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Strategic Planning For Small Business: How To Get Results
According to the U.S. Bureau of Labor Statistics , around 20% of small businesses fail within the first year. By the end of their fifth year, this number increases to 50%. Once you hit the ten-year mark, only 35% of small businesses remain operational. While the lack of an effective strategic planning process isn’t the sole reason for these failures, it is certainly a contributing factor.
A lot of SMEs (Small to Medium Enterprises) are unable to define and execute a proper strategic plan. This is usually because most small SMEs do not understand strategic planning and the role it plays in managing your business.
Strategic Planning For Small Business
Following is a guide to help you understand the strategic planning process and the importance of small business strategic planning .
What Is the Strategic Planning Process?
The strategic planning process is a process used by organizations to develop a plan for achieving their long-term organizational goals. It works as a roadmap that is used to identify your strategic goals and objectives, as well as what needs to be done to achieve them.
What Steps Are Involved In the Strategic Planning Process?
The strategic planning process for small businesses is as follows:
Step 1: Analysis of Your Strategic Position
Small business strategic planning begins with analyzing your current strategic position. This involves understanding the external and internal environment of your organization and identifying your strengths, weaknesses, opportunities, and threats (SWOT analysis).
An analysis of the internal environment of your organization helps you understand your strengths and weakness. As a result of analyzing the external environment, you gain insights regarding the opportunities and threats present.
In order to conduct a SWOT analysis, gather input from sources such as the executives of the organization, your customers and external market data. When you gather this information, it will help you identify your strategic position in the market. This is used to identify the strategic goals and objectives for your organization and help in developing a plan for the future.
You should also carry out what’s known as a PESTLE analysis. This involves understanding the political, economic, social, technological, legal, and environmental factors that affect your organization.
A PESTLE analysis is normally conducted before the SWOT analysis. The results of this analysis are used to identify the potential opportunities and threats in the external environment of your organization.
Step 2: Developing a Vision
The second step of strategic planning is developing a vision. Using the information gathered in the previous step, you must develop a roadmap for the future. Remember, an organization’s vision is more than just a two-line statement on your website. It is the foundation of your strategic planning process.
The strategies or objectives that you adopt must be aligned with your vision.
This is important because you developed your organization’s vision according to the condition of the market. Market conditions change on a daily basis and you must adapt accordingly. However, abandoning your vision and strategic plan in favor of short-term success will affect the sustainability of your organization.
Step 3: Developing a Mission Statement
Many organizations fail to understand the difference between the vision and the mission statement. They believe them to be interchangeable, but this is not true.
A company’s vision represents its long-term plan and where they want to go.
A mission statement , on the other hand, identifies the purpose of the company. It helps answer questions such as what the company does, who its customers are, what value they hope to provide, etc. Essentially, it helps determine how you plan to accomplish your vision.
Step 4: Establishing Organizational Values
This is another key step in the strategic planning process. In order to accomplish your mission, you must establish some organizational values.
These core values will define the culture of your organization. They will help establish how employees are expected to behave and what they must strive to achieve.
Core values are the things that you truly care about and live every day. Creating core values that are nothing more than a “wish list” is a waste of time and energy. #ProTip
The culture and values of an organization play a very important role in its success or failure as well. What your employees do on a day-to-day basis will determine your achievements through the course of the year.
Step 5: Risk Assessment
Risk assessment is very important in strategic planning. This is an extension of the weaknesses and threats identified earlier in the first step of the planning process. You must be constantly aware of the risks and roadblocks that stand in the way of your goals and objectives.
Assessing the possible risks associated with executing your strategic plan helps you plan ahead. It allows you to take on a proactive approach so that you are able to act quickly and resolve any problems that arise.
Step 6: Developing a Small Business Strategic Plan
So far, you have identified your strategic position in the market as well as your vision, mission, and the risks associated with your plan. You are now ready to develop a strategic plan for your small business.
In order to develop your plan, you must consider the following:
- What strategies will have the greatest impact and help achieve the vision and mission of the company?
- Which types of impact should you prioritize? (For instance, are you looking to establish a value-based relationship with your customers or focus on generating revenue?)
- How do you expect your competition to behave?
- Which objectives need to be achieved urgently?
- What tactics should you employ to execute your strategies?
- What resources do you have available?
- How should these resources be allocated?
- How will you measure the progress of your strategic plan?
You must use your vision, mission statement, and organizational values as a reference when selecting strategies. This helps you discard any initiatives that do not further the progress of your organization and help improve your strategic position.
Step 7: Executing and Managing Your Strategic Plan
Once you have developed a strategic plan for your business, you can move on towards implementing it. In order to execute your strategic plan, you must first communicate it to the rest of the organization.
This is done through meetings, email, conversations and sharing the relevant documentation. Make sure your employees receive a clear outline of the organization’s vision, mission, values, goals, objectives, strategies, and tactics.
Organizations that fail to communicate these crucial aspects of a strategic plan to their employees are likely to fail.
Once the entire organization is on the same page, start executing your strategic plan. This involves setting up teams, organizing and allocating resources, guiding and motivating employees, and keeping track of the progress made.
Step 8: Reviewing the Strategic Plan
In the final stage of the strategic planning process, you must review your strategic plan and make changes accordingly. Reviewing your strategic plan involves analyzing the amount of progress made and the current performance of your team.
Compare your progress with the standard of performance that was expected. You must also re-evaluate your priorities and any shifts in the internal and external environment of the organization.
If you observe any changes that influence your strategic position, revise your strategic plan and implement it accordingly. This helps to ensure long-term success.
What are the Benefits of Strategic Planning for Small Businesses?
Strategic planning is one of the key determinants of success for an organization. Some of the key benefits of strategic planning for SMEs include:
It Helps to Minimize Risks
Economic uncertainty is a common phenomenon. As a result, businesses that do not have a functional or concrete strategic plan will find it harder to succeed.
A strategic plan can help mitigate this risk.
It provides the organization with valuable information regarding industry trends and competitors. This allows you to make better decisions. It also helps to bring things into perspective. A business is a dynamic entity that’s fueled by innovation and creativity.
A strategic plan is a great way to rekindle that entrepreneurial spirit and bring in fresh ideas that will take well in the market.
It Gives a Sense of Direction
Small businesses need to survive amongst the large corporations and competitors that exist in their niche. Having a sense of direction is very important in this regard. Fortunately, your strategic plan is a constant reference.
It helps you determine whether you are on the right track or not. It helps you keep track of the goals that have been achieved and those that need to be worked on.
Having a strategic plan in place will help you analyze your progress and allocate resources accordingly. It helps you keep your business focused on only the initiatives that support your company’s mission. This is extremely important for the survival and success of SMEs.
It Minimizes The Inefficient Use of Resources
Strategic planning is very useful in streamlining the operations of your business. It helps bring every employee on the same page. This prevents inefficient use of resources. All employees work towards the same goal and do not invest time and money in tasks that are not aligned with your goals and objectives.
It Enhances Operational Efficiency
With a strong strategic plan in place, a business has a roadmap to follow. This roadmap leads to tactical action steps of the goals they want to achieve.
Organizing functional activities, managing management, determining decision making factors and deciding how to align and budget capital/resources are just a few areas in which strategic planning can help.
In fact, a strategic plan is a great way to break down long-term goals into shorter, more achievable ones. This ultimately increases the productivity and operational efficiency of SMEs.
It Improves Employee Engagement
Another advantage of strategic planning for SMEs is that it improves employee engagement. We have already discussed how the strategic planning process helps bring every employee onto the same page.
When this happens, employees are able to take better ownership of the goals and objectives that have been defined. A strategic plan also inspires trust and motivation within employees.
This is particularly important for SMEs and their employees. A strategic plan inspires confidence in your capacity to lead the organization to success. Knowing that there is a formal strategic plan in place encourages employees to work harder. It also provides employees with some concrete goals and objectives that they can aim for.
It Provides a Formal Framework
The strategic planning process helps specify the policies, procedures, and strategies to be followed. It involves decisions regarding the deployment of resources and provides a guideline for implementing the strategic plan. When you go through this process, you establish a formal framework.
This helps managers in making better decisions in case a problem arises. It also allows employees to act in a more responsible manner. They are aware of how their actions impact the organization and whether it can influence the strategic plan in a negative way.
It Improves the Scope for Improvement
Reviewing and revising your strategic plan can help you improve the overall efficiency and profitability of the organization. You are able to analyze your existing strategies and whether they have delivered the results that were expected.
It also allows you to adopt new trends much more quickly and take on a more dynamic approach. This can help you stay afloat in spite of external and internal challenges that threaten the sustainability of the organization.
The Takeaway: Small Businesses Must Have a Strategic Planning Process in Place
Strategic planning is an extensive and dynamic process that encapsulates the organization’s vision, mission, goals, objectives, and strategies. It helps provide a defined framework under which an organization must operate.
Having an effective strategic planning process in place can benefit an SME in several ways. It improves the financial and operational efficiency of small businesses, helping them stay viable. It also plays a crucial role in identifying and establishing the values and work culture of a small business.
Most importantly, it defines the business’s vision, purpose and thus, its identity.
Working without a strategic plan can put you in a risky and uncertain business environment that can lead to the eventual demise of your small business.
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Kevin A. Nye
A veteran of multiple industries, Kevin A. Nye has applied more than 20 years of management and leadership experience to a consultancy designed specifically for the benefit of small businesses. Having served in roles in Supply Chain, Operations, and Regional management, Mr. Nye was previously the Chief Operating Officer of a regional steel company and is currently Director of Operations for a third-generation family-owned citrus packing company.
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Small business strategic planning: 10 tips to transform your company
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Within our strategic planning practice we have worked with every conceivable type of business, large and small. Larger companies are more likely to engage in strategic planning, not because it is more relevant for them but because they tend to hire professional managers who understand the dramatic impact that a strategic plan can have on profitability and morale.
About half of Vistage members (I have worked with more than 50) engage in some type of strategic planning process, with varying degrees of formality. You may be wondering, why wouldn’t everybody want a plan?
One has to start by understanding the underlying psychology. We get caught in a trap, where the urgent nature of today’s work always takes precedence over strategy. We feel greater accomplishment from finishing routine tasks than attacking larger projects that deliver enterprise value but may require months to complete.
To be fair, small businesses are more strained for resources than larger companies. They do not have dedicated people for things such as research and development. But regardless of size, every entrepreneur should find time to be thoughtful about the future of their company. I have a vivid memory of sitting with a really smart young entrepreneur who wept in her office out of fear she could lose it all. The pressure on small business owners is immense, and a thoughtful planning process can chart a course to a successful future, one with more clarity and less stress.
One thing I have found is that many entrepreneurs have a plan in their head, and they are under the impression that is good enough; it isn’t. Lack of clarity manifests in poor decision making about new products, who to hire, where to staff a sales team and what equipment to buy. When these decisions are made in a vacuum and without sufficient data and context, a management team has to spend a lot of time unwinding mistakes. This is why the notion that we don’t have time to plan is really just a rationalization (one could even call it an excuse). The greater proportion of our time we spend planning (instead of reacting), the less time we expend.
Other small business owners will rationalize that they can’t plan because the world is a volatile place; and it is. But the businesses that plan what they can control, are in better position to react to the things that they can’t.
So here are 10 steps for small businesses to build a successful strategic planning process:
1. Include the right people
Often business owners are resistant to share information out of fear that it will end up in the wrong hands. So they keep a tight circle on who they have strategic conversations with. The problem with this is that the people closest to the customers are the ones with the most information about their problems, and potential solutions. In many companies, capable employees are unwilling to share their opinions. We encourage our clients to include as many people who they can trust (and who can think strategically) in their strategic planning process, and that tends to be a wider circle than they might expect.
2. Gather the data
Having access to pertinent market data is the number one barrier for most small businesses. Like investment bankers, we access industry reports on behalf of our clients but that is not practical for most businesses. However, there is a wealth of free information available at sources such as the Bureau of Labor Statistics, Bureau of Economic Analysis and low cost consumer research tools at sites such as gutcheckit.com.
Also, companies often do a poor job capturing and mining internal data. Every company should segment their reporting by channel, customer, product categories, etc. Surveying your strategy participants is also a useful way to gather information and rank strategic issues by importance.
If you are a really small company, these principles may be executed with five people but it is still the same.
3. Expect preparation
Strategic planning is garbage in, garbage out. Every person participating in strategic planning should be expected to prepare for a strategy conversation, whether that be by developing information or learning more about the mechanics of the business.
4. Create the right environment
Creating a safe harbor, a place where people feel safe about having strategy conversations is as important as making sure the physical environment (such as an off-site location) is suited to creativity. Many companies hire facilitators to keep the meeting on track.
5. Build your plan
Entrepreneurs have a lot of anxiety about writing a plan but it is actually the easy part if you have done your homework. Components of a strategic plan usually include things like an executive summary, financial projections, SWOT analysis, external factors, market/competitive analysis, vision map and action plan.
6. Focus on growth and value
Often companies engage in operational planning and call it strategic planning. Continuing to do what you have always done is not strategy at all (unless you have weighed alternatives). Focus on how you will grow the business, and in particular what product or service innovations will improve the customer experience.
7. Organize around strategic objectives and an actionable plan
The number one thing that should come out of a strategic plan is unity about four or five overarching objectives that serve as a script for the management team. They should be illustrated in some form of vision map that can be shared with managers (and perhaps all employees) throughout the company.
I get to clean up after a lot of companies who hold strategy sessions and fail to put their strategy into action. Don’t even bother doing strategic planning if you don’t come out of it with an actionable plan with an assigned champion and due dates. When action items are organized by objectives, the objectives remain alive even after action items are completed.
The most successful companies I have been around are the ones with clear intention about converting their strategic plan into their corporate DNA. They do this by:
- Sharing their vision map with a broad group of people
- Building a corporate scorecard
- Tie their performance management (including incentive plans) back to the strategy
- Celebrate wins and engage their employees in the process.
9. Execute relentlessly
As Mike Tyson once said, “everyone has a plan until they get punched in the mouth.”
If you only take one thing from this post it should be this: MEET WITH YOUR TEAM EVERY MONTH OR QUARTER TO REVIEW THE STRATEGY AND ACTION PLAN, PERIOD.
10. Think of strategic planning as a process and not an event
Companies operate on all types of cycles. Whether you engage in strategic planning annually or quarterly, it must be a repeatable process (strategy, budget, scorecard, performance management, action plan). Rinse and repeat every year.
Great leaders inspire others with their vision. They don’t get caught in the trap of being operators every day without connection to the broader strategy. Reinforce your plan every day, until every employee understands it and buys in to your vision.
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Vistage for Small business leaders
Discover the most effective sounding board for your toughest decisions. As a small business owner, you may be so busy with urgent matters that you neglect the strategic decisions that drive long-term growth. Vistage helps you get out of the weeds, identify your blind spots and push your business forward. Get started here.
Category: Strategic Planning
Tags: Business Strategy , National Small Business Week , small buisness
Marc Emmer is President of Optimize Inc., a management consulting firm specializing in strategic planning. Emmer is a sixteen-year Vistage member and a Vistage speaker. The release of his second book, “Momentum, Ho
Planning is essential for the success of any business. In business circles, strategic planning refers to a process in which an organization construes its strategies and makes decisions concerning the allocation of resources to plans set forth by the business. A strategic plan can break or make your enterprise; thus you must put in lots of effort in the development stage.
Anyways, read the below. This might help. http://www.namasteui.com/tips-for-creating-a-strategic-plan-for-your-business/
— Regards, Sourav Basak Namaste UI
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Home » Strategic Management » Why is Strategic Planning Important to Small Organizations?
Why is Strategic Planning Important to Small Organizations?
When the future life and well being of a business organisation is pre-planned at the present time using proper projections, strategic planning comes into play. Hence, strategic planning entails some of the steps and procedures which can be put in place in an organisation so that it can experience face lifting in the near or distant future. Each division within a company ought to craft its own strategic plan which will focus on growth and performance. This is necessary because the impressive growth of a business organisation is entirely dependent on laid out plans. Nevertheless, whether in a small or big company, a strategic plan should be in a simplified version which is easy to understand, interpret and implement. Complicated elements in a strategic plan document may not be helpful at all especially when the same is to be implemented. As already mentioned, strategic plan should be in form of a document which implies that it has to be written for the sake of future reference. The written plan should be clear as much as possible and equally based on the actual state of the business organisation at the present time. Although strategic planning is generally considered to be the way forward for organisations which desire growth, it has its own demerits and pitfalls. However, the inevitable pitfalls should not hinder an organisation from projecting into the future by planning in the present.
To begin with, a strategic plan may not materialize as expected bearing in mind that the operational environment of the plan can be very dynamic while the set objectives are static. Such changes which can sometimes be unavoidable may negatively affect the attainability the original plan leading to significant failures. Challenges facing an organisation at the present time cannot be sorted out or addressed by a piece of strategic plan. Therefore, this plan is only useful at a later date and only if the strategies are achieved. If the process of planning has loopholes, the outcome of the plan itself may also go below par and then lead to further failures.
When an organisation jumps from formulating a mission to developing the strategic plan within a very short and inadequate period of time, it can lead to a major pitfall of the plan. When developing the strategic plan, a business management is supposed to bear in mind all the critical details of the mission statement of the organisation so that no single development proposal is crafted void of the company’s mission. In addition, sufficient time should be allocated in the creation, formulation and implementation of the strategic plan.
There are some instances when the top organisational leadership may fail to incorporate the subordinate employees in the creation of the strategic plan. Involving workers from all levels of the organisation in the process of strategic plan and decision making is necessary and cannot be ignored at all. It should be recalled that all the employees in an organisation are part and parcel in the implementation of the strategic plan.
Another likely pitfall to strategic planning arises when the top management resort to adopt intuitive decisions which are not in agreement with the formal planning of the organisation. This can also confuse employees within a company. They will not be in a position to point out which strategies to follow in the course of delivering their services.
Unless the strategic plan is used as a basic unit for quantifying performance, the plan may not be worthy. Assessing the performance index of an organisation is necessary in the process of tracking down the initially proposed strategies.
A planning consultant plays an important role in making sure that the laid down strategies are well formulated and also attainable within the given period of time. The consultant also counterchecks resource availability and allocation for each plan and then gives the necessary counsel. In spite of these invaluable roles played by the planning consultant, the management should still take control of the entire strategic framework. Delegating the planning duties fully to the consultant is a serious pitfall. The management must still possess the plan and oversee its implementation to the latter.
A strategic plan usually passes through different phases before it can finally be articulated and its outcomes realized. For example, it begins by the process of preparing the plan itself. Key development issues are identified at this stage. Secondly, the strategies identified are developed, evaluated and re-evaluated to ensure that they fit within the mission and vision of the company. Finally, the plan is put on the implementation phase. These are complex procedures which requires the all the key employees to be partakers of the process. Failure to do so may as well as lead to the pitfall of the strategic plan. Furthermore, if the management does not create an operating environment which is conducive for cooperation and also resistant to market dynamics, the strategic plan may not record significant success.
Small businesses too need to formulate strategic planning in their operations much more than the big firms which are well established and running. In fact, in order for a business organisation to grow, a business plan alone is not sufficient, it is just a replica of ideas which the management has in mind but not strategically devised to improve performance . It is imperative to underscore that small firms have a higher demand for growth than big businesses which have already taken root. Besides, small businesses often faces a myriad of market risks compared to elaborate organisations and in case of any eventuality, they are bound to lose greatly. It is against this backdrop that small companies need o prepare, develop and formulate very strong strategic plans for the sake of sustainability in the dynamic and hostile business environment .
As mentioned earlier, the success story of strategic planning in a business is largely dependent on quite a number of factors. Regardless of the size of the business, the outcome of a strategic plan will be influenced by the procedures and modalities used in the preparation and implementation of the plan. Therefore, strategic planning can lead to improved performance in small companies if the following cardinal principles are adhered to by both the management and employees of a company.
Although most small companies rarely transit into elaborate corporations, the concept of strategic planning is one way out of transforming small firms into large companies. There are several case studies which have noted down that small companies can only experience growth if they are merged or acquired by market leaders. This may not be universally true because if small firms purse and implement strategic planning to the latter, they can always grow by leaps and bound into giant companies.
This begins with grass root planning on the development of the young company. Strategic planning will provide the right path for the company to take. In addition, it will lay the foundation for contingency planning which is much needed in the heart of the small organisations.
Small scale enterprises may sometimes fail to enforce the process of implementation of the strategic plan developed. If the devised models are put into action, improved performance of these small scale enterprises will definitely be achieved. This is also the clear cut difference between small and big enterprises. The latter will rarely ignore to implement a strategic plan toolkit mainly because it has been heavily invested on. If small enterprises communicate to workers on the formulation and implementation process of the strategic plan, positive growth will be on the way due to support received from employees. Workers in any business organisation form the backbone for growth. A company cannot succeed when it ignores or does not uplift the performance of employees . A small company which is unanimously run by a director and collaborating employees will often achieve the contents of a well crafted strategic plan. This process also entails involving employees in the day-to-day decision making and goal setting procedures. Commitment is an essential ingredient in strategic planning of a small firm. If both the executive arm of the organisation and the subordinate staff are committed in ensuring that the plan works, then the size of the firm does not matter at all; the objectives will still be achieved. It is also worth noting that commitment stems from goal setting theory. Employees will be committed if the goals which are set in the strategic plan are well understood. Moreover, the plan is bound to succeed if the management instills commitment to the employees in two ways. Firstly, workers should be made to understand the importance of the entire strategic plan and the goals set in it. Without a sense of importance in the written document, there will be lack of commitment and irrespective of the size of the organisation; the strategic plan will not be functional. Another way of enhancing commitment is by ensuring that employees can actualize the benefit of the strategic plan on their part and not just on the general well being of the organisation. For instance, they can be promised additional fringe benefits in addition to such motivating factors like higher salaries and promotions . Small firms which adhere to such measures will often succeed in their quest for growth into market leaders.
Similar to any other aspect of planning, strategic planning also requires significant inputs. This includes elaborate intrinsic and extrinsic research to ascertain the ability of the small company against the trends in the current and future market. In this regard, the competitive analysis of the firm should be brought into consideration in addition to the ability of the organisation to undertake certain planning measures based on resource availability. Strategic planning developed by small firms can often sail through if the two mentioned elements are critically analysed. Hence, whether a business enterprise is small or expanse in size, conscientious strategic planning followed by meticulous implementation can improve performance.
- PEST Analysis - External Business Environment Analysis
- Strategic Planning - Meaning, Process and Approaches
- The Importance of Mission and Vision Statements
- Strategic Planning Process - Five Stages of Strategic Planning Process
- Role of Strategic Management in the Survival of Organizations
- The Strategic Position and Action Evaluation Matrix (SPACE)
- Mckinsey's 7S Framework
- Resource Based View (RBV) of Competitive Advantage
- What is Management Control?
- Relationship between Strategy Formulation and Strategic Planning
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Strategic Planning is For Small Businesses Too
Too many people falsely believe that strategic thinking , formulation and implementation is only for the big outfits…you know, the Toyotas, Microsofts, Honeywells, Nokias, and the Exxon Mobils. Our experience, working closely with people from all walks of life and from all sizes of organization, suggest the opposite is true — smaller organizations need to be more devoted to strategic thought and action as much or more than the big players out there.
The most important strategic thing a small organization can do is prepare to do battle with the future, which entails five steps.
- Step 1: Anticipate both threats and windows of opportunities for the vision and mission of the business.
- Step 2: Decide how to respond to these emerging threats and opportunities.
- Step 3: Identify the source which those risks and opportunities will come from.
- Step 4: Figure out when the risks will hit or if the opportunity is truly valuable.
- Step 5: Execute actions to mitigate the threats or take advantage of the opportunities.
Again, let us emphasize that for practical purposes you don’t need to create a doctoral dissertation when implementing strategy. Strategic planning for a small business doesn’t have to be as formal, as long, or as detailed as with a large company. The most important thing to do is strike up a dialogue with your customers, employees, vendors, investors, and do your homework about your competitors. It helps to talk about your strategy with a partner, advisor, or trusted consultant to bring some clarity and focus to your mind around the strategic issues that could affect your business in the future. The biggest disservice a small business leader can do for an organization is be unprepared or surprised by unfolding events. Even if you simply think things through in your mind and then briefly share your strategic ideas or decisions with your employees, you will be ahead of the curve and helping people to understand how they can connect with your strategy.
