Do you remember the game "This is a witch, this is a watch" from when you were a kid? Everyone sits in a circle and you passes one object one direction and the other object the other direction, everyone repeating the "This is a witch - a what - a witch" mantra (or watch depending on where you sat in the circle). Then when one person receives both objects at the same time and the cross-over begins....well....pandemonium reigns. This same reaction frequently occurs when small business owners grapple with which tool might best suit their current situation: strategic plan, business plan, feasibility study, or annual operations plans. I get a deer-in-the-headlights look when I suggest one tool as compared to another. Is it a witch or a watch; a strategic plan or a business plan?
Understanding the unique role that each of these tools plays is key. And as often as I’ve described these tools to people, nothing helps to crystallize their roles more than a visual. As you can see in the graphic, strategic planning is where the visioning takes place, values are articulated, and resources are brainstormed. What you want to be known for and what you stand for are key considerations. This graphic shows that strategic planning takes the long view, thinking 10 years into the future. Some strategic planning experts will tell you that with today’s rapid pace of business that it’s no longer realistic to plan 10 years out and have shifted this timeline back to 3 to 5 years. No matter the timeline, strategic planning is a great tool for “big picture” thinking.
Once you’ve developed your big picture, its best to test your direction. This is accomplished with a feasibility study. You’ve moved from forming the dream to articulating scenarios that will have the dream become reality. The feasibility study helps you to uncover roadblocks and determine which scenario provides the greatest likelihood for your success.
Following the feasibility study, a business plan is prepared to operationalize your best-case scenario. Business plans are usually prepared for a 3 to 5 year period. When you are looking for financial resources, funders may require 5 year projections, but also give a nod to the fact that anything beyond 3 years is hard to project with accuracy.
The final planning tool is the annual plan which, as its name might suggest, is prepared annually. You take a look at the year ahead, determine what your goals are, who has responsibility for them, when they will be accomplished and how much each goal costs. This provides accountability for your goals and a means to check in on them through the year to see how you’re progressing.
The process I’ve just described starts from the very beginning of a venture and moves through as though your business is a start-up. These tools are also applicable at various times throughout your business growth. Feasibility studies are good tools when developing new products and services. A strategic plan is a great tool if you’ve lost momentum in your business and need to renew early energy. Business planning should be engaged in regularly as your business grows. You’ll find that once you’ve prepared an initial business plan, renewing it is a much easier task. If your market changes or the economy changes, it’s also smart to redo your business plan to take the new conditions into consideration. So, whether it’s a witch or a watch, knowing which tool to use and when can move your business forward just when you need it.