The Strategic Objective is all about Action. Knowing your Strategic Objective is the next step after defining the Primary Aim, which I covered in a post last week. What we want to do is create a clear statement of what has to be done to meet the personal goals from the primary aim.
This is not a business plan.
It is about deciding on a direction to move, and the actions (both short and long term) that will meet well defined benchmarks. The strategic objective is useful for marketing the business to your banker, investors, clients and business contacts. However it must be simple enough to lay out quickly for those people to understand, and buy in.
Essentially it’s just a list of standards by which to measure the success of the business. The twist is that it has to be about the specific actions that have to be done along the way.
The number one standard by which to measure success is money!
These are the questions you need to answer:
- What is the gross revenue you expect to have when you’re finished with the business?
- How many assets do you need to meet your primary aim?
- What kind of before and after tax profits do you want?
- When do you want to be ready to sell the business: in 2 years? 5 years? Or more?
Is your business idea worth pursuing? The strategic objective knows the answer. If you have a potential opportunity that needs to be assessed just ask yourself: does the opportunity have a good possibility of meeting the financial goals of your primary aim and your strategic objective. If and only if the answer is yes then the opportunity is one that should be pursued.
Once you have an opportunity that you want to pursue further there are some vital questions that should be explored.
- Does the business alleviate a frustration for enough people to have a market?
- Do you have an emotion that you can sell with the product? i.e. can you give people fantasy? Security? Laziness?
- What is the demographic of your customer, and how can you best market to them?
If it’s still a good idea, then it’s time to start developing a structure and rules to guide the business to success.
- Where can the business expand?
- Will it be retail or wholesale?
- What are your companies policies?
- How will you organize your reporting?
- Will you have a dress code?
- What will your hiring policies be?
- What about firing policies?
- Will you do any training?
Having these standards set can give a company energy because it makes it easier to know what the next thing to do is.
That’s a lot of work to do just to develop the business idea. Over the next week I’ll be going through these steps with a business idea that came my way a few days ago. I’ll go in detail about how this process works as I go through it myself.