Why SMEs struggle with strategic planning (& what to do about it)
- Rachel Vigers
- 3 days ago
- 12 min read
Despite the many proven benefits of Strategic Planning, over half of the UK’s SMEs are totally winging it. These businesses have no defined direction, no business plan (even a one-pager), no marketing plan, nothing*. Step aside, Houston… UK, we have a problem!
This blog looks at why strategic planning is such a problem for SMEs & illustrates how Rock has set out to solve it.
SMEs simply must survive
There are 5.6 million private sector businesses in the UK, of which 99.9% are SMEs (0<250 employees). Together, these SMEs represent 60% of the sector’s employment figures & generate 52.5% of its total turnover.*
SMEs are vital to our economy, our livelihoods, families & communities.
It’s in the UK’s interests for SMEs to survive.
Strategic Planning rocks!
At its simplest, strategic planning is the process by which business leaders define future goals & align operations & activities to meet them. There's a LOT of noise in this space, including a ton of conflicting talk around the power of defining a company's purpose, vision, mission, values etc. We're going to leave all labels out of the discussion for now because they're a distraction.
In Rock's view, the most important strategic goals for SMEs to define are a) where the business wants to be, b) what it wants to achieve & c) what differentiated value it intends to deliver. Everything else is how.
Done well, strategic planning has many proven benefits – providing a framework to support better decision making & resource alignment, improving productivity, team performance & morale & identifying opportunities for innovation & growth. Being strategic makes businesses stronger & more resilient.
For SMEs specifically, strategic planning is also a fundamental source of competitive advantage. When so many players in a market are playing it by ear – guess who’s going to stay stronger, for longer? Yup, it’s the ones who think ahead & plan accordingly.
SMEs struggle with strategic planning
Yet, despite the proven value of strategic planning, according to a recent study by The Marketing Centre*, 54% of the UK’s SMEs had no form of strategic business plan in place & a whopping 67% had no marketing action plan. So, what’s going wrong & how do we fix it?
Rock keeps seeing the same 6 factors…
We’ll explore each of these in turn & give you a solution for them all.
1. Lack of INCLINATION
Sounds harsh but it’s not a criticism. Ambition is a deeply personal thing & not everyone’s out to change the world.
Rock’s clients typically are determined souls – they want to do something different, better or bigger, to make an impact that gets noticed, to build a brand, not just a business. They want to start strong, grow strong &, eventually, exit strong. They realise that doing this requires being more intentional &, especially as their business grows, more joined up too.
But not everyone has this mindset.
If you’re self-employed or running a small lifestyle business & are content with earning enough to cover overheads whilst providing flexible working conditions – go you! There’s nothing wrong with that.
That said, it’s tough out there. Can Rock help?
Sure – book a one-off GRIT Session to learn how to sense check or optimise your position & what you need to do steer yourself in the right direction. It’s only £150 so should be affordable for any business, no matter how micro.
2. Lack of perceived RELEVANCE
The belief that strategic planning is only for big businesses is far more common than you might think.
Traditional strategic planning is not suitable for SMEs
Entrepreneurs often start their businesses with a vision (rarely written down) & build as they go. They learn on the job, adapting & evolving on the journey. They don’t have extensive data to mine & don’t always know what the next 6 or 12 months will bring, let alone the next 5 or 10 years – so they simply don’t see the relevance in formal strategic planning. The earlier the stage of business, the lower the perceived value in planning ahead.
We get it. Traditional, sophisticated modes of strategic planning are complex & cumbersome. They require long term visibility, extensive sector research & detailed data analysis. They produce lengthy business plans & over-structured organisational workflows. In short, they lack the agility, efficiency & practicality needed by SMEs.
Basically, the days of old school strategic planning are done.
But SMEs still benefit from being strategic.
In the very early stages, thinking strategically about a business helps to focus resources, mitigate risk, gain traction & speed up product-market fit.
As the business grows, the ”hands-on, learn-as-we-go” entrepreneurial mindset can get it so far but then there comes a point…
at which a business needs to grow beyond its founder – in size, skills, capabilities or capacity
at which bigger commitments, such as premises or salaries, demand a more sustainable pipeline (potentially from as-yet unidentified sources)
where external market conditions are evolving at a pace that the business can’t match or maintain
where, if some form of basic business strategy is not defined & implemented effectively, the proverbial marbles start to roll in different directions… leading to fragmentation, inefficiencies, disconnect & stagnation.
In dynamic businesses, these trigger points can come much sooner than anticipated & taking an intentional & joined up approach can be a game-changer.
SMEs need a new style of strategic planning
Just because traditional modes of strategic planning don’t suit SMEs doesn’t mean there isn’t room for a more modern, adapted approach.
Enter Rock.
Our foundations-led framework is designed expressly to suit SMEs, pared back & practical but still robust & relevant.
