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October 08, 2014 at 9:15 PM

Why You Need a Strategic Plan and a Business Plan

Strictly speaking, for larger organisations, a well-constructed Strategic Plan may be produced as a one page document which can be circulated throughout the organisation.

Strategic Planning is part of the corporate governance process as the plan will be signed off at Board level.


Strategic Plan




I work across a range of businesses with annual sales ranging from $500,000 with one employee to $35 million with 80 full and part-time staff.

The main reason we develop a Strategic Plan is to provide us with a strong focus with which to develop an effective business plan regardless of the size of the business. We end up with a far more powerful business plan if all resources are focused on achieving the strategies set out in the Strategic Plan. This helps to avoid confusion through ambiguity and reduces the prospect of wasting resources as a result of duplicated tasks within a business structure.

We use a strategic plan as a document that is primarily intended to be used internally by the organization to guide itself. In many cases the Strategic Plan is never seen by anyone outside of the organization.

It often contains information about organizational strategy that we don’t want in the hands of competitors.


Business Plan

A Business Plan, on the other hand, is usually used as a document to show others. We use Business Planning as the process which translates the Strategic Plan to each level and operational area of the organisation to ensure alignment with the Strategic Plan.

In a Business Plan we are able to put into action all of the tactics and tasks designed to make strategy happen. The Business Plan is at the coal face and deals with implementing the Marketing, Finance, Operations and Resources required to support the strategies stated in the Strategic Plan.

The diagram below is an excellent example of a strategy map designed to Sustain Shareholder Value.

View strategy map

Ref: Kaplan and Norton Harvard Business School Press.


Start Your Own

In summary, a business plan should define how you would like to operate your business. It deals at an implementation level always aiming to satisfy the objectives of the Strategic Plan, as above.

To kick-start your own planning, simply buy the guide I have written by clicking below and following the steps:

Business Plan vs Strategic Plan.

If you have any questions after reading the information, go to Contact Us on our website www.DaltonPlan.co.nz and type in your request.

by Dean Dalton DBA
Director, DaltonPlan® Business Action Planning Limited


THE PROOF

By Wallace Stewart
Managing Director
Ezyline Prebuilt Homes
www.EzylineHomes.co.nz
07 572 0230
0272 609 558

We build solid, practical homes for farms, rental properties or baches. We construct all of our houses at our yard in Mount Maunganui, and then we arrange transportation of the customer’s new home to their property - wherever that is in New Zealand. We have been in the building business for 35 years and our additional transportable home business is six years old. We have developed this aspect of our business and have built 77 houses in that time. We currently employ 12 people including qualified carpenters and office staff for administration.

We attended the Master Builders AGM in March this year where Dean Dalton gave a talk, and from that, I thought that doing a DaltonPlan® business plan at this stage of our business development was the right thing to do.  I was looking for guidance in terms of creating efficient operational systems and I also wanted his financial expertise to compare us with what a successful business can achieve in our industry to give us a goal to aim for.

We realized that we could improve our profitability when we compared our gross profit with the DaltonPlan Business Benchmarks for our industry. We should be able to reach the benchmark, which Dean pointed out to us, is being achieved by the top performers that he has worked with in our industry since 1999. This is our new target and will ensure increased profitability and future sustainability.

Every business has its challenges and one of our main ones is sales consistency. We want to balance the workload so we can manage our staff properly and optimise the use of our human resources. We want to take away the peaks and the troughs.

There are various levels that have to be looked at to increase profitability. The starting point is developing appropriate operational strategies so that we can manage the workflow and bring down our labour cost. Then we can look at streamlining processes. We will establish flow charts with our staff to smooth out all of our processes. This will save time during construction and improve our efficiency in communication, managing supplies and building processes. We’ll be in a much better position to deliver our homes to our customers.

In regards to our sales target, we have kept what was in place before and we are working on our marketing strategies to ensure we promote the “benefits” of an Ezyline Home over our competitors to keep up with these targets. We also need to adapt to new ways of communicating. For example, through social media. A more technology focused approach has been identified as an idea that we should explore further.

I believe that the work we have done with Dean and the changes that will come out of it will allow me to change my work/life balance and gain more peace of mind. I have enjoyed the work we did, it was very interesting and it has also involved our staff. It was good for everyone, delivering motivation, clear guidelines, structure and a road map for the future.

I look forward to the ongoing support from Dean over the next 12 months. Together we can assess the changes and adjust where necessary. We’re on the front foot.



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