Strategic Planning for Small Businesses: 5 Steps to Get Things Back on Track
By Robbie Gould on 09/28/2023
Running a small business is no small feat. It's a journey that you've embarked upon with determination and grit, working your way up to a sustainable place.
As someone who's proudly self-made, you might find yourself occasionally feeling out of the loop when it comes to certain business concepts and terminology – especially if you haven't obtained a formal degree in business.
One term that may have piqued your curiosity is "strategic planning." You're not alone in wondering what this term means and whether it's relevant to your world.
Read on to see how a strategic planning process can apply to your business in a practical and actionable way. (Without all the jargon and buzzwords.)
Strategic planning isn’t rocket science, and there’s a good chance you are already implementing some of these tactics.
The strategic planning definition
Strategic planning means, essentially, writing down a plan for your business going forward and changes or points of progress along the way.
Things get a little more heady when you consider what kind of strategy your business needs, how to create that plan and how to break it down into measurable, actionable steps. As an organizational method, strategic planning can be as complicated as entire leadership teams devoted to researching and implementing data-driven strategies. (Buzzword!)
But strategic management isn’t just for large corporations with fancy boardrooms.
Strategic planning can be as simple as setting small goals that build into a larger goal. A thoughtful process of casting a vision for your business and carrying it out.
While you might not have a bachelor's degree in business, your real-world experience is an asset. You've already been making decisions that have shaped your business's trajectory – strategic plans are about doing that intentionally and purposefully over a measured period of time.
Getting started with strategic planning
Strategic planning empowers you to define your business's direction, allocate resources wisely (is it better to spend money on a billboard or a social media ad?) and adapt to changing market conditions, ultimately giving your business the best shot at achieving its goals.
The following steps can help you develop your strategy and plan its execution.
Step 1: Reflect on your journey
Take a moment to reflect on your journey as a business owner. What challenges have you overcome? What successes have you celebrated? What lessons have you learned from your failures? What would you do differently?
These insights are all you. And they are the critical foundation of your strategic plan.
Step 2: Set clear goals
Think about where you want your business to be in the next year, three years and five years.
Write those down as your timeline. These goals will be your destinations on your business roadmap and your strategy execution will be the engine that delivers you there.
Step 3: Know your market
You've already got plenty of market knowledge as a small business owner. You know you’re your client base likes and dislikes. You know how to deliver your service or product in the way people want.
Now you need to identify trends, customer preferences and potential opportunities. This is crucial for crafting a strategy map that resonates with your audience.
Step 4: Try a SWOT analysis
Don't let the acronym scare you – it is your mighty ballpoint pen that does the hard work here – not a team of 16 highly-trained officers in tactical gear.
SWOT stands for Strengths, Weaknesses, Opportunities and Threats, and it is a strategic tool used by businesses and strategic planners to evaluate their current position in the market.1
Conducting a SWOT analysis involves examining each of these four aspects systematically. Make this part of your plan by writing each section out.
To work through these, businesses gather data, engage stakeholders and critically evaluate these elements. The insights you gain from this analysis can guide your decisions. Build on your strengths, address your weaknesses, capitalize on opportunities and mitigate potential threats.1
This holistic evaluation informs the strategic planning process, helping businesses chart a course that aligns with their goals and maximizes their chances of long-term success.
Step 5: Add important elements of strategic planning
Some people prefer to begin with these elements. But for many small businesses that are already up and running, it makes sense to identify some of this information when you’ve already done a SWOT analysis.
These strategic plan elements encompass your overarching goals and objectives, the actionable steps required to achieve them and a clear roadmap that outlines the journey from where your business stands today to where you envision it in the future.
Your strategic plan should consist of the following elements:
Mission statement: A mission statement succinctly encapsulates the core purpose and values of your business, serving as a guiding beacon for both your team and your customers.2
Vision statement: A vision statement paints a vivid picture of your desired future, outlining the ultimate aspirations and achievements your business aims to realize over time.
Ethical/Values statement: An ethical/values statement articulates the moral principles and core beliefs that underpin your business operations, demonstrating your commitment to integrity, responsibility and social consciousness.
Competitive advantage: A competitive advantage represents the unique strengths and distinct qualities that set your company apart from rivals, enabling you to outperform in the market and attract a loyal customer base. The better you're able to articulate and act on your advantage, the greater advantage you can create.
That's a small example of the yin and yang that exists throughout the business world.
Financial plan/assessment: A financial plan/assessment entails a comprehensive evaluation of your business's monetary health and strategies, encompassing budgeting, forecasting and resource allocation to ensure sustainable growth and profitability.
