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Writing The Draft SACCO Strategic Plan/Manual

Successful saccos front cover

(extracted from Stupid Writers: Ojijo’s Guide to Writing Articles, Reports, Proposals, Profiles, Plans and Essays )

 

€        What is a Strategic Plan

A strategic plan is a list of activities to be performed in order to achieve certain targets, or goals.

An investment club strategic plan is hence a written plan that indicates where the investment club is today, and where it wants to be in a future time, listing the various steps that have to be taken to achieve the milestones.

According to Kotler, a leading strategist and leader,

‘in the strategic formulation, goals indicate what a investment club unit wants to achieve, and strategy is a game plan for getting there. Every investment club must tailor a strategy for achieving its goal.’

The strategy is the ‘what’ activity to be done; how, where, when and to whom.

“the devil is in the details, so is failure and successes.”

-Ojijo

Without a strategic framework I do not know where my going or why my going there.  So, then, it does not really matter how I get there!

Strategic planning gives me clarity about what I actually want to achieve and how to go about achieving it, rather than a plan of action for day-to-day operations.

The activities are based on the vision, the final picture of what the organization wants to realize; the activities are based on the final destination of where we want to be within a given time; the activities are it is based on the medium term and short term goals to reach that final destination. The final destination is the dream. But I need strategy to reach my dream.

Strategy is king

Indeed, in the words of the Great philosopher, General and military strategist Sun Tzu,

‘Action without strategy is simply the noise before defeat.’

 

The strategic plan is compass direction. It answers the great question of Peter F. Drucker,

 

‘What is our investment club – and what should it be?’

 

Strategic planning is setting the direction for my organization in a way that helps me identify and take advantage of emerging opportunities.

 

Strategic planning is about three variables,

 

RESULTS=ACTIVITIES=RESOURCES.

 

The process of planning typically involves working iteratively through multiple steps. I will commonly start by identifying results I want to achieve, and work backwards to identify the activities I will need to produce the results. Then, I will need to identify the resources I will need to carry out the activities. At the same time, the planning process generates substantial new knowledge as I proceed, that will cause me to rethink prior conclusions. I will typically need more than one pass to find a match between results, activities, and resources.

 

To become a successful investor, I should know the importance of a strategic plan, and learn to write one up. I should start with a strategic plan.

 

The strategic plan is the document that states what the investment club is, what it will do, how it will do it, and the value that it will give to the clients, and to myself as the investment club owner. Further, once the need to raise finance has been identified, it is necessary to prepare a strategic plan. If I intend to turn around a investment club or start a new phase of growth, a strategic plan is an important tool to articulate my ideas while convincing investors and other people to support it.

 

The strategic plan should also be updated regularly to assist in forward planning.

 

The very process of researching and writing the strategic plan should help clarify ideas and identify gaps in management information about my investment club, competitors and the market.

 

The strategic plan indicates who we are, what we want to do, to whom, how, and when. It then indicates how we will know that we are meeting our goals.

 

€        Sections of Strategic Plan

There are many contents of a strategic plan, which are divided mainly into five (5) main sections, namely,

  1. Organizational Profile
  2. Investment Club Activities/ Operational Plan//Goals/Objectives
  3. Situational Analysis (Feasibility Study)
  4. Performance Measurement
  5. Financial Plan

In detail, these areas cover:

$      Organizational Profile

This section is attached to the strategic plan, and shows the current status of the investment club, indicating the philosophy, people, products, partners, processes, profitability, and plans.

  1. philosophy, (this includes the name, address, legal nature, and location of the investment club)
  2. people, (this includes listing of board members, management, advisors, staff)
  3. products (this lists the products we have in the club, which can include loans, savings, insurance, etc)
  4. partners, (this lists our service providers, including utility service providers,  professionals services providers, etc)
  5. processes (this lists our policies and procedures in doing our activities, and includes credit policies, investment policies, recruitment policies, sales plans, marketing plans, customer care plans, and investment club systems of risk management)
  6. profitability, listing clients, cashflow, and capital base.
  7. plan, listing the future growth and or exit strategy.

$      Operational Plan /Investment Club Activities/Goals/Objectives

This section lists the activities that are to be carried out, based on the goals or objectives or targets of the organisation.

Operational plan is the step by step process of implementing the program, and includes the methodology, or procedure, or start up of project, through implementation of strategies, delivery of product, and measuring of performance.

The matrix lists the objective, or goal, followed by activities, outputs, and outcomes.

The budget, or cot of activities, can be inserted at this point.

In detail, the sections include:

  1. Goal or Objective: This is the ultimate, final destination being sought. Organizations have generally three to five goals, and these can cover membership recruitment, training and capacity building; investment; sales; branding; networking; and institutional development. The identification and realization of objectives determines the relevance and effectiveness of the organisation, respectively.
  2. Activities: These are the specific actions that are taken to fulfil the objective, and they can include training and capacity building; advocacy; purchasing land; research; report writing; etc. They are usually attached to costs element. Activities, and use of resources, determine the efficiency of the organisation to fulfil the resources.
  3. Outputs: These are the immediate results of an activity, and they include meetings held; reports published; advocacy campaign carried out; debates; trainings; etc. They determine the effectiveness of the organisation in fulfilling its objectives.
  4. Outcomes: The overall result of the activities is the long term, final, wider gain, by the various project stakeholders. This is the main objective, or main, goal, of the project. The realization of outcomes fulfils the sustainability, impact, and reach of the project.

