Simple Strategic Planning Process: 9 Steps For Small Business Growth And Success

Doing business can be compared to the scene on the battlefield. Tough competitors, both existing and new entrants, do everything possible to have a share of the same market.

Small and huge competitors strive to win the competition with numerous strategies to achieve one thing: customers. This is because the customers bring the cash after patronizing the products and services. Businesses use the cash to run their activities efficiently and maximize profits.

Therefore, there is a need to learn and develop core competencies and skills that will separate you from your competitors and prepare your business to grow steadily.

Growing and sustaining a business successfully demands strategic planning activities. This demands that entrepreneurs engage in strategic planning and management to ensure that their businesses are competitive.

What is strategic planning?

Strategic planning is an ongoing activity where businesses decide their future growth and success with their present resources. Businesses use strategic planning to identify their core competencies, strengths, and opportunities to address possible threats and weaknesses within and outside the business environment

Is strategic planning important?

Generally, strategic planning helps businesses become more proactive in defining and shaping their future than reactive. It helps entrepreneurs create, initiate, influence, and have control over their businesses. Financially and non-financially, these are some of the benefits of strategic planning:

a. Improvement in sales, profitability, and enhanced productivity.

High-performing businesses use strategic planning to develop products and services to meet their customers’ needs. As more customers are served, sales figures grow significantly. This makes the company more profitable.

b. Long-term financial planning security against market flaws.

The proactive nature of strategic planning helps businesses put financial security in place ahead of unforeseen problems. Market fluctuations, inflation, high-interest rates, and changes in market trends are all secured before they occur.

c. Early identification, prioritization, and exploitation of opportunities

Opportunities in the market and the external environment are identified early. A strategic planning business will prioritize, capitalize on, and exploit opportunities before a non-strategic planning business will.

d. Ensures improved control and coordination of activities

By practicing strategic planning in business, managers and entrepreneurs ensure that all activities go in line with set objectives, and standards. Deviations are quickly identified and resolved.

d. Effective allocation of resources to opportunities

Due to the scarcity of business resources, efficiency, and effectiveness are paramount in business. Resources are well allocated to get the optimum benefits from every opportunity identified. By doing so, the waste of resources is reduced, if not eliminated.

e. Forward-thinking is encouraged.

All staff members in the business are encouraged to live in the future since the entire strategic planning activity is forensic in nature. Entrepreneurs and employees have the chance to predict and work toward the future by planning strategically.

f. Promotes enhanced communication

The dialogue and participation of all employees in the strategic planning process are essential. Once everyone is involved from the vision and mission statements through the development of strategies and implementation to evaluation, the ideas, terms, and concepts are well communicated.

g. Facilitate greater commitment to work hard and achieve objectives

Strategic planning is a cross-functional activity that engages everyone in the business to contribute their efforts toward something worthwhile. Employees are more committed and hard-working toward achieving business goals and objectives when their contributions are valued.

Can small businesses do strategic planning?

No matter the size, strategic planning is required for all, especially small businesses. Big companies have enough cash reserves, experience, and other assets to their advantage. And the cost involved in re-strategizing their activities is very high compared to small businesses.

However, the ease and smartness of small businesses can help them do strategic planning to identify new markets and serve them at a relatively lower cost.

Doing strategic planning does not necessarily require a business to spend a great deal of money. It requires entrepreneurs to use creativity, imagination, and vision to identify the things that are most important to their target customers.

Why do some businesses fail to do strategic planning?

Many firms refuse to do strategic planning. They are mostly engulfed in the day-to-day running of the business without considering the future opportunities and possibilities for growth and success. Here are 8 reasons why some businesses fail to do strategic planning:

• Lack of knowledge in strategic planning: Businesses with no experience in strategic planning will see no need to adopt this thinking.

• Too expensive: Other firms see strategic planning as too expensive to participate in.

• Waste of time: Some entities see strategic planning as a waste of time on paperwork when that precious resource can be used for other important tasks.

• Fear: The fear of failure, risks, self-doubt, and the unknown prevents some businesses from strategic planning.

• Laziness: People may not willingly accept and support the idea of formulating a strategic plan.

• Overconfidence and complacency: Previous successes and achievements make some businesspeople relaxed. But yesterday’s success can’t guarantee tomorrow’s success.

• Self-interests: Some people want to protect their status, privilege, benefits, and self-esteem by using old strategies. They will do everything possible to stop new changes and forward thinking.

• Poor reward measures: When very little reward is given for success and greater punishment is assigned to failure, employees become less creative and innovative in initiating strategic planning.

You can also read about the essential elements of a winning business plan here.

Best 9 Simple Strategic Planning Process For Small Business Growth And Success

Certainly, adopting strategic planning should not be difficult for small businesses. Here are 9 Simple Strategic planning processes for your small business’s growth and success:

1. Write a clear vision and meaningful mission statement

Start by defining a compelling vision that shows where you want your business to be in the future. The vision should be between 2 to 3 years for small businesses. A mission statement should express the purpose and values that guide your business currently.

2. Assess the business’s strengths and weaknesses

Evaluate your internal capabilities, such as skills, competencies, resources, and infrastructure. Identify what your business excels at (strengths) and areas that need improvement (weaknesses). Write them down.

3. Scan the environment for opportunities and threats

Look externally at factors like market trends, consumer behaviors, and economic conditions. Identify opportunities that your business could capitalize on and potential threats that might affect your success.

4. Identify key success factors in the business

Determine the critical factors that contribute to your business’s success. These could be factors like innovation, quality, customer service, or cost-effectiveness.

5. Analyze the competition critically in your simple strategic planning process.

Study your competitors to understand their strengths, weaknesses, strategies, and market positioning. This analysis helps you identify your competitive advantages and areas where you can differentiate.

6. Develop goals and objectives for the business

Create specific, measurable, achievable, relevant, and time-bound (SMART) goals for your business. Objectives should align with your vision and mission.

7. Formulate and select strategies and options

Generate various strategic options based on your analysis of strengths, weaknesses, opportunities, threats, and competition. Available strategies for you include cost leadership, differentiation, and focus niche. Choose the strategies that best align with your goals and leverage your strengths.

8. Put the strategies and plans into action

Develop an action plan detailing the steps required to implement your chosen strategies. Assign responsibilities, allocate resources, and establish timelines for each action. Then do the work as planned.

9. Establish accurate controls

Expect deviations once plans are in action. Set up mechanisms to monitor and measure the progress of your strategies. Regularly assess whether you’re meeting your goals and make the necessary adjustments to stay on track.

Conclusion

Strategic planning isn’t for big companies and corporations only. Your small business should do that too. By following these simple steps, you’ll create a structured approach that will help you stay competitive to guide your small business’s growth and success.

Is there anything else you would like to know about strategic planning? Don’t hesitate to let us know.

Written By: Jonathan Donkor

Edited By: Arthur Kwame Philip

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