We treat business strategy & brand strategy TOGETHER; no duplication of resources
We keep strategic focus on CORE SUCCESS FACTORS (Direction, Connection, Impact & Value), without getting distracted by tons of conventional terminology or popularised jargon
We’re data-led without drowning in it, PRAGMATICALLY prioritising balanced perspectives & accessible research over detailed spreadsheets
We keep the strategy simple & topline - our outputs are led by client needs (not rigid consultancy models) & summarised on A SINGLE PAGE (saving the detail for cohesive implementation).
It’s still strategic planning – maybe not as you know it – but it still works. We wrote a whole other blog on our Foundations approach, which you can read here - or just ask us!
3. Lack of perceived NEED
Of course, not all SMEs are struggling. The "I'm-alright-Jack"s have already built a solid customer base, steady pipeline, tight team & strong culture. For businesses like these, strategic planning is a solution to a problem that doesn’t exist. Yet.
The waves of change are relentless
The thing is, change is a constant & some of it comes from outside of your regular, day-to-day operations… market dynamics, new competitors, regulatory changes, technological advances, changes to management or ownership etc.
It's so easy to get caught up in the day-to-day running of a business that you lose track of what’s happening outside of it or don’t see what’s coming next – which is why many founders find themselves unprepared when the waves of change come again.
Times change, markets move, people move on. Even steady businesses need to keep evolving.
Whatever the stage or state of your business, it’s important to take regular time out to work ON it, as well as IN it.
Need a hand? We're here. Our mentoring packages include scheduled time each month to reflect on your business & make sure you stay strong.
4. Lack of KNOW-HOW
This one’s a biggie. Huge.
Even when a) there’s an identified need for strategic planning & b) leadership recognises its relevance & c) has the inclination to push it through, it’s STILL not all smooth sailing.
When in-house isn’t enough...
Firstly, the existing leadership may not have the necessary skills, knowledge or perspective needed to effectively implement a strategic planning process: what to do, what questions to ask, what to look at, how to go about it, how to make it work.
Anyone can Google “how to write a strategic plan”, or “how to do a SWOT analysis” but not anyone knows how to deal with the resulting wall of (often conflicting) advice, the myriad of methodologies out there or how to apply any of them effectively to their specific business.
This is a situation that small management teams commonly fail to recognise.
Instinctively believing they know best or have all the answers, their strategy is simply an articulation of what’s in their head or heart, which may not necessarily be what the business needs long term.
Founder-driven strategies especially are prone to issues of bias & buy-in...
It's almost impossible for business owners to reflect on their own business with an unbiased eye. But, whilst it’s natural to look through the lens of personal experience & ambitions, that can mean missing vital information, perspectives or opportunities.
Also, whilst demonstrating leadership is important, a purely top-down approach isn’t always the right way to go. Consultation across the business is not just helpful for ensuring a strategy is well-informed but also for encouraging buy-in amongst those who will eventually be tasked with delivering it. Culture plays a vital role in the effective definition & roll-out of any business strategy - check out our other blog on this.
Running a business sustainably takes a diverse set of skills, capabilities & perspectives that go beyond one individual or small management team. If a business owner doesn’t recognise this & seek to plug any gaps, - whether through external consultancy or internal hires - then any strategy will be flawed from the start.…
but outsourced doesn’t cut it either…
That said, it’s not effective to just expect to outsource the whole process.
External consultants can certainly bring a valuable independent perspective & additional knowledge & skills – let alone the capacity that small teams struggle with. However, proceed with caution!
Handing the problem over to someone outside the business, with a brief to come back with a solution, can result in advice that doesn’t resonate internally & so ends up getting soundly ignored (often resulting in bitter, futile arguments over whether the founder or the expert is at fault).
This latter problem is made worse by the volume & diversity of consultants out there – from business strategists to coaches & mentors, from brand strategists to marketing consultants, from growth specialists to digital transformation advisers. There are a ton of different "strategies" out there - business, brand, transformation, marketing, digital, social media etc. It's almost impossible for an SME owner to know where to start, what to ask for or who to ask.
It can be tempting to just target individual tactics – changing pricing, re-designing a website, introducing a staff bonus scheme etc. Bitesize & manageable but, without a strategy pulling it all together, scattergun & ineffective. A frustrating waste of time, money & effort.
The truth is that external strategic help can be genuinely transformational – BUT you have to identify the right type of help & not expect to relinquish responsibility in the process.
This is exactly why Rock works the way we do.
Foundations-First
Our four Foundations look at the whole business from a big picture perspective – keeping the 'strategy' simple & holistic whilst helping to diagnose where the detail really needs to be deployed. We don’t assume anything upfront. Instead, we start by helping you to define your desired Direction, Connection, Impact & Value. Then, & only then, do we identify which areas of implementation need most support.
Led by client needs, not pre-determined outputs
Every business is different & different strategies will require different approaches to implementation. That’s why we’ve built our business model around our clients' actual needs, not any pre-assumed outputs.
