As a small business owner, you wear many hats every day: CEO, CFO, Accountant, HR Manager, Marketing Manager, Website Designer, Social Media Expert, to mention a few and as if it is not already difficult enough to juggle all these different positions, now you also have to worry about your strategy.
Many small business owners are simply too busy with the daily maintenance of their company that they do not have the time to plan and implement an elaborate strategy. However, research has shown that businesses that forego strategic planning are more likely to fail. Consequently, strategic planning is essential to a firm’s survival. Even more importantly, there is a positive relationship between formal planning and firm performance.
Although it may sound daunting, strategic management is simply a series of managerial decisions and actions that are focused on the long-term performance of the firm. It includes analyzing the company’s internal and external environment, formulating a strategy based on the firm’s vision and mission statements, implementing the strategy, and employing a system for evaluation and control. Strategy is setting goals and defining the actions to be taken to achieve such goals with the resources available. However, small businesses often have limited financial and human resources, and consequently, are more susceptible to changes in their environment making strategic planning even more significant.
If you fail to plan, you plan to fail
If you don’t know where you are going, it is true that any road will take you there, but how can you ensure that everyone in your company is taking the same road? And, even more importantly, when will you know that you have arrived? Without a clear plan, you will float around like a cork in the ocean and go wherever the current (i.e. the environment) will take you.
Strategic management does not have to be an elaborate planning process. You can simply start by truthfully acknowledge where your company is now, and not where you would like it to be. Then, visualize where you would be in 2, 5, or 10 years if you continued the same way. If you don’t like that answer, you will have to figure out what changes need to be made to get you where you would want to be. Assess the potential risks and possible payoffs, define specific actions and goals, and get everyone on board. Remember that no matter how elaborate your strategy, it is the implementation of such strategy and taking corresponding action that will set you apart.