By Joe DiNicolantonio
Many small business owners lack a strategic plan for their business, typically for one of two reasons: either because they think strategic planning is only for larger companies or because they simply haven’t made it a priority in the face of more urgent day-to-day concerns.
However, without a strategy, a business lacks the direction it needs to be successful. If you want to work smarter rather than harder and grow with purpose, strategic planning is a necessity. When you find yourself in growth mode, you need to ensure you don’t waste resources pursuing opportunities that are not in alignment with your long-term objectives. A strategic plan can provide the blueprint you need to stay on track to achieve your goals in a changing marketplace.
Strategic planning for a small business doesn’t need to be as time-consuming or detailed as planning for a large company, but your plan does need to identify what you want to accomplish and how you intend to achieve those goals.
If you’re ready to tackle the strategic planning process, consider these eight tips to make your planning more successful:
- Eliminate distractions. Strategic planning is often pushed aside by more immediately pressing daily business. To make sure the planning process receives the attention it deserves, get away from the office. This will eliminate interruptions and improve your focus.
- Involve your team members. Your strategic plan will be stronger if it includes multiple points of view, and involving team members early on will result in greater support for the plan. Encourage open and free discussion during the planning process, and make sure all your key people are on board with the final result.
- Know who you are. Your company’s mission, vision and values will set the direction for your strategic plan. If you have not done so already, you will need to clearly articulate why your business exists as an organization, what you ultimately want to be known for, and your core beliefs and guiding principles.
- Understand your current situation. In order to know how to get where you want to go, you need to understand your starting point. A SWOT (strengths, weaknesses, opportunities, threats) analysis is a good exercise to help you clarify your current situation and the internal and external factors that will be likely to help or hinder you as you pursue your goals.
- Set both long- and short-term goals. You will want to identify longer-term strategic objectives (three or five years is a typical time frame) as well as shorter-term goals (what you aim to accomplish in the next year or so). These goals might relate to launching new products or services, acquiring new customers, expanding into new markets, increasing profitability, raising your company’s visibility, or anything else that is important to your business. Your goals should be ambitious enough to be challenging and inspiring, but not unattainable.
- Create a plan to achieve your goals. Once you have defined your goals, outline the strategies and tactics you will use to achieve them. You will also need to identify the resources required to implement the strategies – such as staff, vendors, facilities, equipment, inventory, and so on – along with the costs involved and the impact on revenues. If you will need additional financing, identify sources of credit as well.
- Focus on execution. A well-crafted plan that ends up filed away somewhere does very little good. Your strategic plan must include an action plan with specific tasks, responsibilities and timelines, and your team members will need to hold themselves and each other accountable for achieving results.
- Keep your plan flexible. Do not become so wedded to the details of your plan that you are unable to respond to changing market conditions. Nimbleness is one of the key advantages a small business has in competing with larger companies, so be ready to adjust your strategy and pursue new opportunities as long as they are a good fit with your long-term objectives.
Whatever the size of your company and whatever your industry, a strategic plan can provide direction to guide your decisions as you grow, keeping you on course to achieve your long-term objectives and ensuring that your business always operates in a way that is consistent with the company’s mission, vision and values. For this and other small business articles and tools.
Joe DiNicolantonio is head of business banking for Regions Bank.