Over 10 million new small businesses opened in the U.S. from 2021 to 2022, setting a new record. Small business accounts for more than 99 % of the businesses in the U.S. However, the five-year survival rate is only around 50% nationwide. Strategic planning is an integral part of the business formation process. There are close to 2.3 million small businesses operating in New York, with over 300,000 new businesses opening in 2022.
Understanding strategic planning
Strategic planning has various meanings in different industries, but the broad concepts are the same. Strategic planning involves the leaders of the organization identifying the objectives and goals needed to fulfill the shared vision of the future. This process includes establishing priorities and the sequence for realizing the stated goals. Strategic planning starts in the business planning stage but should continue as the organization evolves. Studies show less than half of business owners spend time discussing strategy once a month.
More on strategic planning
Strategic planning is an opportunity to document and direct the ongoing progress of the organization. Allocating resources, prioritizing efforts and aligning employees and shareholders with organizational goals is more effective when supported by a strategic plan. This type of business formation and planning establishes purpose, reduces biases like the recency effect and helps leadership track progress more accurately. One of the first steps in the process is formulating a strategy based on strength, weakness, opportunity and threat (SWOT) analysis.
After SWOT analysis has brought the strategic plan into focus, it’s time to establish targets for implementing the strategy. The success of implementing strategic planning largely depends on how well leadership communicates the targets and goals to the rest of the employees in the organization. Once the plan has been implemented, begin evaluating the strategy by reviewing performance metrics and taking corrective actions.