Action plan: AKA a plan of action. This element outlines specific tasks, timelines and responsible individuals, providing a practical blueprint for executing your strategic goals, accountability and turning your vision into tangible results.
Evaluation process: This involves systematically analyzing the outcomes of your business initiatives, measuring their effectiveness against predetermined objectives and using the insights gained to refine your strategies and enhance future decision-making.
Step 6: Identify actionable steps
Break down your long-term goals into actionable steps. What do you need to do on a daily, weekly and monthly basis to inch closer to your goals? This makes the big picture more manageable and realistic.
First, you must clean your bedroom if you want to clean the world.
Step 7: Conduct regular reviews
Your business isn't static, and neither should your strategic plan be. Set aside time regularly —maybe every quarter — to review your progress, adjust and celebrate milestones.
The practical benefits of strategic planning
Now that we've got the strategic planning definition down with all its vital elements, let's dive into how actually sticking to a strategic plan can benefit your small business:
Just like a compass, strategic planning gives you a clear direction. It helps you define where you want your business to go and how you're going to get there. Having a well-defined path can boost your confidence and guide your everyday decisions, ensuring that each step you take is purposeful and aligned with your overarching goals.
In a small business, resources are precious.
Strategic planning helps you allocate your resources —time, money and energy — in the most effective way. This prevents a lot of wasted resources and ensures you're focusing on activities that truly drive growth.
Change might not be your favorite thing, but strategic planning doesn't mean rigidly sticking to a plan no matter what. It's about being prepared for changes and challenges while staying true to your mission and vision statements.
This can actually make change feel less overwhelming.
Small businesses often compete with larger players. Strategic planning allows you to identify your strengths and weaknesses, enabling you to capitalize on what makes your business unique and find ways to stand out in the market.
Remember that you've already achieved so much without a bachelor's degree. Strategic planning builds on that experience, helping you maximize your strengths and overcome your limitations, just like you've done many times in the past.
Who should be involved in strategic planning?
In a large organization, strategic planning should include top executives and representatives from various departments. In a small business, strategic planning might come down to just you or a small team.
If possible, gathering a few key people together for strategic planning will strengthen your plan, and help your employees get on board. By fostering a culture of open communication and collaboration, you can harness the collective wisdom of these individuals to create a strategic roadmap that is both visionary and grounded in practicality.
When you should use strategic planning
In the business world, strategy plans usually align with quarterly financial reporting cycles.
Regarding when to implement a strategic plan, small business owners should do so when they want to make practical decisions that match their goals, helping their business grow steadily and wisely.
In times of economic uncertainty, having a well-crafted strategic plan enhances resilience and safeguards against unforeseen disruptions.
What's the difference between a business plan and a strategic plan?
A business plan and a strategic plan serve distinct purposes in business.
A business plan is a comprehensive document that outlines the specifics of how a business will operate. It typically includes detailed information about the company's products or services, target market, competition, marketing strategies, financial projections and operational processes. A business plan is often created when starting a new business or seeking funding, and it provides a guideline for achieving short-term and mid-term goals.
On the other hand, a strategic plan is a broader framework that focuses on the long-term direction and vision of a business. It defines the overall goals and objectives of the organization and outlines the strategies to achieve them. Unlike a business plan, a strategic plan doesn't delve into operational details – instead, it provides a higher-level perspective on where the business is headed and how it will stay competitive and relevant over time.
Embrace strategy planning and empower your success
Strategic planning is not a mystical concept reserved for elite global businesses. It's a practical approach to shaping your business's future.
As a small business owner, you've already mastered the art of making decisions, overcoming challenges and seizing opportunities. Strategic planning takes these skills and directs them towards a clear path of growth and success.
So, the next time you hear the term "strategic planning," don't feel left out or overwhelmed. Embrace it as a tool that will help you achieve your organization's goals. With your entrepreneurial spirit and a practical approach, you're more than equipped to navigate the world of strategic planning and guide your business towards even greater accomplishments.
If you're interested in gaining more insight into how you could boost your marketing strategy by creatively stretching your marketing resources, check out our article, "8 Small Business Marketing Tips to Help You Make More With Less."
1S Schooley. Business News Daily. What is a SWOT Analysis? (And When To Use It). Date accessed 8/23/23. https://www.businessnewsdaily.com/4245-swot-analysis.html
2D McCarthy. LiveAbout.com. 7 Important Elements of a Strategic Plan. https://www.liveabout.com/strategic-plan-elements-2276139