Start Where You Are

The starting point of strategic planning is for you to develop absolute clarity about your current position.  Look at your overall business and ask, “What’s working?” and “What’s not working?” in every area.

What is your current level of sales?  Break them down by product, product line, service, market, and distribution channel.  What exactly are your selling, to which customers, at what prices, and with what level of profitability?

Compare your current sales with your assumptions, your expectations, and your projections.  Are you on track? What are the trends?  Are they up or down? Are they temporary or permanent? What do the trends suggest for the future of your business?  What could you do to respond more effectively to them?

Cash Flow Is Everything
Look at your cash flow and levels of profitability for each product, service, and area of activity.  Are your profits going up or down?  Are they on budget or going sideways?  Look at the percentages. Analyze your return on equity, return on investment, and return on sales. Are they increasing or decreasing?

Jim Collins says in Good to Great: Why Some Companies Make The Leap – And Others Don’t that you must be willing to ask the “brutal questions” about your business if you are going to solve your problems and achieve your goals. If your goal is to build a great company, why isn’t your company already great?

Clarity Is The Key
Perhaps the most important word in strategic planning is “clarity.” You must be absolutely clear about the answers to each of these questions. Vagueness or fuzziness in any area can lead to problems, difficulties, and even disasters.

Look at the people around you. Who are your most valuable people? Who is no longer valuable as before? Who even represents a net loss or detriment to your business? Be prepared to ask and answer the brutal questions.

The Customer Is King
Who are your best customers today? What and where are your best markets? What do your customers like most about what you do for them? What do they compliment the most of what you offer to do for them? What is your number one area of customer satisfaction?

What do your customers like least about what you do? What do they complain about most? What is it that you sell that your customers and potential customers prefer tom buy somewhere else rather than from you?

Identify Your Personal Strengths
Look at yourself honestly. What are your own personal best skills, qualities, and abilities? What are the most important things you do at work and for your company? What are the most valuable contributions you make personally to your business?

Imagine yourself as a doctor conducting a complete medical examination on your own body.  Treat your business as though it were a body as well. Get accurate information on every critical detail of your company, and use this as a baseline to determine your future actions. Be honest and objective at every step.

Question Your Assumptions
Everything you do in your business is based on certain assumptions. Some of these assumptions could be wrong. The answers may have changed, and what was correct in the past may not be correct today. Check every assumption and ask, “What if this assumption was not true?”

Strategic planning requires that you begin with a realistic and honest assessment of exactly where you are and what you are today.  This becomes your starting point for strategic planning and strategic thinking.  It becomes the foundation upon which all future decisions are made.