Strategic planning may sound tedious (it doesn't have to be), but it's necessary

Successful entrepreneurs and business scholars both say that without a clear set of goals, deadlines and numeric benchmarks, a small-business owner can quickly become overwhelmed by a tsunami of tasks.

Defining Your Own Success No matter your industry, don’t underestimate the importance of strategic planning in today’s competitive business environment By Tim Collie and Linda Kleindienst Originally published in the Aug/Sep 2010 issue of 850 Magazine

When Allie Fleming set out with her close friend to start their own Tallahassee group fitness gym, she knew that everything had to be on paper.

And along with all the cost projections about staffing, space, hours and equipment, Fleming knew she had to set a few simple goals in a strategic plan.

“We had a very straightforward mission, and some very clear goals,” said Fleming. “Our numbers weren’t just based on how many we signed, but on how many used our service. A lot of fitness centers are all about the numbers, but we knew instead of 1,000 members who may only come occasionally, we’d rather have 400 who come weekly.

“We also knew we had to open by January, or we might as well just wait another year,” Fleming said. “In this business, it’s true that January is the time when people are filling those New Year’s resolutions and signing up to exercise.”

Quitting your job or cashing in your assets to start a business without a plan may seem crazy, but experts say a surprising number of entrepreneurs don’t take the simple first step of writing it down on paper.

Why? Maybe it’s because many feel the goal is simple: cover expenses, turn a profit, make a living.

If only it were that simple.

Successful entrepreneurs and business scholars both say that without a clear set of goals, deadlines and numeric benchmarks, a small-business owner can quickly become overwhelmed by a tsunami of tasks.

According to businessdictionary.com, a strategic business plan is an “internal document that (1) outlines an organization’s overall direction, philosophy, and purpose, (2) examines its current status in terms of its strengths, weakness, opportunities and threats, (3) sets long-term objectives and (4) formulates short-term tactics to reach them.”

The good news is that the word “strategic” is not nearly as frightening as it may seem. We’re not talking about building Rome in a day — more like jotting down a few goals to reach Rome in several years.

Basically, a strategic plan is a single-page plan that “bridges the gap between where the business is and where it wants to go,” said Ted A. Kirchharr, vice president and chief operating officer for Landrum Consulting in Pensacola. It should take no more than a few hours, he and other experts say, and should include a range of goals from six months to a few years out. At the end, you might even want to add what famed business guru Jim Collins calls your “big, hairy audacious goals.”

“Whether you’re a $300 million company or a bakery with three employees, you want that strategic plan simple and straightforward,” Kirchharr said. “And this is very important: It should have clear goals, in clear English, with designated responsibilities and clear deadlines. Otherwise, it’s worthless.”

He and other experts tend to break down the strategic plan into several simple steps.

First is what’s known as the SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis. This involves taking a hard look at where your business is right now — number of clients, amount of billings per month, employees and expenses.

Crucial to this exercise is a good hard look at your weaknesses. Are partners pulling their weight? Is the service you’re offering the right fit for your clients, or does it need some fine-tuning? It should go without saying that the idea here is to correct the weaknesses, but Jerry Osteryoung, director of outreach for the Jim Moran Institute of Global Entrepreneurship at Florida State University, says this is where some owners fall down. He believes the chief weakness is communication — between partners, among employees, with clients.

Next comes what might be called the opportunity and threat assessment. What opportunities are out there for you to seize in six months, a year, two years? And what are the biggest threats to you obtaining that goal?

Again, the key here is to keep this simple — you’re going for a single page in your final plan. And don’t make the type too small; stick with straight, declarative sentences that anyone walking off the street into your business would understand.

There should be no wiggle room. The plan has to have clear goals with quantitative targets — the number of widgets sold, the number of accounts closed. The qualitative goals frequently include objectives such as improving the customer service experience and improving the quality of new hires.

Getting your team to buy in to the strategic plan after it has been agreed upon and written up is crucial. The plan must be embraced by everyone in the organization. And Osteryoung says it should then be revisited every month — and the progress (or lack thereof) should be recorded. Remember too that the plan you have for your company will become an important roadmap for its continuance, should something happen to you.

As Osteryoung puts it, “Running a business without a strategic plan is like flying an airplane with no guidance assistance.”

There are plenty of websites available to help you formulate your strategic plan. And don’t forget nearby academic resources that you may be able to tap into for help.

In formulating your plan, Fleming, the group fitness gym co-owner, says one of the most important pieces of advice she can give is not to be afraid to ask for help.

“The people you do business with — your equipment suppliers, the electricians, printers, whatever — they want to help you,” she said. “Because if you succeed, they succeed. And they’ve all been through this before, starting a business from scratch, making plans, formulating targets and goals. That’s one of the most important things I can say — don’t hesitate to ask for advice.”

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There are many approaches to strategic planning that can be found on the Internet, but sometimes simpler is better, at least to start out. The key questions are, where do you want your business to go and how are you going to get there. For some simplified planning examples, we turned to Wikipedia:

Draw-See-Think:

Draw — What is the ideal image or the desired end state?

See — What is today’s situation? What is the gap from ideal and why?

Think — What specific actions must be taken to close the gap between today’s situation and the ideal state?

Or you can try See-Think-Draw:

See — What is today’s situation?

Think — Define goals/objectives.

Draw — Map a route to achieving the goals/objectives.

But no matter what you use as a roadmap for your company’s future, Colleen Gildea from interbiznet.com has some sound advice on how to start.

1. Find a quiet place (alone or with a carefully picked core group), usually away from the office.
2. Bring beverages and snacks, pads, pens, markers and paper, all reports on the status of the business, laptops and anything you require for uninterrupted, sustained thought.
3. Begin.