Small to medium sized enterprises (SME’s) make up over 99% of all Australian businesses but many still don’t have a Strategic Plan in place. Given that a lack of strategic management and planning is nearly always cited as one of the top three reasons for corporate insolvencies, it begs the question why more businesses don’t take the time to do it.
What is a Strategic Plan?
A Strategic Plan defines the purpose of the business, what goals the business aims to achieve over the coming 3-5 years and what plans the business is putting in place to achieve those goals. They can be helpful in understanding the overall purpose and direction of a business right through to an exit strategy. A Strategic Plan doesn’t have be complex either – a simple one-page Plan can be very effective for SMEs.
There are many benefits to having a Strategic Plan: For example:
- When seeking funding, any lender will always want to see a Strategic or Business Plan
- You can set goals and get everyone on the same page
- Your team can better understand their contribution to these goals and where they fit
- Risks are more easily identified and managed
- You can look back and review progress
How to create a Strategic Plan?
Creating a Strategic Plan for your own business doesn’t have to take long. But it can be useful to involve key staff in the process – sometimes the greatest benefits come from the conversations that happen when documenting the Plan.
Use these questions to draw out the elements of a Strategic Plan:
1. What is the current situation of your business and where are you now?
2. Where do you want to go from here eg. over the next 3-5 years?
3. How will the business get from where it is today to where you have projected in 3-5 years?
To do this, it can help to answer these questions:
- What services and products will you be providing (same, different, new)?
- How big will the business be (revenue, staff)?
- What clients will you be working with (same, new)?
- Why will your clients continue to prefer your business to others?
4. What obstacles will you have to overcome?
5. What additional skills or resources do you need?
A Strategic Plan is a must for all SME’s, as it provides direction and clarity on what the business is aiming to achieve.
If you would like any help creating a Strategic Plan for your business, please contact your local Accru advisor.