Proper strategic planning can lead to profits
BY NANCY DAHLBERG
Goals, goals, goals — we all have them, but did your company hit them last year? How about for the Q3 and Q4 of 2019? What are your growth goals for 2020 for all of your functional areas and does everyone in your company know what they are?
If your company is like a lot of small businesses, there’s room for improvement. In a recent holiday period discussion, one owner of a local restaurant chain described his planning effort as “just winging it.”
Unfortunately, this is the situation too often in today’s business management. The competitive marketplace is too complex and moving too fast to trust the fate of your organization to be guided by intuition and the laws of random chance.
That’s where strategic growth planning comes in, says Spike Schultheis, a consultant with Florida SBDC at Indian River State College. Already have your goals, you say? Often times, Schultheis says, a company will develop goals, but do they track progress and does the company meet or exceed those goals? According to Schultheis while most business owners think strategically, their business does not have a good strategic planning process in place that every employee participates in.
Contrary to conventional wisdom, profitability is not the result of luck or good fortune in the marketplace. The profitability of your organization can be planned. A sustainable strategic growth planning process focuses on the little steps your company can make every single quarter.
These steps help your business grow and stay on track for achieving your larger goals. The process should involve every single person in your company.
Schultheis believes that the strategic business plan for the organization will review the current market and the resources available to create a strategic platform to guide the business’s allocation of energies and resources. The strategic plan created will project the results expected and assigns specific objectives and responsibilities for their successful execution with specific outcomes defined in both dollars and calendar milestones. While every business should have a traditional business plan in place and update regularly, a strategic plan takes a deeper dive into specific actionable items, providing clarity and direction for employees. A strategic plan focuses on aligning three key areas of the business: The Mission and vision; defining the business’s purpose.
Strategic Platform: The rationale for approach to the market. The specific Action Initiatives and Performance Metrics to measure achievements.
“In short, the strategic plan is about creating a competitive advantage for the business in a rapidly changing business environment,” said Schultheis says.
Getting started with the strategic plan:
1. To have repeated growth year after year, a business needs to have an intentional planning process in place.
2. The business needs to formulate overarching objectives for the organization. It needs to be one statement that everyone in the company can see how their work leads to that objective. Then everyone feels they are contributing to that result.
3. The company needs to have a growth goal with quantitative objectives and milestones for every business function within the company. Whether that is an established department or just one person, you still need that function — sales and marketing, operations, HR, finance, CEO strategy — to have a target for the year.
4. All these goals need to be broken down into specific bite-sized pieces that can be accomplished every quarter by one human being. It’s not the company will do X, it’s John Smith will be doing X; it needs to be that specific. Each of these steps will move the company forward to the strategic objective that you have for the company.
5. Every quarter, recognize and celebrate your successes. This helps to keep the focus on strategic growth.
“The goals should be stretch goals — pushing the organization beyond the day to day work to move the organization toward overall long-term sustainable growth,” Schultheis says.
For now, look for ways the business can break down your big growth goals into actionable steps each quarter that will make growth headway for your company — and get buy-in from the entire team. Make sure to go beyond sales and operations — also have goals for HR and finance. Once accomplished, celebrate those, and make another step in the next quarter.
For more information on how Schultheis and the entire Florida SBDC at IRSC Team can help your organization develop a strategic plan, contact Katie Muldoon at [email protected] or call 772-336-6285.
Treasure Coast Business is a news service and magazine published in print, via e-newsletter and online at tcbusiness.com by Indian River Magazine Inc. For more information or to report news email [email protected]