Now that we have our vision for what we want our business to be when it grows up, we need to focus on what will take to attain that vision. Just as we had to go to school, exercise, do homework and finish our chores as children, we have to perform specific activities to grow the value of our businesses. This is called a strategic plan.
Remember making up excuses for why we did not finish a task -- including the dog ate my homework, or it was too hot outside to exercise? There are a number of common reasons that business owners give for failing to develop their strategic plans.
Here are three that are pure myth.
Myth 1: It will take forever to produce
The real value of developing a strategic plan for your business lies in taking some time to think about your situation – to work ON the business instead of just IN the business.
Thinking strategically does not mean working out all the individual tasks you will need to do to achieve them right there and then. For example, suppose a goal is to grow revenues at an annual rate of 7 percent. This sets off all kinds of nitty gritty, task-oriented thinking about labor needs, promotional materials, space planning, etc. that can immediately bog you down. Strategic planning works on a higher level. One example would be “developing a new offering to broaden the service base and decreasing reliance on aging offering lines.” Only when a true strategy is devised and implemented is it time to think about the individual tasks needed to accomplish it.
Myth 2: My business is too small to need a strategic plan
A business owner can use a strategic plan to outline for employees the specific set of goals he wants the business to achieve. This provides employees with direction and focus for their activities. A strategic plan can form the basis of all measurement activity and keep an owner informed of how the business and employees are performing.
Doing the right things and doing them efficiently and economically are activities that every business, large or small, needs to get right, and a strategic plan is the foundation for achieving that.
Myth 3: A strategic plan is out of date from the time it’s finished
Too many small business owners treat their business plan as a closed book. That’s not helpful. A business plan should be an active document that the boss reviews and updates at least quarterly, if not monthly.
Your strategic plan won’t be doing what it is supposed to do unless you have regular meetings with the people responsible for achieving goals and checking progress against the planned goals. When you track the results of your efforts you can make mid-course corrections to get back on track if necessary. Regular meetings give the opportunity to make the best decisions possible as you progress, and manage the plan as a team.
A plan's purposes are action and accountability. Without both of these, the plan is useless and the dollars invested in creating the plan are wasted.
Treat your business like a real business
Businesses that perform at the highest level usually have a formalized strategic plan and have implemented it well. Businesses that struggle usually have no plan in place and often flounder in their attempts to be successful.