With any company, it’s important for owners and managers to make time to step back and decide what the future goals for the business should be. But it can be hard to do that when you’re a smaller business owner or manager wearing multiple hats and responsible for keeping the business running day in and day out.
“Small business owners get so entrenched in the day-to-day activities that it’s difficult for them to take time out to think about the future. The problem is that the future is going to happen and if they’re not prepared for it, they will suffer,” according to Jeffrey S. Harrison, Ph.D., a strategic planning expert with over 30 years of experience. In the past, Harrison has worked as a consultant to more than 100 companies, including Lockheed Martin, Siemens Westinghouse, American Express, Bell Technologies, and Volvo Group North America.
But when offering advice to pass on to those in the pallet industry, Harrison said the long-range planning process doesn’t have to be overly complicated. In fact, he said there are two key things that all businesses should do when it comes to strategic planning. “If any business owner will just do these two things, I guarantee they can increase revenue and efficiency,” he said.
Learn from Stakeholders
First of all, according to Harrison, “You want to learn from your stakeholders.” These include those directly connected to your business like your customers, suppliers, employees, and financiers, but it also includes those on the perimeter such as community groups and community governing authorities.
“They need to systematically learn from their stakeholders. They have to have a way to tap into this collective wisdom and knowledge,” Harrison said. This can be done in many formats, ranging from surveys to face-to-face conversations to formal meetings, as long as you ask the right questions. “You can’t just expect it to come to you,” he added.
Stakeholders will almost always be able to give you information, according to Harrison, on 1) how to improve your business; 2) what the trends are; and 3) where new business opportunities can be found.
Not only is this kind of information very valuable, but learning from stakeholders is also absolutely free, although it does take some time commitment. And though it seems like such a simple thing to do, Harrison emphasized that it has to be a real systematic process where stakeholders are engaged.
Keep Looking Forward – Consider Where You Want the Business to Be in Five Years
The second thing pallet businesses need to do to increase revenue and efficiency is to look at where they want to be in five years and figure out how to get there, commented Harrison. In a different industry, like salt mining which is extremely stable, this might be 10 years, and for an unstable industry, it might be two years, he explained.
Basically, once you’ve decided where your business should be in five years, you start working backwards and looking at what interim goals you need to meet in order to get there. For example, many business strategists recommend that you decide where you need to be in one year in order to reach your five-year goals, and then where you need to be in the next quarter, and then in the next month.
This can vary, but the basic idea is that the business figures out what small steps they need to take in the near future to get to where they want to be in the distant future.
Harrison strongly recommends that business owners get help with long-range planning so that they will stay motivated. It’s typical for small businesses to put work into developing long-range goals, but then not follow through and do what needs to be done to meet the goals, he explained.
“They can get discouraged and quit because it takes time away from the day-to-day operations,” he said.
The good news is that there are free resources available to help small businesses with their strategic planning, said Harrison. He works with the Capstone Project, an MBA requirement at the University of Richmond, in which grad students serve as business consultants to regional businesses for free, while overseen and advised by an expert like Harrison.
“Almost all business schools of any credibility have some kind of free outreach program to small businesses,” he said. And even if they don’t, a business owner should still speak to a department chair or dean of their closest business school to see if there is a professor there interested in doing pro bono work as a consultant.
Many communities also have small business programs. He suggests checking with the Chamber of Commerce in your community as a starting point.
“I don’t think the typical small business owner should try to do it all on their own,” Harrison suggested when it comes to strategic planning.
Editor’s Note: Jeffrey Harrison is the W. David Robbins chair of strategic management at the Robins School of Business at the University of Richmond. Harrison previously taught at Cornell University and has authored more than 10 books on strategic planning. He can be reached at harrison@richmond.edu or 804-287-1920.
