Friday, 8 July 2022
A popular Chinese proverb states that the best time to have planted a tree was 20 years ago, the next best time is now. The start of a new year usually spurs most individuals and by extension businesses to look forward and try to marshal their dreams, goals, available and projected resources into defining a desired future for themselves. Planning is a must have skill for every business owner, whether large or small.
Small businesses by their nature find it hard to plan extensively as it is usually a quite small team tending to all areas of the business. However strategic planning remains a vital skill that every business regardless of size must have and practice if they want to survive, grow and thrive in an increasingly volatile business environment.
The mortality rate among small businesses is prevalent due to lack of proper planning and business foresight. Therefore, it has become pertinent for businesses to adopt a strategic planning process that helps them create a framework that sets long term goals and develop lines of action to achieve these goals and objectives. The dynamic consumption behavior of target markets, the rapid changes in technology, the aggressive marketing activities of competing brands and the volatility of the economy and changing government policies strengthen the case for small businesses to have a strategic planning apparatus. It involves establishing and documenting a direction for your business and employing resources to ensure that the strategy is effectively executed.
A continuous learning mindset is important for every small business owner, this will enable them to keep identifying strategic tools that can be used and infused in the strategic planning process and also daily running of the business. The Organization for Economic Co-operation and Development (OECD) in its Future of Business survey recognized that most small businesses in Nigeria mostly utilize online sources of information in learning Business Management tools useful for their business growth. There exists a plethora of quite useful strategic business management tools explained on line and available for small business owners.
One of the most common tools used in strategic planning is SWOT analysis. A SWOT analysis is an organized list of your business’s greatest Strength Weaknesses, Opportunities, and Threats. Using a SWOT analysis will help in developing a strong business strategy by making sure the business’s strengths and weaknesses, as well as the opportunities and threats it faces in the marketplace are considered. Strengths and weakness are internal to the company such as its reputation, patents, location, etc. They are within the control of the organization and can be changed over time but not without some work. Opportunities and threats are external such as suppliers, competitors, prices, government policies, etc. They are not within the control of the organization; they happen anytime in the marketplace. SMEs can use a SWOT analysis as part of their planning process or to assess a changing environment and respond proactively.
Strategic planning has its obvious benefits to small businesses. It impacts positively on the quality of decisions being made. This is because the internal and external environments are gleaned thoroughly for information which is used in setting its long-term goals. The process brings a sense of togetherness and clarity of purpose since every member of staff – from the management to the employee is involved in the goal setting process. The process allows for a vivid understanding of the organization’s product offering. It leads to enhanced customer satisfaction because the vigor in implementing the vision of the company will lead to an improvement in the organization’s structure which will in turn lead to the development of products or services that meet the needs and tastes of the target market. Ultimately, it engenders competitive advantage. Businesses are able to set up processes that highlight the value and uniqueness of their products.
LAPO MfB supports its client’s base with workshops and training on business planning and business management. We understand that businesses with proper foresight and a well-built mechanism for achieving their goals will reduce the rate of closure among small businesses and impact positively on the nation’s economy.
The best time to have started using strategic planning tools for your business was yesterday, now is the next best time to start using strategic planning tools and giving your business a fighting chance to survive these turbulent times.
The content provided is for informational purposes only. Neither LAPO Microfinance Bank, nor any of its affiliates, is providing legal, tax, or investment advice. You should consult your legal, tax, or financial consultant about your personal situation. Opinions expressed are those of the author(s) and do not necessarily represent the opinions of LAPO Microfinance Bank or any of its affiliates.
Links to third party sites are provided for your convenience and do not constitute an endorsement. LAPO Mfb does not provide, is not responsible for, and does not guarantee the products, services or overall content available at third party sites. These sites may not have the same privacy, security or accessibility standards.
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