Strategic Planning add value for Small and Medium Enterprise: Does it?

Planning is the often-used phrase and an activity where most of the members of management spend time and money either its a big organization or a small and medium enterprise. SME business owners working in any industry (furniture industry to dry cleaning or small manufacturing unit or others) always look for ways where they can interact and engage with their employees. It is more feasible to have any conversation with employees on the floor in SME's. This short talk can be very beneficial for the management as this gives a window to understand or become aware of the problems their employees face while doing the day to day task. This exercise can be challenging for SME management who although are great business-people but sadly hard listeners.

Every consulting project we have worked gave us an opening to look at the business problem through a strategic lens of people. It is not surprising to us that more often than others, employees knew about the business problem or are expecting the problem to deteriorate. Great employees always try to make an effort to communicate about the possible business problem to owners or top management either through body language or by approaching them. Sadly, their message was either unintentionally ignored or forgotten.

SME's can only better prepare themselves from the business problems when they start applying phases of strategic planning in their firms.

Research indicates that some SMEs do not engage in strategic planning (Majama & Magang, 2017) while other authors (Sandada, 2015; Herath & Mahmood, 2013; Kee-Luen et al., 2013; Karabut & Efendioglu, 2010) put more emphasis on the importance of strategic planning in SME.

Strategic planning can surely add value to an SME's by preparing them about the industry dynamics and competitive environment. Industry knowledge is significant for firms who are on the nascent or in the growth stage. Every business decision taken without any prior industry regulation or change in customer behaviour can make their business dive into debt.

In our consulting experience, there is an approach difference on how SME owners perceive the value of strategic planning. SME owners in developing countries are more focused on short term strategy i.e., increase profitability and expand customer base. In developed countries, SME owners were somewhat more aware of the industry regulations and preferred to be more strategically knowledgeable about the business impact of every decision to the firm and its employees.

There is no doubt that strategic planning has its benefits, but it is more about the perception of the business owners. It is tough for small and medium business management to come out of the operations hassles of their businesses and plan and strategize for a year or five-year plan roadmap.

All Fortune 500 companies, like Amazon, Facebook, or Microsoft, have moved the ladder from SME to Fortune 500 by integrating strategic planning in their culture and every business decision. Business owners need to take the courage to step out of operational challenges to the strategic mindset that focuses more on sustainability and serving the customers in a better way for generations to come.

As a business owner, do you incorporate strategic planning and execute with your workforce?. Again, it is not the answer but the perception of how you see the value of strategic planning for your firm, industry, or an organization.