The Strategic Plan:
Don't Run Your Business Without It
The expression "can't see the forest for the trees" comes to mind when discussing strategic planning. We need to step back and take a "big picture" look at where our business is heading.
Many small business owners are heavily involved in the day-to-day challenges of running their companies. They find it difficult to look ahead when the present issues seem so urgent. Yet sometimes thinking in broader terms is more valuable to the company in the long run.
Why develop a strategic plan? In today's world, where technology is changing rapidly, where your customers may be located next door or across an ocean, you need to be able to react to a whole host of outside influences. What works for local customers may not work for out-of-state or out-of-country customers. You need to have mechanisms in place to help you react to changes of all sorts.
Also, taking a fresh look at your business practices may prove helpful. Just because something has worked in the past doesn't guarantee that it will work tomorrow. Companies need to reexamine their practices and strategies from time to time to make sure they are working in the current environment. An objective look at how things are heading may be just the approach you need to take your company in a profitable direction. That is where the strategic plan comes in.
What are the steps to creating a strategic plan? There is no one perfect way to engage in strategic planning, but the basic components are provided below.
Mission, Vision and Values
Start by identifying your company's mission, its vision and its values. These are the broad ideas that can constitute a framework for crafting your plan. What are you truly trying to accomplish by being in this business? Your mission statement puts into words your company's purpose not only for you and your employees, but also for your customers, suppliers and other interested parties.
Research
The next component would include a scan of the environment in which your company operates - the technical, economic and social factors that affect your operations. An analysis of the company's strengths, weaknesses, opportunities and threats (SWOT) would be appropriate to include. The SWOT analysis is not solely concerned with external factors. The analysis should uncover weaknesses and strengths within your business, whether with production, distribution, internal communication, etc. Step back from the day-to-day running of your business, and perhaps you can see opportunities for growth in other markets, other geographic areas, new or improved product lines. See if you are overlooking opportunities by not exploiting your strengths.
A competitive analysis is an important part of your strategic plan. Who are you competing with in your industry? Are they doing a better job than you are? By more fully understanding your strengths and weaknesses as a company, you will be better able to understand your competition and find ways to exploit the differences between you and them.
Objectives, Strategies and Tactics
Pull it all together and turn your strategy into a plan. Once you have identified your goals as an organization through the mission and vision process, you need to create a plan as to how to achieve them. Set measureable, quantifiable, consistent objectives and outline the strategies and tactics you will use to accomplish those objectives.
Responsibilities
It's all well and good to set out strategies to achieve your goals, but don't forget the specifics. Who will take responsibility for those projects? How long will it take to achieve your goals? You want to set realistic timetables for achieving performance goals.
Monitoring Your Plan
Again, an objective look at how your plan is working is essential. Are you achieving the results you set out? Is the plan being followed?
Adjustments
Your strategic plan is not a static document. You may find that in actual practice the tactics you have chosen are not achieving the goals you have set. Take the time to reevaluate your plan. Make the necessary adjustments based on changes in the business climate and other external factors.
"This all sounds complicated and time-consuming."
Many entrepreneurs resist taking the time to plan. They feel it takes time away from growing their businesses. Given the fact that most small businesses fail within the first five years, and research shows that many failures come about due to lack of direction and information about competitors, strategic planning would certainly be time well spent. Think of the planning process as an investment in the future - the future of your business. Strategic planning will give you a framework to help your business grow and change. It will keep you and your employees focused - focused on shared, agreed upon goals.
Now that you have decided that your company could benefit from implementing a strategic plan, how do you go about doing it? Could you use the help of an objective outsider to facilitate this process? George McAllister, regional director of the Charlotte office of the Small Business and Technology Development Center (SBTDC), can help. You can reach him at 704 548-1090 ext. 3343.
