What is a strategic planning process?

The primary purpose of the planning process is to help companies set goals and have
an actionable plan to achieve those goals. Strategic planning can take place at every
level of a company. There may be a plan in place that covers the goals of the entire
organization, but there may also be plans individual managers design and implement
with their teams.
The strategic planning process is integral to a company’s long-term success. With a
strategic plan in place, a business can more effectively focus its energies and resources
on achieving a goal.
What Is the Purpose of a Strategic Plan?
A strategic plan exists to turn goals into realities. The strategic planning process merges
the idealism of a vision statement with the decision-making realities of everyday
operations. Effective strategic management identifies the strengths of an organization—
for instance, its dedicated workforce or the visionary thinking of its founder—and it also
acknowledges its limitations—for instance, cash flow, a limited customer base, or robust
competition. It then articulates a business strategy that exploits its assets while guarding
against its liabilities.
Seven steps of a strategic planning process
Consider the following seven steps to help you create effective, actionable plans:
1. Understand the need for a strategic plan.
2. Set goals.
3. Develop assumptions or premises.
4. Research different ways to achieve objectives.
5. Choose your plan of action.
6. Develop a supporting plan.
7. Implement the strategic plan.
Environmental scanning
is the ongoing tracking of trends and occurrences in an organization’s internal and
external environment that bear on its success, currently and in the future. The results
are extremely useful in shaping goals and strategies.
Effective environmental scanning examines both quantitative and qualitative changes.
Ultimately, you should create a set of key environmental indicators—internal, external,
qualitative and quantitative—that you believe have the most important potential impact
on the work you do.
Consider Internal and External Factors
These indicators may include internal issues and trends that are inherent to the
institution, such as budget issues, enrollment fluctuations, fundraising opportunities, and
changes in leadership.
They may also include external factors in the environment outside of the institution that
our out of our control such as:

 Demographics – locally, regionally, nationally, and increasingly internationally

(e.g., population, racial/ethnic mix, immigration status, education levels, etc.)
 Politics and public policy – changes in governmental regulation, federal financial
aid policies, and public attitudes toward institutions of higher education
 Economies – local, regional, national and international
 Labor market – the demand in relevant fields and the associated skills desired by
employers
 Academic interests – popular fields and the employment interests of prospective
students and their families
 Technology – the increasingly rapid changes in which bear on nearly every
aspect of higher education
 Research – changes in interests and funding from governmental, private and
foundation sources
 Philanthropy – changes in available funding and in the attitudes, interests, and
approaches of donors

Choosing a business location

business location is one of the most important aspects of starting a small business.

Especially if you're running a small retail or restaurant operation, finding the right
location means everything. It can dictate foot traffic, business atmosphere and long-
term success for your small business.

Finding the right location means understanding the right qualities to look for in a
potential space. Analyzing your area, reading about potential customer demographics,
and considering where competitors are located are all important aspects to finding and
choosing the right location.

Factors to consider as you look for a business location

By analyzing your business, what's available to you in your general area, and what
types of features you find important, you can find the right location for your business. Of
course, oftentimes the most important factor is affordability. It's critical to assess your
options and work with a local bank while you're trying to find the right location for your
business.

Beyond affordability and lease terms, however, there are other factors and questions to
assess in finding the right business location.

How important is the location to your business?

This may seem like an obvious question, but consider how location will impact your
business. A retail store's location varies widely compared to a central office's
headquarters. Consider your customers and clients, as well as your employees, when
deciding the impact location can have on your business. You want to choose a location
that makes the most sense for everyone.

Will your business receive ongoing shipments of goods?

If you're working in the industrial sector, or you're running a business that receives large
supplies of goods, pick a location with warehouse storage space and easy delivery
options for clients and customers. A business that specializes in shipping and holding
goods needs certain structural amenities, like loading docks.

Will you conduct meetings at your business site?

Again, consider how your clients and customers will see your location. If you meet with
customers and clients regularly, you need an accessible location. It also needs to have
reception areas, waiting rooms and conference rooms so you can meet with multiple
clients and customers throughout the day.

Will you, your customers or employees need dedicated parking?

Consider the size of your company when choosing a business location. Your employees
will likely have to drive to your location. If that's the case, is parking available? Similarly,
if you're meeting regularly with clients and customers, you need convenient parking
options for them. Sometimes the most important aspect of a business location is the
parking options that exist around it.

Who will see and interact with your location?

