How Come Over 87% Of Businesses Not Succeed? No Strategic Planning Is Most Likely The Answer
Article by Lynda Moore
A businessman who was rushed off his feet said, ?Strategic planning? No time for that.? How true ? he was overwhelmed and the reason that he was so busy is precisely that he had chosen not to undertake a strategic planning process. It is like the chicken and the egg ? business owners are too busy to consider any planning yet without planning they will stay overwhelmed. To be clear; busy is not the same as successful or profitable.
Does your company stand out from the competition?Many business people are action-takers who just desire to get on with the job. They commonly feel that ?planning? is something that big corporations are able to do as lots of people who can do it. They know who to sell to ? ?everyone? and why people buy from them ? ?quality and low price?. With those two ideas, the business is just like the vast majority of the competitors in the market which means they do not stand out.
Without a well developed strategic or business plan, that company will rarely be more anything other than a job. There may be some staff but the firm is likely to have lower sales than it could, be less profitable than it should be and be less efficient than is necessary.
Put simply, a good strategic planning framework will identify the ideal market to target (not ?everyone?), how to position your company in the market so that you are not cheap and the key, the systems to make it more effective.
What is business strategic planningA large problem for company execs in starting a planning process is not fully understanding what they should do or how to go about developing the strategic plan. Usually they went into business based on a profession they had learned. However business planning is not taught in schools therefore most managers have very little understanding of the principles or business models they can use.
Other issues are that most owners are too close to their company and have an emotional attachment to it to take an objective view of the market and the way of providing the product to that market. So the ideal approach is to invest in a strategic planning consulting service.
What can a strategic planning consultant do?Good business consultants will help the owners and executives through a strategy planning process employing proven planning tools and models.
These can show the core skills of the company and how you can be different from the other players in your market. Bear in mind that there are many other firms that provide a almost the same product or service so simply claiming you are the best at plumbing, financial planner or tyre fitter does not make you stand out.
The planning tools will help narrow down your market from ?everyone? to one where you can stand out as the specialist in that market for example a plumber for office blocks, a financial planner for owners of businesses with sales less than m or a tyre shop for performance cars. Suddenly, your potential customers will recognise you as the go-to business for that service and you are competing in a much less crowded market place.
The final element to a successful strategic plan and this is what the action-taking business owners want to hear, is the execution plan.
It is no point having a brilliant plan if no-one implements it.
A mediocre plan well executed will outweigh an excellent plan poorly implemented.
Therefore a critical component of a business planning process is to assess resources to see if they can fulfill the goals and objectives.? Is there sufficient plant?? Are your staff trained properly?? Do you have enough funding?? Does the plan make a good rate of return?
The last part of the plan is measurement? With no measuring you have no idea of your advancement.
Effective businesses have one feature in commonAll of those factors ? discovering your target market, positioning the business as the first option in that market and a well resourced action plan ? are the bedrock to a profitable business.
A great strategic plan will not guarantee you a profitable business. But without a strategic plan, you are certain to fail.
About the Author
Lynda Moore helps business owners get more from life by getting more from their business and their relationships. She qualified and practiced as an accountant in New Zealand and in recent times she has studied psychology at Auckland University and uses both skills for better strategic planning and succession planning. For more information, visit http://quantumsolutions.co.nz
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