Importance of Strategic Planning for Small Business

Tap to Read ➤ Ashwini Kulkarni Sule

Every small businessman dreams to be in the league of 'big guys' someday. To materialize this dream into reality, strategic planning is immensely important.

Business is all about planning intelligent strategies and wisely implementing them. Even small business are no exception, since the ultimate aim of a small business is to grow into a large business.

However, many people wrongly believe that strategic planning is only for big players in the market. But if you aspire to compete with them someday, you will also need to focus on strategic planning for your business.

What is Strategic Planning?

It involves formulation of policies and business growth strategies over a defined period of time. The time period would typically depend upon the kind of your business.

Certain businesses like the Internet or mobile technology have to deal with changing trends very frequently, hence formulating a five year plan for such businesses is not a feasible option.

The management can prepare a strategic plan for a single aspect of the business, or it can focus on the business as a whole. The concerned departments then, devise strategy plans that are in accordance with the overall business plan.

Writing a strategy plan is not similar to writing a business plan. Business plan deals with the challenges likely to be encountered while starting a business, but strategy planning covers the opportunities for growing the business and the methods of harnessing those opportunities.

Without a strategy plan, a business would have no direction. The chances of succeeding in a business that has no strategy plan, diminish significantly.

Basic Model for Strategic Planning

There is no definite model of strategies. Every business formulates its own model that has a potential to work for that particular business. No matter which model you choose, the critical components of the strategy plan remains the same. These components include:

Business Purpose

Business purpose explains the whole idea of why the business exists. It is also sometimes called the 'mission of the business.' It need not be complicated, and should only focus on the ultimate objective of the business.

Organizational Objectives

Organizational objectives are the ultimate goals at which all the organizational efforts are targeted. These are the goals which help you to achieve the mission of the business. Set goals that are practically achievable within the defined time period.

Strategy Planning for Every Goal

Strategies are the approaches you are likely to adopt, to accomplish each goal.

It is possible that a certain strategy may not work for a certain goal at a particular point of time, hence make provisions for checkpoints, which will allow you to ascertain if the strategy is working or not. Devise alternative back-up plan for every strategy, in case it backfires.

Action Plans

These are actual activities that are to be implemented as per the strategy plan. An action plan is a set of all the activities that ultimately focus on accomplishing the goals.

If multiple departments are involved and each department has its own set of goals, then it is important that the action plans for all the departments work in sync with each other.

Monitoring Implementation of Strategy Plan

Most businesses formulate an intelligent strategy plan, but fail to monitor its effectiveness. The whole purpose of strategic planning gets defeated if you cannot invest time to monitor its implementation. Periodically monitor the implementation of strategic plans and revise it, if necessary.

Though strategic planning is not the only essence of the business, it definitely forms an integral part of it and can take you a long way in your business when coupled with intelligent tactics. In Sun Tzu's words "Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat."