Strategies are required for a business which has already been set up to help it remain on the right path and achieve success. A good strategy points you in the right direction and helps you to make decisions regarding allocation of resources, which includes capital as well as people.
Strategic planning should provide the answers for ‘what, why and where’ of the business. A strategic plan should act as a guide to define functional and divisional plans, including, but not limited to, technology, marketing and human resources. This is called the ability to look at the “big picture”.
A small business owner should not be concerned with small details, which should be either delegated to employees, or looked into once the strategies are finalized. The need here is to recognize patterns and establish trends and priorities develop a vision for the future and set long-term goals.
Usually, a three-step approach to strategic planning should be used:
- Situation– This should evaluate the current situation that the business is facing. There should be an attempt to look into the reasons for the particular situation. For a start-up business, it should look at where it is at the moment, and whether the business has the things required to be successful.
- Target– After evaluating the situation that the business is currently facing, you need to identify and define the goals and objectives. You should have a clear vision of where you would like the business to be five years from now. You can decide to have a single long-term goal; alternatively, this can be broken down into a series of short-term goals that need to be achieved after specific intervals, and which will help you be where you want to be in the long term.
- Path– After defining your goals, you should chalk out a clear path that will successfully lead you towards your goal. When deciding on this, you need to take various possibilities into consideration that may have the ability to derail your progress. While it is not always possible to foresee all the possibilities right at the beginning, it will definitely help if you have at least some idea of the situations that might come up, so that you are not taken by surprise. You should also have contingency plans in place, so that if certain things do not turn out the way you had planned, your growth is not hampered by it.
One of the most common ways to carry out an analysis to develop strong and successful strategies is the SWOT analysis. It is used to evaluate Strengths, Weaknesses, Opportunities and Threats. This can be applied to any situation in an organization. The strengths and the weaknesses are attributes that may be either helpful or harmful to realize an objective. Conversely, opportunities and threats are external factors that may be either helpful or harmful in achieving an objective. If you have clear objectives regarding your business, SWOT analysis can be very helpful in pursuit of those objectives.
To have a successful business, you must have a strategy. You can’t know where the business is going unless you have a plan to get there.