If you want to live a satisfying, rewarding life, you have to play to your strengths. You have to know who you are, what you’re good at, and what you’re not so good at. You’ve got to put yourself in positions that bring out the best in you. Sometimes we just have to get through the day, and the next day, and the next day, but if you don’t have some broader plan or vision for yourself, you end up directionless and stagnant.
It’s the same in business. Too many businesses only plan for the short term and don’t think beyond the current quarter. As important as those short-term goals are, they must be mapped out and executed within the scope of a long-term strategic plan. Setting goals and making plans is vital to the success of any business, as we’ve been saying for years. In this blog post, we’ll focus on strategic planning.
Strategic Planning for Sustainable Growth
Successful growth requires laying the track before the train. The way you do that is with a clearly articulated strategy—a plan designed to achieve a specific long-term goal. Strategic planning involves understanding what you will need to learn, develop, and invest in to accomplish that goal. While this seems like something only larger businesses would have to worry about, strategic planning is even more important for small businesses because they have fewer resources to work with.
Strong planning leads to more efficient and effective allocation of limited resources, which in turn gives you a clear understanding of what you will need in the future. Growth planning is a vital component of strategic planning.
The Steps of Strategic Planning
1. Where Are You Now?
Strategic planning is a fluid process, but there are some steps every business must take to assess its current capabilities and identify areas for improvement. First, take a look at where and what you are right now. Ask yourself the following questions.
- What is your competitive advantage?
- What makes you different from other businesses offering similar products or services?
- Who are your current customers, and why do they work with you rather than another manufacturer?
You will also want to assess your business’s current capabilities: your personnel, processes, and production.
- What is the capacity of your current staff and facilities?
- What is your current unit cost and market share?
- Are you operating at close to capacity or do you have built-in room to grow?
Take, for example, a company whose employees are at their limits in terms of the hours they can work and the productivity they can provide. You have employees doing multiple jobs. You’re having to turn away new clients. You’re managing the floor while also doing the marketing and trying to run the company. Your strategic plan is going to look a lot different than the strategic plan of a company that is actively seeking out new clients because its employees and facilities have so much unused capacity.
2. Where Do You Want to Go?
After assessing where you are, it’s time to think about where you want to go. What are your growth goals? At this point, you’re looking at a roadmap and planning your route. You could just get on the road and follow the signs, but you might end up spending more on gas, food, and lodging along the way as you spend time correcting wrong turns, sitting in traffic, and diverting around construction. Good strategic planning gets you to your goal faster and with fewer resources expended.
- Where would you like this business to be one, three, five, ten years from now?
- What are some model businesses who have already achieved that kind of growth? How did they do it?
- How will you conduct sales and marketing with growth in mind?
- How will you raise sufficient capital to invest in growth?
3. How Do You Get There?
With your destination in mind, you can begin planning your route, so to speak. Note that the first question below is about your staff. Every employee of the company should be involved in strategic planning. They should be aware of the company’s plan and understand the role they will play in its future.
- Will your current staff need any additional training in order to scale up?
- What new problems will growth bring?
- How can you adjust your processes to accommodate adjustments?
One company that successfully implemented strategic planning for growth is Oakland Fortune Factory, owned by Alicia Wong and her mother Jiamin. Jiamin needed her daughter’s help with translation, but Alicia arrived with a vision of what the company could become. There are plenty of fortune cookie manufacturers, but Alicia saw a niche for gourmet fortune cookies with customization options.
It’s not just a vision for cookies that guided the company’s strategic planning, but a vision for the company’s place in the world. “My passion and my purpose are to use the cookies to help nonprofits that work for social justice,” Alicia told The Oaklandside. Finding a niche, understanding the company’s purpose, and analyzing available capital, staffing, and capacity all came together through a plan that allowed the company to grow and thrive.
Accommodating Scalability through Flexible Infrastructure
Scalability refers to the ease with which business functions can be expanded. One person making custom jewelry in their garage could be an expensive hobby or a profitable business, depending on the goals and business acumen of the one person in question. But what it is not is easily scalable. Without major organizational changes, a business like that has a definite ceiling. Ask yourself these questions when evaluating your business’s scalability.
- Do you have enough floor space to expand? Is your use of space optimized?
- Is your workspace optimized for workflow so that no time or effort is wasted as products move through different phases of production? How will this workflow change as you expand?
- Are you running at capacity? If so, how can you best increase capacity?
It’s not just physical infrastructure that needs to be flexible. Your IT infrastructure must also be flexible enough to scale up with your business. You’ll need a CRM system that is scalable for businesses of any size, providing as little or as much as you need as your business grows.
Begin Your Growth Journey Today
Laid out like this, it all seems easy. But each of these simple steps requires a lot of thought and research—and often, an expert voice in strategy, management, and organization. You’ve built the train, and you know how to operate it, but you might need help from a specialist in laying down track and blasting through mountains, so to speak. Strategic planning, growth planning, and investing for growth is our specialty. StrategyWerx is here to guide you through your growth journey.
Are You Ready to Do Better Growth Management?
StrategyWerx is all about growth strategy and management. That means giving you the tools you need to develop sound strategies, structure your organization to lay the track ahead of the train, and implement the tools you need to grow. Ready to learn more about how we do that? Book a free consult and bring your questions. See if you like working with us on our dime, and get some good advice in the process.