In the world of big business and corporates, planning, in particular strategic planning, is a key foundation for the business.
Often a strategic plan in large businesses will span multiple years if not even decades.
It’s not uncommon for corporates to plan 10-15 years out.
Given the continuing nature and landscape of business – i.e. technology, political, environmental etc, why would anyone want to plan that far out into the future?
The simple answer is that it provides the business with some form of guiding principles to work with and work on.
Now, that does not mean plans can’t change – in most cases, what is relevant today may not be in 10 years’ time – the point being that in that time the business leaders at least have a ‘beacon’ to aim for.
On the flip side, it’s not unusual for small-medium businesses to not have a plan at all or if they do, it may only span out at best 12 months.
The SME world is very tactical in nature – it needs to be – these businesses operate in different business environments compared to that of large business.
However, that does not mean SME’s should not start to think more strategically and long-term.
What is a Strategic Plan?
A strategic plan is a vision of your business’s future and the basic steps required to achieve that future.
Typically, a strategic plan will include; goals and objectives, desired outcomes, KPI’s and metrics for measuring progress, timelines, budgets and responsibilities.
Any business that is growing or wants to grow and hopes to sustain that growth needs a set of strategies to guide them forward - build a solid financial foundation, and prepare for challenges that will definitely lie ahead.
Why don’t SMEs Plan Strategically?
One possible reason could be that many, SME’s may feel strategic planning is not for them – it’s only for the ‘big boys’.
This could not be further from the truth – if anything, strategic planning for SME’s is a vital need.
Too many business owners are driven merely by day to day activities – with the only planning being year-end tax preparation.
What’s involved in developing a Strategic Plan?
First and foremost, the business owner has to come to terms with the fact that strategic planning has a long time horizon.
Long terms goals and objectives will take time to come to fruition – there are not short cuts here!
Rather than looking to achieve a meteoric growth, the objective rather should be for steady, consistent and sustainable growth.
Even though the ultimate goal of the strategic planning process is to develop the plan itself, the value of the exercise often lies in the process itself.
The strategic planning process will give the business owner an opportunity to learn more about their business, understand its strengths and weaknesses and discuss any critical issues affecting, or likely to affect, the business in the future.
How do you start to develop a Strategic Plan?
Your best starting place is to speak with your accountant first.
The accountant already has a very good idea about the finances of your business and given their experience, they are best place to provide you with advice to go forward with.
While you could go it alone, it’s not uncommon for the owner to start off enthusiastically and then lose interest over time and/or the daily business needs take over and drown out any desire to continue with the planning process.
Working with your accountant will definitely overcome this issue – they will not only ask the right questions, yet, also keep you on track with developing the plan and ultimately, putting it into action.
On a final note, any business that embarks on developing its strategic plan and goes about putting it in place, will automatically put itself far ahead of those who don’t do so – simply because they are now thinking about and work on the business – and not just in the business.
Aperture Accounting, 1300 273 788