3 Steps to Develop Strategic Objectives for Small Businesses
Running a small business can be extremely rewarding, however it requires a lot of hard work and commitment. Between selling to customers, managing inventory, and the long list of daily tasks, it can sometimes feel like you are running in several different directions.
Amid all the daily responsibilities, there is rarely time for anything more than routine meetings, much less strategic planning. According to statistics, 63% of small business owners say they only plan for, at most, a year in advance. Lack of short-term and long-term strategic planning puts businesses at risk. Businesses that fail to take the time to develop strategic goals and objectives often end up floundering after a period of growth or may even fail to take off in the first place.
Whether your small business is well established or still clawing for market share, strategic planning should play a significant role in how you operate. A well-drawn strategic plan with clearly identified objectives can play a vital role in the growth and success of your small business because it provides meaningful goals that will guide the company in the right direction and focuses efforts efficiently and effectively.
Here, we will share steps small businesses can use to develop strategic objectives and the most important factors to keep in mind.
Step 1: Define Strategic Objectives
The first step to creating effective strategic objectives is to gather as much valuable information as possible about your company’s current state. The purpose of this stage is to answer critical questions that will be pivotal to charting the course of your business. These include questions, such as, “where are we now?” and “where do we want to go?”. You should focus on gathering a broad sampling of opinions and data, to ensure you are creating valuable and relevant objectives. Depending on the nature of your business and number of employees you employ, this might require holding a few meetings, analyzing data and or conducting surveys. Remember, the goal is to understand where the business is, what the business wants to accomplish short-term and long-term and then determine a course of action to get there.
Here are steps to identifying strategic objectives:
● Get the right people involved: Whether you are a sole proprietor or have a small team, it is imperative to get varying inputs and perspectives on issues related to your business. Employees provide a unique and valuable perspective since they are the individuals handling the process or interacting with customers daily. This firsthand information is critical in providing better products, services, and customer experience. For example, employees generally know, how your customers feel about a new product, or they may have a more personal connection to the data than you do. However, if you don’t have a staff then you should try and get feedback from customers, suppliers or consult a business professional to help evaluate the business.
● Analyze your current position: After assembling the right people and gathering data, next you will want to analyze where you currently are. A part of this should include conducting a SWOT analysis. This involves identifying the Strengths, Weaknesses, Opportunities and Threats of the business. In analyzing your position, you may also consider how the company is performing compared to competitors.
● Identify the most impactful goals: Define what important goals you want to achieve with your business. Do you have a target market share? Do you want to attain a specific level of relevance in your industry? Make a list of items and prioritize them by importance and complexity. It is important to keep in mind that these goals define the existence of your business. If you are having trouble identifying your goals, you can start by creating a vision, why was the business created? and a mission statement, how your business plans to behave? or what it intends to be known for? as the company pursues this vision.
Step 2: Develop an Action Plan
Now that we have a clear understanding of the business’s current strategic position and how it correlates to where the business wants to be. We can now start developing strategic objectives.
It is important to note that strategic objectives are a roadmap to achieving the growth and success you desire for your company and should be used as a guidepost for executing daily tasks and decision-making.
Here are steps to creating an action plan:
● Ensure high-level goals are aligned with objectives: Your objectives should be aligned with the company’s high-level goals. Businesses can often experience a misalignment between where they want to go and how to get there, because there is no strategic fit. Be certain that each objective is tailored specifically to achieve a component of the crucial steps that will lead you to your goals.
● Structure and breakdown the objectives: Structure objectives around what you project to be completed for the month, quarter, or year depending on the short-term or long-term nature of the objective. Even more important, ensure the objectives are SMART. Breakdown objectives into smaller actionable items to plan the execution and implementation process, this will help ensure you achieve your goals efficiently and effectively.
● Create an action plan to execute goals: At the most basic level, strategic objectives are checkpoints on a larger plan for success. Brainstorm on how best you can achieve your most critical business goals and put it into a plan that is Simple, Measurable, Attainable, Reachable and Time-Based (SMART).
Step 3: Take Action & Review Results
Lastly, now that there is a target and a plan of action. It is time to test your action plan and see how it performs in real-time.
Here are steps to testing and assessing the effectiveness of your strategy:
● Testing and risk assessment: Evaluate objectives to see how well they align with business goals. Identify possible risks associated with executing your plan and develop a counteracting contingency plan.
● Implementation: The objectives and action plan should be clearly communicated, and tasks assigned to the responsible parties.
● Set periodic progress reviews: Finally, the most important thing to always remember about strategic planning and objectives is they must be flexible. Never become fixed to one course of action. Set aside time throughout the year to review and modify the strategic plan and objectives, to measure where you are against where you are going, and, even more importantly, whether your plan is still relevant or needs changing. Strategic planning and objectives can be the keys to unlocking powerful growth for your business. No business grows by accident. Sooner or later, you will find that you need a plan, whether to cope or just to survive. Take steps now to create a plan and strategic objectives that will put your small business on the path to sustainable growth.
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