Planning and strategy are the foundation of small business success. They go hand-in-hand and are essential to running a successful small business. They’re often mentioned together because both are about guiding your business in the right direction and helping it grow in a smart, organised way.
What is Planning?
Planning is the process of thinking ahead. It’s goal-driven and helps you prepare for the future. When you plan, you’re setting clear goals, identifying your target market, and understanding your competition. This gives you a step-by-step guide—especially helpful when you’re just starting out—so you don’t feel lost or unsure about what to do next.
Good planning also includes:
- Thinking about what could go wrong—not just what you hope will go right
- Having backup plans ready in case things change
- Finding ways to improve how your business runs, by cutting out unnecessary steps and focusing on what works best
When planning is done well, it can:
- Lower your costs
- Make your business more efficient
- Improve accuracy by setting clear checkpoints
- Help your team understand how to reach your business goals
It helps you get organised and stay focused, which can save money, improve efficiency, boost accuracy, and make it easier for your team to understand how to reach business goals.
Planning also prepares you for different outcomes. If things don’t go according to plan, you’ll have a backup ready.
What is Strategy?
Strategy is the bigger picture. It’s about the direction you want your business to go and how you plan to get there. While planning focuses on “how,” strategy focuses on “why” and “what.”
Your strategy defines your business vision, how you’ll stand out in the market, and how you’ll reach your goals. It ties together everything you do—marketing, operations, finances, and more.
Here are some key areas where strategy plays a role:
- Marketing and Sales: Know your ideal customer, choose the right platforms, and grow your brand.
- Risk Management: Prepare for challenges and unexpected situations.
- HR and People Management: Plan how to hire, train, motivate, and retain great employees.
- Technology and Innovation: Use the right tools, including AI, to boost growth and make daily tasks easier.
- Financial Management: Budget wisely, track expenses, and plan your cash flow.
- Operations: Create smooth processes and systems to keep things running efficiently.
- Legal and Compliance: Make sure your business follows the rules and stays protected.
Why Planning and Strategy Matter
Many small business owners get caught up in the day-to-day tasks—putting out fires, so to speak. But long-term success comes from working on the business, not just in the business.
Running a business successfully isn’t just about reacting to problems as they come up. It’s about being proactive and thinking ahead—working on the business, not just in it. That means making time to focus on strategy, not only daily tasks.
Strategy also includes setting both small (short-term) and big (long-term) goals and making sure everything your business does is aligned with those goals.
While strategy gives you the overall vision, planning breaks that down into specific steps and actions. Together, they help you stay focused, make better decisions, and build a business that can grow and succeed over time.