If you’re a small business working toward a strategic plan (know the difference between a strategy and a plan ) and you commit it all to paper in a short two to five page plan, so much the better! You just moved ahead of many of your competitors. Invite your strongest employees to respond to your strategic issues, concerns and get them involved so they feel some ownership in this simple process. Have a strategy adaptation meeting with all hands twice a year for a couple of hours to clarify the direction, make adjustments and respond to questions.
Your strategic analysis should look at six aspects of the business.
- Your customers: Figure out who your customers are now, who they will be in the future, how they are changing, and what they will want in the future.
- Your people and talent: What skills and capabilities will be needed to address the threats and opportunities? How many people, what kind of new roles will be needed, how will people’s roles change in the future to handle the threats and seize the opportunities? Will the organization grow and are we developing the leadership to manage the changes coming?
- Suppliers and Vendor: Can they give you what will be required to meet future challenges? Are there new offerings that can help you resolve your particular business issues?
- Competitors: Who are the players in your market? What are the strengths they offer? How can you take advantage of their vulnerabilities with your unique capabilities?
- Products and Services: Are you preparing something new, refreshing, and value added for your customers or users which enable them to be more productive?
- Organizational infrastructure & technology: What will the organization need to do differently in the future to keep up with new and emerging customers? Are you using technology to improve productivity?
Strategy really isn’t rocket science; rather it is a common sense and a willingness to ask some challenging questions. Be willing to think it through, communicate with others, and solicit additional perspectives. Write down your conclusions and share them with your organization. Finally, issue a call to work on strategic action each day to compliment the routine tactical work that has to be done to pay the bills and meet current obligations. Help your small business stay ahead of the curve – starting today!
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Strategic Planning in Small and Medium Enterprises (SMEs): A Case Study of Botswana SMEs
by Muthu Kumar
Although small and medium enterprises contribute immensely to the economy of a country, they are characterised by low performance and high failure rate which is often blamed on lack of resources such as funds, land and skilled labour. Many business management specialists argue that even on the availability of such resources, some SMEs still fail due to lack of strategic planning. Extent literature indicates that formal strategic planning improves business performance as it involves deriving a game plan that enables SMEs to anticipate and respond to the turbulent market by arranging their resources and capabilities accordingly. As such, this research investigates the status of strategic planning by SMEs in Botswana. The study also investigates the perceived value of Strategic Planning by SME owner managers, and the extent of planning as well as identifying the barriers that prevent effective strategic planning. Using semi-structured interviews of 36 Small and Medium firms selected across several sectors, the study finds that strategic planning efforts do exist within SMEs but most of these firms engage in strategic planning activities to a limited extent. The study also finds several barriers, which contribute to lack of strategic planning. For instance, the study finds that most SME owner/managers have limited knowledge in the area of strategic planning. Some indicated that they do not plan because of the size of the business. Whereas some admitted that they still possess the traditional based thinking where most business decisions are based on intuition. The findings of this study have implications for policy decision makers and SME owner managers.
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Despite Zimbabwe sharing with the rest of the world, the notion that SMEs are the impeccable engines to economic revival, growth and development, many of the nation`s SMEs are plagued with high failure rates. Previous studies carried out in most foreign countries suggested that the high failure rate of SMEs was attributable to lack of strategic planning among a host of other factors. Against this backdrop, the purpose of this study was to examine the driving forces for the practice of strategic planning in SMEs. A quantitative cross sectional study was conducted among active SMEs who are registered with the Ministry of Small and Medium Enterprises and Cooperative Development in Zimbabwe. The study revealed that globalisation, business ownership motivations, environmental dynamism and innovation & technological advancement have a positive and statistically significant influence on the adoption or practice of strategic planning among SMEs. The study has important implications for the ...
Effective strategic planning and its implementation enhance Small and Medium Enterprises’ (SMEs) performance which in the long run has a significant impact on their survival. Hence, the plans become handy as they influence better decisions, accountability, organization focus, proper resources allocation and utilisation, good returns, market recognition, growth and success of entrepreneurial ventures. The overall objective of this study was to evaluate the effectiveness of strategic planning in the performance of SMEs. Specifically it looks at factors which influence SMEs to adopt strategic planning; contributions of the strategic planning in SMEs performance; and examine factors influencing effectiveness of strategic planning. 50 different categories of SMEs in Ilala Municipality were surveyed and data were collected using questionnaires, interviews and focused group discussions. Data were analysed by using descriptive statistics aided by Statistical Package for Social Science (SPSS) version 20 and thematic approach analysis. Findings revealed that organizational complexities, environment dynamics and external constraints are among the factors towards strategic planning adoption. Most of entrepreneurs seem not to be familiar with the process as they could not differentiate it from a business plan. Strategic planning is considered to be effective only if it is well formulated and properly implemented to attain the desired goals regardless of the challenges in the process and this can happen when; resources are adequate, management supports team work and also the plans are flexible. It is regarded as a factor for success through its contribution in better decisions and solutions, satisfaction to the customers, competitive advantage and market recognition which they all facilitate the chances of success and improve performance. It is concluded that there is a positive relationship between effective strategic planning and performance improvement, hence, the study recommends a need for providing training to entrepreneurs concerning proper formulation and implementation of strategic plans; also it is important to improve legal framework and development of internal experts for SMEs to ensure that they adopt and become able to continuously apply effective strategic planning. Key words: Strategic Planning, Performance of SMEs, Ilala and Tanzania
2002, Management Decision
Little attention has been paid to the strategy‐making processes of small and medium‐sized firms (SMEs), or to the effectiveness of strategic planning in the SME sector. Planning often fails because of implementation problems often associated with SMEs’ lack of capability to determine and overcome potential barriers to strategic planning. This paper examines the concept of formal strategic planning, presents the findings of a critical analysis of the suitability of formal planning for SMEs, and identifies some of the barriers which prevent effective implementation of strategic plans. Suggests that SMEs that engage in formal strategic planning experience fewer barriers to implementation than those that do not and that subsidiary firms tend to place a greater emphasis on formal planning than independent firms. Indicates that the eight barriers to deployment examined are experienced to a lesser degree by subsidiary firms compared with independent firms. However, the differences are not ...
Sebastian Reiche , Carl Henning Reschke
Summary This paper examines how and to which extent small and medium-sized enterprises (SMEs) apply strategic planning within their business activities. Specifically, we address the question of why SMEs seem to plan less than big companies, whether strategic planning and corporate success correlate with each other and whether strategic planning is a function of increasing company size.
2014, International Business & Economics Research Journal (IBER)
Strategic planning is a business tool that small and medium businesses need in todays dynamic and highly competitive business environment. It has a potential to cushion these enterprises from such unpredictable harsh business conditions. The purpose of this paper was to establish the relationship between strategic planning practices and business performance among SMEs in the Gauteng province of South Africa. Data were analysed from 200 useable questionnaires that were distributed to SME owners/managers. Factor analysis, correlations, and regression techniques were used in order to extract the dimensions of strategic planning and their relationships with business performance. Environmental scanning, business mission and vision, formality of strategic plans, evaluation and control, informing sourcing, strategy implementation incentives, employee participation, and time horizons emerged as strategic planning dimensions. The results confirm that strategic planning has a positive associa...
2019, FOCUS: Journal of International Business
Nowadays, small and medium enterprises (SMEs) are facing a very demanding and competitive environment in Tanzania. The demanding and competitiveness required SMEs to be constantly attentive to the current situation and plan for the future. Tanzania's SME firms should engage in practicing strategic planning activities to develop their chances of firm's survival and success as industry development. The main objective of the study is to develop a strategic planning model for guiding Tanzania's SME firms in their future strategic planning. The specific objective of this study is to identify and determine the main factors and barriers that obstruct strategic planning application in SMEs of Tanzania. It is observed that most SMEs are implementing a myopic and informal approach to strategic planning and are facing many barriers to its implementation.
