Why Is Strategic Planning Important to a Small Business?
Strategic planning is an absolute necessity to any company seeking guidance on where they currently are and where they want to go. Rather than relying on assumptions or emotion-derived decisions, strategic planning thoughtfully breaks down goals that are in line with a business’s vision, mission, and values.
One in five small businesses will fail in their first year—strategic planning will help your team to avoid this. According to Forbes, strategic plans can fail for a variety of reasons, including just having a plan for the sake of it, not focusing on results, not fully committing to a plan, ignoring reality, or setting unrealistic goals, to name a few. If your strategic plan meets some or all of these characteristics, there’s a good chance your plan will not take your business to new heights.
With facilitated strategic planning sessions, a deep desire to step back and assess the situation honestly, consistent effort, and the accountability from an experienced facilitator, your small business’s strategic plan can be the difference between struggling to stay afloat and thriving.
Strategic Planning Within a Small Organization
With a dedicated team and steady focus, strategic planning can be incredibly beneficial to a small business. In our planning sessions, it is crucial every member of the leadership team is present. This may be one or two business owners or a small group of people that manage various departments.
On the agenda, you can expect us to work together to answer the following core questions:
- Where are we now? Where do we stand?
- Where are we headed?
- How will we get there?
- How will we ensure we get there?
With a firm grasp on the current standings of the company, a few universal goals to strive towards, and a solid roadmap that values breaking down barriers as a team, strategic planning will ensure your organization is headed towards success.
The cost and preparation involved with strategic planning sessions involves two full days of convergence as a leadership team. Working as your facilitator, I will be present to not only walk you through each step but also work through them, ensuring you are confident about what needs to be done and why.
Strategic Plan to Start a Business
Strategic plans can be useful to people before they’ve even started a business. If you haven’t taken the time to thoughtfully lay out your steps based on your realistic goals, you could be spending time on less important tasks that do not lead to growth. With a strategic plan, you can stay more focused on what is currently most important to your success.
How to Make a Strategic Plan for a Small Business
Before you can make a strategic plan, you have to choose a framework to help guide you through the process. My favorite framework is StratOp, a strategic planning method developed by Tom Paterson. StratOp boils the strategic planning process down to six simple steps.
1. Start with Perspective
The most important part of starting a strategic plan is gaining an honest perspective within the framework of your small business. It is extremely difficult to know where to go—and how to get there—without understanding what brought you to your current destination.
Observing your business with an objective perspective means celebrating wins (like growing from a single-person operation to having an employee) as well as reflecting on losses (like losing a big client you were counting on for your profit goals). By starting with perspective, you can gain a clearer view of where you are, how far you are from your goals, and how to close the gap.
2. Create a Core Plan
The core plan determines what steps are necessary to increase revenue, increase customer satisfaction, cut back on spending, secure funding or grants, hire more employees, and more. Whatever your annual goals are, the core plan helps to develop the steps it will take to achieve them.
3. Focus on What’s Important Now
Once you’ve highlighted the issues and big ideas, focus on what’s important now (W.I.N.s). Discussing tasks and solutions with the entire team in a cross-functional manner welcomes problem-solving collaboration. In a small business, gathering input from every member of the leadership team means not only gaining valuable perspectives, but also fostering a team that agrees on what needs to be tackled and when.
4. Determine the Best Structure
The form of the plan must allow for optimal function. As a facilitator, I guide teams through the creation of a framework that values efficiency and decisiveness. With a small business, it is important to maximize every role and task, and creating a structure that nurtures and improves growth is integral.
5. Manage the Plan Over Time
To ensure the plan is working properly, it is important to take time to reflect on how your team is doing, what in the plan may need to be tweaked, and what is definitely working to better your organization. Accountability through regular feedback is integral to maintaining a highly beneficial strategic plan.
6. Review & Renew
Every year, the team must reconvene to review, renew, and restart the StratOp process, utilizing the knowledge from the previous year to adapt and overcome new issues. Regularly incorporating StratOp practices into your business will ensure you continue to feasibly scale and wow your clients.
Small Business Strategic Planning: How to Prepare
In order to prepare for strategic planning, small business owners will need to:
- Document their current processes: It’s hard to fix what isn’t well defined. Taking the time to document or even discuss your current processes can help illuminate ongoing miscommunication and inefficiencies.
- Gather and provide an overview of current financial standings: Through exploring your current financial situation, we can set realistic goals that are easily measured throughout the year.
- Administer team assessments: Talent assessments and personality tests are incredible tools that ensure you have not only the right people around you, but also that they are in the correct position to maximize success at your organization.
- Determine goals and identify desired outcomes: A clear understanding of what you want out of strategic planning will make understanding what is important now more effective.
Tools for Small Business Planning
I utilize the following tools in my strategic planning sessions:
- Four Helpful Lists: During strategic planning, we will work to understand where your business is positioned to succeed and where it needs to avoid unnecessary risk. The Four Helpful Lists identifies what is right, wrong, confusing, and missing at your organization. This helps to determine which goals are realistic for your team and your business as it currently stands.
- Thinking Wavelength: This team-based tool identifies which members of your team are more abstract thinkers and which are more concrete. Understanding this helps improve communication styles and task delegation. A blend of thinkers is beneficial to the running of any business.
- Patterns/Trends Analysis: This tool helps the team to look at the changes in the world that impact the business as a whole. Together, we can observe the future of the business in light of those trends and identify what needs to change. This prevents unexpected issues and keeps the team prepared on all fronts.
- SWOT Analysis: Identifying the strengths, weaknesses, opportunities, and threats that impact the business illuminates areas of optimization and can enable the team to develop proactive strategies in the event that an issue arises.
Create a Small Business Strategy Today
Give your business the best chance to not just survive, but thrive for many years to come. Send me a message today to learn more about strategic planning for your small business.