The benefits of strategic planning for your business
Read time: 3 minutes
A common misconception is that strategic planning is only for large companies. But the reality is that most businesses can greatly benefit from the exercise.
Whether it's buying a competitor, increasing your capital or aiming for higher growth, you need the right strategies, structure, plans and controls in place to optimize the return on your investment.
"Strategic planning involves looking at where you want your company to be in the next 3 to 5 years and determining what you need to do to get there," says Nyron Drepaul, Business Consultant at BDC.
"If you're always busy putting out fires, you may feel you have no time for planning," Drepaul says. "But by developing big-picture strategies to guide your day-to-day operations and setting goals, you're no longer flying blind. A long-term plan simply increases your chances of success."
Another reason for entrepreneurs to make strategic planning a priority is that it reduces risk, particularly in periods of economic uncertainty. "As part of the process, you'll be assessing your current situation, resources, strengths and weaknesses, competitors and the business environment. This way, you will be better equipped to make decisions and therefore to minimize risk."
For Drepaul, strategic planning also helps entrepreneurs to shake things up a little. "It's a way to rekindle the entrepreneurial drive that got you started in the first place. For example, you may have started out with a dream of a $10-million business with stores all over the world. But along the way, you got distracted by daily challenges, lost sight of that dream and settled for less than your true potential."
"Strategic planning reignites that passion for what you're doing. If you have a real plan with goals, it's very rewarding to achieve each milestone. That sense of satisfaction builds the momentum you need to push even further."
Involve your employees
Drepaul recommends entrepreneurs involve their employees in the strategic planning exercise, particularly in smaller companies. When employees contribute, they take ownership of the plan and help you reach your goals.
"This builds enthusiasm in your company and gets everybody on the same page." For example, entrepreneurs can ask employees to brainstorm about a company's strengths and weaknesses. After all, your staff knows your company inside out.
Get outside advice
A crucial part of successful strategic planning is to ensure you seek an external, objective point of view. Most small businesses don't have the resources and expertise in-house to guide them through the strategic planning process.
"A consultant can give you a fresh perspective on your business, help you envision the future you want and define your long-term goals," Drepaul says. "An expert can also ensure you follow a rigorous plan with clear timelines and assigned responsibilities.
"It's about getting you thinking differently about your company and bringing you closer to achieving your dreams."
At a glance
Strategic planning enables you to:
- Envision your company's future over the next 3 to 5 years
- Define your long-term goals
- Assess your current environment, as well as strengths, weaknesses, opportunities and threats
- Develop strategies and tactics to address any identified problems
- Assign timelines and responsibilities to turn your plan into reality
- Reduce the risk of doing business based on better decisions and achieve your company's potential