Small and medium businesses (SMB) often invest in the creation of a business plan or strategy at some point or another. The effort is often justified by :

  • The need to have a reference document to submit for financing issues,
  • The need to comply with business practices that business managers learned or heard about. After all, all business advisors will say that you must always have a business plan.

 

 Yet, after completing the business plan, the SMB will quickly start ignoring the plan and not monitoring against it. This is usually due to the entrepreneurial nature of the SMB, their fast-pace and also the fact that most business plans are impractical to communicate, maintain or monitor:

  1. Business plans are usually made of 20-50 pages of text and numbers, all related to each others. Changing part of the plan is not easy and it often forces lots of rework. The plans tend to become obsolete very quickly, defeating their purpose.
  2. The plan contains confidential information like financials and it is unpractical to distribute it freely to all staff. The plan tends therefore to stay secret, again defeating the purpose.
  3. The business plans do not allow easy monitoring of the performance. Quickly managers will rely on pure financials assessment of their business, focusing on P&L and balance sheet, forgetting the other important aspects of the business.

 

A better solution for SMB is to use on-line enterprise performance management (EPM) solutions. Easy to share between managers and staff, yet easy to secure confidential information, the EPM is easy to implement, easy to maintain, straightforward to monitor. Best EPM are based on the balanced scorecard concepts, where the strategy formulation and its monitoring (through KPIs) is built-in a single, easy to understand framework. The strategy stays always fresh, is communicated well and the active monitoring foster better short and long term performance.

To get an idea or try an EPM you can visit our web site at www.managementscorecards.com.

Article Source:http://www.articlesbase.com/strategic-planning-articles/strategy-planning-for-small-and-medium-size-businesses-1508794.html