Question

Identify and explain three reasons for conducting strategic planning for small businesses.

Answer 1

Strategic planning helps a small business in focussing on what it really needs to do and avoid any kind of distractions. This is very essential because with the small capital it needs to invest in the right way inorder to develop. Hence one of the major reasons for conducting strategic planning for a small business is to avoid any kind of distractions and have a goal.

Another reason is to plan and invest in the right way so that the capital and manpower can be utilised in an efficient manner. This helps in increasing the productivity of the firm.

Another reason is that a strategy can be used to analyse the present and future of the firm using the past experiences and set some goals in the future inorder to improve and develop it's current market position.