Small-business owners can approach decision making and operations in one of two ways. They can make decisions each day based on the conditions that arise, or they can plan strategically for how employees will perform. The strategic approach ensures that small-business owners are being proactive instead of reactive to business conditions.

Developing a Strategy

Strategic planning is based on the idea that a company will want to set goals and create a detailed strategy for implementation. This plan provides direction for all employees. Managers must consult the plan and allocate resources throughout the business cycle, ensuring that the most resources are aligned with the top priorities of the business. A small-business owner can make adjustments to a strategic plan based on sudden changes in the business environment.

Using a Process

Small-business owners commonly use three steps in strategic planning, which is similar to the problem-solving approach that many professionals use in routine decision making. According to the Mindtools website, the three stages are "analyzing the context in which you're operating, identifying strategic options [and] evaluating and selecting the best options." This process involves some research to study present conditions, project future conditions and find possible options to consider for your business strategy.

Articulating a Vision

Strategic planning is not just important for providing guidelines to managers. This process helps to ensure that the small-business work force is helping the company achieve a common vision. If an organization uses a planning process every five to 10 years, it will be forced to evaluate its overall direction. That's because a lot can change in a few years, including what customers want and need. For small businesses with employee stock ownership, there is an added need to ensure that employees are part of determining the company's vision for the future.

Using Diverse Ideas

Small businesses can include employees in the strategic planning process and encourage them to brainstorm in meetings. Some of the ideas that seem wackiest could be important for setting a new strategic direction for the business. If the owner is worried about how the most outlandish ideas will be implemented, she might suppress the creativity of people participating in brainstorming sessions. Determining how to turn good ideas into reality is something that managers and employees tackle after the strategic plan is complete.

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