Poor planning and lack of planning are repeatedly cited among the top reasons for business failure. Attempting to perform the basic managerial functions of organizing and controlling your business can be difficult to impossible without a viable plan. Strategic planning is identifying the path a business can realistically take for securing opportunities given the company's environment and existing resources. The Guidance Firm will assist the client in growing and succeeding. It is essential for a firm to dedicate the time identifying the best position from which a company can meet its existing resource demands.

Need for Strategic Planning

• The strategic planning process helps guide an organization for deciding how to productively manage relationships with competitors, suppliers, customers, and other environmental forces. It is a process that has become even more critical in today's environment as business managers face technological breakthroughs and a global marketplace that has made the business environment less predictable.
• To plan effectively, a company needs clear understanding of its strengths, weaknesses, mission, goals, and objectives. Strategic planning involves collecting, screening, and analyzing information about a company's environment, including: the economy; market; competitive forces; and regulatory changes. Acquiring this understanding inevitably involves a great deal of research and work, however, it will help any business realistically assess its future and develop a feasible timetable for implementation.

The Changing Business Environment

• Given the major changes in the business environment, strategic planning plays an important part in overall business strategy. Advancements in information processing and telecommunications impacts all industries and gives rise to new threats and opportunities.
  
• Additionally, the growth of foreign economies and the rise of new competitors have created a global marketplace that redefines industries. As a result, consumers are exposed to a wide selection of choices: thus diminishing customer loyalty.

Proactive Management

• The Guidance Firm will encourage careful planning before time and money is invested in any business venture. Proactive planning in a dynamic, technology-driven business environment is vital for a successful business endeavor. Rather than reacting to environmental changes or being blindsided by change, proactive planning requires that an analysis of company's environment is done to ensure effective resource-allocation decision-making.

Defining Your Business

• The first step in the strategic planning process is defining the ultimate purpose and the specific targets or objectives of the business. One must try not to define a business too narrowly causing the firm to miss new growth possibilities and/or risk opening competitive challenges and vulnerabilities.
• Once a business is defined, the firm's basic philosophy is developed. Will a company grow through risky ventures or cautiously expand from a solid foundation? Will it strategically conduct business with customers, prospects, suppliers and competitors?

Clearly defining a business's philosophy will lead to the development of a consistent business culture.

Establishing Goals

The next step is to set clear goals to guide management decisions consistent with a company's mission. Goals help to reduce uncertainty by clarifying what the organization is pursuing and will influence how the strategic planning will proceed. It is important to involve employees and stakeholders in this process, as it will improve understanding and commitment to the firm. Accomplishing a goal requires establishing and achieving several specific objectives directly related to the strategic plan. When setting objectives, the following must be considered:

• Quantify and target the results to appropriately measure outcomes.
• Define the objectives based on available resources and the realities of the business.
• Establish performance reports and milestones to measure progress toward the objectives.
• Formulate objectives in clear and concise statements.
• Modify objectives to meet changing conditions and priorities.

Analyzing Environmental and Industry Trends

In developing a strategic plan, a business will need to consider the broader business environment to help monitor emerging threats and opportunities. Several trends in the economy, market, and competitive landscape, may affect business prospects. Examples may include demographic shifts in the population, the rise of electronic commerce, and regulatory and social challenges. By assessing existing business resources a company may adopt various approaches to the changing business environment. For instance, to help attract more business during slow and/or challenging times, a business may decide to develop advertising and pricing strategies. In addition, an owner or executive might assess and utilize employees' diverse skills to help develop and grow the business. Forecasting is an approach that all businesses can use when anticipating environmental changes. Although many trends and changes are very difficult to anticipate, a business must develop awareness for technological breakthroughs in its industry, new and potential competitors' plans and operations, changes in the cost and availability of raw materials, and shifts in consumer taste. Any of these situations may force a company to reallocate resources, delay goals, and/or cut back business operations.

Developing an Information System

The most important consideration in developing an effective approach to planning is the way a company gathers, screens, analyzes and uses information that affect its business. Many businesses take an informal decision making approach when it comes to collecting information about its business and its environment. Developing a good information system is a dynamic process that starts with determining what information needs collecting and the best way to obtain it. Employees and objective individuals must be involved to provide necessary insights and perspectives. When implementing an information system, a company will find that much of the information generated will be found in the documents that are used to conduct everyday business. Other sources may include industry trade journals, newspapers, annual reports, and internet sites. A company must condense, analyze and organize the collected data in a form that is useable to make effective decisions. Whether a company relies on an electronic (i.e. database) or a manual system, such information must be stored for easy retrieval.

Assessing the Business Internally

Identifying the resources that give a company a competitive advantage is critical for any successful business venture. For example, patents, trademarks, distribution systems, employees, or strategic partners can often yield competitive advantages. Once a company has realistically assessed its strengths, it is equally important to recognize its weaknesses. Which product lines or activities are generating sales? Which are stagnant or declining? Based upon analytical determinations, a company is in a better position to develop a strategy that will have a chance at succeeding. Action steps may include capitalizing on opportunities, neutralizing weaknesses, and taking advantage of available resources. When a company has a clear grasp of its own strengths and weaknesses, it can develop a strategic plan with a probability of succeeding.

Implementing the Strategic Plan

Implementation is the most challenging part in the strategic planning process. The most common timeframe for a strategic plan is one to five years. The key task is to effectively communicate and get input from employees as much as possible in the planning process. By involving employees and tying individual goals to the plan, employees will have a solid grasp of their role in the implementation process. Successful implementation also depends on a realistic schedule that factors in training time, periods of low productivity, and slowdowns.

Quantifiable measures for monitoring performance and progress must be established. Developing measurement and control systems will help assess progress toward full implementation and correct organizational oversights. Set performance standards for profits, units produced, quality of goods, and worker productivity. The standards are determined early in the strategic planning process based upon clear operative goals. Effective measurement systems are crucial to encourage consistent performance that will lead to the realization of strategic goals and objectives.