Reasons to Carve Out Time For Strategic Planning

Most entrepreneurs start their own businesses for one, all, or a combination of three main reasons: 

1. Because they are passionate about what they do.
2. Because they want to bring something new to the market.
3. Because they want the freedom that comes with running their own company.

It is safe to say that all entrepreneurs desire a profitable, thriving, long-enduring business. But despite best intentions, many small businesses won’t make it to year five in operation.

Data from the U.S. Bureau of Labor Statistics show that approximately 20% of new businesses fail during the first two years of being open and 45% fail during the first five years. Only 25% of new companies make it to 15 years or more.

Entrepreneurs work incredibly hard on their businesses.  Nearly 90% work on weekends and a large percentage of entrepreneurs work more than 49 hours per week.  Small business owners are often so consumed with the hard work of keeping their business running from day to day. 

They hardly have time to eat lunch, let alone make time for goal setting or planning for the future.

But even though it doesn’t feel as though there are enough hours in a day, carving out time to look ahead and plan can prevent a business from stalling and becoming obsolete. Adopting a strategic plan can keep a business on a growth path toward success. 

WHAT IS A STRATEGIC PLAN?

A strategic plan is a statement of vision for your business. It serves as a roadmap or atlas to help guide business decision-making and ensure steps toward growth are taken. It provides a direction and can detail specific goals. A strategic plan reflects the startup’s initial intention (the passion, innovation, or freedom that inspired the business’ creation). It also holds business owners and employees accountable to that intention as they encounter challenges when trying to reach milestones. 

Small businesses often travel bumpy and winding roads on the way to success, but with a strategic plan in place, those twists and turns can be far less frightening. New companies will survive and have a better chance of reaching subsequent success levels if they have a strategic plan in place.   

THE STRATEGIC PLANNING PROCESS

Strategic planning is the process of establishing the direction for the business by first acknowledging where the company is and then determining where it will go. While the outcome of the strategic plan is critical, there is great value to be derived simply from embarking on the exercise of the planning process. 

Most strategic planning sessions attempt to accomplish three primary goals: a mission statement or aspirational goal, a set of initiatives, and a plan of how best to align those initiatives with the budget and financial constraints.

The strategic planning process specifically sets out to:

1. Set a vision that encourages proactive decision-making.

Every small and large business that hopes to grow and last needs a vision for its company and a generalized set of steps needed to achieve that vision. The strategic planning process attempts to lay a strong foundation for the business’s growth, rooted in the realities of the business’s environment. A good strategic planning session should enable a company to foresee potential future challenges, which will allow it to be proactive instead of simply reacting to unfavorable situations. The strategic planning process can help a business prepare for whatever may come and potentially avoid future problems or unfavorable turns. 

2. Provide a roadmap to increase efficiencies.

Investing time and energy in the strategic planning process helps set a clear vision and series of goals. An essential outcome of the process is the establishment of a roadmap or directional guide that ensures the business stays on a course toward its goals. An effective strategic plan helps chart a path to obtain the vision and objectives like a GPS system advising on turns and traffic detours.

The strategic planning process endeavors to guide future decision-making by giving shape to the company’s day-to-day operations. In other words, the strategic planning process’s outcome of a roadmap helps determine the appropriate use of finances, profits, and resources. 

When done optimally, the strategic planning process ensures the business will operate efficiently, and the business owner can make effective decisions.

3. Safeguard the business so it can face future turbulence.

Ultimately, the strategic planning process helps business owners and stakeholders focus on current and potential future market trends when setting their vision and priorities. It is extremely helpful in ensuring the longevity of a business to know what is possible and what may happen within their market sector. Studying the market environment through the strategic planning process provides valuable insights which may increase growth and profitability and provide backup plans and contingencies. 

The foresight proper strategic planning encourages can safeguard a company when the business landscape gets rocky. 

WHY STRATEGIC PLANNING IS IMPORTANT FOR BUSINESSES OF ALL SIZES

Many small businesses lack a strategic plan. 

Entrenched in day-to-day operations and working hard to meet short-term goals, small business owners often forgo long-term planning and future goal setting.

The idea of strategic planning can feel too lofty an ambition for an entrepreneur because it is time-intensive and highly conceptual for a business just starting out. However, having a strategic plan is as crucial as setting core values. Just as core values determine and impact the tone and ethos of a business, a strategic plan sets the direction and steps to success. Both help unite a team – regardless of size – in the pursuit of a shared, understood endeavor. 

Some small business owners also fear that having or creating a strategic plan will take away from the passion behind their startup. They worry that planning for the future could detract from the organic growth and success they envision. However, engaging in the planning process – which includes brainstorming conversations, market and competitor analyses, and research – can be extraordinarily beneficial in the long run. While every small business is unique, studying how and why other small businesses “made it” can be inspirational and encouraging. Knowing what pitfalls could lie ahead encourages calm, proactive navigation that can lead to better outcomes.

IT IS NEVER TOO LATE TO CARVE OUT TIME FOR STRATEGIC PLANNING

While strategic planning is highly advantageous when a business is in its early days, it is never too late to embark on the process. Getting clear about the business’s direction and including employees and stakeholders in the process will undoubtedly contribute to its strength and longevity whenever it happens. Reflecting on the status of the business and considering future goals is an essential step in the evolution of any small company, at any point, especially during times of transition or growth.   

For example, Freedom Makers met for its first-ever in-person strategic planning session in Dallas, Texas, this fall. While we have always been forward-looking as an organization, we typically focused on short-term goals for the upcoming quarter. But our company experienced remarkable, 200%+ growth in 2021, and our core team members prioritized meeting to plan out new strategic goals for 2022 and beyond. 

Gathering together to take stock of where a company is and refocusing on where it wants to go in the future helps ensure future growth. 

Finally, strategic planning is not a one-time “set it and forget it” event. Instead, proper strategic planning should be an ongoing, cyclical process of examination and re-evaluation. As growth occurs and decisions are made, it is important to occasionally recalibrate the strategic plan and shift resources and concepts to better anticipate and respond to market forces. Carving out time for strategic planning and every so often stepping out of the day-to-day operations to reassess the strategic plan should be a high priority for all small businesses.