Abel Anyieni , abel anyieni
The Kenyan Small and Medium Enterprises (SMEs) sector is a very competitive environment, and they need strategic planning to remain competitive. Kenyan SMEs, which include agriculture and rural businesses, have contributed greatly to the growth of the economy, mainly in the creation of employment. Yet there have been high failure rates and poor performance levels. Many are faced with the threat of failure within the first few months. Many SMEs perform well after start up, but only a few experience sustained growth through the full lifecycle and become large firms. Lack of strategic planning may prevent them from achieving their potential, or even surviving. There is very little evidence however indicating whether SMEs in Kenya engage in strategic planning, and if they do how it impacts on their general performance. This study endeavours, through a literature review, to find out how strategic planning impacts their performance. The study established that the most successful businesses use strategic planning, and there is a high failure rate for those who do not. The recommendation is that the owner or entrepreneurs of the SME to be trained in the skills of strategic planning.
The Kenyan Small Enterprises sector is a very competitive sector, and they need strategic planning to stay put competitive. Kenyan Small businesses which include agriculture and rural businesses, have contributed greatly to the growth of the economy, mostly in the provision of employment. Hitherto there have been high failure rates and poor show levels. Many are confronted with the threat of failure within the first few years. Many SMEs perform well after start up, but only a few experience sustained growth through the full lifecycle and become large firms. It has been established that lack of strategic planning may thwart them from achieving their potential. There is very little evidence however indicating whether SMEs in Kenya engage in strategic planning, and if they do how it impacts on their general performance. This study attempts, through a literature review, to find out how strategic planning impacts their performance. The study established that the most successful businesses use strategic planning, and there is a high failure rate for those who do not. The recommendation is that the owner or entrepreneurs of the SME to be trained in the skills of strategic planning.
Dr. Nimalathasan Balasundaram
2009, Petroleum-Gas University of Ploiesti Bulletin, …
2015, Ecoforum Journal
FREE RELATED PAPERS
2020, International Journal of Academic Management Science Research
This work examines relevance of strategic planning on performance of small and medium enterprises (a case study of osun state). The specific objectives are to: determine if poor strategic planning is behind the low performance of Small and medium Enterprises in Osun State; examine how strategic planning can help in improving the operations of Small and Medium Enterprises in Osun State; and to investigate the relationship between the process of strategic planning and SMEs performance. This study employed descriptive research design. The sampling techniques employed for this study are stratified and simple random sampling methods. The instrument used for this study was obtained from primary data. The primary data was obtained through properly structured questionnaire. The statistical method used to analyze the data for the purpose of this study includes both the descriptive and inferential statistics. The descriptive statistics of frequency distribution, percentages mean and standard deviation were used to analyze and relate variables which were obtained from the administered questionnaire.. The Regression analysis was used to test hypotheses. The Pearson Product Moment Correlation was used to test the hypotheses two and three. The findings show that there is a significant relationship between poor strategic planning and Low performance of SMEs, Strategic planning has significant relationship in improving the operations of small and medium enterprises in Osun State and , a significant positive relationship is therefore existed between strategic planning and SMEs Performance. The study recommended that SMEs should learn to set long term goals with implementation plans in the management of their businesses. SMEs should vigorously carry out the various strategic planning process activities that is related to their performance
The study examined the relationship between the use of strategic planning and performance in SME sector. In spite of the seemingly increased interest in the running of small and medium enterprises in Nigeria, along with a greater institutional support to sustain the sector, performance appears to be below expectations. It has been indicated that such poor performance of SMEs is possibly due to varied attitudes toward strategic planning. A descriptive and regression analysis with the aid of SPSS was used for analysis purposes. The study revealed that there is a significant relationship between the use of strategic planning and SME performance (r=0.604, F1,480= 275.484, p<0.05). The percentage of variance in SME performance explained by strategic planning is about 36.5%. It was revealed that SMEs in Lagos State practiced and used formal strategic plans in their operations. The implementation of working strategic plan as indicated by the respondents has contributed to the significan...
Ismail Yusuf Abdi
2023, The Effect of Strategic Planning on the Performance of SMEs in Hargeisa
The objective of the study was to investigate the relationship between strategic planning and the performance of small and medium enterprises in Hargeisa. The study analyzed the relationship between the two variables strategic planning as independent variable containing four perspectives (Environmental scanning, formulation of strategy, strategy implementation and evaluation of strategy). The performance variable as dependent variable consisting four perspective (financial, customer, internal business process and learning and growth). The descriptive and quantitative research approach was used.384 business owners, managers and employees in Hargeisa made up the sampling for the survey used to gather research data, questionnaires were used to gather data from the respondents. Software called Statistical Package for the Social Sciences was used to analyze the data. The relationship between the variables were identified and measured using the regression analysis. The findings demonstrated a favorable correlation between SMEs' performance and strategic planning. The findings demonstrated that strategic planning has a positive and statistically significant impact on financial, customer, and learning and growth outcomes. Additionally, the findings indicated a moderate statistically significant effect of strategic planning on financial perspectives. It’s recommended that SMEs to adopt strategic planning in order to maximize their performance as well as focusing financial perspective.
2006, Management Research News
Evangeline Elijido-ten , judy wijesinghe
An energetic Small and Medium Enterprise (SME) sector plays a pivotal role in the growth of any economy as it provides a number of benefits for economies, irrespective of their level of development. Recognising this reality, governments around the world increasingly encourage and support SMEs as part of their overall national development strategies (Abdullah & bin Bakar, 2000), and Sri Lanka is no exception. The commitment of the government of Sri Lanka to the strengthening of the country's SME sector is clearly stipulated in its national economic policies. Despite this external push from the government, SMEs in Sri Lanka have yet to improve their sustainability (Wijesinghe et al., 2011, 2012). Prior research suggests a positive relationship between strategic planning and business performance. As such, it is highly likely that internal factors such as having formalised plans among SMEs could help to facilitate their survival and growth. The purpose of this paper is three-fold: 1...
Tim Mazzarol , Sophie Reboud
Abstract This paper examines the English and French literature relating to the nature and value of strategy and planning within the small firm. It seeks to follow the literature trail that has emerged since the publication in the mid-1980s of a benchmark paper on planning and strategy in small firms by Robinson and Pearce. The literature review found that despite the passage of 24 years the no discernable pattern or generic theory relating to the value of planning or how such planning should take place within small firms has emerged.
Mednarodno inovativno poslovanje = Journal of Innovative Business and Management
Strategic planning is an important element for companies growth, gaining competitive advantage as well as further development. However, not many scholars have done researches which emphasize the role of strategic planning in small and medium-sized enterprises (SMEs). In Macedonia, SMEs are the major source of the country’s potential economic-growth in terms of their contribution toward the creation of employment and overall economic development. This study is about to find out whether and how strategic planning is employed in the Macedonian SMEs, as well as to explore the main characteristics of the strategic planning process. Data was gathered using online questionnaire method and analyzed with standard tools of descriptive statistics. It aims to work as a reference for the business owners and manager to better improve and utilize the strategic planning tools for their future growth.
This cross-sectional research explores the relationship between strategic planning practices and performance of SMEs in the Nigerian service-related sector, to establish empirically whether adopting strategic planning impacts performance, as previous studies covering the developed world have found. It appraises the attitudes to and perceptions of SME owners and managers in Nigeria towards strategic planning, to determine if strategic planning adoption impacts on performance. It also attempts to ascertain the extent to which SMEs in the Nigerian service-related sector make use of strategic planning and the role the peculiar Nigerian socio-cultural dynamics (such as the patronage culture, corruption, religion, societal norms, and education) play in hampering adoption. It intends to provoke debate about and generate awareness of the need for Nigerian SMEs to plan strategically for continuity. It also presents a framework for deducing the relationship between strategic planning and SMEs...
R. Deni Muhammad Danial
2021, Management Science Letters
Although small and medium-sized enterprises (SMEs) typically employ a major share of an economy's total employees, SME management suffers from an insufficient business-related knowledge base that top managers in SMEs possess. Indeed, formal plans or cost controls are often only provided on an irregular basis and planning instruments are usually only used by a small number of individuals and developed rather intuitively (Brinkmann, 2002).
