Tools for strategic planning.

• Author: Steed, Val D.
• Position: Business Bytes

The U.S. SBA (Small Business Administration) defines strategic planning as follows:

Strategic planning is matching the strengths of your business to available opportunities. To do this effectively, you need to collect, screen and analyze information about the business environment. You also need to have a clear understanding of your business--its strengths and weaknesses--and develop a clear mission, goals and objectives. Acquiring this understanding often involves more work than expected. You must realistically assess the business you are convinced you know well. Source: U.S. Small Business Administration, STRATEGIC PLANNING FOR THE GROWING BUSINESS (http://www.sba.gov/library/pubs/eb-6.doc)

Strategic planning focuses primarily on managing interaction with environmental forces. These forces include competitors, government, suppliers, customers, various interest groups and other factors that affect your business and its prospects. For example, managing receivables more carefully and reducing the day's sales in receivables could be an element of your strategic plan. It is not appropriate to assume that the strategic plan will be made up of large new initiatives introducing a new product line.

Your ability as a business owner or manager to deal with these groups will vary widely depending on the group and on the timing. For example, you may have greater influence with your suppliers than you do with your customers. Therefore, a good strategy to improve your cash balance may be to approach your suppliers for better credit terms, rather than trying to get your customers to pay more quickly. How you manage these and other relationships is one of the decisions you will make during the strategic planning process.

Because of major changes in the business environment, your familiarity with strategic planning and your ability to implement it is critical. One of the most overused expressions around is that "The world is constantly changing." For business managers this means that while you continue to pursue the things that have worked well for you in the past, carefully watch the changes that impact your business. This is exactly what the strategic plan does.

While many businesses will actually prepare a formal written strategic plan (this is particular]y true in much larger businesses or in businesses entering new markets), the central focus of a strategic plan for most businesses should be to identify specific strategic goals and objectives that will...