ultimately, having a good strategy can have the following tangible benefits:
- A clear sense of direction
Acting without a strategy can waste a lot of time and resources on something that does not benefit your company. When you know the direction you want to take with your business, you’re better positioned to make decisions that help you achieve your objectives.
Having a clear vision and mission for your company makes it a lot easier to communicate what you do externally. In addition, sending out an easy to understand message can help raise awareness of your brand and even help find investors to back your business.
- A competitive advantage
Part of strategic planning in conducting thorough market research. You’ll probably gain a better understanding of your competitors, and you can think of ways to make your product better than theirs.
You’ll also get a clearer picture of how your industry operates as a whole and the unique challenges that companies in this area are facing. Find out more about why market research is so essential for small businesses here.
A better understanding of the challenges and opportunities for your company will help you adopt a more proactive approach to finding solutions. When you’re actively anticipating changes in the market, your company could have a better chance of succeeding.
- Achieving your goals
With strategic planning, you can set measurable, achievable, and meaningful goals. It helps achieve goals by formulating steps and putting them into action using a clear strategy.
It’s probably good to have a mix of short, medium and long term goals. This allows you to understand what you want the business to achieve within a year and know what to work toward for the next two or three years.
When you’ve outlined your strategic plan clearly, it will be much easier to evaluate how your business is doing in terms of reaching your goals. You can then make informed decisions of any changes needed for your business to do better.
Stages of strategic management
There are a few different approaches to strategic management, but most of them tend to focus on the same five steps:
- Creating a clear vision
The first step is to identify your short and long term goals and objectives. Once your goals are clear, you can start thinking about accomplishing them, and customise your processes based on what you want to achieve. This step also involves evaluating your company’s current mission and strategic direction.
- Gathering and analysing information
This step is about identifying your business’ current strengths and weaknesses. Gather as much information as possible about your company. What is currently working? What isn’t? Are you moving closer to your goals? And if not, what needs to change?
A handy tool for analysing the current state of your business is a SWOT analysis. A SWOT analysis is designed to help you identify strengths, weaknesses, opportunities and threats.
- Formulating your strategy
Now that you have a clear understanding of your business’ current state and goals, you can create an action plan for reaching your goals.
When you have a focused plan with clear steps to reach a goal, you can always refer back to it to follow your progress and share your strategy with others if needed.
- Implement the strategy
Once you have a clear strategy, all that’s left to do is execute the plan. By now, you should have a clear roadmap with specific steps to move you towards your outlined goals.
But make sure that all the resources and funds needed for implementing the plan are ready to go before you start. Then, once everything is ready to go, just follow the steps outlined in your strategic plan.
Evaluating your strategy is an ongoing process. In this step, you can reflect on how well your strategy is working and if it’s helping you towards your goals or not. To help you evaluate your progress, determine which parameters would be suitable to measure your success.
If you discover that your strategy isn’t getting you any closer to your goals, you can implement changes or even start creating a new approach altogether.
Make smarter financial decisions with Countingup
Thousands of business owners are using the Countingup app to save time on their financial admin and focus on growing their business.
Countingup is the business current account and accounting software in one app. It automates time-consuming bookkeeping admin for self-employed people across the UK.
With automatic expense categorisation, receipt capture tools and cash flow insights, you can confidently keep on top of your business finances and save yourself hours of accounting admin, so you can focus on doing what you do best. Find out more here.