An Introduction to Strategic Planning
Strategic planning is the process of documenting and establishing a direction of your small business—by assessing both where you are and where you’re going.
The strategic plan gives you a place to record your mission, vision, and values, as well as your long-term goals and the action plans you’ll use to reach them.
A well-written strategic plan can play a pivotal role in your small business’s growth and success because it tells you and your employees how best to respond to opportunities and challenges.
Despite the benefits of having a strategic plan in place, a growing number of small business owners aren’t focusing on the long-term strategies of their businesses. In a 2018 Constant Contact survey of 1,005 small business owners, 63% said they plan only a year (or less) in advance.
If you’re one of these small business owners, it’s not too late to think differently. Your future success depends on effective strategic planning. It’s a process of looking ahead that should involve your entire business, and the discussions can lead to meaningful changes in your business.
Strategic planning consists of analyzing the business and setting realistic goals and objectives. This leads to the creation of a formal document that lays out the company’s views and goals for the future.
Benefits of Strategic Planning
The strategic planning process can take some time, but it’s beneficial for everyone involved. As the small business owner, you’ll have a better idea of the goals and objectives you want to accomplish and a path to do that. For your employees, the process can foster an increase in productivity—contributing to the success of the business.
Communicating Your Strategic Plan
The strategic planning process should involve your employees. Your employees are involved in the day-to-day operations and can provide you with a unique view of the company. Employees can share with you what they think is and isn’t working with the business today, which can inform your planning for the future.
In addition to your employees, it’s beneficial to reach out to people outside of your company to get their opinions. Like your employees, vendors have a unique perspective on your industry. Talk to them about the business, and get their thoughts on how they think the business landscape can change in the future.
The U.S. Small Business Administration recommends that the strategic planning process be a flexible one. When you meet with your employees and any people outside of the company, remember that the discussions should encourage new ideas and thoughts.
Involving your employees in the strategic planning process also means they receive a sense of accountability that can increase productivity. Whether they contributed in the process or were informed of the business’s goals and objectives after the strategic plan was created, they’ll be more likely to want to help you achieve those targets.
Identifying Strengths and Weaknesses
As part of the strategic planning process, you’ll examine and analyze your entire business. You’ll take a look at what your business does well and the areas where it still needs to improve.
By identifying your business’s current strengths and weaknesses, the process gives you and your employees an opportunity to improve in the future and become a durable business by minimizing risks.
Although you may have a good idea about what your business excels at and areas that need to be improved upon, don’t forget to involve your employees. They may tell you something you didn’t think of.
Setting the Direction of the Business and Fostering a Proactive Business
By the end of the strategic planning process, you and your employees should have a clear direction of where you want the business to go in the future. These discussions and the planning process itself help put the business in the best position to succeed in the future.
Strategic planning gives you and your business time to figure out how to grow over the next few years and how to address new opportunities and challenges. Think about the challenges or issues your business may face in four or five years and plan accordingly, so your business doesn’t stumble down the road.
Strategic Planning Misconceptions
There are many strategic planning misconceptions. From not having enough time or thinking it only benefits larger businesses, to fearing you’ll put your business on the wrong path, there are a variety of reasons why business owners may be wary of strategic planning. But don’t be alarmed; strategic planning can help your business—big or small—and the benefits far outweigh any perceived negatives.
Regardless of the size of your business, a strategic plan is beneficial. Whether you are a small business or a large corporation with hundreds or thousands of employees, strategic planning helps you make sure the company is headed in the right direction.
But how do you know if you’re steering the company in the right direction? The beginning phases of strategic planning focus on research and discussions. The decisions you make during strategic planning aren’t based on assumptions; they’re based on research and information you’ve gathered while talking with your employees and people outside of your company.
The strategic planning process may seem daunting at first, but when you understand what’s involved and how to do it, it’s not that complicated. It takes time, but the amount you invest in the process pays off when everyone in your company works toward accomplishing the goals and objectives you’ve laid out.
The process doesn’t stymie creativity either. When you meet with your employees for strategic planning, you’re asking everyone to have a discussion and brainstorm ideas. The strategic planning process puts everyone’s minds together to think of creative ideas.
If you go through the strategic planning process once, don’t think you won’t have to do it again. The strategic plan is a living document; it should change over time. It’s not uncommon for business owners to create a strategic plan with their employees and rarely—or never—revisit the document. Reviewing and evaluating your strategic plan regularly will help keep you accountable and on track to achieve your goals and objectives.
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