Covid 19 has severely affected business and small business in particular. While there is a great deal of optimism that the coming vaccines will finally control the virus, it appears likely that this will not have a major impact until the second or third quarter of 2021. Now is a critical time to review and adjust your plans to deal with this.
Less than 10% of small business owners classify their plan as excellent and only about 15% review their plan monthly. Over 20 % of owners do not have any written plan. A Strategic Plan will help:
- Focus business activities on more effective growth and improvement.
- Improve communication with employees and the leadership team.
- Set priorities and make better decisions.
Data from the U. S. Small Business Administration (SBA) shows that companies with a written plan grow 30% faster than companies without a plan.
Start with the numbers. What were your sales, expenses and profits and how do they compare to last year and to your plans for this year? Calculate the differences and analyze the reasons for the deviations. Preparing a list of things gone wrong and things gone right will provide a good starting point for making improvements.
While the numbers are critical, they are not the only thing you should review. Items such as your overall vision and strategy for the business should be examined. Do you have the right people in the right job? What training is needed? Are you happy with the style of your organization? How is morale? What is your businesses reputation? Are you satisfied?
Small business is risky. 30% fail within two years and 50% fail within five years. Having a plan this is clear and understood by everyone in your organization can greatly reduce these risks.
The following series of manageable steps can help reduce your risk.
1. Make sure your vision aligns with the company vision that is shared with employees and customers. It should be short and make clear what the company’s future will be including products, markets and long-term goals.
2. Review and analyze your current situation. A good approach is to use the SWOT analysis technique to review of your Strengths, Weaknesses, Opportunities and Threats. Where will future growth come from? What are you competitors doing and what will be your competitive advantage?
3. Establish personal goals with your employees and overall goals for the company plus plans on how to accomplish them. An effective technique is to use the SMART check list to make sure your goals are:
- Responsible Party
4. Regular reviews and follow up are essential to make sure progress is being made. A common approach is an in-depth monthly review with weekly follow up on a few specific items. Plans rarely work out exactly as expected. It is important to allow some flexibility and to build in some contingency ideas to deal with unexpected events that are very likely to occur.
SCORE, “Mentors to America’s Small Business” is a part of the SBA. It is an organization of volunteers who provide free unlimited confidential counseling to business owners and entrepreneurs. They have local members who have prepared business plans and are available to help. A more detailed workshop is available at www.score.org/event/creating-strtegic-plan If you would like a confidential review of your situation with a local councilor, you can schedule a meeting at www.score.org or you may call 610-376-3497 in Reading, 610-327-2673 in Pottstown or 717-397-3092 in Lancaster to speak to a volunteer.