Why Is the Strategic Planning Process Important?
It may take a little time to get it right, but strategic planning is an ongoing process that benefits everyone. It helps business owners define priorities, manage resource allocation effectively and prepare for potential challenges. Likewise, effective strategic planning in management teams improves cross-department collaboration. Meanwhile, it fosters an increase in productivity among other employees, which keeps your business adaptable and focused on the bigger picture.
Increase Productivity
Involving your employees in the strategic planning process also means they feel more accountable, which can increase productivity. Whether they contributed to the process or were informed of the business’ long-term goals and objectives after the strategic plan was created, they’ll be more likely to want to help you achieve those targets.
Identifying Strengths and Weaknesses
You can conduct a SWOT analysis and generate a balanced scorecard of what your business does well and what areas it needs improvement. Review your internal environment (operations, resources and processes) alongside external factors like market trends, competitor activity and customer behaviors that influence performance. Proactively identifying strategic issues, addressing potential challenges and setting priorities that positively impact long-term growth will make your business much more durable.
Setting the Direction of the Business
Strategic planning gives you and your business time to figure out how to grow and how to address new opportunities and challenges. Think about the challenges or issues your business may face over multiple years and plan accordingly. By the end of the strategic planning process, you and your employees should have a clear direction for where you want the business to go in the future. The discussion and planning processes themselves are often integral to putting your business in the best position to succeed.
Communicating Your Strategic Plan
The sooner everyone is involved, the better. Seeking early feedback from employees can unearth valuable insights into what may not work and highlight any specific project plans that need improvement. Input from vendors, advisors and other stakeholders can be equally valuable in highlighting market trends, opportunities and potential risks you may not have considered. When sharing your plan, focus on timelines and how responsibilities will be communicated across business units so that everyone understands their role in achieving the company’s goals.
Most plans can be broken down into the following distinct phases:
- Discussion
- Development
- Review and updating
Let’s take a closer look at what each step involves and why it matters.
1. Discussion Phase
The discussion phase is designed to gather as much information, opinions and input as possible. Set up a regularly scheduled meeting with the employees and any other stakeholders in your business who will be involved with strategic planning. Make sure you have an agenda and clear expectations of what you want to accomplish in each meeting. This will keep discussions on track and help prevent distractions.
In the first few meetings, try to answer questions that will help you define mission-critical criteria, such as “Where are we now?” and “Where are our competitors?” Once you have a realistic idea of where the business is, you can focus on specific details in future meetings.
When you’re conducting a SWOT analysis as a team, strengths should be easy to identify. When you’re discussing weaknesses, don’t be afraid to be candid. Every business has weaknesses and things to work on. Besides, anything that stands out is something you’ll aim to improve on with a detailed initiative outlined in the strategic plan. Likewise, opportunities may be pretty clear, while identifying threats can be more difficult. So, in addition to regular meetings with your employees and stakeholders, you can also gather information from people outside your company, like:
- Vendors
- Investors
- Analysts
External people will have a unique perspective on not only your business, but also the industry you’re operating in. Getting their opinions on where they think the industry is going and what they think will change can help you put together your strategic plan and determine where you want your business to be.
2. Development Phase
This is when you’ll start putting together your strategic plan based on the seven key elements we outlined above.
The first step is to decide what you will use to create the strategic plan. Are you going to purchase software to help you create and house the plan? Or are you going to create the plan yourself and save it in the cloud for easier access?
When you’re creating goals and objectives for your business, make sure they’re realistic and measurable. Work with your employees to create goals and objectives for at least the next one to three years and discuss how they will be measured and tracked. For example, if you have a goal of increasing sales by 10% in the next year, you can track this by measuring sales numbers.
Equally important is having an action plan to achieve your goals and objectives. Using the same example of increasing year-over-year sales by 10%, you can pursue more marketing and social media outreach as part of your action plan.
The bottom line? If an action plan doesn’t help your business achieve its goals, the plan needs to be rewritten.
3. Review and Updating Phase
Designate someone to be responsible for reviewing, updating and sharing any strategic planning changes with the rest of the company. Whether it’s you or another employee, you’ll want to make sure everyone in the business is aware of the changes and how they affect the overall strategic plan.
Your strategic plan takes time and effort to finalize, so don’t fall into the trap of ignoring it once it’s done. Schedule a time for review that won’t slip through the cracks. For example, if your action plan requires you to put in sales numbers every quarter to track revenue, you could take that time to review the rest of the plan. You can also set an alert to check the strategic plan every few months, every quarter or every year.
When reviewing, don’t panic if you discover you’re not on track to meet an objective or goal. Reassess the situation and return to the discussion phase to figure out what went wrong. If a particular goal was too ambitious or unrealistic, change it and update the action plan to help you get back on track. You also may find that your small business has met a goal or objective earlier than you thought you would. If so, you can create a new goal or objective to work toward, or try to maintain the progress you’ve already made. Discuss ideas with your employees to see what they think is possible.
Strategic Planning Examples for Small Business
A small business strategic plan focuses on solving real challenges that affect growth, productivity and profitability. For example, if you’re struggling with talent attraction and retention, your plan might include launching a targeted social media campaign to
boost recruitment. You could also outline initiatives to improve your workplace culture and enhance employee benefits to remain competitive.
Whatever your challenges, the key is to define clear objectives and accurately measure progress against them, making adjustments when necessary to ensure your strategy supports long-term growth.
According to a recent survey of small business owners, these are the
top challenges for small businesses in 2025:
- 22% said inflation/price increases
- 17% said they expect challenges with recruiting/retention of employees
- 18% said lack of capital/cash flow
Nonprofit Strategic Plan Example
Just like small businesses, nonprofits also benefit from a clear, well-defined strategic plan. However, nonprofit plans often focus more on the internal and external factors that can affect funding, programs and services. Because organizational structures and priorities can shift quickly, the plan must remain flexible enough to adjust when needed.
For example, the
Minnesota Council of Nonprofits has a strategic plan with in-depth descriptions, outlines and strategies covering the ‘what’s’, ‘hows’ and ‘whens’ of the organization’s:
- Vision
- Mission
- Community it serves
- Goals for the four-year period
The plan also lists the people responsible for working on the strategic plan.
IT Strategic Plans
The IT industry is continually evolving in response to increasingly advanced artificial intelligence (AI) and machine learning technologies. While other business strategic plans may focus on the next three to four years, it’s not uncommon for an IT strategic plan to look at only the next 12 to 16 months.
For an IT or tech company, a robust strategic plan may include upgrading critical infrastructure, strengthening cybersecurity or migrating systems to the cloud. Specific project plans might include data analytics initiatives to improve decision-making or explore opportunities to integrate AI and machine learning tools that enhance customer experiences.
However often you review and update your IT strategic plan, it’s important to involve your business’ Chief Information Officer or technology lead. Remember to always include details on how to make a decision when it comes to investing in new equipment or technology.
