How Far In Advance Should SME Businesses Plan?
Having a plan is one thing but executing it is quite another. So just how far in advance should SME businesses plan?
A man, a plan, a canal – Panama! The world’s most famous palindrome also describes the strategy-to-execution process (a man had a plan... and made a canal) but disguises the challenges along the way. Proposed in plans dating back to the 1500s, the Panama Canal didn’t actually open to ships until 1914.
Small and medium enterprises (SMEs) don’t have centuries – they need to deal with the here and now and have a vision for the future. But one of the dangers for SMEs is that they get caught up in the immediacy of work and don’t allow time to strategise. Alexi Boyd, CEO of the Council of Small Business Organisations Australia (COSBOA), suggests that instead of crafting a financial plan to keep the bank happy and dropping it in a drawer, SMEs should instead be creating active plans spanning their financials, marketing, cybersecurity, social media and, yes, pandemic preparation.
“Even a bricks-and-mortar business like a butcher needs to think about social-media planning,” says Boyd, because if the competing butcher across the road has Instagram followers for daily specials that’s where customers may go.
SMEs need to be able to access different subject matter experts, according to Boyd. “Gone are the days when you’d have one person overseeing the entire process. Now a small business goes to its bookkeeper when thinking about accounting or how efficiently it runs its business and talks to its financial advisor about the next five to 10 years. It also talks to a social media strategist to create marketing plans and an IT consultant about a cybersecurity plan. If you’ve only got a financial plan, like you would have five or 10 years ago, then you’ll be behind the eight ball.”
That’s not an option for South Australia-based satellite-communications business Myriota, which has 50 staff and multiple schemes covering all aspects of its business – for today and into the future. Myriota’s strategies for rocket launches cover a couple of years – but other plans detail how it will meet customer needs this month. CEO Alex Grant says a three-year planning horizon is Myriota’s limit while shorter-term policies are designed to align with its long-term vision.
“What are we doing this year to move us in that general direction? What are we doing this quarter? What are we doing today? Checking in as you go on a quarterly basis – am I achieving alignment up and down the organisation?” And if something big happens, “you respond immediately,” says Grant. “Don’t calcify until the next quarter. You can kill yourself in the short term by taking your eye off the ball for the things that are in front of your face. Or you can kill yourself pretty rapidly by being myopic and kidding yourself that you’re succeeding when in fact you’re setting up some looming disaster.”
The motto? Do for today but plan for tomorrow.
