Strategic planning for small businesses in 8 steps
Managing an SME is a big challenge, especially when you think about making processes more efficient.
In Ireland, SMEs are a vital pillar of the Irish economy. According to the Enterprise Office – SME and Entrepreneurship Policy in Ireland, approximately 250,000 companies were active in Ireland in 2016, and virtually all SMEs. About 92% of the companies had less than ten employees (micro), 6.8% had between 10-49 employees (small), 1.2% had 50-249 employees (medium), and only 0.2% had 250 or more employees (large).
Many small business entrepreneurs don’t have strategic planning for their businesses, usually for two reasons: either because they think strategic planning is only for larger companies or because they haven’t made it a priority with their day-to-day running of the business full of urgencies and worries.
However, without strategic planning, small businesses are left without direction. A strategic plan can provide the guidance that the company needs to stay on track and achieve meaningful goals to grow, remain profitable, and be competitive in the market.
Strategic planning for small businesses doesn’t need to be as time-consuming or detailed as planning for a large company, but the plan needs to identify:
- What you want to accomplish
- How do you intend to achieve these goals
If you’re ready to tackle the small business strategic planning process, consider these eight tips for putting together a helpful document that will be used to guide all business decisions.
1. Involve your team members
Your strategic plan will be more robust if it includes multiple points of view and involves team members. This will result in increased support for the most critical phase: execution.
During the creation of the plan, hold dedicated meetings with the people you think are key strategic members. Don’t forget that those who deal directly with your customers are essential team members with valuable insight.
2. Know who you are
Your company’s mission, vision, and values will define the direction of your strategic plan. If you haven’t already done so, you will need to articulate this clearly. Think about:
- Why your company exists as an organisation
- What you want to be known for
- Your central beliefs and guiding principles
3. Understand your current situation
To know how to get where you want to be, you need to understand your starting point.
A SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) is an excellent exercise to help you clarify your current situation and the internal and external factors that are likely to help or hinder you as you pursue your goals.
4. Set long and short-term goals
You’ll want to identify long-term strategic goals (three or five years is a typical time frame) as well as short-term goals (what you intend to achieve in the next year or so). These goals may be related to:
- Launching new products or services
- Acquiring new customers
- Expanding into new markets
- Increasing profitability
- Increasing the visibility of your company
Your goals should be ambitious enough to be challenging and inspiring but not unattainable.
5. Create a plan to achieve your goals
After defining your goals, describe the strategies and tactics you will use to achieve them.
You will also need to identify the resources required to implement the strategies, such as:
It is also necessary to carry out a survey of the costs involved and the impact on revenue. If you need additional financing, also identify sources of credit.
6. Focus on execution
An elaborate plan that ends up being filed away is of no use to your company. To avoid problems with implementing strategic planning in small businesses, your strategy should include an action plan that details:
- Specific schedules
Your team members will need to hold each other accountable for getting results.
7. Keep your plan flexible.
Agility is one of the main advantages a small business has in competing with larger companies. Be ready to adjust your strategy and look for new opportunities that fit your long-term goals.
8. Include and track performance indicators and analysis
Key Performance Indicators (KPIs) are quantifiable values. The company should use KPIs to define its performance against its established goals.
The performance indicator must provide verified information and be able to put the company’s goals into context.
Periodically monitor the results your business has achieved, and through these results, analyse whether your planning and the actions taken are effective.
A good EPOS system can help you understand consumers’ purchasing behaviour and make various refined analyses, such as stock control.
Measuring and analysing the results is critical to your strategy. Organising and managing your company objectives, metrics, and results becomes a much simpler process when using specific technologies, such as an EPOS System with back office and drill-down reporting capabilities.
Whatever the size or sector of your business, a strategic plan can guide you and provide the foundation for your decisions, keeping you on track to achieving your long-term goals and ensuring that your business always functions consistently with mission, vision, and company values in mind.
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About the author:
Juliane Camozzato is an Executive Marketing at Retail Solutions. You can follow her on LinkedIn!