Many people think of strategic planning as a management concept only for big businesses. It is, however, a mechanism that small- and medium-sized businesses need to consider.
Strategic planning matches your business to market opportunities. To do this effectively, you need to collect and analyze information about the business environment, have a clear understanding of your business and develop a clear mission with obtainable goals and objectives.
Strategic planning focuses largely on managing interaction with environmental forces. These include competitors, government, suppliers, customers, various interest groups and other factors that affect your business. Your ability to deal with these groups will vary widely depending on the group and timing.
As your environment changes, your ability to implement what youve learned from your planning is critical. The more data you have and use, the better you can plan for changes.
Planning and anticipation of future events is crucial since decisions then can be made based on predictions of future states of the environment instead of just reacting to crises as they occur.
Think in terms of the who, what, when, how, how much and where. These variables will help in filling in the details and in making your plan more specific. They also assure the collection of enough relevant data to reduce uncertainties. Such foresight will take your business where it needs to be in the next month, year and decade.
The first step in the strategic planning process is an assessment of the market and of your business goals. The outcome of this self-assessment is a mission statement for your business. Key to defining this mission statement is addressing the question: What business am I in? In determining the nature of your business, dont tie it strictly to a specific product or service you produce, but rather tie it to the result of your output and the competencies developed in producing it.
Next you must define your basic philosophy. This will help explain to investors, employees and associates how you envision your operations. Set clear, firm goals to guide and maintain the business on a path consistent with its mission. Accomplishing this requires establishing and achieving specific objectives, which must:
n be clear, concise and attainable.
n be measurable.
n have a target date for completion.
n include responsibility for taking action.
n be arranged according to priority.
In determining appropriate goals, you will need to consider the position of your business within its industry and the broader business environment. Some trends that may affect you include population shifts, economic trends, technological developments, legislation and activities of special interest groups.
Some approaches to dealing with such fluctuations are:
n buffering: when vigilance can be relaxed with confidence that your resources are sufficient to accommodate any changes that may occur.
nsmoothing: when the abundant resources of one area are used to meet the overtaxed resources of another.
nforecasting: the projection of future sales, income or other variables.
nrationing: delaying or foregoing altogether business goals due to sudden changes in income or other unexpected circumstances.
Setting up an effective information system is integrally related to your mission and goals and to the specific environmental factors defined in your strategic purpose. Involve employees in determining what information is needed and where and how to obtain it.
Now consider a mechanism for conducting internal business analyses. The primary task in this phase is to identify those factors giving you a competitive advantage. These may include holding a patent or an exclusive license on a particular product or service, the technology used to make your product or employing individuals skilled in areas unique to your business.
Flexibility is a major advantage small businesses generally have over larger rivals. When you have identified areas in which you are ahead, analyze the strengths, weaknesses, opportunities of and the threats to your business. This SWOT analysis forges development of a success strategy by identifying and devising measures for correcting potential problem areas, setting a preliminary course of action, developing alternative courses of actions and evaluating, shifting and revising your current actions and immediate goals.
With a clear grasp of the competitors, customers, suppliers and situations combined with a realistic understanding of your own strengths and weaknesses and a well-written, comprehensive business plan, you can develop a strategic plan that will lead to success.
Robert Garrisons company based in Rowan County is called The Garrison Group, which offers import/export support, help in obtaining capital and mentoring/consulting services. Contact him at rgarrison@thegarrisongrp.com.