Whether you’re a small, medium, or large business, it pays to spend some time, at least once a year, on strategic planning. While you may not need a formal plan, going through the strategic planning process can help you define your competitive advantage—how your business and products uniquely meet the needs of your customers—and meet your business goals. A business strategy, in its simplest terms, is a plan for how you plan to achieve your vision and business objectives. Typically, a complete strategic plan has 3 main components: it identifies where the business stands today—including its strengths and weaknesses, what goals and priorities you want to focus on, and the plan to get there.
How Is the Business Performing Right Now?
Many business planning sessions begin with a simple SWOT analysis. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats and is a good measure of how the business is currently performing. Make a chart with these four headings and brainstorm all the factors influencing your business right now.
- Strengths make your business strong and can be anything from the location of your business to your killer pesto lasagna recipe.
- Weaknesses include anything that is currently hurting your business, like limited capital to advertise or slow order processing.
- Opportunities are things coming up in the near future that you believe will positively influence your business, such as an event or a potential partnership.
- Threats will negatively affect the viability of your business. They often stem from the competition, but can also include things such as pending legislation, a bus stop moving locations, or nearby construction.
Once you have these four categories mapped out, prioritize the most pressing concerns you believe will be important to meeting your goals in the coming year. These are the things that need to be addressed in your strategic plan.
How Do You Compete With Other Businesses?
This question digs a little deeper into the Threats category. Even if you’re not attempting to grow your business, you want to make sure it will be viable going forward which means keeping an eye on the competition.
Start by doing basic research on who your competitors are. Do a few searches online about your products and services, look at local news reports, and check in with your local chamber of commerce. Ask customers where they shop and your suppliers about other businesses in your area. Are there new businesses that might compete with yours? Are there other businesses that would interfere with your ability to continue working in your area? For example, if you’re running a child daycare facility, are there changes in the neighborhood that make it less child-friendly?
For a deeper dive into competitors, take a look at research tools. Clover Insights, the free analytics app by Clover, can give you great insight into local competitors as well as similar businesses in other cities. You can easily look at how similar businesses are performing and what kinds of customers they bring in. Sometimes your biggest competitor comes from outside your industry, so make sure to research where your customers are also shopping—not just businesses by industry or type.
What Are Your Goals?
Once you have a good sense of where your company stands, consider where you want it to go. Are you looking to grow the company, or better serve your customers? Do you need to improve efficiencies, or perhaps devote less time to unrewarding tasks? Make a list of your goals for this year. (Check out this blog on setting business goals to help you get started.) Make sure to include financial goals.
After thinking through all the factors above, the next step is to prioritize what actions you’ll take this year to reach your most important goals. With your budget and financial situation in mind, consider the following questions:
- How much money do I need to make to reach my goals? Even if you are not planning on growing your business, you’ll need to at least break even. The break-even point is how much you need to sell to make back your investment in the business. To calculate this, add up all your operational costs, then divide that by the profit you make on each sale. This will give you a sense of how much you need to sell to stay in business.
- What kind of promotions or activities do I need to do to reach my goals? Your business goals determine what types of promotions will work best for you. For example, if the main purpose of your business is to educate consumers, promotions geared toward growing your email list would work better than throwing an annual sale which is geared toward increasing revenue. Consider your goals and create a list of possible promotions. (Need ideas? Check out this post with 13 promotion ideas for the most common business goals.)
- When is the best time to conduct these activities? Take a look at upcoming events such as holidays, conferences, and seasons and map out a draft calendar of when each promotion or activity should be run. Then think about your resources—your available staff, money, and time—and whether the schedule makes sense or whether you need to make adjustments.
- How much money do I need to invest to reach these goals? Not having enough capital can derail the best of plans. Sometimes moving your promotions to a different time of year when cashflow is better is the answer, and sometimes you’ll need a little extra help. Bank loans are not the only option for funding. Clover Capital can help you tap into future credit card purchases to fund your business now.
- How will I measure success? Periodically, during the year, you’ll want to check in on your progress and determine whether you’re on track to meet your goals. Take a minute to work out how you’ll measure success and put reminders in your calendar to check your progress.
One of the advantages of being a small or mid-sized business is the ability to nimbly respond to changes in the marketplace without having to deal with a lot of bureaucracy and formal planning. That said, going through the above process, even informally, will help you reach your business goals. With Clover in your corner, strategic planning is a little easier.
Clover is sold by leading U.S. banks including Bank of America, BBVA, Citi, PNC, Sun Trust and Wells Fargo. You’ll also find Clover at our trusted partners including Ignite Payments, Restaurant Depot, and Sam’s Club. For more information, visit us at clover.com.[image: Strategic planning workshop by Samuel Mann on flickr]