The daily demands and challenges of running a business—from inventory and invoicing to client fulfillment and staff management–are enough to keep any small business owner more than occupied. It’s easy to get caught up in the day-to-day, but if you want to grow your business and maximize your profitability, the day-to-day must be grounded in purpose and planning.
For this reason, it’s imperative that business owners take the time to step back and engage in strategic planning. Strategic planning is your company’s compass; if successfully developed, your strategic plan will serve as a tool for you to assess who and where you are as an organization, to orient your business to the direction you wish to take, and to create guideposts and action steps towards your desired destination.
The following are five key elements to ensure that your strategic planning is as successful as possible:
1. Involve the right people.
Who you involve in your strategic planning process can be a determining factor in its success. There are two general mistakes business owners make in choosing their planning team. Some business owners are reluctant to create a wide circle, wanting to keep the company’s vital information more protected and private. On the other end of the spectrum, casting a circle so wide that it includes a daunting number of voices or individuals not committed to the process can be just as detrimental.
So who should be included in your strategic planning team? You’ll want a cross-section of your organization, not only inclusive of the varying departments, but also across all organizational levels. Including team members who can think critically, analyze information, and express ideas articulately will also bolster your success.
Beyond your organization, be mindful of including the input of relevant partners or advisors, such as your legal counsel and your CPA.
2. Invest the time in proper research and analysis.
Strategic planning does not have to be an overwhelming process, but it also shouldn’t be rushed. Conducting research and gathering data is vital, as it will help define your current state as well as the external factors that impact your growth.
Many small businesses utilize SWOT analysis to aid their strategic planning. The benefit to using a SWOT analysis is that it is a framework for evaluating your own areas of strength and weakness as well as the opportunities and threats presented by the market. This involves an examination of consumer trends as well as the strategies of any competitors, which can help you to establish and capitalize on your differentiators.
3. Be realistic.
The basic elements of a strategic plan include your mission statement and core values (who you are as a company and what you believe in), your vision statement (where you see your business going in five to ten years), your objectives (what goals need to be accomplished in order for your vision to come to fruition), and your action plan (the steps you need to take to achieve these goals).
It’s vital that your vision, objectives, and action plan not only align with your mission and core values, but are achievable within the time frame you’ve established for the plan. In order to keep your strategic plan realistic, tie these elements closely to the research and analysis you’ve done. This will give you a true gauge of the resources—human, financial, and otherwise—you have to work with to carry out your plan.
4. Understand that this is a living document.
A strategic plan is just that—a plan. It’s not written in stone. And while it should be taken seriously and its conclusions infused into all aspects of your company’s culture and operations, it should not be so rigid that you find yourself unable to pivot if needed.
Strategic plans are living documents, which means they are meant to be lived. And life requires flexibility. A sharp downturn in the market or a wild upswing, a new consumer trend or major change in the conditions affecting your demographic, unexpected turnover in your organization—all of these factors and more can impact the feasibility of your vision within a given time frame, and the appropriateness of your objectives and action steps.
Even absent significant changes, business owners should revisit their strategic plans regularly to ensure they are still on target for steering the organization towards maximum growth.
5. Engage your workforce.
The best researched and developed strategic plan will not do any good if it gets printed into a binder and put on a shelf, or just sent out in an email with little to no follow up. The success of your strategic plan will be largely determined by how it is communicated to the entire organization, and what measures are put into place to incorporate the plan into daily operations.
This means engaging your workforce, showing them how the plan is relevant to them so you get their buy-in, and establishing a process for ongoing monitoring and implementation.
Strategic planning can make the difference between working hard to keep the status quo, or working smart, with a mission and research-based focus, to scale your organization and profits. You can boost your likelihood of successful strategic planning by involving the right people—including key advisors like your small business CPA firm—putting the time into proper research, being realistic and flexible, and creating a culture where the strategic plan serves as a blueprint for every member of the organization.