Journal of Life Economics
SMEs are the main economic actors in terms of the healthy development of the countries’ economies and the increase of social welfare level. The continuity and success of these enterprises also have some social effects. Socially, effective use of capital, employment creation potential, support for development and effective meeting of customer demands are among its most important and strategic features. The aim of this study is to determine the level of knowledge of SME managers in Karaman province about strategic management discipline tools and to reveal their views on strategic management. Within the scope of the research, SMEs in the Karaman Organized Industrial Zone were determined according to the complete count method and a questionnaire study was applied. The differences in opinion and knowledge level according to the demographic variables of the participants were analyzed. According to the results of the research, there is a significant positive relationship between education ...
2013, European Journal of Business and Management
1 | P a g e w w w . i j c b s s . o r g ISSN 2312-5986 FACTORS THAT INFLUENCE IMPLEMENTATION OF STRATEGIC PLANS IN SMALL AND MEDIUM ENTERPRISES IN KENYA Theme: “The strategic angle adopted by SMEs for survival In Africa” Date: November 4 to 6, 2014 Venue: Kenya Institute of Education Mariam Moige Muhando P.O. Box 34163-00100 GPO Nairobi, Kenya E-mail: [email protected], ma[email protected] Tel No.: +254 722 310 535 or +254 735 310 535
2021, Journal of Asian Finance, Economics and Business
Hotels drive the growth and development of tourism. Despite their important role, many hotels are small and medium-sized firms (SME) that are struggling to survive against fierce competition. Experts agree that strategic planning is vital for SME survival, but it is not wholly applicable for SME managers. Meanwhile, Mintzberg’s concept of crafting strategy offers a more productive insight into SME strategic planning, but its abstract nature has historically discouraged empirical research on its practical benefits. This study will be the first to empirically explore the operationalization of Mintzberg’s crafting strategy characteristics, and analyze its influence on organizational learning using structural equation model. Using a sample of 50 hotels in Bali, Indonesia, this study reveals that managing pattern and stability, detecting discontinuity, and knowing the business have a positive but weak effect, whereas reconciling change and continuity proves to have a positive and significantly strong effect on organizational learning. This study has bridged the gap between the abstract concepts of crafting strategy, which is a potentially better approach for SMEs, with daily operational practices. This study also proves that Mintzberg’s approach can be used to predict organizational learning. This relationship is crucial since previous studies concluded that organizational learning improves company performance.
Small and Medium Enterprises (SMEs) make up the majority of business entities in the region and contribute significantly to revenue generation and employment. For SMEs to be profitable and to grow into larger corporate entities, a significant amount of management capacity is required. As a SME owner, private sector leader and management student, the author has recognised a significant gap which exists between SMEs and the knowledge required by owners to deploy an effective company strategy to maximise potential of a business. The purpose of this research study is to examine the need for this gap to be addressed, the level of strategic thinking among owners which exists –if any; and the barriers to its inclusion by SMEs in Guyana. By investigating and studying twenty three (23) organisations in a rural community, reference was made to both quantitative and qualitative data from respondents in the context of management knowledge literature of SMEs. Host country and knowledge provider perspectives were also considered. The results of the research confirmed the limited to average level of strategic thinking which currently exists in the majority of SMEs. By addressing the identified knowledge gap all the parties involved including the SMEs, the host country and the knowledge providers are likely to benefit significantly in terms of increased revenues, profits and employment.
2015, Journal of Small Business Strategy
Research on small firm planning has established that small firms plan and has generally indicated that planning has value. Strategic plan content research often focuses on developing a written plan. Little research has focused on who engages in planning and who does not. This study investigated the relationship between individual and firm differences and the extent to which planning takes place in the firm. Owner demographics, such as education, age, and years in business, had little relationship with planning activity levels while firm sales and number of employees were related to several planning activity measures.
Santander De La Ossa
Modern Applied Science
Small and medium enterprises (SMEs) are a driving factor in the Colombian economy, being fundamental for the generation of most of the country's employment; their limited conditions lead these organizations to face challenges to achieve a sustained position in the market and favorable returns. In this sense, strategic planning is presented as a response to the need to structure its actions according to the fulfillment of visions, missions and objectives coherent with the reality of its position in the market, and its internal conditions. This is how this research proposes an analysis of the main contributions of the use of methodologies, techniques and strategic management tools in SMEs, highlighting their contribution to the establishment of successful marketing plans, innovation and commitment of employees, as well as the integration of stakeholders. The methodology applied was of mixed cuts, since quantitative and qualitative paradigms were combined. The results a...
Carl Henning Reschke , Dietmar Roessl
2023, Not yet published
This study examined the impact of strategic management on SMEs performance in South-east Nigeria. A survey of three-hundred and ninety-eight (398) respondents were randomly selected from Small and Medium Enterprises (SMEs) (Sole Proprietorship, Partnership, Private and Public Limited Companies, etc) in the manufacturing, processing, services (oil and gas, educational, etc) that registered with the Ministry of Commerce and Industry in the five States of: Abia, Anambra, Ebonyi, Enugu and Imo States. The data collection was a well-structured questionnaire. Data analysis was performed with the using Frequencies, Percentages, and Regression Model. Hypotheses were formulated to test the dependent variable with the predictor of the four management strategies. Data were analyzed using the statistical package for social sciences (SPSS) Ver. 20, which generated the Analyses of Variance, t-statistics and the correlation Coefficients (R2) to test the relationships between the variables. Result reveals that majority of respondents are male (57%), married (69%), with Secondary education (45%), with household size of 6-10 Persons (45%), with SME experience between 6 – 10 years (35.68%). Majority of enterprises in the study area were small –sized businesses (51.5%), providing services (65%), with fixed assets in buildings/factories including machinery/equipment worth N2 – 5 million (26%), current asset base of cash/draft at Banks and inventory/raw materials worth N2 – 5 million (31%), with human capital asset (number of employees) of 1 – 5 workers (51.5%) and number of branches (88%). About 96.5% did not apply any of the management strategy practices in their operations. Details of the results on the effects of strategic management practices on SMEs’ Performance further showed an average mean of 4.19, equated to the ‘agree’ position on the Likert scale. The constraints to the utilization of strategic management approach include: lack of clear Vision and Mission (83%), reliance on narrow objectives of only profit-making (85%), lack of effective coordination between relevant personnel (65%), informal and inadequate performance matrices on periodic measurements of achievements of the firm (81%) and low level of education of most SME Operators/Managers (86%). Other constraints were: the time-consuming nature of strategic management processes (86%), narrowness in measurement of enterprise performance and growth by SMEs (84%) and lack of/inadequate skills and competence in the development and application of strategic management processes (80%), showing that the level of strategic planning awareness and involvement are very low. The R2 of 74% of the variation in the dependent variable “employee training and job satisfaction is caused by the explanatory variable “Planning and Organizational Structure, with a probability value (t-cal = 34.014); environmental analysis strategy and resource allocation on market share (92%) with t-cal (66.76), implementation strategy and Customer Satisfaction (99%) t-cal = (165.015). The R2 of .860, about 84% of the variation in the dependent variable, Sales Revenue/Profitability by evaluation strategy with regression result, (t-cal = 49.496) indicate a positive effect. Based on the findings, the study concluded that the strategic planning process has not been fully implemented by SMEs operators in the South-east Region of Nigeria. The study therefore recommends that SMEs operators/managers should be motivated to align their performance to the planned goals in their strategic plan. If these elements are consciously integrated into SME business plans and judiciously implemented, there would be a stimulating effect on the overall performance of these enterprises; thus triggering growth, profit, expansion, competitiveness, diversification and sustainability.
Research on small firm planning has established that small firms plan and has generally indicated that planning has value. Strategic plan content research often focuses on developing a wriaen plan. Little research has focused on who engages in planning and who does not. This study investigated the relationship between individual and firm differences and ihe extent to which planning takes place in the firm. Owner demographics such as education, age, and years in business, had liule relationship with planning activity levels whileftrm sales and number of employees were related to several planning activity measures.
