Why a strategic plan is important to attract capital
by KEN PATEL
When organizations struggle to get a handle on spending, fail to meet goals, or have a hard time meeting commitments to customers, it’s often the result of a weak or non-existent strategic plan. Research conducted by Harvard Business Review found that 85% of leadership teams spend less than one hour per month strategizing, and 50% of leadership teams spend no time at all on strategy.
When leadership isn’t aligned on the strategic direction of an organization, it can have a massive impact on the growth of that organization, its financial standing, ability to attract capital, and its success. Here are five major ways that a thorough strategic plan will benefit your organization:
1. BUILDS A LIVING REFERENCE FOR BUSINESS DECISIONS
Not only should the leaders in any organization spend ample time discussing strategy, but that strategy should also be documented and monitored regularly. With a living, breathing document that clearly explains your organization’s overall strategy and the discrete components, all leaders – new and old alike – will be able to reference the strategy when making large business decisions. If something isn’t aligned with your strategy, you shouldn’t be focusing time, energy, and money on the action item.
2. BREAKS STRATEGY INTO ATTAINABLE GOALS
“Strategy” can sometimes feel large and ambiguous, making it hard to take action. With a strategic plan in hand, your leadership team can break the vision down into smaller, bite-size pieces, then figure out how to tactically articulate those components. With all your components outlined, your organizational goals can be monitored and met. It’s great to have your annual business plans developed from your strategic plan and extremely important to continuously update and maintain your five- or 10-year strategic plan to help drive alignment with long-term strategy and short-term goals.
3. ENSURES ALIGNMENT THROUGHOUT THE ORGANIZATION
If your teams aren’t on board with the goal you’re working toward, they won’t be able to see the connection between how the work they do fits directly into the goals of the organization. With a strategic plan, you can share and communicate your initiatives at all levels of the organization, you can create an alignment of a unified team, and boost the likelihood that your plan will come to fruition.
4. PROVIDES CLARITY TO INVESTORS
When looking for any type of outside funding, whether it’s a loan from a bank, an investment from friends and family – or even from an investment firm – a strategic plan is a minimum requirement. Your plan will show that you have an idea of your ultimate goals, the specific steps to take along the strategic journey, and give investors the chance to see your vision before deciding to put money in your bank account. Additionally, your plan will help you exude professionalism and sophistication so that investors see you as an expert and have confidence you can deliver on your promises.
5. HIGHLIGHTS AREAS FOR OPPORTUNITY AND GROWTH
You can’t make improvements if you don’t have visibility to the gaps and deficiencies in your own organization. By taking the time to flush out a strategic plan, your entire leadership team can self-diagnose what’s missing from your approach and take the necessary steps to fill those gaps. The growth of any organization depends on its leaders to perform a 360-degree SWOT analysis to understand the opportunities every year and make them a priority.
THE DATA DOESN’T LIE
Research shows that individuals are 42% more likely to achieve their goals when they write them down, and organizations are no different. With a fresh strategic plan and the organizational alignment it drives, your business performance will excel, and it will be easier to convince investors to help capitalize and support your vision.
Ken Patel is the owner and CEO of A&R Group. After immigrating to the U.S. in 1996, he began his career in the hospitality industry by managing a family-owned hotel. He soon became more familiar with the industry and decided to invest in his first hotel in 1998. With his tireless energy and passion for hospitality aided by a great deal of business knowledge and a drive and determination to succeed, Patel founded A&R Development Group, LLC. In addition, Patel has accumulated a portfolio of globally recognized brands such as Hilton, Intercontinental Hotel Group, and Wyndham.