Strategic Plans Drive Small Business Success
Over 85% of small businesses do not have a strategic business plan (strategic plan). By operating without a strategic/business plan, many small businesses are missing out on a powerful tool to help them define and reach their goals. Many small business owners believe that only large companies need such plans, but the reality is that small businesses can reap tremendous rewards by creating a strategic plan.
A strategic plan is like a roadmap for your company. It needs to identify where you are and what you stand for, where you are going, how to measure progress and estimate when you will arrive, and what resources are available for the journey. The plan helps the company maintain focus, recognize progress, and take corrective action when needed.
While each company will have a unique document, the elements of the plan are remarkably similar across the board. Common elements and their purpose are listed below:
- Vision, Mission, and Commitments: what do you stand for, what are your high-level goals, and to what are you committed?
- Executive Summary: a quick synopsis of the document Company Background, Products, and Services: what does the company do to produce value for its clients?
- Marketing Plan: How will the company attract new clients, keep current clients, how much is budgeted for marketing, and how is success measured?
- Operational Plan: How will the company execute operations?
- Organizational Structure: How is the company structured and what are the roles and responsibilities to identify accountability?
- Financial Report: what is the long-term financial projection?
- Strategies: what is the company going to do to accomplish its goals? Challenges and Solutions: what obstacles are anticipated and what solutions are identified in advance? Budgets: how much will be allocated to each functional area?
Taking the time to put a guiding document together requires thinking through what the business objectives are, how they will be reached, the role individuals will play, etc. It is also a “living” document. It is of minimal value if it is put on a shelf and only referenced quarterly. It becomes a part of the operation of the business and is updated and referenced frequently. It can and should be used at meetings to measure progress and to help the company’s employees stay focused on the strategic goals and progress towards those goals.
What are some of the benefits of having a strategic plan? The effort required to create the plan necessitates the contemplation of long-term goals and a manner to achieve those goals. The strategic plan helps orient the organization towards a common target and is a useful tool to create an environment of accountability. By constantly measuring progress against the identified goals, the workforce maintains focus and understand where their efforts fit into the grand scheme. A well thought out plan helps accurate budgeting and enables quick adjustments to be made if needed.
Elements can also be a useful tool to engage employees, focus productivity, and reduce turnover. We live in a different economic and workplace environment compared to a few decades ago. Gone are the job-for-life and benefits into retirement contracts that used to be common. Because of the turbulence now inherent in our business economy, people feel totally free to change jobs frequently and without concern for the loss of accrued benefits. A strategic plan enables workers to see the long-term plan for the small business and helps create buy-in into the future they helped define. Reduced turnover and employee buy-in are valuable to any small business.
In summary, while the perception may be that strategic plans are not needed for small businesses, the reality is that a small business with a strategic plan is more aligned, has better employee engagement, and can quickly and accurately measure its progress towards well-defined goals.Read More