When these decisions are made in a vacuum and without sufficient data and context, a management team has to spend a lot of time unwinding mistakes. Lack of clarity manifests in poor decision making about new products, who to hire, where to staff a sales team and what equipment to buy.

One thing I have found is that many entrepreneurs have a plan in their head, and they are under the impression that is good enough it isn’t. The pressure on small business owners is immense, and a thoughtful planning process can chart a course to a successful future, one with more clarity and less stress. I have a vivid memory of sitting with a really smart young entrepreneur who wept in her office out of fear she could lose it all. But regardless of size, every entrepreneur should find time to be thoughtful about the future of their company. They do not have dedicated people for things such as research and development. To be fair, small businesses are more strained for resources than larger companies.

We feel greater accomplishment from finishing routine tasks than attacking larger projects that deliver enterprise value but may require months to complete. We get caught in a trap, where the urgent nature of today’s work always takes precedence over strategy. One has to start by understanding the underlying psychology. You may be wondering, why wouldn’t everybody want a plan?

Larger companies are more likely to engage in strategic planning, not because it is more relevant for them but because they tend to hire professional managers who understand the dramatic impact that a strategic plan can have on profitability and morale.Ībout half of Vistage members (I have worked with more than 50) engage in some type of strategic planning process, with varying degrees of formality. Within our strategic planning practice we have worked with every conceivable type of business, large and small.

Effective small business management pdf