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Developing a business strategy is one of the best things you can do to set yourself up for long-term success in your business career. A good strategy, notes, is a big part of why some companies—big and small alike—flourish and others fail. Having a solid strategy in place can not only help a company improve, it can also ensure that all stakeholders—employees, leadership, and clients—are aligned on the value of the business.

A strategy is similar to a business plan, with a few distinctions: While a business plan is designed to start a business, establish its identity, and direct initial operations, a business strategy is essentially the playbook that drives that plan. It helps a business understand what steps, resources, and actions are needed to execute on a plan and reach your goals—and a good one can make a big difference.

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Because developing a business strategy is an essential part of any company's growth, students in business school are often asked to create mock strategies as assignments. To help you prepare for such an assignment, here's a step-by-step look at how to create a strong business strategy, using a hypothetical marketing agency called Impact Marketing as an example.

1. Identify your mission and vision.

The first step in creating a business strategy is to develop clear and distinct mission and vision statements. These are the guiding principles that you'll return to as your business evolves. According to , a mission statement can play a key role in distinguishing your company from your competitors. While the mission statement focuses on what the business is currently accomplishing, the vision statement delineates how the business wants to influence the market and grow. There's typically a customer-centric element to these statements that help businesses align to the people they serve.

Most businesses write their mission and vision statements in their initial business plans, and they'll likely return to—or sometimes revise—those statements when crafting their strategy to make sure their goals and action steps connect well with these initial thoughts.

Impact Marketing wants to create modern, cutting-edge digital marketing solutions for companies in the K–12 education industry, so its mission and vision statements likewise focus on these elements. The statements clearly identify who Impact Marketing's customers are and include a specific explanation of how it wants to serve them. Once completed, these statements will collectively act as the north star guiding Impact toward its goals.

2. Learn about your competition.

Many businesses think they know their competition—but not everyone does their homework, asserts. Knowing your competitors makes a huge difference.

As part of its competitive analysis, Impact Marketing identified several marketing companies in the education industry. From there, it conducted a deep dive into these competitors, exploring what kind of educational market they reached, what tools they used, their strengths and weaknesses, and how they differentiated themselves in the market. Understanding what your competition is doing and how they're doing it is the first step toward identifying opportunities in the market.

3. Set short-term goals.

Every company, big or small, needs to have measurable benchmarks that it can track right now. Accomplishing big goals takes time; having more immediate goals to work toward helps everyone find meaning in their work and align to similar plans and timelines.

Impact Marketing set goals for one, three, and six months out. It set renewal business goals for the upcoming quarter, increased its new business goal for the next two quarters, and asked each of its team leads to set team goals for client upsells and management that rolled up into the larger company goals.

4. Set long-term goals.

Short-term goals should build into long-term goals to help the company and its employees prosper. Impact Marketing, for example, might set a short-term goal of developing a proposal for agile project management workflows with the expectation of having everyone trained within six months. As a related long-term goal, it might want to use this approach to reduce project completion time by 10 percent within the next two years, allowing teams to take on more projects with their newfound time. Building on goals is a smart way to create a business strategy that will lead to progress and success.

5. Crosscheck your strategy with your business plan.

Your initial business plan served as the blueprint that built your business, and you put a lot of work into it. It's now time to go back to that original business plan to make sure your strategy aligns. For Impact Marketing, that meant ensuring its short- and long-term goals connected with its initial vision and that the financial needs laid out in its strategy aligned with the financial goals of the business plan.

Through this important process, you might come across instances when things don't align, though. Impact Marketing's budget for implementing the agile project management workflow conflicted with the overall budget outlined in its initial business plan. Now's the time to make the necessary adjustments and prioritize the strategic steps to help the business grow.

6. Execute.

After you've outlined your strategic mission and set your goals, it's time to communicate them to the company. Creating and following plans to execute those goals is crucial, as are checking in with teams regularly along the way and rewarding teams when they reach a milestone.

Impact Marketing might choose to use all of its communication tools—email, its chat app, its company platform—to set timelines and team goals. Then it'll schedule regular meetings with department heads to ensure that everyone is aligned to the company strategy and understands how they fit into the company's broader goals.

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A winning strategy.

Think of a business strategy as a living document—something that helps you take the steps needed to realize your business plan and evolve as your company adapts to changes in the market. Pivoting to accommodate new ideas is critical to executing a strategy properly. As a business student, you'll no doubt encounter business strategies in your bachelor's or master's program, so practicing these steps can give you a leg up in your program—and eventually in your career.