Strategic planning for your small business: What it is and how to do it
Some businesses are planned and well-thought-out from the beginning, with a business plan, funding sources, and a product launch plan. Others are bootstrapped – a hobby or interest turns into a business over time, until suddenly, you’re supporting yourself and your family with your new venture. No matter which way your business got started, and no matter what stage you’re at right now, you should have a strategic plan to ensure success now and in the future.
A strategic plan is different from a business plan. A business plan is usually created when a business is first starting out and may be used to obtain funding. But a strategic plan is more dynamic and will change and grow with your business. It can help keep you on track and alert you when it might be time to switch gears. The four steps of strategic planning are to create, work, review, and revise your plan. Let’s explore them in more detail.
4 Steps to creating a strategic plan
1. Create your plan
A strategic plan does not have to be a long, detailed document. It’s meant to be a work in progress, so don’t get too caught up in the details. Your strategic plan should include these components:
- Your company’s mission. This indicates what your company does, who its customers are, where it operates, and why it exists, including what makes it unique.
- Your current situation. Describe the business as it currently exists, including what products or services you provide, what your current revenues are, what your current operations look like and your competitive position.
- Your business goals. Where would you like your business to be in a year? Five years? Ten years? Do you want to grow organically or acquire other products or businesses? Would you open additional locations or consider franchising your business concept? Do you want to bring on more employees, or perhaps a partner? Your goals can be just about anything – it’s your business, after all.
2. Work your plan
Take a look at the short- and long-term goals you have for your business. Choose a few that are feasible and focus on those first. A mix of short-term and long-term goals is best. You don’t want to have to wait too long before you see some results, but you also want to tackle some of those bigger initiatives.
Now that your target goals have been identified, determine how you will achieve them. Try using “if-then” analysis. Ask yourself, if I change this, what will likely happen? You may discover several ways to achieve a single goal, so rank them by how easily you can implement them and how likely they are to be successful, then decide which one you’ll try first.
3. Review your plan
Once you have created your plan, review it periodically. The first review should be fairly soon after you’ve written it – say, within 60 to 90 days. This early review will help you see if you’ve assessed your business correctly and if you’ve included everything you want your plan to cover.
You should review your plan again after you have implemented changes. Take a look at what you changed and whether the change had the intended effect. If it didn’t, figure out another way to reach that particular goal.
4. Revise your plan
Your strategic plan should grow and evolve along with your business. Revise it regularly to show the changes you made and the effect they had on the business. Update your goals to reflect your new status – if your goal was to increase sales by 10% last year and you achieved that, perhaps you want to shoot for 20% this year.
If you’re having difficulty reaching a goal, try breaking it down into smaller goals that may be more achievable. Or, consider if a different goal might be better for your business.
It’s often said that no one plans to fail, they just fail to plan. With a comprehensive and dynamic strategic plan, you can set your business up for success.