Why do some SME owners find it difficult to find time and motivation to engage in strategic planning? Well, it probably stems from our human nature. We get caught up in the busyness of the day to day operations. We also feel good when we are busy making sales and completing tasks compared to attacking larger projects that would deliver greater business value but may take months to complete.
Many entrepreneurs have a plan in their heads, and they are under the impression that is good enough. But it isn’t. Putting ideas, goals and actions down on paper brings clarity and it means they don’t forget all those brilliant ideas they thought of in the middle of the night some time ago! A written plan provides structure and a road map for the business going forward. It also guides better decision making about important matters such as product development, marketing, staffing, contracts, significant purchases and so on.
Some business owners have said to me that they can’t plan because the world is so volatile, things are constantly changing. But the businesses that plan what they can control are in a better position to react to the things that they can’t. While SME businesses don’t have the resources of large companies to engage in detailed planning, this shouldn’t stop them from planning for their future. It’s just a matter of scaling down the level of effort and detail to suit an SME.
A good business strategy will focus on what you are going to do differently and better to achieve your company goals and objectives. The very act of developing a business strategy is valuable in itself. Developing your plan encourages you to think about your goals, how the business operates and communicate your vision to those that can help you succeed. My seven steps for successfully developing and implementing a business strategy for SMEs are briefly outlined below.
1. Have a good framework
A good starting point is to have a suitable template or framework to structure your strategic plan. This helps you to focus your efforts on developing the content for the plan.
2. Identify your goals
As the business owner(s), you need to decide your company vision, mission and values. You also need to identify your overall objectives about how you want the company to change. For example, do you want to grow your business within the same market or expand into related markets?
3. Gather information and data
Having access to relevant market data is the number one barrier for most small businesses. However, there is a wealth of free information available at sources such as the Australian Bureau of Statistics. Also, look at all your relevant internal data. For example, sales data from various marketing channels, customer types, product categories, etc. Talk to your staff, customers, suppliers and anyone else that has a vested interest in the success of your business about opportunities for growth and improvements.
4. Involve your team
Involve those who have a stake in the business, especially staff and contractors who are in contact with your customers. They can give you insights and intelligence about your product and customers. In particular, get their reaction to the changes you are proposing and ideas about how they may be achieved. It may be useful to have an independent facilitator to run workshops leaving you free to actively participate in the discussions. I can help you with this.
5. Build your plan
Once you have enough information and ideas, start writing your strategic plan. It’s the easy part if you have done your homework. The fundamental components of a strategic plan comprise:
– Vision, mission and values (the why)
– Strategic objectives goals (what you want to achieve)
– Strategies and projects (the how-to)
– Measures of success including KPIs and targets
The most important thing that should come out of a strategic planning activity is an agreement about three to five overarching goals or objectives that will focus the efforts of you and your team going forward.
6. Communicate your plan
After you have developed your plan, you need to communicate it to those who will help you make it happen, especially your staff. Based on my experience two things work: Firstly, explain your plan to your team in person with a passion so they can feel what you are seeking to achieve. Secondly, give people a visual in the form of a diagram or model that outlines the fundamentals of your plan as outlined at point 5 above. This allows people to see the bigger picture without being confused by the details.
7. Be a strategic manager
Don’t get caught in the trap of just being an operator in your daily activities. Make time to work on implementing your strategic plan. This means allocating time to working on the projects and monitoring your key business measures. Reinforce your plan with your team to help them understand and support your vision.
Periodically review your plan (say every three months) to see how you are tracking and whether you need to make any adjustments.
Contact me if you are thinking about reviewing or developing your business strategy and would like some more information. I also have a business strategic plan template, which I have specially designed for SMEs which I can share with you. Email me or call me on 0402 843 314.