It is hard to accomplish anything without a plan. Whether you are coaching a football team, cooking Thanksgiving dinner, or running a small business, you need a strategic plan.
A strategic plan looks at all the things your small business could do and narrows it down to the things it is actually good at doing. A strategic plan also helps business leaders determine where to spend time, human capital, and money.
However, how should small businesses approach strategic planning? There are hundreds of business books dedicated to the topic. We have read most of them. We put the others on our bookshelf just for show.
Developing a strategic plan might seem like an overwhelming process, but if you break it down, it is easy to tackle. Here is our five-step approach:
1. Determine where you are. This is harder than is looks. Some people see themselves how they want to see themselves, not how they actually appear to others. Many small businesses are snared in this same trap.
For an accurate picture of where your business is, conduct external and internal audits to get a clear understanding of the marketplace, the competitive environment, and your organization’s competencies (your real—not perceived—competencies).
2. Identify what is important. Focus on where you want to take your organization over time. This sets the direction of the enterprise over the long term and clearly defines the mission (markets, customers, products, etc.) and vision (conceptualization of what your organization’s future should or could be).
From this analysis, you can determine the priority issues—those issues so significant to the overall well-being of the enterprise that they require the full and immediate attention of the entire management team. The strategic plan should focus on these issues.
3. Define what you must achieve. Define the expected objectives that clearly state what your organization must achieve to address the priority issues.
4. Determine who is accountable. This is how you...