2002, MPP Working Paper No. 15/2002
After many years of academic and scientific interest in the strategies of large enterprises, the situation has, not too many years ago, turned increasingly to the strategic behaviour of smaller enterprises. This is certainly justified, in fact essential, if we take into account the importance of small and medium-sized enterprises in the economies of most countries. Implementing strategic management in the current activity of the small enterprises has become a stringent necessity. This situation is a consequence of the serious challenges that exist on the market place, of the unstable balance of the business environment forces and other influencing factors that can be identified in the actual economic context, especially in the transition economies, where SMEs are very predominant and also very young and inexperienced (Lobontiu & Lobontiu, 2001). The existing literature on strategic management, whilst being difficult to reconcile in terms of the conflicting theories stated in the field, appears even further flawed in the SME context. On the other hand, if there is a single difference between the strategies of the SME and the large corporations, it is that they seem to be heading in different directions (MacGregor, 1999). Whilst SME strategies largely appear to be about growth and development, the corporate sector appears to have spent the last twenty years in a process of sub-division and shrinkage. This paper is a theoretical one, whose aim is to synthesize and systemize the most important ideas outlined in some of the papers and articles published in the field of strategic small business management. The problem here is that the information is very dispersed and it’s difficult for both a small business manager and an academic researcher to have a rapid overview of this field. So the author of the present paper is trying to facilitate this process, presenting the relevance of strategic management for small businesses. The author is also proving that the small business managers are actually very preoccupied by the issues of strategies and strategic management and that SMEs are displaying a pronounced strategic competitive behaviour.
2014, Kelaniya Journal of Management
Dr. Ernest J E B O L I S E CHUKWUKA
Asian Journal of Economics, Business and Accounting
The study investigated the connection between success in the SME sector and the adoption of strategic planning. Despite what appears to be improved institutional support for the sector and an apparent increase in interest in starting small and medium-sized businesses in Nigeria, performance seems to be falling short of expectations. According to several reports, the poor performance of SMEs may be caused by a variety of attitudes toward strategic planning. With the use of SPSS, a descriptive and regression analysis was performed. Findings of the study include the fact that market share growth in Delta state was significantly and favorably impacted by the implementation of strategic plans. In Delta State, there was a substantial and favorable correlation between the development of the strategic plan and the profitability of small and medium-sized enterprises. The examination of cross-functional decisions has a considerable and favorable impact on customer satisfaction in Delta State....
2008, International Journal of Entrepreneurship and Innovation Management
2014, Mediterranean Journal of Social Sciences
Dr. Julius P EYANUKU
2021, Crawford University, Ogun State
The current economic downturn, occasioned by the Covid-19 Pandemic has created high levels of turbulence for many businesses, requiring only the ability to turn strategies into action. The presence of good strategic plans can help businesses become less vulnerable to the volatile business environment. The objective of this study was to assess the impact of Strategic Management variables on the performance of Small and Medium Scale Enterprises (SMEs) in Nigeria in order to improve their sustainability. The study used a survey setting with questionnaire administration to collect data on factors related to business structure, orientation, and performance. The information was gathered from a sample of small and medium-sized businesses in Lagos. A total of 270 questionnaires were distributed, with 240 collected using the early and late response technique. This equates to an 89 percent response rate. The collected data was analyzed using regression analysis at a 5% level of significance. The findings revealed that strategic management and organisation structure have positive and significant effect on SMEs performance, with coefficient and probability values of: Strategic management (β1 = 0.6412, P-value<0.05) and organisation structure (β2 = 0.3201, P-value <0.05). The F-stat (32.971, P-value<0.05) shows the fitness and overall significance of the regression model. It implies that strategic management and organisation structure are good predictors of SMEs performance. The Adjusted R 2 suggested that 37.5% change in SMEs performance is accounted for by strategic management and organisation structure. Since strategic management and organisation structure are key determinants of SMEs performance, it is recommended that SMEs should be proactive, innovative, and strategic in order to improve performance. They should recognize that ability to adapt to external environmental changes is only one of several factors that contribute to performance. So, relevant skills should be honed to spot growth opportunities among other development initiatives.
2012, International Business Economics Research Journal
Ahmed A . Palladan, PhD
2019, ANNUAL NATIONAL CONFERENCE
Despite the surplus literature on strategic planning and organizational performance and its effects on organization's performance, little is known about the effect of individual strategic planning dimensions on SMEs performance especially in Nigerian context. In this study we examine the effects of environmental scanning, strategy formulation and strategy implementation and evaluation dimensions on the performance of selected bakeries in Gombe metropolis of Gombe state Nigeria. The population of the study comprise of all Bakeries located in Gombe metropolis. The unit of analysis was the Bakeries themselves, while N=71 managers and sectional heads served as the respondents for the study. The study suggest that strategy formulation dimension and strategy implementation and evaluation dimensions are positively related to SMEs performance; while environmental scanning has negative effect on SMEs performance.
IRE Journals , Dr SALAU A D E Y E M I Nurudeen
2022, Iconic Research And Engineering Journals
Firms grow from SME to multinational organization within a dynamic and competitive environment hence there is need for a good strategic management in order to survive the turbulent whether or period. The study appraised the effect of strategic management on the performance of SMEs in Nigeria. A well-structured questionnaire was administered on a targeted sample of 210 owners or managers of SMEs in Lagos state. However, the study adopted purposive and simple random sampling techniques to draw the sample from the population. The descriptive statistics such as frequencies, percentage and graphs are used for the analysis of the research questions while the PPMC, and Linear regression was used to analyse the hypotheses. The study concluded that the all the variables of strategic management (environmental scanning, business strategy and organizational structure) are positively significant to the performance of SMEs. Also, that the not all the SMEs are aware of strategic management. strategic management. Based on the findings of this study, it is therefore recommended that SMEs should continually scan their environment, introduces suitable business strategy and adapt a suitable organizational structure I.
The current business world has experienced rapid environmental changes due to the ever changing PESTEL factors that have resulted to provision of innovative products in the market and changing customers' demands. In order to survive, organizations constantly improve their performance by reducing costs, enhancing quality and differentiating their products and services by laying long term strategies that can only be realized by adoption of strategic planning. The research study aimed at investigating the adoption of strategic planning in both small and ©Author(s) Licensed under Creative Common Page 568 medium sized manufacturing enterprises in Kenya. Specifically, the study aimed at investigating the rate of adoption of strategic planning by the small and medium manufacturing enterprises (SMEs). The target population was the 260 small and medium manufacturing firms that had been in operation for the last three years in Thika town-Kenya. Data was collected by use of questionnaires ...
Small and Medium-size Enterprises (SMEs) fulfil an important role in the long-term growth and development of the economy of the country. The development and growth of construction SMEs are important for all countries, as a strong SME base has the capacity to produce a high-quality infrastructure for the country. However, research has revealed the high failure rate of small businesses within the first five years of their existence in South Africa. In addition, research also indicated that lack of long-term planning and lack of strategic thinking are major contributing factors to the failure of most SMEs. For instance, despite the considerable growth in the industry in the past decade due to government’s considerable infrastructural spending occasioned by the 2010 FIFA World Cup, the majority of construction SMEs failed to use the opportunities gained in this period to develop into established construction entities. This study investigates how strategic management can be applied to ad...
This study investigated the influence of strategic management practices on performance of small and medium enterprises in Mombasa County. The target population for the study was the top 100 SMEs in Mombasa CBD. Stratified sampling was adopted. The sample comprised of 50% of the target population. Hence the sample size was 50 SMEs. The study concluded that the external environment played a crucial role on the SMEs decision to adopt various strategies. Issues of critical concern to the SMEs included; the economic situation, social factors, the technological concern and the uncertain competitive environment. The internal environment of the SME also played a crucial role to the SME's adoption of new strategies; these factors include: top managers' ability to develop effective strategies, internal processes, firm's resources, SMEs behavior and characteristics. Strategic management had a positive relationship with competitive advantage of the organizations. It was established ...
During the last several years, a lot of attention has been paid on the role of strategic planning in small business. Even academicians and researchers continuously emphasized on the merits of strategic planning. The literature on strategic planning in small business suggested that small firms should use strategic planning as an important tool to enhance the performance of firm. Strategic planning has a great influence on the growth of company and it can also help in maintaining the existing capacity and size of the firm. Therefore, this study will contribute in the present stock of information about strategic planning in small business. Finally, it is found that strategic planning has a significant impact on the overall performance, growth and production of a small business. Strategic planning is significantly and positively related with financial success of a firm. Further, the level of uncertainty in small business can be reduced by planning activities.
