Why Strategic Planning for Small Business Has to Come Before Everything Else
- May 13
- 5 min read
Tony Paez builds houses in Dallas. Before a single wall goes up, he spends weeks in the homeowner’s living room asking questions most contractors never think to ask. As a result, his typical project runs with two or three change orders while the industry average is closer to fifty.
For Tony, change orders take a sliver of the project time versus a quarter of it for most others in the industry, because he takes the time to put together a strategic plan for every project. This is the difference between a job that runs clean and one that runs over, and Tony figured out a long time ago which kind of project he wanted to run.
I have been a business coach for twelve years, working primarily with small and family-owned service businesses. Before that, forty years in corporate as a controller, CFO, and CEO, including Fortune 100 work. What Tony described about jobsites is exactly what I can see on the P&L every time an owner calls me after things have gone sideways.
They are almost always living with the cost of strategic planning they never did. Unfortunately, most did not know the cost was avoidable.
What is strategic planning for a small business?
Strategic planning for a small business is the honest inventory of where you are, the specific definition of where you want to go, and the clear naming of why it matters to you personally. Three pieces, in that order. All three are required.
In a large company, strategic planning involves quarterly reviews, outside facilitators, and slide decks. In a small or family-owned service business, it has to be simpler than that. The owner who runs the business is also the one who answers the phones, manages the team, and closes the work. Planning time is time taken directly from operations.
At this scale, a business plan is not a document you produce once and file away. It is the discipline of looking at the whole picture honestly — revenue, margin, team, capacity, your own energy — regularly, and before the business picture shifts underneath you.
This is the work the PASSPORT method calls Step 1.
Why do most small business owners skip strategic planning?
The most common answer I hear is time. The real answer is discomfort.
Strategic planning for a small business begins with looking at what is actually true about the revenue, the margin, the team gaps, and the systems that are held together with good intentions and habit. Looking at all of it together, without filtering, is a different exercise than checking a monthly report. Most owners avoid it not because they do not have an hour, but because they do not want to see what the hour reveals.
I had a client a few years back who told me he wanted to grow revenue. I asked what grow meant. He said more. I pushed and asked him how much more, by when, at what margin, and what would he do with the money once he had it.
He went quiet. We had two hours on the calendar. We never got past the definition of the word grow.
He is not unusual. According to the Small Business Administration, roughly 80 percent of small businesses operate without a written strategic plan, and the businesses that fail before the five-year mark disproportionately come from that group.
The owner who skipped planning rarely says he skipped planning. He says the market shifted, a key person left, or a big client walked. All of those things may be true. None of them is the reason.
That client eventually sat down and did the work. He landed on a number, $850,000 in revenue by the end of the following year, at a margin he could defend, with a team structure that did not require him to make every decision. He hit it because he finally knew what he was building toward. Not because I handed him a strategy.
How specific does a strategic plan for a family business need to be?
Specific enough that someone else could execute it.
Make more money is not a plan. It is not even a wish. It is a shrug.
A workable plan sounds like this: I want to grow revenue to $750,000 by December 31st. I want to hold profit margin above eighteen percent. I want a team of four who do not need me on every decision. I want to be home for dinner most nights.
Those are measurable targets with a timeline and a definition of success that does not move. You can build a year around them.
The plan also has to include more than the financials. It needs to account for your time, your team, the clients you want to serve, and the life the business is supposed to be funding. Leave any one of those out, and the plan eventually breaks on the piece you ignored.
This is the pattern I see most often in family-owned businesses: the financial picture is precise, and the life picture is vague, and within a few years, the business has consumed the very thing it was built to protect.
Think about what Tony Paez needs before he can draw a single line. Not “a nicer kitchen.” He needs to know you want a six-burner gas range against the west wall because you cook with your family on Sunday afternoons. That specificity is what makes the project buildable. Your business plan requires the same standard. The more precisely you can describe what you are building and why, the more executable the plan becomes.
The owners who do strategic planning for their small business get to build what they intended to build
Tony Paez does not finish with two or three change orders because he works harder than other contractors. He finishes that way because by the time he breaks ground, there are no surprises left. He has already worked through them at the kitchen table, weeks before the first tool came out.
That is what strategic planning for a small business actually delivers. Not a document on a shelf. The clarity to build something on purpose, and to make decisions from a plan instead of reacting to whatever walked in the door this week.
Most owners know they need a plan. The ones who sit down and make one — who look honestly at where they are before they decide where they are going — are the ones who get to build the business they intended, not the one that assembled itself around them.
If you want to have that conversation about where your business actually is, where you want it to go, and why it matters, reach out.
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Doreen Milano, CPC is the founder of Visions to Excellence and the creator of the PASSPORT method for strategic planning in small and family-owned businesses. She hosts Big Ideas Small Business on the OBBM Network.
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