Small businesses are absolutely critical to the US economy. According to the Small Business Administration web site, small business represents more than 99.7 percent of all employers. They employ half of the private sector employees, generate over 65% of the new jobs, and pay 44% of the total US payroll. Small businesses are in this position because they can quickly take advantage of market conditions. The small business is agile, nimble and can fluctuate with changing market conditions. The challenge is being able to identify the shifts in the market and adjust the business accordingly. This is the one big hurdle that can mean the difference between success and failure. The prediction of and capitalization on these trends is the small business strategy. Without strategy, the small business will fail.
The small business typically starts with an owner having a vision of what they want their business to become. They know what the business is about and what it takes to be successful. Once the business is viable, the owner usually spends all of their time in the daily tasks that keep their business alive. The challenge is that these daily activities of running the business operation prohibit the owner from focusing on forecasting the future state of the business. Over time the business can start to run the entrepreneur. The vision has been started but not finished, and the more the owner does daily activities, the less they think about their future state. Therefore the small business strategy is not in place, and the business most likely will fail.
The small business is at a disadvantage when compared to larger companies. Larger companies have the budgets to hire dedicated resources that can focus on company strategy and future state opportunities. Compare that to a small business where each person often has multiple responsibilities. Most of these duties focus on daily business operation, not strategy. There must be a process in place for recognizing ideas and making turning them into standard operating procedure, if not the business will have a limited life span. If the small business does not find a way to continually define and redefine their vision they stand little chance of accomplishing it. This leads to the one-hit wonder businesses -- companies that get into a market because of a need but are unable to take advantage of other opportunities.
The small business does not have to lose out to market opportunities for growth. They can think and make strategic decisions just like the big corporations. The key to doing this is to be able to think strategically about the business and focus on activities that are going to lead the company to the future state. It is possible to have a living, breathing, strategic plan that if communicated properly will help the stakeholders focus their efforts on the activities that are going to push the business forward.
A key to building this strategic plan is first and foremost awareness. The whole company needs to be aware that a plan is needed and beneficial. The second element is simplicity. The more complex the plans the less likely it will be adopted. Therefore limit the plan to a page or less to begin with. Adopt a strategic planning framework to help you build on your initial business plan. Whether using your current plan or a new plan, setup a regular time to review the plan and assess your progress toward meeting the goals initially outlined in your business plan
The benefits to a strategic plan are endless. As previously stated, it can mean the difference between being in business and going out of business. You can start focusing on what is important to grow the business and delegate the other activities to hired help. The plan can also give you choices. You can choose if you want to grow and become a large company or stay a small business. With the right vision and strategies in place you should be able to enjoy the success of your small business.
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