Many entrepreneurs are missing out on a key tool that, when used appropriately, can give small businesses a competitive advantage in line with that of a larger business: strategic planning.
Many businesses “mistakenly believe that strategic planning is only for large businesses that can afford the time and personnel to develop a sound plan,” according to Small Business Notes.
However, by following a few basic guidelines, your small business can establish a plan to keep your business going in the right direction. Here are the basic components of a strategic plan:
Business purpose: The business purpose (or mission statement) simply defines who the company is and what it wants to achieve. Many small business owners may get bogged down trying to make their mission statement sound more elaborate or impressive than it needs to be. A simple statement can actually be more powerful.
For example, CVS has a clear, simple, concise mission: We will be the easiest pharmacy retailer for customers to use. That’s it. You get it all in 11 words: who their customer is, what their ultimate goal is, and what sets them apart from their competition.
Organizational goals: An organization’s goals explain how the business plans to fulfill its business purpose. A Strengths, Weaknesses, Opportunities and Threats, or SWOT, analysis tool is a helpful way to quickly assess where each of your business attributes are– and many times you will find that your weaknesses or threats are actually just opportunities in hiding!
Strategies for reaching each goal: In order to reach your organizational goals, you must have a strategy that explains how you will get there. Don’t worry if your strategies change throughout the strategic planning process; you want your plan to be flexible to be able to respond to changes in the marketplace, unanticipated opportunities that arise, and unforeseen threats that you need to mitigate.
Action plans to implement strategies: Small Business Notes defines an action plan as “the specific activities that you will be using to implement the strategy.” Your action plan should include timelines and necessary resources for implementation.
For example, your action plan might lead you to realize that cash flow could be a problem for your company because you need to make some additional purchases. This would help you identify a need to obtain a small business loan or line of credit to ensure you have adequate cash on hand for expenses.
Monitoring plan implementation: Monitoring and consistently analyzing your action plan is the most important step, but also the step that is most difficult to implement. Small Business Notes suggests putting “checkpoints on your calendar and make it a point to not let them pass unnoticed. Include benchmarks in your financial reporting system. This is your chance to not only verify that you are on track towards your goal, but it gives you an opportunity to make modifications if they seem needed.”
Telhio Credit Union is open to everyone who lives, works, worships or attends school within Franklin County and surrounding communities. Founded in 1934, originally as the credit union for the Columbus Telephone Co., Telhio is a not-for-profit financial cooperative where its members are also its owners. Driven by its philosophy that members come first, Telhio is committed to the highest standards of responsibility and conduct.
Telhio offers a variety of innovative programs, services and products to support its members’ financial needs. Telhio offers seven branching offices throughout central Ohio and nearly 4,000 shared branching locations nationwide. Additionally, Telhio participates in the highest level of combined federal and private share savings insurance available, insuring deposit accounts up to $500,000.*
* Federally insured by NCUA. Additional coverage up to $250,000 provided by Excess Share Insurance Corporation, a licensed insurance company.