Strategic Planning: Big Ideas for Small Businesses

Your small business is doing pretty well. Sales are growing, and customers keep coming back. And then someone suggests that you should create a three-year strategic plan. It might be a board member or a banker looking to approve a financing. You might even decide yourself that the business has gotten complex enough that seat of your pants isn't enough.

Strategic plans aren't just for big businesses; they are valuable for any size company. There's no need to panic, though, and you don't need to run off looking for Excel templates just yet. Keep yourself focused on a few key principles, and this will all work.

First, understand WHY you need a plan. The purpose of a strategic plan is really just to answer a few fundamental questions:

• Are we going after the right opportunities (i.e. the ones that will let us grow profitably)?
• How will we beat the competition?
• What do I have to invest, and what is the return?

Don't get me wrong, creating a good plan involves getting a lot more specific than this and going to the next couple of levels down in detail. But fundamentally, everything revolves around these three questions.

Second, remember Dwight Eisenhower's maxim: "Planning is everything, the plan is nothing."

The real value of a formal plan is the process: asking and answering the right questions and making sure that people are talking to each other about the right issues. Make sure this happens, and your business can survive an ever-changing market. This is far more important than the formal output. It's so important that it should become part of your company's DNA.

You will end up with a set of spreadsheets, and perhaps a PowerPoint deck or two, but they are only as good as the work that goes into the process.

Third, don't delegate the planning process. Managing the interdependencies involved is critical, and it's something that only a CEO or business owner can do.

Is the sales and marketing team's view of what the customers need consistent with what your engineers are working on? Is this consistent with what you have built for a supply chain and an information system? Are you developing the talent you will need? If you aren't asking these questions, you can bet no one else is. Plus, you will be surprised what YOU learn through all this.

One important caveat though: Don't dictate the plan top down. You should drive your vision of what the company stands for, where it is going, and how it competes, but your team must come up with the details. Your job is to provide the context and to make sure the details make sense.

Strategic planning is very important, particularly as your business gets more complex. However, people tend to make these things much more complicated than they need to be. Focus on what you really want out of it, keep it simple, and the process -- and the finished plan -- will work for you.