Consider who will come to your business on a regular basis. You need to tailor a
location that meets both their needs and your needs as a business owner.
Consider these steps first before examining other factors:

 Do your research. Researching the right business location means

understanding local zoning laws, plotting competitors' locations, and maintaining
a keen awareness of what properties are available (or may become available
soon). You should also research your target market and other benefits or
restrictions from local or state entities. 

 Consider taxes. Consider the state and local tax implications of your prospective
location. Depending on your business type and location, it may be more lucrative
to seek out a location outside a certain zone or municipality to get a tax benefit. 

 Ask about government incentives. There are incentives on both a federal and

state level for small businesses in certain industries. By choosing the right
location, you may qualify for certain incentives that could apply to your business.

How to choose the right business location

Besides the factors listed above, when it comes time to choose where your business will
be based, there are some important steps to take to make the right decision.

You want to analyze all of your options and consider the perspectives of as many
people associated with your business as possible. Choosing the right business location
means doing as much research as possible.

Consider these factors, too, as you hunt for the best location for your business:

 Demographics: Consider your target audience and where they're located.

Research different demographic aspects about your local area, particularly
around where your desired location is. If you're a business that relies on foot
traffic, you want to position your business as close to where your target
audience is clustered as possible. By knowing this information, you can also build
more facts about disposable income in your area and how high the demand for
your product or service could be. 

 Competition: Consider where your competitors are. You don't want to move in

directly next door or across the street from a business rival. By knowing where
your competitors are, you can find a business location that allows you to
 establish your own base. It can also allow you to better gauge demand for your
product or service compared to other companies. 

 Building structure: Of course, finding the right business location is not just
about the property, but about what's on the property. Find a location with a
building both you and your employees like. Consider its perspective from a
potential client or customer. You need a location with a structure that makes the
most sense for your business and your clients or customers. 

 Zoning: Research zoning maps for your local town or city. This allows you to
gauge what business activities are allowed, according to your local area. If you're
a retail store or restaurant, considering the proximity to commercial zoning can
be essential. Nearby residential zoning means you could have direct access to
foot traffic in your area. 

 Other nearby businesses: Similar to considering where your competition is

based, consider what other businesses are nearby your potential location. This is
important, because those businesses could attract customers that are in your
target demographic. Make a balanced, conscious decision when considering
your neighbors. You want to collaborate with other businesses to create a
prosperous economic environment. You shouldn't have to settle for adversarial
business relationships. 

 Foot traffic: Good foot traffic can be the crown jewel for certain small
businesses. When searching for the right location, if it's in a highly foot-trafficked
area, visit the location several times throughout the day so you can see how
crowds ebb and flow. Do your best to gauge how your business could benefit
from the level of foot traffic in the designated area of the potential location. 

SWOT ANALYSIS

What Is SWOT Analysis?

SWOT (strengths, weaknesses, opportunities, and threats) analysis is a framework

used to evaluate a company's competitive position and to develop strategic planning.
SWOT analysis assesses internal and external factors, as well as current and future
potential.

A SWOT analysis is designed to facilitate a realistic, fact-based, data-driven look at the

strengths and weaknesses of an organization, initiatives, or within its industry. The
organization needs to keep the analysis accurate by avoiding pre-conceived beliefs or
gray areas and instead focusing on real-life contexts. Companies should use it as a
guide and not necessarily as a prescription.

Strengths
Strengths describe what an organization excels at and what separates it from the
competition: a strong brand, loyal customer base, a strong balance sheet, unique
technology, and so on. For example, a hedge fund may have developed a proprietary
trading strategy that returns market-beating results. It must then decide how to use
those results to attract new investors.

Weaknesses
Weaknesses stop an organization from performing at its optimum level. They are areas
where the business needs to improve to remain competitive: a weak brand, higher-
than-average turnover, high levels of debt, an inadequate supply chain, or lack of
capital.

Opportunities
Opportunities refer to favorable external factors that could give an organization a
competitive advantage. For example, if a country cuts tariffs, a car manufacturer
can export its cars into a new market, increasing sales and market share.

Threats
Threats refer to factors that have the potential to harm an organization. For example, a
drought is a threat to a wheat-producing company, as it may destroy or reduce the crop
yield. Other common threats include things like rising costs for materials, increasing
competition, tight labor supply. and so on.

Strengths Weaknesses
1. What is our competitive 1. Where can we improve?
advantage? 2. What products are
2. What resources do we have? underperforming?
3. What products are performing 3. Where are we lacking resources?
well?
Opportunities Threats
1. What technology can we use to 1. What new regulations threaten
improve operations? operations?
2. Can we expand our core 2. What do our competitors do well?
operations? 3. What consumer trends threaten
3. What new market segments can business?
we explore?

