By its very nature, strategic planning process feels hard.  That’s why entrepreneurs and small business owners avoid it.  The purpose of a process is to make things easier to do because you don’t get stuck in trying to figure out what to do next. If you find yourself needing to put a strategic plan in place - this guide will walk you through the process, step-by-step.

What is the Strategic Planning Process?

Let's Define the Strategic Planning Process

Why Do You Need a Strategic Planning Process?

By its very nature, strategic planning feels hard.  That’s why entrepreneurs and small business owners avoid it.  The purpose of a process is to make things easier to do because you don’t get stuck in trying to figure out what to do next.

It is easy to get swept up in the day-to-day activities of a small business.  When you do, you find yourself reacting, instead of proactively choosing to succeed down a path of your own desires.  As the saying goes, most people don't plan to fail, they just fail to plan.

What Can a Strategic Plan Do for You?

A lack of a strategic plan will waste your time, your money, and your motivation to keep going. Having a strategic plan will do three things:

Who Do You Involve in Strategic Planning Process?

Many hands make light work.  You are likely to get more buy-in and more momentum behind your goals when you have people involved in the strategic planning process. 

For my clients with 15 or fewer employees, the answer to ‘who’ is everyone. However, in some businesses, it is logistically impossible to have everyone involved in the process.  If you are running as a sole proprietor, include the other partners or sub-contractors who help you get the work of the business done.

Also, think a little outside of the box when you consider who you want to bring to the table.  People who think differently, people who challenge the status quo, and people who balance out your team (or your own personality) can bring value to the process.

For your team, set a few house rules about the planning process and expectations. These rules should allow the team to ask questions, challenge assumptions, and give freedom to offer up innovative solutions to the challenges you have in your business.

Steps to the Strategic Planning Process

You have your model and your tools; let’s define the strategic planning steps.

Strategic Planning Step 2 – Where Have You Been, Where Are You going

The second step in the strategic planning process involves looking behind and looking forward.  The first step is to conduct is a Business Audit; this is the homework before the strategic planning meeting.  The business audit reviews the performance and the trends of the business. It helps to identify where money is leaking, where money is being left on the table, and where the opportunities are to create cash.

The following areas are starting points, and can serve as a framework to your audit, they include:

Strategic Focus: Financial & Fiscal

            Good business is good math.  If the math of the business doesn’t work, then the business won’t work either.  When you look at the financial health of the business, you are looking beyond sales or revenue. In this area, we review:

Strategic Focus: Customers (Marketing, Sales, Product)

 Your customers are critical to the continued growth of your small business. In this area, we review:

Strategic Focus: Internal (Operations, Systems, Processes)

As you grow and scale your small business, the ability to be productive with your team will come down to how easy it is to get the work done.  The operational area that will require specialized KPIs, consider some of these questions in the process:

Strategic Focus: Team (HR, Hierarchy, Hiring)

The single largest line item for every service-based business is payroll, or professional services.  People are the key to your scalability, but business owners don’t often see this area as a strategic focus.  When thinking about the team, consider these questions:

Strategic Focus: Plus, Delta, Low Hanging Fruit

Based on all the findings and the goals you have for the business:

Strategic Focus: Change the World

Our world is changing at a fast and furious rate. Industries are shifting and disrupting every day. The way things were in the past is not the way things will be in the future. To be relevant and profitable in your small business, you must look for ways to innovate. The challenge is to use the rate of change to your advantage. It is too easy to get started down this road and get locked into complaining about the way things were.

For example, a CPA firm was expressing their frustration around hiring millennials who were willing to work 80 hours a week. They continued to express their frustration, mentioning that the problem was ‘millennials.’ My observation is that society’s expectations around quality of life have changed, yet the business has not evolved with that expectation.

In the ‘Change the World’ framework, the firm would be better served to ask themselves this question:

What would disrupt your business enough to change everything? How can you be on the leading edge of that change? If that is not a path you desire, where does the business need to go to be relevant and profitable in five years or even ten years from now?

Strategic Planning Step 4 – Prioritize and Timeline

Create Your One Page Business Plan

The value of a one-page strategic plan is that it forces you to communicate where the business is headed. The term ‘one-page’ is open to interpretation.  One page could be a standard 8.5” x 11” paper, and it could be 11”x17” paper – chose what works best for your business.  Here is a basic layout that you can do in excel or word that you can adapt.

Create a Timeline for Implementation

As much as you would love to, you cannot accomplish your plan in the next 30 days.  As you look at the strategies developed by you and your team, it is time to prioritize the strategies and give structure to them.

One of the most effective ways of timelining strategies is to utilize the 90-day planning timeframe.  Map out on a paper, or with sticky notes, four columns – one for each of the quarters in 2020 (QTR1, QTR2, QTR3 and QTR4). As you look to lay out your goals, consider the following:

Did some of the strategies not make the cut? Don’t worry. You don’t need to abandon them. They get placed onto the ‘Good Idea’ list. You’ll reconsider them at your next quarterly planning session.

Create a Focus for the Next 90 Days

Here is where small businesses need to deviate from how large companies tackle strategic planning.  As a small business, you can move faster than others.  For this reason, only address the next 90 days or quarter for implementation. 

This method of planning is more iterative, allows the focus you need to achieve results, and keeps you fluid and flexible enough to pivot.

Looking at the upcoming quarter:

Staying Motivated to see the Strategic Plan Generate Results

Focus and dedication are crucial to seeing the strategies through to completion. Determine what a win looks like, and how you will recognize and celebrate that win. Accountability also plays a part in staying the course while implementing your strategic plan. Do you need someone to hold you accountable? How will you keep your team accountable for their roles?

Often accountability can be as simple as having to give updates, because no one likes to say that there are no updates. At times, though, there needs to be to help you see and remove the resistance to getting things done.

Tracking, reporting and rewarding will go a long way in staying motivated during the next 90 days.

Strategic Planning Step 5 – Compounding the Results

Adopt a 90-Day Strategic Planning Cycle

Two weeks before the start of the next quarter, you and your team will need to come back to the table to report on their progress and look at the next quarter of initiatives.