The importance of strategic planning in small and medium sized businesses is easily overlooked. The business owner or senior manager that fails to plan strategically is creating a recipe that inevitably leaves the business on the back foot.
Plan the route to success.
“My target is to run faster than anyone has ever run before!” a simple statement, or how about “I want to own the best car sales business around”. Two great statements but they have one thing in common – both require and reality check.
Personally I’m 60 years old, overweight and have coronary problems – I couldn’t achieve the first but physically it is now impossible. Nor could I achieve the second because I have no interest in cars and my enthusiasm would soon wain. Is that what I mean by a reality check?
No. To achieve anything worthwhile, we all need a clear plan.
The “reality check” is the planning process. We have to ask the right questions and respond with honest answers.
When Usain Bolt decided he wanted to run faster than anyone before him he knew this, the same with every highly successful business. Many successful business owners don’t realise they have a plan but they implement the key components.
To be successful in business requires that we understand the importance of maximising the skills, talents and resources we have.
A clear overview of what you want to achieve and how you are going to achieve it is a basic form of strategic development.
A Strategy requires a Target outcome!
So, strategy creation follows a five-stage process:
- Opportunities and options
- Bench Test
- Selection and progress review
“Know thyself” is often thought to be the basis of this but again knowing your business isn’t enough, we must position the business. One tool seldom used now is analysis of local market share. If no one is buying locally why will that change if you suddenly decide to become international?
The critical question must be am I skilled enough to create business growth? “I started the business – so of course I am” is a poor starting. Learning in business is the key to strategic and operational growth. Therefore, my next question is “what new skills have I gained and what skills do I need?”
Recently I was asked to calculate the hourly rate for company looking to grow. Straightforward enough but how had they set the figure before? Asked around to see what competitors were charging and priced themselves £2 an hour lower. This was ridiculous!
Isolate the capacity you require, either learn the skills or buy them in at a fixed price. Never fall prey to an open-ended consultancy, create a project based approach.
Business Capability and Capacity
We can all review our resources, liabilities, capabilities, strengths, and weaknesses.
Explore the Core Competencies of key members of your team. It could be time to part company with some of the management team or staff. If you are buying in skills from consultants that senior staff should have then be honest with. Train them or replace them.
Understanding and working with the unique strengths of the business enables the team to consolidate, focus and develop.
This analysis can lead to painful outcomes but remember your teenage years – growing is painful. The greatest asset and liability of any business is the people who work in it and yet they remain critical when setting yourself apart from your competitors.
Once you have an understanding of your own capacity, capabilities and a realistic target for the business systems then apply the same rigorous approach to:
- The business environment
- the marketplace
- existing customers
- Target customers
Introduce Strategic Planning
I was always taught that plagiarism is a fools game in the education sector because if I found something of interest on a subject the likelihood is that my tutors will have already used it. So I am going to credit every other blog and newsletter writer I have ever read because I know that many of my ideas and comments are not unique, however, they do reflect those who influenced my business development approach.