Strategic planning is a coordinated and systematic process for developing a plan for the overall direction of an organization and the allocation of resources to optimize future potential. Many companies start with just an idea and a desire to succeed. Sometimes it works; more often, it is not. According to the United States Small Business Administration (SBA), the main reasons companies fail are a lack of a solid plan and a lack of adequate capital. These two reasons are not unrelated, especially in tough economic times. After all, if you don’t invest in a good plan for your business, why would you expect someone else to invest in your business?

Strategic and business planning isn’t just a checkbox on your to-do list. Strategic planning is the foundation of everything – your business identity, your marketing and sales, your operations, your management approach, and your financing. However, apologies for not doing so abound. Even well-established companies must differentiate themselves from their competitors to grow and improve their margins.

Regardless of the size of your business or how long you’ve been in business, if you’re willing to invest, you can be someone who can outperform your competition and change the nature of our economy through new processes, products, or services.

Planning is much more than just a team-building exercise, but one of the benefits of using the inclusive planning process outlined below is building a strong and cohesive management team. The feedback from my Strategic Planning Workshop is that the process highlights the different management perspectives and structures them into a unified strategy.

My six-step process for building a viable strategic plan is the foundation of my Strategic Planning Workshop.

Orient the participants – Develop a common understanding of the planning process and the frameworks that provide information about your business. This step defines the general framework of the process and explores alternatives to develop different aspects of the process more fully. The members of the planning team must come from the functional units of the company (finance, marketing, operations), so they may have different perspectives depending on their area of ​​expertise. The owner’s endgame is a major strategy engine.

Review your current mission, goals / objectives – Establish the starting point and examine alternatives that can add value to your current plan. Whether your current goals and objectives are loosely defined or well defined, they define your business and how it is run. If you are not sure where you are, you will have a hard time defining your address. I use a customer-focused 3-question exercise to define your current business, and then I look at the next 12 months.

When you define your business from the customer’s perspective, you can make a difference in your success. Growth comes from focusing on customers and consistently delivering value to them. Although strategic plans generally cover longer periods of time, a solid plan for the coming year is important so that you have confidence in a three- to five-year plan.

Prepare your situation analysis – Identify market segments, competitors, capabilities, core competencies and opportunities. Rather than trying to address large and broad markets, define your niche and preferably define it for your competitive advantage. To position yourself against your competitors, understand who they are and what their market strategy is.

When considering your capabilities, you should conduct an honest Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis. All of your core competencies should be strengths, but does each add value? Are they unique and sustainable? How important is each competency to your customers? Finally, identify and evaluate your perceived opportunities. Preparing a situation analysis can be an intense activity, especially if you find that you are not well aligned with your clients. If you are not well aligned, you are left with the options of finding new customers, developing new products or services that match the customer’s needs, or becoming a statistic. Over the past two years, we have seen some important examples of companies failing to respond to changing customer needs and wants or changing government regulations.

Formulate your strategy – Brainstorming; develop the industry scene; comprehensive strategic evaluations; formulate strategies, mission statement, goals and objectives. “First comes thought; then the organization of that thought into ideas and plans; then the transformation of those plans into reality.” – Napoleon Hill, author of Think and Grow Rich.

This is where you differentiate yourself and find ways to beat the competition. Some companies have fared poorly in the economic downturn, but others have grown and prospered because they had a strategy that responded to change. Small businesses have an advantage over their larger rivals because they can move faster to respond to change and implement new ideas. This step definitely requires thought, but the rewards can be substantial. Remember that many of today’s great companies were founded during a recession. Other small businesses proved they had value and were acquired by a larger company.

Prepare your implementation plan – Define action plans, schedules and budgets. Action without a strategy is misdirected. A strategy without action is wasted. What specifically needs to be done to achieve your goals and objectives? Who should do it and what other resources will they need? When should it be done? Actions should be divided into measurable steps according to a schedule and assigned to specific people. How are you going to finance your plan? Your implementation plan is your basic reality check. If the timeline is unrealistic or if you don’t have the necessary people, resources, or funds; What adjustments can you make to achieve your goals?

Prepare for follow-up – Establish metrics and a follow-up schedule. Once you have established what needs to be done, you need to define how you are going to measure progress towards meeting your goals and objectives and how often to do it. Monitoring should be frequent enough that corrective action can be taken before you miss critical dates. Monthly progress reviews and quarterly strategy reviews may or may not be enough. It can also be helpful to set minimum, objective, and ambitious goals. Remember that the plan is not chiseled in stone. If your reviews show that something is not working, change it.

In general, I recommend using the SCORE business plan outline that was developed for startups, but can be easily adapted for established businesses. Questions answered during the planning process feed directly into the business plan sections: Business Description – What do you do? Products / services: what do you sell? Marketing plan: how are you going to sell it? Operational plan: how will you carry out the daily operation? Management plan: how will your business be managed and who will manage it? and the financial plan: how will you finance the business?

As you go through the steps of developing your strategy and preparing your plan, it is important to consider the endgame. Although no one can guarantee the success of your business, good planning creates a solid foundation for your business and minimizes risk to you.