As mentioned in the article 4 Steps to a Strategic Plan, the strategic planning process is a necessary foundation for a company's success. However, there are some things to watch out for.
To help identify the traps you should avoid, we’ve followed the advice of Michel Grenier, Executive Director of Centre d’entrepreneuriat ESG-UQAM, and Guy Dallaire, Associate Vice President, Sales and Business Services at National Bank.
Some entrepreneurs mistakenly believe that strategic planning is only for large companies—and that the big guys are the only ones who can afford it.
Not to be confused with a business plan, strategic planning is important at every stage of a company’s existence, from startup through periods of growth or major change.
Strategic planning should be an automatic reflex for entrepreneurs. It lets them decide in advance where they want be in the short or long term, determine the necessary steps to get there, and be proactive instead of reactive. This essential road map will help the entrepreneur stay on course, even in tough times.
Guy Dallaire stresses that strategic planning is the key time to review a number of things.
“You can analyze current and potential customers, take stock of accounts payable, and check whether the terms of payment meet industry standards or not. You can review productivity and determine if your workforce is big enough to successfully complete new projects.”
Michel Grenier adds, “You may also want to look more closely at your company’s results, the state of the market, and the competition.”
Small and medium-sized businesses that want to grow have a deep-rooted interest in implementing a strategic planning process.
“If you’re aiming for growth—whether it’s by acquiring another company, purchasing assets or equipment, or capturing new markets—strategic planning is a must. Without it you’re flying blind,” explains Guy Dallaire.
In any case, it’s important to substantiate the assumptions you’re making in your budget forecasts. For example, if you want to acquire equipment, you have to assess the financing rate, the amortization period, and any other relevant details.
Once you’ve prioritized your projects, you’ll need to conduct regular monitoring and make adjustments as you track implementation and progress.
For a short-term action plan with a one-year horizon, monitoring should take place on a monthly basis. For a long-term plan and projects lasting three to ten years, evaluations should take place annually. A scorecard can also help make decisions easier.
Don’t be fooled, strategic planning can be beneficial for any organization, big or small. Strategic planning doesn’t necessarily have to be expensive. Even a minimal investment of time in strategic planning will increase your projects’ chances of success.
Sometimes it’s better to entrust strategic planning to an external consultant who can take an unbiased and objective look at the organization. However, if you’re doing it in-house, who should be in charge of the process? A team of key players who have the full support of the CEO.
Once the exercise is complete, it’s time to ask the real questions. Strategies have to evolve to take changing realities into account. For example, a printing company will need to change its roadmap to keep up with new technologies.
Ultimately, by helping you make informed decisions, a detailed and well-structured vision of your company’s expansion projects increases your odds of success—so long as you avoid the traps.
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