Don't you hate how it always rains the one day you forget your umbrella? While we can't successfully plan ahead for every possible situation, having the right tools and info when you need them can make your life so much easier.
One of the biggest reasons that companies fail is a lack of strategic planning. Some entrepreneurs are so passionate about their ideas that they jump right into starting a business without really thinking it through. Entrepreneurs who have a shortened planning period or forgo planning altogether usually have to deal with bigger issues down the road--worse than getting soaked in that thunderstorm we mentioned above.
3 Ways Strategic Planning Helps You in the Long Run
1) Anticipating the Future
While we can’t predict everything about the future, a thorough planning stage give you a much better picture of the world ahead than a crystal ball or blind guesswork.
Entrepreneurs who skip the planning stage fail to anticipate what their business needs will look like down the road, and they often can't adapt to changing market pressures. One recent study found that the planning phase helps entrepreneurs succeed in three key areas:
1. Understanding the uncertainty in their business environment
2. Increasing their self-efficacy and confidence
3. Improving their ability to effectively gauge their predicted financial performance.
Leaders who employ strategic planning from the get-go have taken the time to consider their company’s future. This preliminary planning puts them ahead of the competition because they’ve already come up with Plans B, C, and D if their first strategy doesn’t go as expected.
They’ve got backups in place, and they’re ready to pivot.
So don't get caught running into a wall; make sure your strategic planning process is complete before you're ready to go. When you skip out on planning, it's likely that you'll get stuck.
2) Choosing the Right Goals
Another important benefit of strategic planning is that it helps you identify the right short-term and long-term goals for your organization. Being forward-thinking and setting business goals gives your team tangible prospects they can strive for, which can inspire your team and help them stay motivated.
But with this in mind, you need to choose goals that are a good fit for your organization and align with your overall purpose and values.
Choosing goals that don’t make sense or are way too easy to reach will ultimately hurt your chances of success.
Famous actor Bruce Lee once said:
“A goal is not always meant to be reached, it often serves simply as something to aim at.”
Noted business author Jim Collins follows this sentiment, suggesting that leaders should set Big Hairy Audacious Goals or BHAGs, which are goals their companies have a 50-70% chance of achieving. Lofty goals push your team to new heights and help your company avoid stagnation or plateaus.
Your planning process helps your leadership team choose the right goals to aim for, not just things that sound good on paper.
3) Destroying Your Competition
Strategic planning helps give you a leg-up on competitors in your industry. A big element of your planning process should involve market research. This kind of research, combined with competitor analysis helps you understand what your rivals are doing well and what they're not. If you find their weak spots, you can pinpoint opportunities for your business to come out on top.
Many companies perform this research as part of their SWOT analysis, a structured planning method that looks at a company’s strengths, weaknesses, opportunities, and threats.
Use your prep stage as a chance to find out where your competitors are falling short and learn how your organization might be able to swoop in and a provide a service or product they’re not currently offering.
Entrepreneurs who fail to plan, simply fail. Use the planning process as a way to get your business in order and set yourself up for success from the get-go.
With that, you’re ready to get your strategic planning underway.
Use these processes to make predictions about your company's future, set the right goals, and beat out your competition.
For more info on this topic, check out some of our other posts:
Ready to start seeing entrepreneurial success? Start a free trial of our Align business management platform to help your team articulate your goals and stay on track to achieve them.