For many, if not most, middle-market CEO’s, Strategic Planning sounds worse than a trip to the dentist.
Regardless of what we conjure up when we hear the words “Strategic Planning”, this is a lost art for many business owners. It is lost in the busyness of the day. Yet it could be the most important step in getting a business ready to double or triple in revenues, profits and value.
Let’s take the mystery and pain out of Strategic Planning. What is Strategic Planning?
Regardless of the textbook definition, we think of Strategic Planning as follows: Look at the products or services that we offer, the industry in which we live and the strengths and weaknesses of our management and employees. What business are we really in? What course of action do we need to take to get the business to the “next level”. The process must also help us determine what that “next level” is – or in other words, “what is the end game?”
For example, if we are a $10 million business in the widget industry, we might ask ourselves the following questions:
- How can we gain more customers buying our widgets?
- Are there other products besides widgets that we could sell our customers which would strengthen our relationships with our customers?
- What really drives volume in our business? Is we invest more, or hire more, or open more offices, will that increase sales and profitability? Most businesses have just a small number of true drivers for revenues and profits. Everything else is noise.
- If we could do a joint venture, or partnership with another company, what are we missing that could make us a $20 million, or a $50 million business? Should we pursue an acquisition? A sale?
- If we have a plan to grow from $10 million to $20 million, what capital will be required? What skill sets would be needed to be brought into our company?
- What do we really want to accomplish? Hit $20 million and sell the business? Work for another three years and retire?
Asking the right questions are critical. Dream and dare to think out of the box.
Strategic Planning, simply put, is a process of creating a road map for your company’s growth and future.
Amazingly enough, most CEO’s don’t have a road map. Every day is filled with “to-do” lists, driving sales, driving people, etc. However they generally don’t know where they are driving to.
A friend of mine has a favorite saying … your path determines your destination.
It doesn’t matter if you are the best business person in history … or if you have the best vision … best execution…
If you are traveling on I-95 you will never get to California. Your path determines your destination.
Strategic planning is no more than getting on a path to the destination that you want to reach. Finding that path often requires stepping back and as the old saying goes, “finding the forest rather than all the trees”. Most CEOs focus on trees, whatever problem is right in front of them on a moment by moment basis.
Outside third-parties typically see issues that CEOs don’t see. That’s why an strategic, financial advisor can be so helpful. Getting to your most desired destination requires stepping back, surveying the forest, determining the end game and creating the plan to get there.
We help companies find and get on the right path so that real value is created and harvested. CEOs figure out what they really want to accomplish, and then we help them accomplish