How to Use a SWOT Analysis

Internal
What occurs within the company serves as a great source of information for the
strengths and weaknesses categories of the SWOT analysis. Examples of internal
factors include financial and human resources, tangible and intangible (brand name)
assets, and operational efficiencies.

Potential questions to list internal factors are:

 (Strength) What are we doing well?

 (Strength) What is our strongest asset?
 (Weakness) What are our detractors?
 (Weakness) What are our lowest-performing product lines?

External
What happens outside of the company is equally as important to the success of a
company as internal factors. External influences, such as monetary policies, market
changes, and access to suppliers, are categories to pull from to create a list of
opportunities and weaknesses. 1

Potential questions to list external factors are:

 (Opportunity) What trends are evident in the marketplace?

 (Opportunity) What demographics are we not targeting?
 (Threat) How many competitors exist, and what is their market share?
 (Threat) Are there new regulations that potentially could harm our operations or
products?

Five major pitfalls that stop entrepreneurs

1. Cash flow
When starting a business, entrepreneurs are usually focused on the next sale and the
next client. They often don't think about the long term or plan for the future. Cash
flow can make or break a business. A business without profits can survive for years, but
a business without cash flow will fail within months. Planning for how to maintain
positive cash flow can get your business through the lulls that are bound to happen.

2. 'I have to do it all' syndrome

Entrepreneurs wear multiple hats when they start a business. Sometimes they forget
that, in order to grow, they must pass some (if not most) of those hats to other people
along the way. This mentality of "I can do it all, faster and better" sinks many
entrepreneurs. Learn to exit roles, and have a plan of what that looks like. Who fills that
role as you exit it? What does that free you up to do now? What is the next role you will
exit? 

3. Sales and marketing

Entrepreneurs often think that all their friends and family will buy from them when they
start out. Sadly, this is often not the case. You need to have a strategy for sales and
marketing. Know who your ideal client is, and then go teach them why they need your
service or product. If you wait for the sales to just come in, you will be waiting a long
time. 

4. Underpricing

Entrepreneurs want to be competitive in the market, so they price themselves under the
competition to gain more clients. This results in lots of hours for little to no profits. When
an entrepreneur does not plan out their pricing intentionally, they are offering a service
that costs them money to fulfill. Pricing for profitability is essential, yet too rarely done. 

5. No big vision

When entrepreneurs start their business, they know what they want to do, who they
want to help and why, but they don't plan out what that will look like in three to 15 years
or what the final exit plan is. An exit strategy gives you a solid map to follow for the
entire life of your business. Without it, you are on a road trip wearing a blindfold. 

Tips that could keep an entrepreneur from failing

The best way to successfully launch your startup is to establish short-term and long
term goals. Having top-notch operational capabilities – including good management,
financial planning and a solid work-life balance – can help your company make it
beyond its second year. Here are seven tips to help you keep your business running
past the two-year mark. 
 1. Surround yourself with the right people. People who believe in you can provide great
support and advice. This can help you stay focused on the big picture of your business,
no matter what pitfalls come your way. 

2. Keep up to date with your industry. It's crucial to continue your research and gather
as much knowledge as possible about your market, because the business landscape
can change quickly. You need to look ahead so you can improve your products or
services to stay on trend and in demand. 

3. Plan for continuous growth. Manasi Gangan, founder and CEO of Nested Bean, says
planning for continuous growth helps keep entrepreneurs from failing. You can plan for
continuous growth by creating inflection points through an ongoing cycle of product
innovation, then channel diversification and, finally, geographic diversification. You must
create these inflection points when things are good and you're growing, not when the
plateau hits. 

4. Share your vision. Share your vision by hiring a diverse team with entrepreneurial
spirit. You should hire people who share your vision and believe in you and your ideas. 

5. Inspire others. Foster a culture of learning and a productive mentality until it becomes

the norm for your team. You should create smaller goals and benchmarks to keep your
team motivated and on course. 

6. Create a culture of learning, iterating and automating processes. A big factor

in building a successful business is swinging for the fences and trying new things until
you find something that works for you. 

7. Stay motivated. Take your long-term, overarching goals and break them down into
smaller tasks and goals. Then, when you have wins, celebrate them! This makes the big
goals seem less daunting and more easily achievable.

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