When you hear “strategic plan” do you think about large company retreats at which people have group discussions of the company’s pathway to the future? Do multi-page documents that are not read again after the retreat is over come to mind?

Entrepreneurs and managers of small to mid-sized businesses often believe that strategic planning is not necessary for their businesses; they think it is a process that belongs to larger companies. After all, when your business is not large, you know everything that goes on in it, right?

On the contrary, says Gerald Bricker, principal, Aadvise Consulting. “A strategic plan is more useful for small to mid-sized companies because it gives you a plan to move toward your end goal,” he says. A strategic plan is not a document created by a highly paid consultant, then stuck on the top shelf in a closet. It is a living document that reflects the vision, values and goals of a business owner, he points out.

The first step to developing a strategic plan is to define your vision, says Bricker. “What is your end goal?” he asks. This is especially important for entrepreneurs who have started a company or for someone who is in a family owned business. “Owners of small and mid-sized companies don’t work forever, so you need to know what you plan to do with the business,” he points out. Knowing whether you plan to sell the business or turn it over to family members when you decide to retire or move on to another business will help guide your strategic decisions before you reach the point in 10 or 20 years at which you want to leave the business.

“The next step in a strategic plan is to define your values,” suggests Bricker. “How do you want to be seen in the community?” If you want to be known as the business at which the customer comes first or the company that is a valued member and participant in the local community, your business decisions should reflect those values, he says. “Clearly defining the values helps you and all of your employees make decisions that reflect the values.”

Once you’ve defined your long-term goals and the values that will guide your decisions, gather the information you need to set short-term goals, recommends Tom Anastasi, Ph.D., author of The Successful Entrepreneur: American Dream Done Right. “General information that you need to know includes the source of your sales,” he says. “Eighty percent of your sales will come from 20 percent of your customers or 20 percent of the services you offer.” Understanding which services sell and how many repeat customers you have will enable you to make better decisions, he says.

Use Accurate Data

Be careful, however, when gathering income and expense information for a strategic plan, warns Bricker. “One of the biggest mistakes a business owner makes it to underestimate expenses and overestimate revenue,” he says. Before projecting revenue, find out what is going on in your market area. Services such as First Research, ZapData.com and Manta.com can give you industry information while other services such as the U.S. Census information available on FactFinder2.census.gov can give you information about population trends in your area, he suggests. By knowing what is happening in the car wash industry as well as your local market, you’ll be better able to project revenues or identify opportunities to expand your business.

“If you want to grow your business, you have to sell more,” points out Anastasi. Selling more services can be accomplished by selling more of what you already offer, or offer new services or upgrades to existing services, he suggests. “You can also increase income by cutting expenses but you have to be careful not to cut expenses to the point that you cut quality,” he says. “Also, be aware that although price increases can increase income, the percentage of the increase should be comparable to inflation, or you will lose customers to other businesses.”

Don’t forget customer retention in your strategic plans, advises Jeff Mowatt, BComm, CSP, customer service strategist and author of Becoming a Service Icon in 90 Minutes a Month. Mowatt compares a business’ lack of customer retention to a leaky bucket. “A business owner who is constantly looking for new customers to keep the business going is like someone who is constantly filling a bucket of water when the bucket has holes in it,” he says. “It’s much easier to plug the leaks and keep the water in the bucket, or to have customers stay loyal to your business,” he explains.

To identify services that your customers value, ask them for input, suggests Mowatt. “Be proactive and don’t wait for complaints, because many people won’t complain about your service, they’ll just go to another carwash,” he says. “Ask two questions on a regular, random basis, and don’t just ask your favorite customers, or your most regular customers.” Be sure you choose customers randomly, he warns. “Decide that today you are going to ask every four customers or every customer who chooses a specific service,” he says. Mix it up and set different criteria each day you survey.

Employees Can Help

Include your employees as you gather information and develop your strategic plan, recommends Anastasi. “Your employees want the business to succeed, and they are an excellent source of information,” he says. Your employees can tell you if a customer asks for a service or a combination of services you don’t offer. If there are frequent requests for something you don’t offer, such as an option to self-vacuum after an exterior wash at a full-service car wash or even drinks or snacks for purchase in the waiting room, your employees’ feedback gives you an opportunity to see if that additional service is a good fit for your strategic plan.

If your strategic plan does include a new service, be sure to test it, suggests Anastasi. “Too many business owners go ahead with an idea they think is good and hope it works,” he says. To reduce the risk of investing in something that won’t work, find 10 or 15 people and talk to them in groups of four or five people at a time. “Pitch your idea to them, along with three other ideas that are ‘fake’ ideas,” he says. “Ask what they think of each idea to find out if they are good ideas and if they would be willing to pay extra for the service.” By doing your own market research, you can avoid investing in a service that won’t generate business. “Be willing to hear negative comments about ideas you like,” he warns. “It’s not easy to hear feedback, but it is necessary to have as much information as possible.”

If you do include changes in your strategic plan, build in a way to measure success and evaluate new services that are part of your short-term strategic goals, suggests Bricker. “If you can’t measure what you do, you can’t manage it,” he points out. Even if your strategic plan includes a service enhancement or addition for which you received positive feedback before implementation, be ready to discontinue it or make additional changes if it is not producing the results you expect, he suggests. Set specific goals, such as selling a specific number of washes per day, along with a specific number of additional services per week, he suggests. Don’t forget to measure customer retention as well and keep track of how many repeat customers you have, he adds.

Customer loyalty cards that offer discounts or extra services after a certain number of washes not only have a perceived value for customers, but they also give an owner a way to track purchases by customer, says Bricker. “Use customer retention information as well as other income and expense data to evaluate your business and specific goals set in your strategic plan every three months,” he says.

“Some programs within your strategic plan may require evaluation after one month of implementation,” adds Bricker. Your plan should specify when you expect to see results and when you need to evaluate a particular program. “Although the vision and values you define in your strategic plan never change, the shorter-term goals and programs you identify to reach your goals should change if they are not helping you reach your long-term goal.”

Although developing a strategic plan requires research and time to think about the business beyond the next month or year, it is time well spent, says Mowatt. “A business plan keeps the owner motivated and excited about the future of the business. Without a plan, your attitude goes up and down with daily revenues and hassles. With a plan, you know that you are doing something that will increase your revenues and reduce your hassles,” he says. “This perspective and peace of mind gives you resilience and persistence that other business owners don’t have. It may be your biggest competitive advantage.”