Foundations strategy is Rock's wheelhouse . We don't claim expertise in areas we can't own. When it comes to implementing that strategy, we offer a flexible range of options - from working directly with our client's in-house team, to briefing their own preferred suppliers or sourcing partners from our own network. Who is best placed to deliver the different aspects of the strategy depends on what needs to be done & what resources are available.
Rock's specialist delivery partners cover a host of different Commercial, Creative or Cultural specialisms - from GTM strategy to graphic design, financial modelling to measuring motivation. Whatever support you need, we'll help you find it.
With you, not for you
We run programmes with you, or provide mentoring support to support you, but we don’t take strategic problems away & hand them back fixed. It’s your business so you need to own your own strategy.
If you're not willing to invest your time and attention to making your business stronger, for longer, then Rock is not the right partner for you.
5. Lack of TIME
Speaking of time... Never has the need to look ahead been more valid than in the current climate, where change of all types – technological, economic, social and political – is coming thick & fast.
SMEs who weren’t prepared for such unprecedented levels of change are now struggling to stay afloat. They’re so busy trying to survive their NOW that they have simply no headspace to consider what’s NEXT. Seems fair?
The Survival Mode mistake
We understand what it feels like when your back’s against the wall. But don’t let a lack of time equate to a lack of progress - some sensible thinking is better than none.
Looking ahead doesn’t need to be a long-winded process or even have long-term visibility.
Whilst Rock’s FIRM Foundations programmes take anywhere from 6-12 weeks (depending on the scope of the research/consultation & the depth of the deliverables), our FAST Foundations programmes can be done in as little as 2 weeks & our GRIT Sessions will take up just a couple of hours of your time (if you can’t even find 2 hours to spend on your business, that’s a problem we can’t solve!).
Running out of steam…
Taking some time to define your strategy is one thing. Implementing it is another…
By far the biggest timing mistake that SMEs make is having unrealistic expectations of how quickly a strategy will yield results or treating is as a one-off “done that” exercise.
Strategy is not a short-term solution. It needs to be shared with the people that matter. They need to be equipped & empowered to deliver on it. It needs on-going management – with regular reviews baked into the business calendar. It needs to evolve & adapt over time.
Implementation planning can sometimes be geared around quick-hits vs short- to mid-term targets but true strategy takes time to deliver. We don't have any solutions for this - it just needs to be accepted.
6. Lack of BUDGET
We know - it’s bad enough trying to find budget to define a strategy, without then having to invest in implementation too… thankfully, we have options!
Robustness vs risk
Put simply, strategy is about making decisions. How good those decisions are depends, to a degree, on how well-informed the decision making process is. The more robust the process, the less the risk of making bad decisions.
Rock believes strong strategies come from balancing different perspectives – specifically Business + Market + Audiences (both internal & external).
In an ideal world, each of these perspectives would be considered in the context of diverse data sources too – i.e. not just what the business owner thinks of them, but what people across the business think too, plus people outside the business (customers, clients, strategic partners, advisors, investors etc.).
When Rock is running a FIRM Foundations programme, it’s this type of research & consultation that typically consumes most of the budget. It’s important because assumption can be risky. Asking is always better.
But ideal isn’t always real, is it?
SMEs without the budget to commission a full consultation piece need to take a more pragmatic approach, focusing on readily accessible desk research, leveraging existing knowledge within the business, and using external advisors to bring the valued independent angle. This is exactly what Rock's FAST Foundations programme is designed to do - compromising on the independence of the data but not on the breadth of the perspective.
Where a client has team members who have time capacity & relevant research skills, but who maybe just need some guidance & support, we can also provide affordable mentoring programmes that lead SMEs through their own strategic planning process, managing their costs whilst upskilling their team and increasing ownership of their strategic development..
The Daydream-Nightmare dilemma
There’s a Japanese proverb that Rock regularly cites:
“Vision without Action is daydream
Action without Vision is nightmare”
In short, strategy is useless without implementation & vice versa.
There’s no point in defining any strategy without paying sufficient thought to what’s practical & affordable to implement. Budget needs to be considered from the beginning in order to any strategy to be effective. Otherwise, knowing what to do is no use if you don’t have the resources to do it.
Rock doesn’t just drop a strategy & run but sticks around to see it through. When it comes to implementation, we work with clients to set up an OKR framework that prioritises selected activities to best support the foundations strategy, focusing resources to make your budget work as hard as it can.
Long blog - short summary:
SMEs need to survive & strategic planning & implementation can really help.
Traditional modes of strategic planning are not suitable for SMEs but Rock’s Foundations-led framework is
Common challenges include a lack of know-how, time or budget but Rock's pragmatic suite of solutions & flexible delivery style solve them all.
Don't struggle with your strategic planning. It really doesn't have to be this hard.
Rely on Rock.
*Sources:
We are Rock.
The business consultancy focused on four core foundations – Direction, Connection, Impact & Value.
We help determined businesses to first define their core foundations & then align their whole business around them.
Commercials, Creative & Culture working in harmony.
Strong. Straightforward. Silo-free.
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