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[S1051]Strategic Planning For Small Business

by Isabel Baldry, Isa

Small businesses tend to cater to a niche market. Therefore it becomes very important to learn the art of strategic planning in small business, to receive a good market share of whatever business niche the small business is supposed to cater to. Whether your small business is a catering company, a small bistro or a used car dealership, some sort of strategic planning for your small business will aid you in acquiring the required market penetration that you seek.

Small businesses can become very profitable if handled properly. The strength of a small business lies in its ability to move fast to capture and grow in a certain niche area. Planning is therefore of the greatest importance. Because of the fact that small businesses do not dominate the market even in the niche area, planning and marketing the business is crucial to the eventual success or eventual failure of the business.

This is because the type of problems that small businesses face differs from problems faced by large companies. The small businessman will have to plan accordingly, keeping this in mind. Bankruptcy is a real threat faced by most small business owners, in a large number of cases, small businesses simply go broke not because of economic problems but due to a poorly planned business model. Under capitalization is another huge factor that causes small businesses to fold up before their time.

Make a business plan - and stick to it as far as possible. This plan is what is going to guide you through to success or failure. Many small businesses find it difficult to get capital to start their venture. Since many small businesses depend on loans to fund their startup, a business plan is an important first step towards that loan. Research the business that you are going to enter into, study the market, and focus on the niche area.

You must identify all the potential negatives before beginning the business. Your business plan will decide the difference between winning and losing. A good plan takes cognizance of all factors and guides you through the intricacies of your market. It becomes the reference point to which you keep coming back in case of roadblocks that may appear on your business horizon.

Start up capital and funding are important issues, a bank loan can usually be acquired by the use of a convincing business plan. However, the real worry in financial terms that a small business has is that of repayment. Should you go in for a loan? Who will provide the initial seed capital? How and when will you break even? These important issues must be factored in your business plan.

A small business credit card is available through many companies. Is your small business suited to the use of one of these cards? This may depend on what type of business it is. Whatever it is, and however you go about funding your small business, make sure that you keep a finger on all the finances concerned with the business.

Proper financing is a major factor in your small business that can decide a successful outcome or a failure. Considering the number of small businesses that fail because of cash flow reasons compared to the actual number of small businesses started, financial planning seems to be a crucial link in the chain.

Marketing: let us come to this point at the very end. Did you clearly identify a market in the business plan? How many units did you figure the business could sell/deal in? What are the channels you will use to reach your market? A strategic business plan will have included all these issues before the business was even started. Marketing will decide whether people will buy your products or services - so make sure that you market yourself well. You are essentially selling yourself. Just smile and do it.

Whatever business you are keen on entering, remember that strategic planning in small business is a very important issue before you. Take the time to think through a plan and write it down. Your business depends on it.

Are you a new business owner who has no time to prepare a strategic plan for your business? Do you even know how to prepare a strategic plan? For the new business owner, it's better to have a simplistic strategic plan instead of not having a strategic plan at all. This article will show the new business owner how to develop a strategic plan in 8 easy-to-follow steps.

If you're like most beginning business owners you have an idea of what you want to accomplish in your business but it's not written down. A document that captures your thoughts, vision and objectives on how you want to make money will give you, your current employees, and future employees direction when making business decisions. This type of document is called a strategic plan.

Strategic Plan versus an Action Plan. A strategic plan is usually a short document that talks about your current business, your future business, and 4-7 key strategy statements. These statements are the 4-7 items that you feel are critical to your business success. You are communicating to your employees and reminding yourself that these items are the focus of your Company. An important point to make is that a strategic plan does not go into "how" you plan to accomplish these 4-7 key strategies. A separate document, called an Action Plan, contains the information on "how" you will accomplish what is in your strategic plan. This article explains only the development of a strategic plan.

Three Parts of a Strategic Plan. There are three parts to a strategic plan. Part one includes your business mission, vision and values. Part two looks at your business strengths, weaknesses, opportunities, and threats. This is commonly referred to as a SWOT analysis. The third, and last, part is the 4-7 key strategy statements that were mentioned earlier in this article.

For the new business owner, here is an easy, 8-step process to develop a strategic plan.

Mission, Vision, and Value Statement. Step one is to write your Mission Statement. This is a statement of what you want your company remembered for. Answer these three questions: What product or service does your company provide? Who is your customer? Why do they come to you and not your competitor? Your answers can be separate sentences or can be combined to make a single statement.

Step two is to write your Vision Statement or a statement of what your company aspires to be in 5 years or beyond. It usually is a very short statement. Answer these questions: What do you want your company to do that seems impossible right now but will build on your company expertise, strengths, resources or customer bases? Is the vision challenging and vivid? If not, make it so.

Step three is defining your values in a Value Statement. The basis of your company culture is dependent upon the values you include in your strategic plan. Write down words that describe the most important values for your company. Some words to consider: Customer-oriented, helpful, high quality, teamwork, integrity, expertise, or creative.

SWOT Analysis. A SWOT Analysis may be difficult for the new business owner because you may not have enough history to determine your strengths and weaknesses, however, the SWOT Analysis still should be done.

Step four is to define your company strengths. What does your company do very well? This could be related to service, product, employee, management, operations, etc... List 1-5 items. These will be items that you want to capitalize, leverage and / or promote.

Step five is to define your company weaknesses. What areas does your company need to do better? List 3-5 items. These are items that you want to improve upon.

Opportunity and threats to your company deal with the environment influences outside of your company and outside of your direct control. You list theses items to be proactive and to determine which items need to be prioritized and used to your advantage or to have plans developed if or when a particular situation arises.

Step six is to list 1-4 opportunities and step seven is to list 1-4 of your company's external threats. For both steps six and seven, you will need to consider the best or worse case scenarios if, while operating your business, the following changes occur: your business environment changes (political, legal, environmental, social or technical), if the industry that your business is in changes (new competitors, alternative products), the market changes (grows, gets smaller, new markets), or something happens with your competitors (what's their strategies, strengths, weaknesses?).

Key Strategies. Once you know where you are (Mission), where you want to go (Vision) and what values will guide your company, you need to determine the top 4-7 strategies. These strategics contribute to achieving your company vision.

Step eight is to refer to your Mission and Vision statements and to begin to write down answers to the following questions: 1) How will I achieve my vision looking at where I am at currently (products / services, people, resources, environment, etc...)? And 2) What do I need to be doing today to achieve this vision? Look at your weakness list. Are these things preventing you from growing a stronger, more profitable business? Do they need to be addressed as a strategic statement?

Using Your Strategic Plan. As you gain more information about your business and customers you should refer to and update your strategic plan often. Reviewing your strategic plan may be on a monthly or quarterly basis.

With this easy to follow, 8-step method, you now have a strategic plan that any new business owner can immediately refer to for guidance and decision making criteria.

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About Author

Both Isabel Baldry & Sharon Marsh are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Isabel Baldry has sinced written about articles on various topics from Science, How to Sell on Ebay and Home Improvement. Isabel Baldry is a freelance writer who writes passionately about a number of subjects. Learn more about here.. Isabel Baldry's top article generates over 40500 views. to your Favourites.

Sharon Marsh has sinced written about articles on various topics from Fitness, Internet Marketing and Finances. Resource City Connections, your knowledgeable and nurturing business community, for business owners and entrepreneurs looking to accelerate their business. If you're ready to super charge your sa1es, easily attract perfect customers, and have more fun and. Sharon Marsh's top article generates over 12100 views. to your Favourites.