The operational plan/activities, also includes the Growth & Exit Plan. This part of the plan indicates the procedure, processes and activities that will be carried out by the organisation so as to grow, or to exit the market, after realization of initial objectives.  These include:

  1. Increasing Sales/Profitability/Net Cashflow: This involves increasing the money flowing into the organisation by increasing the gross revenue, or profitability, or net cashflow.
  2. Investment & Expansion/Expanding To New Markets/Net Products/ Increasing Reach/Impact/Market Share: This involves increasing brand image of the company, or organization, by increasing market share, or program reach, or impact of activities. This involves expansion of the project.
  3. Exiting The Program/Market/Management/Product Development.  This involves either the project being stopped, or ownership changing, or the management changing.

The details covered include:

  1. Entry strategy:
  2. Production plan (research & development)
  3. Marketing plan (4p marketing plan, branding plan)
  4. Sales plan (sales forecasts, break even analysis)
  5. Customer/member retention plan (stakeholder satisfaction)
  6. Investment club systems (risk management plan, investment club systems checklist)

The template for listing the objectives activities, outputs, and outcomes, is also the same template for monitoring and evaluation, with a few minor changes, and the template for Mid Term Review (MTR), annual report (AR) or End Term Review (ETR) of the project.

$      Financial Plan

This section of the strategic plan lists the budget of the organisation, that is, the sources, and uses of funds. The budget is based on the implementation plan, and indicates the costs of achieving the said objectives. In some instances, the implementation plan is fused with the budget.

In summary, it lists the following:

  1. Cost of project & means of finance (expenses forecast, sources of financing, the offer, claw back strategy/guarantees)
  2. Financial Statements (Income Statement, Balance Sheet, Cash Flow Statement)
  3. Financial Ratios (Liquidity, Efficiency, Profitability, Leverage/Solvency )

 

$      Situational Analysis (Feasibility Study)

This section list the factors that might affect the achievement of the goals, and hence, the feasibility of the project.

The analysis looks at various areas of key import to program success, and they include:  Social Economic factors; Technological factors; Economic factors; Ecological/stakeholder factors; Regulatory Issues; internal factors of strengths and weaknesses of the organisation; and Competitor Factors.

The key areas for feasibility study, in summary, are:

  1. Social-Economic analysis, including life standards, cultural issues, etc, that affects the operations of the organisation. High population growth, leading to increase in demand for services. Culture and lifestyle is changing, and can affect the product. Political stability will lead to ease of doing investment club.
  2. Technological analysis, including systems of development, or delivery or product. Technological factors can lower barriers to entry, reduce minimum efficient production levels, and influence outsourcing decisions.
  3. Economic analysis/ Gap Analysis/Demand Analysis/Market Analysis/Supply and Demand Analysis, which indicates the supply and demand of the products, and hence ability to sell or deliver the product. Economic factors affect the purchasing power of potential customers and the firm’s cost of capital.
  4. Regulatory Issues, including laws, policies, constitutional provisions, as well as regional and international obligations that might affect the organisations work. Regulatory factors include government regulations and legal issues and define both formal and informal rules under which the firm must operate.
  5. Ecological Analysis/Stake Holder Analysis (all players in the industry value chain, from production, through distribution, to sales).
  6. Internal Environmental Analysis/ Ojijo 4P Analysis of People, Product, Principal and Property. The internal environmental analysis looks at the competencies, structure, resources and culture within the company. The internal environment comprise factors within the control of the organization, and is analysed using the Ojijo 4P Analysis Model, which looks at the people (board, directors, management and staff); product (the quality, price, and delivery); property (fixed and moveable assets); and principal (capital finances for operations as well as machinery).
  7. Competitor Analysis. An analysis of the competitors, their product types, production processes, pricing, promotion, distribution, and value proposition.

$      Performance Measurement

The purpose of any activity is to produce results. The strategic plan has a section that lays out the plan for monitoring and evaluating the results being achieved for comparison with the intended results.

The areas of performance measurement include:

  1. investment club performance,
  2. staff performance matrix,
  3. strategic plan review,
  4. implementation matrix

The result of performance measurement is the:

  • Evaluation Report,
  • Mid Term Report (MTR),
  • End Term Report (ETR), or an
  • Annual Report.

 

…………………….

The Author, Ojijo, is a public speaker and consultant in financial literacy, collective investment schemes (investment clubs and saccos), and business financial projections; lawyer and guest lecturer in financial services law, law firm management, and ICT law; author of 49 books; Rotarian, Inua Kijana Fellow; Poet Pianist; and owner, www.luopedia.com,  www.lawpronto.com, www.treazures.co.ug, www.allpublicspeakers.com,  www.bankitgroup.com, and www.achibela.com.

Email: ojijo@treazures.co.ug  Mobile:+256776100059