The Zimbabwean economy has been in free fall with an economic decline of up to 50% over the past seven years. However, since February 2009, the economy has stabilised and signs of growth are now evident. Nonetheless, there has been massive scaling down in terms of capacity utilisation and employment creation on the part of large businesses, a situation made worse by the drying up of direct foreign investment. This situation calls for locally-driven solutions to boost both economic activities and employment creation. Small to Medium-sized Enterprises (SMEs) have a key role to play in driving local economic development. However, to date, social and economic support structures have had little impact on the growth and survival of SMEs. The social, economic and political changes that are impacting on the business environment require owners to be proactive. While a supportive environment and favourable policies have not resulted in SMEs playing a bigger role in Zimbabweâ€™s economy, there...
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- 1. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA STRATEGIC PLANNING FOR SMALL BUSINESS TOPIC #1
- 2. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA TOPICS UNDER THIS MODULE: • Strategic Planning • Implementing Strategic Plans • Fundamental Strategies for Small Business • Strategy Concerns of Small Business • Reasons Why Small Business Operators Ignore Strategic Planning
- 3. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA OBJECTIVES: a. discuss the importance of strategic planning; b. determine the steps in strategic planning c. identify the fundamental strategies for small business d. explain why small business operators ignore strategic planning
- 4. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA It refers to the process of determining the primary objective of the entrepreneurship and then adopting the course of action & allocating resources to achieve those objectives. STRATEGIC PLANNING
- 5. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA The definition involves 3 steps: • Determination of the objectives. • Adoption of course of action. • Allocation of resources. STRATEGIC PLANNING
- 6. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA 1. DETERMINING THE OBJECTIVES The Mission Statement refers to the basic description of the fundamental nature, rationale, direction of the firm. 1. How the entrepreneur intends to use his resources 2. How the entrepreneurs expect to relate to the ever changing environment 3. The kinds of values the entrepreneur intends to offer to his customers.
- 7. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA 1. DETERMINING THE OBJECTIVES Strategic Objectives are specific performance targets that the entrepreneurship hopes to accomplish. The objectives define, in specific terms, how the firm’s mission will be realized. Examples: Expand production capacity by 50% within 2 years Increase sales by 50% by 2012 Increase market share by 10% every two years Increase the number of outlets by 3 within 3 years
- 8. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA 2. ADOPTION OF COURSE OF ACTION After the primary (or strategic) objectives are established, the entrepreneur must develop strategy which is alternately called course of action. In developing realistic strategies, the entrepreneurs can make use of the most popular tools. These are the following: • SWOT analysis; and • Forecasts of future sales performance
- 9. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA 2. ADOPTION OF COURSE OF ACTION SWOT ANALYSIS is an organized method of assessing a firm’s strengths and weaknesses with external environment that confront the firm.
- 10. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA 2. ADOPTION OF COURSE OF ACTION STRENGTH refers to a skill, a competence, a valuable organizational resource or competitive capability, or an achievement that gives the firm a market advantage. WEAKNESS refers to something a company lacks or does poorly or a condition that puts it at a disadvantage. OPPORTUNITY refers to the chance offered by the external environment to improve the firm’s situation significantly. THREATS refer to a challenge posed by an unfavourable trend or development in the external environment that would lead to, in the absence of purposeful entrepreneurial action, the erosion of the entrepreneurship’s position.
- 11. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA EXAMPLES: STRENGTHS 1. A recording firm's unique line-up of contract singers. 2. A company’s ownership of the land that is the source of high grade material required for producing its products; 3. The strategic location of the Firm’s sales offices; and 4. The firm’s exclusive supply contract with a reliable manufacturer. 2. ADOPTION OF COURSE OF ACTION
- 12. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA EXAMPLES: WEAKNESSES 1. Lack of qualified managers 2. Poor design of the firm’s products 3. Low employee morale; and 4. Poor location of the firm’s sales offices. 2. ADOPTION OF COURSE OF ACTION
- 13. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA EXAMPLES: OPPORTUNITIES 1. For a motorcycle trading firm: the escalating cost of fuel ; 2. For a small restaurant : the withdrawal from business of a major competitor; 3. For a tailor residing in provincial city; the absence of a reliable tailoring shop; 4. For a newspaper dealer: an exclusive supply contract for the entire province offered by a major national publisher. 2. ADOPTION OF COURSE OF ACTION
- 14. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA EXAMPLES: THREATS 1. To the grocery store : the proposed opening of a mall in the vicinity 2. To the restaurant located along the highway: the proposed construction of a diversion road by passing the highway and the restaurant. 3. To the local dealer of skin-whitening soap and cream: the proposed dissolution of the company supplying the product. 4. To the local operator of 20 units Of public utility tricycles: the proposed City ordinance banning tricycles from plying The major streets of the city. 2. ADOPTION OF COURSE OF ACTION
- 15. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA Strategies for a Going Concern 1. Segment markets – identify the market segment with which it has expertise then compete. 2. Efficient use of research and development 3. Think Small 2. ADOPTION OF COURSE OF ACTION
- 16. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA Why Small Business Operators Ignore Strategic Planning 1. Lack of Expertise – Few small business operators are trained in strategic planning. 2. ADOPTION OF COURSE OF ACTION
- 17. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA Why Small Business Operators Ignore Strategic Planning 2. Inability to Get Started – Lack of sufficient exposure to planning activities. 2. ADOPTION OF COURSE OF ACTION
- 18. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA Why Small Business Operators Ignore Strategic Planning 3. Uncontrollable, often Intangible Variables. 2. ADOPTION OF COURSE OF ACTION
- 19. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA Why Small Business Operators Ignore Strategic Planning 4. Resource Poverty – Planning requires time, but the small business operators oftentimes does not have it. 2. ADOPTION OF COURSE OF ACTION
- 20. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA Why Small Business Operators Ignore Strategic Planning 5. Focus On Daily Operations – Keeps the small business operator so busy, left with no time for planning. 2. ADOPTION OF COURSE OF ACTION
- 21. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA Why Small Business Operators Ignore Strategic Planning 6. Failure to Realize the Importance of Strategic Planning. 2. ADOPTION OF COURSE OF ACTION
- 22. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA Forecasts of Future Sales Performance Forecasts are supplementary tools for SWOT analysis. It is an estimate or prediction of the future sales or income of the firm. It may be SHORT-TERM (one year or less), MEDIUM- TERM (one to five years), LONG-TERM (over five years). SALES FORECASTS are often determined through a combination of statistical and intuitive forecasts tempered by the experience of the entrepreneur. 2. ADOPTION OF COURSE OF ACTION
- 23. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA The specific aim of planning is to be able to deploy the right quality and quantity of resources in the various activities required to achieve the objective. The resources would be indicated in terms of human and nonhuman elements. 3. DEPLOYING THE RESOURCES
- 24. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA 3. DEPLOYING THE RESOURCES Fundamental Strategies for Small Business There are certain basic strategies that are necessary for the survival of small business. These are the following: 1. The flexibility strategy 2. The strategy of effectiveness as priority 3. The strategy of starting simple
- 25. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA 3. DEPLOYING THE RESOURCES Strategy Concerns of Small Business In determining what strategy to adapt, the entrepreneur is confronted with two general situations: 1. Is he organizing a new business? or 2. Is he currently running an old business?
- 26. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA 3. DEPLOYING THE RESOURCES New Business- this refers to one that will be operated for the first time by the small business operator. If so, his options consist of the following: 1. acquiring an existing business; 2. organizing a new business; and 3. buying a franchise.
- 27. Source: Entrepreneurship and Small Business Management/Third Edition MR. ROBERT G. MEDINA SUMMARY Small business needs to be successful. The high rate of small business failure makes the need more urgent. Strategic planning provides an answer. In strategic planning, the major objective of the organization are determined, and strategies are formulated to achieve those objectives. A carefully designed plan for achieving the objectives is called a STRATEGY. The strategy adapted will depend on whether a new business is being considered or an old business is currently operated. Important as it is, small business operators often ignore strategic planning for various reasons.