What Is Strategic Planning and Why Is It Important ?

 SP

SP

What is a Strategic Plan? A strategic plan is simply a game plan of how you will compete in the marketplace. The plan itself essentially lays out where you are now, where you want to be, and how you’re going to get there. Over the next several weeks we’ll walk you through the steps needed to create and execute on a successful plan.

Our process for developing a strategic plan for a customer starts with breaking it down into four phases:

1) determine who the business is serving, how they are competing, and what their strengths and weaknesses are

2) document a clear picture of what the business stands for (your “why”) and what the future will look like (your “vision”)

3) determine a detailed execution plan on how we will reach our vision (3-5 year goals), and

4) begin implementing and monitoring the plan to ensure we’re on the right track.

Why is Strategic Planning Important? Having a well, laid out plan helps you stay on track and not get lost in the day to day operations of your business. Not only does planning help you understand what needs to happen, it can help you identify what doesn’t need to happen. How many times have you made a business decision and later regretted the path it has taken you on? Or you operate on a “Trial and Error” basis to see what develops. With a plan in place you can identify the right opportunities that will help achieve your ultimate long-term success.  

Many small businesses don’t think they need a strategic plan, but they are misguided. In fact, I would say a small business needs a strategic plan more than a large business for several reasons. In a small business the owner is usually working in the business, serving customers, managing employees, handling vendors, and anything else that may be needed. It is easy to get sucked into the day to day, or short term tasks, and forget about the long-term vision. Also, a small business may have limited resources, so it is harder for them to compete in a broad market. It is important for a small business to consider focusing on building a niche market, and having a plan in place to achieve that.

Don’t get overwhelmed by the term “strategic planning”. We’ll show you how to think through the four phases above. Our next blog post will help you work through a business model.

If you want to know more about this topic, email Joy at joy@lizottecpa.com