Small business owners frequently don't know, or fail to practice, what management in large companies knows is essential--PLANNING. Planning can make the difference between failure and success; between survival and going out of business. A small business with a plan, will outperform a similar, or bigger one, without a plan.
Planning Requires Discipline
In order to plan effectively you must be disciplined. It requires thoughtful analysis to plan, and regularly revisiting your assumptions, goals and strategies. The discipline of developing and implementing plans must also be combined with the discipline of monitoring, evaluating, modifying and maintaining your plan. Plans must be re-examined periodically to re-test their viability and validity. A regular schedule of planning updates must be developed and adhered to.
Planning Requires Participation
Planning is best when it is done as a TEAM. The old adage, "everyone knows more than anyone" applies here. Of course, in addition to gaining other perspectives in the planning process, the benefit of support is also important. People are much more committed to a plan that they helped develop, than to a plan developed without their participation, and "crammed down their throats."
Planning Requires Goals
What is the purpose of your plan? What are you trying to achieve? The plan is there to help you arrive at your destination-- like a roadmap. Ambitious goals require comprehensive plans. In the business world we speak of SMART goals: Specific, Measurable, Attainable, Realistic, and Timely (King, et.al.). A goal which is not specific will be difficult to communicate, monitor, and attain. Without measurements you will have no way to track progress. Unattainable goals are a waste of time and a set-up for failure. Realistic goals are not grounded in fantasy or illusion; rather, in fact and concreteness, with of a probability of attainment. Finally, timely goals are those which are synchronous with the window of opportunity, meet a need which is apparent, and include achievable milestones and deadlines.
Planning Requires Analysis
You're probably tired of hearing about the SWOT (Flagenbaum, et.al.) analysis, but it remains at the core of the strategic planning process. Each small business has some unique attributes. It is important to identify and build upon these Strengths, but also to recognize and minimize any Weaknesses. Likewise, Opportunities must be recognized to capitalize on them and Threats discovered so that strategies can be developed to mitigate or avoid them. The SWOT analysis is an excellent process to discover and record the realities of the internal and external environments. Armed with this information, plans can be created to address each area.
Planning Requires Data
Your planning assumptions should be grounded in data. Mere speculation will not suffice. Gather data and determine the most important data elements, for incorporation into the monitoring process. Estimates are fine if they have a historical, or benchmark, basis. Whether you're preparing a comprehensive business plan, a marketing plan, a sales plan, a relocation plan, an expansion plan, a retrenchment plan, a contingency plan, a competitive strategy, etc., you will need data and realistic forecasts. Some of this data may already be available to you in industry reports, government data (especially demographics), Chamber of Commerce or Business Association analyses, or even reports produced by the competition.
Planning Requires Creativity
Playing it safe when developing a plan is not enough. Plans need to be made with "stretch" goals that will significantly, perhaps dramatically, advance the enterprise. The most effective plans reframe reality. They look at problems from fresh perspectives and new angles. "Brainstorming" is a useful technique so that as many ideas as possible can be created and considered. (There are excellent references and Internet sites which will provide the groundrules.)
Plans Focus Energy, Resources, Attention, and Effort
Plans are useful to direct available resources and talent toward the solution of a problem, or attainment of a goal. With this focused attention and support, successful implementation of change becomes far more probable.
There is no Best Formula for Planning
Writing a plan is far superior to one carried around in your head. The act of writing seems to make it more real and concrete. Written plans tend to reflect more analysis and thought, and are easier to share with others. There are excellent planning software packages, great books on the subject, even workbooks. However, your business is unique, and as such you will need to only use any references as basic guidelines. Adapt your planning process to meet the exigencies of your situation and don't rely on "cookie cutter" solutions.
You may think you don't have the time, resources or energy to devote to developing a comprehensive strategic, business, marketing, financial or other important plan(s) for your business. However, even a plan scribbled on the back of a napkin, at a lunch, is better than no plan at all.
References:
Flagenbaum. Hart & Schendel, "Strategic Reference Point Theory," Strategic Management Journal, vol.17, (1996): 219-235
King, Oliver, Sloop & Vaverek, "Planning and Goal Setting for Improved Performance," Participant's Guide (Cincinnati, OH), Thompson Executive Press, 1995
Copyright © 2008, Dr. Ben A. Carlsen, MBA. All Rights Reserved Worldwide for all Media. You may reprint this article in your ezine, newsletter, newspaper, magazine, website, etc. as long as you leave all of the links active, do not edit the article in any way, leave my name and bio box intact, and you follow all of the EzineArticles Terms of Service for Publishers.
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