Strategic planning is the process of developing and documenting the direction for your business. It considers where you are now, where you want to be, and how you’re going to get there – even in the face of unexpected challenges (like a pandemic). If you don’t have a strategic plan in place, this should be a priority for you in 2021.
What is strategic planning for businesses?
Strategic planning refers to the activities businesses undertake to set priorities, focus resources, and work towards business goals. We promote a NOW, WHERE, HOW approach for businesses looking to develop effective strategic plans.
Here’s quick rundown:
The Process for Strategic Planning: NOW, WHERE, HOW
We use the Now, Where, How tool from MindShop to develop practical strategic plans for businesses. This approach encourages you to solve problems by implementing solutions that will help get your business where you want it to be in the future. This is what the Now, Where, How process for strategic planning looks like:
Assess Your Business Position NOW
Initially, you want to identify your current business position. To do this, you’ll need to brainstorm issues your business is facing. You might be having trouble finding or retaining staff. Perhaps you have cash flow issues or other financial concerns. Or maybe your industry is becoming more competitive.
At this stage, you want to outline all your concerns so you have a holistic view of your business position.
Conduct a SWOT Assessment
A SWOT Assessment is a useful tool that provides structure when you’re assessing your current business position. You stocktake your business strengths, weaknesses, opportunities, and threats to find out what’s working well – and what’s not. Let’s take a closer look at what goes into a SWOT Assessment:
Consider Your Strengths
Outline what advantages you have over your competitors and what your business does well. Scroll through your Google Reviews, ask your team members and/or contractors, and try to look at your business as though you were a competitor.
Keep in mind that your business strengths are the unique areas where you excel above others. They need to be factors that set you apart from your competitors. This means that strengths like ‘high-quality products’ are only an advantage if your competitors sell products that are actually inferior quality. If your products are comparable in quality, you shouldn’t consider it a strength for this exercise.
What Are Your Weaknesses
Reflect on your people, resources, processes, procedures, and systems. Then consider how your competitors are doing in those categories, as well as where you could be doing better. Again, rely on perspectives other than your own. It’s not uncommon for business owners and managers to be a little blind to issues. You can check your negative Google Reviews for any consistent criticisms, ask contractors or suppliers if they experience any frustrations working with you, and you may want to seek customer feedback.
Opportunities You Might Be Missing
In this part of the assessment, you should think about how you can turn your strengths into business opportunities. Consider whether there are any pivots you could make to enter a new, booming market. Determine whether you could cut costs by using new technologies or improving your processes. Look into social and geographic factors, like your customer demographics or government grants, to see if there’s anything you could be leveraging.
These opportunities will be open to your business and to your competitors. You’ll need to act quickly to gain a competitive advantage.
The threats you consider should be likely obstacles you’ll face in selling your product or service.
You should list internal issues, like cash-flow problems, as well as external threats, like low-quality supply chains, shifting markets (increasing competition or lower demand), or advancing technologies that may impact demand. There’s a downloadable template available here. It will help guide you through the SWOT Assessment process. If you need further information, this MindTool blog post is helpful.
Determine Where You Want Your Business To Be
In the planning phase, many business owners first consider how they’ll address any weaknesses or threats after identifying them. Using the Now, Where, How approach encourages you to make future-focused decisions by thinking about where you want to be – and by when – before you decide on the ‘how’.
In this step, you should outline precise goals you want to achieve based on your SWOT Assessment. Make sure they are specific. Instead of saying you’ll have more staff, outline that you will hire and train 2 new team members within 6 months. If you want to earn ‘more money’, provide details about how much more – and in which areas of your business. Provide details of specific processes and/or technologies you want to implement, instead of simply saying that you’ll improve efficiency.
Determine How Your Business Will Get There
Once you know your current business position and where you want to be, you’ll need to fill in the details about how you’re going to get there. Here’s what to do:
- Determine HOW the business will get to the WHERE.
For this step, you’ll need to work out the practical steps for getting your business where you want it to be. Consider what resources you need and what needs to change. You can look to your competitors for inspiration, but don’t assume the way they’ve done things is the right way. Assess your options and make choices based on your business needs.
- Create a One Page Action Plan.
Develop an action plan and outline it in a one-page document. You should detail who is involved, what their responsibilities are and provide a timeline. This ensures everyone is working towards a common goal.
- 90-Day Cycle to Work Through Strategy Items.
If you try to attack all your strategic changes at once, you’ll likely struggle to remain focused and productive. Integrating a 90-day cycle can help.
Choose a select number of the strategic changes you hope to make and focus on them for 90 days – leaving the others to simmer in the background. Once those 90-days pass (and you can see the changes taking effect), select the items you’ll focus on for the coming 3 months. By focusing on a few tasks at a time, you remain motivated – especially when you see the changes taking effect.
Strategic Planning with Sharp Accounting
Sharp Accounting provides assistance with strategic planning as part of our business advisory services. We work with business owners to establish what’s holding you back and how you can overcome obstacles and challenges your business is facing. To find out how we can help your business, book your free 20-minute consultation. Start with Sharp.