SmallBizLady: As 2017 ends, why is it important that entrepreneurs create a strategic plan for the upcoming year?
Andrena Sawyer: Strategic plans help business owners create action for achieving outcomes. It is important for entrepreneurs to remember that goal-setting is more than just good ideas. Businesses are driven by outcomes, and a new calendar gives entrepreneurs an opportunity to reset, set new goals and strategize to achieve those outcomes in all areas of business—finance, capacity, customer engagement and operations.
SmallBizLady: How is a strategic plan different from a business plan?
Andrena Sawyer: A strategic plan is different from a business plan because it displays the finished product or goal. It creates action for achieving final outcomes like increasing revenue, and improving ROI. Strategic plans also simplify decision making and drives alignment. Typically, businesses create a strategic plan that can be reevaluated periodically to track the organization’s growth and progress. It’s an accountability tool that ensures that everyone is playing their part in the success of the business.
SmallBizLady: What are the first steps for creating a strategic plan?
Andrena Sawyer: A good strategic plan starts with an assessment of the organization’s current positioning, typically with a SWOT analysis. SWOT stands for strengths, weaknesses, opportunities and threats. A SWOT analysis serves as an environmental scan and provides a clear picture of the organization’s internal and external assessments. After completing a SWOT analysis, an entrepreneur can begin to create the baseline for the strategic plan, before moving to the components which include the mission, vision, core values and goals.
SmallBizLady: As a new year begins, many entrepreneurs will think about their resolutions. What can THEY do to set better goals?
Andrena Sawyer: To set better goals, start by creating an accountability system. Include visual reminders of goals, schedule check-ups on progress, or designate a team member to monitor progress of the goals. Be intentional about your goals when you create these systems, because they take you from a reactive stance to a proactive stance, which increases your chances of success.
SmallBizLady: When it comes to goal-setting, how can an entrepreneur avoid the mid-year burnout?
Andrena Sawyer: It’s not uncommon to experience mid-year burnout. In fact, only 8% of people who set New Year’s resolutions actually achieve their goals. Most people have forgotten about them, or have given up by the end of the first quarter. To improve the chances of success, it’s important to identify key performance indexes, or KPIs early on. By actively measuring activity, it holds entrepreneurs accountable to the process. It is also important to include incentives and rewards as part of the goal-setting process. These help to keep everyone involved motivated.
SmallBizLady: Should business owners set New Year’s resolutions?
Andrena Sawyer: Goal-setting should be an ongoing activity for entrepreneurs. However, a new year is a great time to reset and retry previous goals that were not met, or to attempt new goals. By January, most entrepreneurs have a clear picture of their performance from the previous year. By actively analyzing performance, you should be able to identify areas for improvement for the upcoming year. For entrepreneurs who lead a team, a new year is a great time for vision casting and improving morale.
SmallBizLady: Do you have any recommendations for someone who has never done a strategic plan before?
Andrena Sawyer: Start by identifying your goals for the four major areas of business—finances, operations, customer engagement and capacity. After you identify your goals, engage in a SWOT analysis to better understand your positioning for achieving your goals. Lastly, create action items and performance measurements for each goal that you identified.
SmallBizLady: How can I evaluate if my plan is good?
Andrena Sawyer: The SM.A.R.T. goal formula is a great metric to start with. After you have set a goal, ask yourself whether it is specific, measurable, attainable, realistic and timely. If it does not meet some of the elements, the goal should be reassessed and adjusted until the meets all of the elements of the formula
SmallBizLady: Which of the S.M.A.R.T. element would you say is the most important?
Andrena Sawyer: All of the elements of S.M.A.R.T. are equally important. If a goal is not specific or measurable, it’s difficult to track your progress or evaluate success. If it is not attainable or realistic, you’ll find that you would have wasted a lot of time and resources on a poor goal. Lastly, if the goal is not timely, there is no sense of urgency. Urgency helps keep entrepreneurs motivated.
SmallBizLady: How long should a strategic plan be?
Andrena Sawyer: There is no standard length for a good strategic plan. What is more important is that measures are taken to make it a working document. A strategic plan can be a one-page document for a small business, or a 30-page document that outlines each department’s goals and action plans. Regardless of its length, the strategic plan should have the following elements: mission, vision, core values, goals, action steps, and performance measurements.
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