In the first of a series on setting up a new firm, Steven Petty looks at the importance of a strategic plan in ensuring the business has appropriate goals – and achieves them
In early 2014, I, along with my long-time friend and colleague Paul Harrison, set up Feldon Dunsmore Solicitors, a niche commercial real estate practice. The process, both before and after launch, was a steep learning curve, and I’ll be outlining some of the more significant lessons we learnt in upcoming editions of Managing for Success. In this article, I look at one of the most important building blocks for a new firm: a strategic plan.
Any new business needs a business plan – and almost all established businesses have one, too. For new law firms, the authorisation process requires the production of a business plan, and your bank will frequently ask for a copy. This plan will provide profiles of the key personnel in the business; outline the competitors in the marketplace; and identify the customers of the business (the ‘who’). It will also detail the products and services the business provides and how they are provided (the ‘what’).
A strategic plan, however, seeks to establish how you will achieve your business goals and how you will measure your success (the ‘how’). It also sets a timescale for the implementation of the actions required to achieve your business goals (the ‘when’).
Strategic planning is often seen as the preserve of the large corporation rather than the smaller business, but its importance cannot be underestimated, especially for a new firm. Without a strategic plan, a business has no goals, no plans for achieving goals, and no means of measuring whether goals have been achieved. Without a strategic plan, a business is like a boat with no sails and no rudder. It might be perfectly seaworthy, but its ultimate destination is left completely to chance.
Preparing a strategic plan
Before we embarked on the process of preparing our strategic plan, we thought about who would be involved. A strategic plan starts with a vision for the business in three to five years’ time. It also includes the firm’s mission statement and its core values. It’s therefore essential that these ideas are clear and focused, and agreed by key owners of the business.
However, it is critical that everyone in the business takes ownership of its strategy, so once the vision and values of the business are established, they need to be communicated to all personnel. Unless everyone believes in the vision and adopts the core values, the plan is doomed from the start. In small and medium-sized law firms in particular, business owners often seem reluctant to involve employees in strategic planning, but if the firm’s employees feel disconnected from the owners’ vision for the firm, then it’s unlikely that vision will ever be realised.
Contents of a strategic plan
A strategic plan includes seven key elements, outlined below. Seven might seem daunting – it is tempting to think the process is more trouble than it’s worth. However, the list boils down to some short and simple concepts.
1. The vision
This is a statement which describes the business in three to five years’ time. It must be one that all owners of the business agree upon; if the owners can’t agree on a destination, there is little chance of the business arriving at all, never mind on time.
2. The mission
This should be a factual statement of the purpose and activities of the business. A common misconception is that a mission statement is a ‘soft’ statement of values. Google’s mission statement is “to organise the world’s information and make it universally accessible and useful”.
3. The values
This is where the business describes the softer side of its relationship with its customers, suppliers and the world at large. One of our key values at Feldon Dunsmore is: “Building trust / rapport with our clients is a critical first step in building the solicitor / client relationship.
4. The objectives
These are the key milestones the firm wants to achieve. They may include targets for turnover, profitability, number of employees, or new services the firm wishes to offer.
5. The strategies
These are the general guidelines for achieving the mission and objectives. A good example of a strategy a law firm might adopt is prioritising risk management to minimise professional indemnity risks.
6. The goals
These are measurements against which the success of the firm’s strategy will be measured – for example: “The firm will achieve annual turnover of £1m.”
7. The programs
This final element is the activities in the action plan for implementing the strategies. These should cover resources, objectives, timescales, deadlines, budgets and performance targets.
All of the elements of the plan should link together, so that the programs flow naturally from all the other elements. In my next article, I’ll outline how you put a plan into effect.