Throughout our lives, we are conditioned to plan for the future. As children, we were encouraged to do well in school in order to successfully apply to universities and colleges, or to develop necessary life skills in order to enter the workforce. As adults, we are encouraged to plan and save for the future – for our children’s education, to purchase a house, or to prepare for retirement.

The Benefits of Long-Term Planning

Although we experience this conditioning throughout our lives, many small business owners fail to plan for the future of their small business. This is understandable – it is difficult for many small business owners to simply keep the lights on and the doors open month-to-month, and “treading water” is almost always preferable to going out of business. However, every small business and organization can benefit from long-term planning – even small businesses that are currently struggling – and developing a five, ten or even fifteen-year plan can often provide positive short-term benefits as well.

Establish Who You Are And What You’re Doing

The first step to developing a long-term plan for your business is to establish who you are and what you value as an organization. It may be a cliché, but it becomes difficult to plan ahead when you don’t have a clear idea of who you are and what you want to accomplish. If your business doesn’t already have a mission statement and a set of objectives and goals, create a document that lays out the core purpose and focus of your organization. A mission statement is meant to be permanent, so take the time to do it right the first time!

Understand Your Financial Health

The second step to developing your long term plan is to have a clear handle on the financial health of your business. As a small business owner or manager, you likely already know the day-to-day finances of your business, but do you have a clear idea of the total financial picture? If you’ve been neglectful in the past, now is the time to establish a system that you can use to not only get a handle on your books now, but maintain your accounts on an ongoing basis. Once you have the complete picture of the financial health of your small business, you will be prepared to develop realistic and achievable goals for increasing profitability and growing your business.

Choose A Set Of Realistic Strategies And Goals

The key to developing realistic strategies for your small business is to create practical strategies and set achievable goals. Creating a list of broad, unrealistic goals can do more harm than good – expecting yourself and your employees to achieve a lofty set of goals, such as “We’re all going to double our business by this time next year,” without a set of strategies and benchmarks often just leads to failure and disaster. It’s not enough to just say, “This is where we need to be in three to five years,” it’s also necessary to say, “This is how we’re going to achieve our goals and this is where we need to be in six months, in a year, and in two years”. It’s also important to note that your goals don’t have to be linear – if your only goal is to increase profitability, a series of financial goals would be appropriate, but it is likely that your business has other goals, such as expanding, which can include hiring more employees, purchasing equipment or expanding a product line.

Stay Adaptive And Flexible

No matter how realistic your strategies and goals are, don’t be afraid to change them if your business grows or expands in unexpected ways, or if your industry or market radically changes. While it can be a poor idea to give up on a strategy or goal if things aren’t going your way, it can be an equally bad idea to follow your strategy or goals off of a financial cliff – if it’s damaging or simply unrealistic to keep going, stop and reassess what you want to accomplish and how you want to get there.