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Wednesday, May 18, 2022

Making Time for Strategic Planning Worth the Trouble

Making Time for Strategic Planning Worth the Trouble

Entrepreneur’s Notebook – Evon G. Rosen

Many business owners resist the concept of planning, using excuses from “I don’t have time,” to “planning is a waste of time,” to “planning is too restrictive to my business,” to “I’m doing well so why do I need to change?”

This is unfortunate because all businesses, even successful ones, can benefit from strategic planning. A carefully constructed strategic plan can help any business do a better job. Periodic assessments to re-examine roles and responsibilities help focus efforts, leverage resources, reduce organizational redundancy and ensure accountability within a business.

Even if only held annually, strategic planning meetings can stimulate creative thinking that can help generate new business, streamline production, create awareness of business hurdles, identify opportunities in the marketplace, and move a company forward in achieving goals.

Whether with your trusted business advisers (CPA, attorney, business consultant) or with your key employees, discussing what you want your business to do in the upcoming year, how you think it can get there and what’s going to stand in the way is critical to your company’s long-term success.

Financial preparations

Strategic planning will also help identify those areas and times when the business will need a capital infusion or may need to restructure its current financing arrangement. Understanding capital requirements in advance of actual needs will afford you the time required to explore and evaluate all available financing options.

The bottom line is that your business can benefit a great deal from the process and from having a detailed, written blueprint for achieving your goals.

The first step is to understand the dynamics of planning meetings themselves. Meetings typically are most productive when held offsite, free of telephones and other interruptions. Meetings should also be viewed as open forums for any and all ideas. As such, participants should not be “judged” on their input. In these types of meetings, there’s no such thing as a dumb idea; everyone needs to know they can speak freely. This is the type of atmosphere that encourages creative thinking.

At your first planning meeting, before an actual strategic plan is created, it’s important that everyone involved in the planning process is in agreement on some basic issues about the business itself, which include:

– A precise definition of what the company does.

– What the company’s competitive niche is.

– Who the competitors are, and the strengths and weaknesses of each competitor.

– Who the customers are, and whether they are the right customers.

– Where the industry is headed and how the business is positioned within the industry.

– Growth plans for both the short-and long-term.

Just getting to this point will be quite eye opening, and once an understanding and agreement is reached on these pivotal issues, writing the strategic plan can begin.

The cornerstone of the plan will be the drafting of the major business objectives you want your business to achieve over the time frame covered by the plan. It’s critical that objectives are clearly stated and measurable. One of the biggest mistakes often made when drafting a strategic plan is the omission of measurability.

For example, if one of your objectives is to reduce operating costs, it’s important to determine by how much and over what period of time, and to include those parameters when writing that objective. If another objective is to increase business, the objective should state by how much, from whom, and over what time period. Only when goals are measurable can success in achieving them be truly evaluated, and can their impact on the bottom line be accurately assessed.

Realistic goals

In developing strategic objectives, it’s important to look forward as well as to look back. Analyzing accomplishments and how they’ve been achieved will help determine realistic goals for the future. Goals that are too unrealistic will only serve to sideline the strategic planning process in the future, which will have no benefit for your business. That’s not to say that goals must be easy to achieve, but they should be reasonably attainable based on where the business is now, where it’s been in the past, and how any current situation might impact the future.

Strategic planning is really about anticipating the future; it’s about setting goals that will be achieved over time. As such, it’s important to be aware that over time, circumstances can change. Therefore, make sure that you continually stay abreast of the business climate in which you operate, and recognize that your strategic plan should never be cast in concrete.

Evon G. Rosen is senior vice president and director of marketing for Celtic Capital Corp. She can be reached at erosen@celtic capital.com

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