Strategic Planning for Small Business

Strategic planning for business is a method that has been used for decades. Large corporations invest a lot of time and a lot of money in developing their strategic plans. For the small business owner, the good news is it doesn't take money, it only takes a little time.

Strategic planning is simply thinking ahead of where you want your business to be in several months and a few years. With this plan in mind, you can make decisions today that will help you reach those short and long term plans, or goals. 

Simple Strategic Planning Method - "PB&J Method"
Strategic planning is not complicated. We recommend that you keep it simple. Think what you want to accomplish, then identify when you want to accomplish it. Once you have an approximate date, then work backwards thinking through the steps you need to complete to reach your accomplishment, or goal. Let's look at a simple, silly example: 

Goal: Have a peanut butter sandwich on Friday for lunch (assuming it's Monday)
Plan Steps: 

1. Inventory existing supplies to determine what is needed - Due on Tuesday
2. Acquire the necessary supplies - Due no later than Thursday
3. Assemble tools, and materials to assemble sandwich no later than 8am on Friday for lunch at noon. 

Strategic planning for small business owners is really that simple -- Think ahead, then work backwards identifying the steps that need to be accomplished toward reaching your goals and set a deadline or schedule for accomplishing those goals. Using the deadlines you can stay on track to reaching your goals. 

Use the same simple method in two primary areas; Long and Short term plan development.

Now that we know the method, let's look at strategic planning which consists of short and long term planning. 

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• Long Term Planning covers the next 2-3 years. (Note: many large businesses look at five years but we often see those plans are abandoned, or revised within 3 years.) Your long term plan should focus on broad goals, such as; Increase sales of goods or services by 20%; expand goods or service offerings by 10%. Let's look at an example: 

Event Planner
An event planner plans to expand their service by 20% in three years. Starting three years out and working backwards, they identify some steps to reach that goal: 

• Two to four additional employees will be needed to provide increased services at least one year prior to goal, so in about two and half years. 
• Identify additional event venues to offer a larger variety of events at least 2 years prior to goal. 
• Increase marketing efforts to reach additional customers at least 2 and half years prior to goal as it will take time to build an additional 20% customer base. 

Now reverse the order of the steps you have created. Add them to your calendar. As you continue your daily work you can consider implementing the steps you have identified as your business allows. The planner knows they will need additional funds in their marketing account in the next six months so they start saving money now and exploring ways to expand their marketing efforts. 
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• Short term strategic planning is your plan for the coming 12-18 months. To effectively develop a short term plan you can take long term plans and break them down into smaller, more specific tasks you need to accomplish in the coming year. Also, think about annual recurring tasks that arise such as tax season, or maybe your business is affected by the seasons. 

Let's look at some examples: 

Event Planner
An event planner looks ahead knowing that the holiday seasons will normally result in an increase in contracts for services. It's July, but "strategically thinking" the event planner decides to reach out to customers early to start planning so they can get a better deal on venues, supplies like decorations, and start menu planning with a caterer.

Also, considering their long term plan, the event planner makes a financial plan to move more dollars to their marketing efforts. 

Another example - Business consultant

Requests for engagement normally slow down during the holiday season. To keep the revenue flowing the consultant looks for offerings for their clients. The consultant decides to develop some online training programs for their customers and provide them to their clients. Online training allows employees to complete training when their schedule allows, requires little effort on the part of the consultant during the holiday season and allows them to continue to build revenue streams. Developing the training early allows the consultant to sell their training programs while consulting during the busy times in an effort to prop up sales during the slow period. 

Strategic planning is a simple process that will help you grow your business, plan effectively and efficiently to reach your short and long term goals. Make a plan today, to plan for tomorrow.