Does your small business need a plan?

One of the biggest observations I’ve made working with small business owners for more than a decade now is they tend to focus on the word “small” or “micro” or “solo” and then downplay the importance of proper planning and strategizing for growth. They don’t think about succession planning or how the business can continue if disaster strikes. And boy, oh boy, don’t even mention taking a vacation – the business would never survive!

It’s no mystery that two main reasons for business failure are poor management and lack of planning. Is that what you want to be—the next statistic? I’m thinking you don’t.

One of the biggest reasons small businesses don’t do the proper planning is because they don’t have the time or the resources like the big guys. Your business is important and if you want to stay in business you need to take the time to do it!

Today we’re going to take a look at strategic planning.

What is strategic planning?

Strategic planning is a process – not a one-time event – that needs to be an integral part of your business. It’s the simple (not complex) process of defining direction for your business. Your strategic plan is a formal, internal document that helps to:

• Guide you through your business;
• Make decisions on allocating resources (capital and people);
• Figure out where you’re going; and,
• Figure out how you’re going to get there.

Strategic Plan vs Business Plan

Wondering what the difference is between a strategic plan and a business plan? Think of it this way, a business plan is more ‘what’ the business is all about and mainly used as a statement for evaluating in the beginning. The strategic plan is more about the growth. Again, ‘where’ you’re going and ‘how’ you’re going to get there. The strategic plan will actually create the foundation for the business plan.

Typical elements of a strategic plan include:

• Mission statement
• Vision statement
• Goals
• Objectives
• Action plans
• Contingency plans
• Competitive analysis
• Financials

As compared to the business plan:

• Cover sheet
• Table of contents
• Executive summary
• The company
• The market
• Operations
• Sales /marketing
• Management
• Financials

There’s no set format and you have to do what works for you and your business. It’s the process and the implementation that become the most critical. I actually create more of a single mixed document that I refer to as an annual operating plan. This becomes my living (breathing) planning document for the year.

Let’s quickly break down the critical parts of the strategic plan.

Mission Statement – a short statement where you define the existence of your business. Why are you in business?

Vision Statement – identifies what you want to be and what you will achieve. This may be presented in an outline or bulleted list.

Goals, Objectives, Action Plan

If you do nothing else to plan for your business I encourage you to do this portion. This is where you take all the thoughts and ideas floating around in side your head and put them to paper with a time line attached. You’ll be amazed by how much you can achieve just by making your plans visible to yourself on paper. Suddenly, you become accountable!

• Goals – Broader statements with medium to long-term view
• Objectives – More specific statements with time frame and amount
• Action Plan – Identify step-by-step how you will achieve each goal

Remember I said earlier that you are creating a ‘living’ document. That means you don’t just go through the process of putting the plan on paper—you have to implement! And, you have to visit the plan often to either check to see that you’re still on course, or adjust it accordingly if you have taken a little detour. Give yourself permission to adjust the plan, but also give ample time to see measurable results before changing course.

Finally, don’t get bogged down by the process. It ought not to be a difficult and time-consuming task where you’ll need a 3-inch thick binder to house the plan when printed.  Keep it simple.