Many small business owners think that strategic planning is for larger companies, but they are mistaken. No matter what size a business is, it can benefit from a strategic plan. In fact, compared to larger companies, small business owners are in a good position.
They have greater control over the development and implementation of the strategy. They can assess its successes and failures easier, allowing them to make changes and pivot quicker. This allows them to have a greater impact on the profitability of their business, with fewer hassles and politics. It is a lot simpler to do a 3-point turn with a car, rather than a semi-truck.
But, there is a downside. Small business owners have fewer resources to draw from – less time, money, people, experience, and knowledge. Not having enough resources can make creating a plan more difficult. Most owners know they need a plan, but often do not know how or where to start.
The following 3 areas are good places to start.
Get a new attitude about learning
Owners are known for not being willing to take others’ advice. In the long run, this unwillingness to ask peoples’ opinions and learn from them hurts the success of the business. The best strategic thinkers will not substitute someone else’s judgment for their own, but they are willing to listen to and learn from them.
Also, effective planners understand that everyone makes mistakes. They can learn from theirs and not do them again. Ineffective planners make the same ones over and over expecting different results. Businesses fail every day because the owner would not acknowledge and correct his mistakes.
Understand the financials’ strengths and limitations
Usually, owners are the “I don’t look at the numbers, I go with my gut” guy or the “I’m a by-the-numbers, they don’t lie” guy. In the long term, neither is useful for the well-being of the company. The financials are an important planning and management tool, which should not be ignored or overly emphasized.
The successful strategist strikes a balance between relying too much on perceptions or the numbers. Using and understanding the numbers adds a much-needed dose of reality to the gut guy. While having a feel for the clients, product and employees will get the numbers guy out of his office and make him a more hands-on, better manager.
Seek out advisors
A confident owner asks others for help before the plan is created. He realizes he cannot know everything he needs to know, no one can. Today’s business world is too complicated for just one person to understand it. So, he seeks out others (i.e. peers, experts, employees, key people, vendors, customers) who have the knowledge and experience he does not have. He gathers data, ideas, and opinions, and uses them to reach his own conclusions.
Developing, implementing and following a good strategic plan can take time and effort. But, it is worth it – like most rewarding things in life. Once it is in place and working you will wonder why it took you so long to do it.
At Cogent Analytics, we never stop looking for ways to improve your business and neither should you. So, check out some of our other posts for helpful business information: