Small Business Management

Strategic Planning For Small Business

Strategic Planning For Small Business Is Essential

Strategic Planning For Small Business

Strategic planning is important for small business. Often, strategic planning is traditionally associated with large enterprises. Small operators that want to create superior business outcomes and make the best use of available capital and resources should engage in strategic planning. Analyzing internal and external issues, assessing resource and capital requirements, investigating competitive market forces and identifying strengths, opportunities and threats allows a company to better align to its overall goals and objectives. Companies should have an established business plan. Strategic planning for small business is important to undertake to determine how well a company is tracking the business plan. It can also provide useful feedback for reconsideration of current and future business initiatives in response to market forces or changing business priorities.

Financial strategy:

Financial planning for small business requires identifying capital requirements for current operating programs and future growth initiatives. When cash flow is insufficient to support day to day operations and fund expansion plans, alternative sources of finance become necessary. Strategic planning for small business looks at the big picture. Questions get asked about how capital is currently being used and whether current business processes are effective. If an organization has large amounts of capital tied up in idle inventory, decisions need to be made about whether new processes or software can help better manage inventory procedures. This frees up idle capital that can be better used to fund business expansion initiatives.

Marketing Strategy:

Strategic planning for small business can help companies adjust the focus of its marketing initiatives. Product and service lifecycles stages warrant the use of different marketing strategies. If companies adjust the focus of core operating goals and objectives, marketing programs must be changed. This is particularly evident in organizations that shift from product centric to customer centric models. Establishing sales targets and aligning marketing resources according to business objectives is a fringe benefit of carefully considered strategic planning for small business.

Human Resources Strategy:

What are the labor requirements now and for future business expansion plans? Will consolidation of existing operations result in redundancy and the need for retraining? Will we need to hire new staff with additional expertise to fulfill new job requirements? What are the capital costs of new labor and is outsourcing a more cost effective option? Strategic planning for small business considers human capital and supports decision making to align labor to operational goals and objectives. Strategic planning should be regularly undertaken by small businesses that want to improve business performance.

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