4 Reasons Your Business Needs a Strategic Plan by Joseph L. Saka, CPA/PFS
Posted on October 25, 2018
A business with the most innovative idea for solving a specific and immediate need for a majority of the population will likely fail if the owner and senior management team do not consider how and where they want the business to be five- or 10-years from now. Do the business’s mission and core values support its vision for the future? How will it adapt its goals, processes and people to respond to new technologies and changing environments in its industry or that of its clients? Will those modifications impact the business’s long-term vision? The truth is that a business cannot map out a plan for its future until it identifies its intended destination.
A strategic plan is a written document that points the way forward for your business by laying out your company’s goals and explaining why those objectives are important – not just to senior management but also to employees, business partners and clients. Yet, it is also a living and breathing tool that requires regular review to keep the business focused and readily adaptable to change. When properly executed, the plan becomes woven into your company’s culture and a rallying cry of unity for all important stakeholders.
What is Strategic Planning?
Strategic planning is an ongoing process in which a business identifies what it is, its short-term goals and its long-term vision of future success. It typically requires management to look outside of the boardroom and the corner offices to engage front-line employees in the planning process, since they will be the ones who actually carry out the ultimate strategy for moving the organization forward and progressing toward its goals. With this in mind, the planning process ensures that all members of an organization understand and agree to a shared focus and motivation for working together to carry out their individual responsibilities in pursuit of the business’s carefully defined and desired results. When done right, strategic planning will also help businesses realize the following benefits.
Attract and Retain Talent
Countless studies indicate that job seekers consider a business’s culture second to salary when deciding whether or not to accept an offer of employment. Therefore, it is critical that businesses define the culture they seek to create and the common goals on which that philosophy will be based. When employees understand and embrace a common goal, they are more apt to step up to the challenge of working together towards attaining it. Moreover, it is those goals and the plans for achieving them that helps the business attract and retain talent. After all, potential employees buy into the image of the business and work environment that you represent to them.
With a written strategy in place, a business can effectively communicate to employees its vision and map out the specific action steps it expects individual employees to take to achieve that vision. Ultimately, it establishes a series of benchmarks against which businesses can monitor and measure the performance and productivity of its individual workers, their contributions to the team and their impact on the business as a whole. Employees know what is expected of them to help move their careers and the firm forward.
Guide the Business Forward through an Uncertain Future
Businesses operate in a fluid and unpredictable environment in which new technologies, regulations, employees, clients, vendors and even new or existing competitors can upend a well-thought-out strategy and subsequent plan of action. The problem is that change is the one constant on which all entrepreneurs can rely; the future cannot be controlled.
Strategic planning provides an opportunity for business to anticipate, address and plan for a wide range of potential internal and external forces that may impede its progress on the path to success. These potentially damaging influences may include economic downturns, the emergence of a new and stronger competitor, a change in leadership and even an interruption in operations or a threat to the business’s reputation. However, a strategic plan will provide a solid foundation on which a business may maintain focus on its end-game while allowing it the flexibility to quickly shift priorities and reallocate resources to adapt to short-term changes without causing significant disruption normal business operations. Moreover, it will help the business minimize its exposure to risks and potentially costly outcomes, and it may even, at times, help the organization turn a potential negative threat into a market opportunity.
By regularly reviewing the plan in relation to market shifts, the business will be better prepared to respond quickly and effectuate change, as needed, while remaining true to its core mission, values and culture.
Identify Areas Where a Business Can Improve Performance
A key element of the strategic planning process is an honest assessment of a business’s strengths, weaknesses, opportunities and threats. Over time, these elements may change along with market conditions and the business’s own evolution. Are the business’s products or service offerings still viable or have they become stale and outdated? Is the business missing out on an untapped opportunity to leverage its expertise and offerings and grow its market share? Is it making the most out of its investment in technology to improve sales efficiency, comply with new regulations and protect company and customer data? For many businesses, identifying these operational weaknesses is a challenge, especially when employees are mired in their day-to-day tasks. However, when a business sets a schedule for regularly reviewing its strategic plan, its employees can more easily and quickly identify and respond to these issues and avoid scenarios in which emerging threats become the business’s downfall.
Strategic planning is a critical element of business success that requires all an organization’s constituents to abandon the status quo and think outside the box to define the “why” of its existence, its endurance and its survival. It is only with a plan that a business may navigate successfully into an uncertain future.
Berkowitz Pollack Brant’s team works with domestic and international businesses of all sizes and across a wide range of industries to advise in areas of tax minimization and structuring, financial consulting and auditing, strategic planning and management consulting, and shareholder and partner financial planning.
About the author: Joseph L. Saka, CPA/PFS, is CEO of Berkowitz Pollack Brant, where he provides a full range of income and estate planning, tax and business consulting and compliance services, and financial planning expertise to entrepreneurs, high-net-worth families and family companies and business executives in the U.S. and abroad. He can be reached at the CPA firm’s Miami office at (305) 379-7000 or via e-mail at firstname.lastname@example.org.