This is an original article for
Chicago Consulting Resources>
June 1999

Simple Strategic Planning for the Small Business Owner

by Jerry Pinney

Strategic planning guides an organization toward those goals that will provide the stakeholders with the results that will encourage continued investment in the organization. The plan becomes the roadmap for ongoing growth. An effective strategic planning process is a key management tool for insuring a vital, growing organization. The most important factor to remember is that Planning is a process, not a project. As the planning process becomes part of the day to day activities of an organization, the results will become the fuel to maintain and improve the growth and expansion of your business.

The following are few simple hints that will help you get started and easily maintain the process over time. There are five key elements to an effective Strategic Planning Process. They are:

1. Evaluation
2. Opportunities
3. Objectives
4. Strategies
5. Control

The first step to is to put five divider tabs into a three ring binder and to label them Evaluation, Opportunities, Objectives, Strategies and Control.

Opportunities

On a sheet of paper behind the Evaluation tab, list all of the key things that you need to manage in order to have a successful business. Here are a few ideas:

• Accounting
• Marketing
• Manufacturing
• Purchasing
• Sales
• Human Resources
• Public Relations
• Customer Relations
• Training

Evaluate

You get the idea. Make your list to fit those key areas that are important to your business. The next step is to evaluate each of these key areas. Use your own system of evaluation and be very honest. I suggest that you ask all the key people in your organization to do the same thing. In effect you are creating your own business report card. It could be as simple as grading each area on a scale of 1-10, with 1 being poor and 10 being the ideal. Writing a statement or two on the good points of each area and a statement or two on those things that need to be improved is another way to evaluate each area. You now have the Evaluation section completed.

Opportunity section

Next is the Opportunity section. This is the where the fun begins. Basically you want to ask the question, If I could do anything with my business, what would it be? Please don't limit these dreams. In order to plan you need to get out of the box and be creative. Write down all of your dreams and wishes. Again, you want to ask some of your key people and/or advisors to participate and to submit ideas on how you can grow your business. I suggest that you take each area that has been evaluated in the previous section and make some notes on how you would like each area to be improved. An effective approach is to ask, "If each area were a 10, how would it be different than it is now?" You now have the Opportunity section completed.

Objectives

At this point you have evaluated where you are and you have dreamed about where you would like your business to be. The next step is to set some specific objectives. Objectives are written statements of measurable results to be achieved. An objective needs to be a clear statement about what you want to happen, rather than a statement of how you are going to accomplish a goal. An effective objective will be action oriented and will be a stimulus and guide to establishing the strategy. The better the objective is written, the easier it is to develop the strategy. An example of an objective would be, "Create at least one new product (or service) to market to my existing customer base and create a minimum of $5,000 in new revenue by December 31." You will probably have 2 - 3 objectives written for each area that you have evaluated. This completes the Objective section.

Strategy Section

You are now ready for the next step, to develop the strategies to accomplish each objective. The purpose of the Strategy Section is to take each objective from the prior section and generally state how the objective will be achieved. This is simply a "to do" list of everything that needs to be done to achieve each objective. With a list of strategies completed for each objective the Strategy section is completed.

Control section

The final section of your plan is the Control section. This section contains all the things that you need to control and monitor your plan's progress. Included will be the Profit and Loss statement, the Balance Sheet, Action Plans for each objective, and Position Descriptions for all key employees

In order to make your strategic plan a management tool and to be certain that planning becomes a process and not just a project, there needs to be a regular review of progress. This review should include all key people in the organization and should take place at least once a quarter. As you can see each of the five steps facilitates the next. The planning cycle is really just that, a cycle that keeps on going. The control section feeds the evaluation section, which feeds the opportunity section and so on.

Many organizations find that it is most effective when one person is responsible for the planning process. This can be a senior executive or it can be an outside consultant that monitors the process and insures that everyone involved is part of each quarterly review. A neutral third party can be a real asset to the entire planning process.

The old adage, "Plan your work and work your plan" certainly applies here. It is easy to get started and once you do you will see planning will help focus your activities on those things that are important to the growth and expansion of your business.

Jerry Pinney is a business consultant who specializes in business planning and new business development.