Scenario Planning for Your Small Business’s Future

ou wouldn’t think that looking into a crystal ball would be a productive use of your time, but looking into the future is exactly what most small businesses must do on a regular basis. Scenario planning is crucial to small business success.
What is Scenario Planning?
Scenario planning involves looking at a number of vectors and asking, “What will the future look like for this vector?” in order to paint a picture of the future. You should look at:
Technology
Customer needs
Suppliers
The environment
Organizational dynamics
The objective is to identify the most probable change in dynamics and to understand how those changes will affect your business. You may not have gotten each scenario exactly right, but at least when change occurs you are prepared to be proactive rather than reactive.
How Often Should Business Owners Engage in Scenario Planning?
Most small businesses say they’ll put a stake in the ground and think that everything will remain constant. The truth is that everything changes on a consistent basis. It is likely there will be a major change in some area that will have a significant impact on your business strategy and planning.
I recommend that small businesses engage in scenario planning about once a year—more if the industry is fast-paced.
There’s no one-size-fits-all answer to how often a business should engage in scenario planning. It depends on the speed of the industry. But let me tell you, if you’re a software vendor, once a year won’t be enough.
Make the Time
Most small business owners don’t get bogged down in planning for the future. They get bogged down in the day-to-day. You have to allocate time on an annual basis to plan for the future, and you have to allocate a few hours each month to talk about what is happening in the marketplace.
Bringing in a Third Party
I recommend bringing in an objective third party to help with scenario planning. I even get an outsider to help with my own scenario planning, and scenario planning is what my company does!
There are several resources to help small business owners with scenario planning, including SCORE, state and federal resources, and consultants. It’s a real leap of faith for some small business owners to engage in scenario planning, but you have to be ready for change on a consistent basis.