Friday, May 31, 2013

Why is Strategic Planning Important to Small Business

When a person starts a business whether it be a restaurant, bakery, small manufacturing plant, etc they do not want to always remain a "small fish in a big pond." They want to become one of the "big fish" and in order to do that requires strategic planning. To increase their businesses revenue the owner needs to not only plan intelligent strategies but they also need to implement them wisely. If not implemented wisely the business is not going to see a profit and they may even be forced to go out of business. Strategic planning involves formulating business growth strategies and policies over a specific period of time. If your business involves mobile or internet technology the trends in these fields change quite often so you would have to do it more often so formulating a six month to one year business strategy plan would make more sense than doing a five year plan. When doing business strategies or strategic planning you or the management team can concentrate on the entire business or just one aspect of the business. Writing a business plan deals with the challenges that you are likely to occur when the business is just starting out. The actual strategic planning will deal the opportunities to grow the business and the methods that will be used. Although they are two different things, you do need to make sure that you have a business plan written up so everyone will know just what direction the business is going. If you do not have a business plan which is usually used for strategic planning there is a strong chance your business will not succeed. In strategic planning there is no definite model that a business can use because each business is different and usually formulates their own model that will work with their particular business. Although the model may vary there are some important compounds that you need to include. One component is the purpose of the business which is when the business will explain the entire idea of why your business exists. This component is not complicated and will focus just on the businesses objective. Another component is the ultimate goals of the business called organizational objectives which will help you achieve the purpose of the business. You want to make sure that goals you set are achievable within the time period you set up. The next component is strategy planning for every goal. Having strategies in place will help to insure that you will accomplish each goal that you have set out. You should also make checkpoints so you can see if the strategy is working or not and if you need to make any changes. The last component is monitoring implementation of your strategy plan. If your strategic plan is not monitored you will not know how effective it is and whether it needs to be revised. As you can see, strategic planning and good business strategies are very important to a business, especially if it is a new business.