Strategic planning is essential for small and medium-sized enterprises (SMEs) for many reasons. While SMEs may not have the same resources as large corporations, their size and agility can be a significant advantage with a well-defined and executed strategic plan.
What is a Strategic Plan?
A Strategic Plan outlines the trajectory of a business, its goals, and purpose. More specifically, it will detail where you’d like your business to be in the next 3 - 5 years and how you’ll get there.
A few key reasons why your business should implement a strategic plan are:
- Long-term sustainability: one of the most challenging parts of running an SME is successfully and sustainably scaling the business. Strategic planning encourages long term planning with the future of the business and its success at the forefront.
- Resource allocation: Most SMEs have limited capital and resources, so avoiding resource wastage and identifying priorities is crucial. Strategic planning allows SME’s to have greater visibility over their resources and to allocate their resources efficiently.
- Resource attraction: having a strong strategic plan can make SMEs more attractive to potential lenders, partners and investors. Showing that the business is well-structured, organised and is more likely to secure external support.
- Risk management: strategic planning helps SMEs recognise where potential risks may arise and how to mitigate them. Which allows management and staff to respond cohesively and minimise uncertainties.
How to Create a Strategic Plan
Here are six key questions to help form the basis of your strategic plan:
- Why do your clients come to you over other businesses?
- Where do you want to be in 5 years?
- How will the business get from now to your 5-10 year business goals?
- What clients/customers will you be attracting (same/new)?
- How big do you want the business to be? E.g. number of employees, number of clients, sales, etc.
- What products and/or services will you be providing (same/new)?
Involving key staff in the design of this plan is of high importance and will typically yield stronger results.
Having a vital tool like a strategic plan in your back pocket is a great way to empower your business to navigate the complexities of the business world effectively.