Business owners find it so much easier to do strategic review rather than a plan because it is an analysis of the past. There is no guesswork, no uncertain future, no risk management, it is all done and dusted, it is all in the past.

Here is a fact of life: Most business owners don't have a business plan. Most people repeat past behaviour and they do that unconsciously. Emotions run them, old habits die-hard, you know the clichés. Well, you can spend a lot of time and effort in personal development, planning sessions, scenario planning, think tanks, brainstorming and white boards. And you should! But the reality is most people don't and won't.

There is a treasure trove of lessons to be extracted from your past successes and failures. There are more life lessons in your past than in your future. This is especially true if you have been running old behavioural patterns and haven't stopped to explore your limiting beliefs. They run deep and under the surface.

Let's explore the core elements of a strategic review. Now remember some of these elements won't have been stated in the (non-existent) planning phase so you may need to infer them with the benefit of hindsight.

There are seven steps to planning and therefore seven steps to a strategic review. They are:

• Vision
• Goals
• Strategies
• Financials
• Actions
• Review

Vision

What was your vision for the past year? If you didn't have one then try to infer one. Ask yourself, "Looking back over the past 12 months what did I accomplish?" Use January 1, 2011 as your starting point and December 31, 2011 (or today) as your end point. What happened? You will have done one of three things: 1. Created and stated your vision deliberately and consciously, 2. created your vision unconsciously, or 3. not created a vision at all and just reacted to events as they unfolded, or maybe a combination of all three.

What did you create? What economic value did you create? Is your business worth more or less? And if you don't know what it is worth then simply acknowledge that right here, right now, "I own a business and I don't know what it's worth."

Goals

What goals did you achieve over the past 12 months? If goal setting is not your thing then at least know how you define and measure success. There is a success formula in business. You must know key performance indicators like revenue, cost of sales, profit (gross and net), cashflow and a range of efficiency measures derived from your balance sheet including liquidity, gearing, ageing of debtor/creditors and return on assets.

Many small businesses run and manage cashflow and profitability and that's all. If that's you then know this – you fund your lifestyle with cashflow and you create wealth on your balance sheet. If your business has enterprise value and you wish to sell or exit at some point you must start tracking your balance sheet movements. Even if you don't have goals start by identifying what the key measures are and track them. This simple process will soon have you managing them better.

Strategies

Strategies are the "how" questions. A great place to review your strategies is a quick examination of your business model. This is the most underrated aspect of business strategy. When you get your business model right you bridge the gap between generating an idea to generating cash (often called The Path to Cash). Many businesses operate in a retail model and yet with the rapid growth of online stores wholesalers increasingly encroach on this space and devalue the traditional retail model on which they were based.

Strategies may fail for one of two reasons: 1. the strategy is flawed, or 2. the execution is flawed. Don't be too quick to throw out your strategy. It may be fine but in need of some tweaking.

So, in closing I have this to offer. Before you embark upon the New Year take the time to conduct a strategic review of the past year. If you don't normally plan then this strategic review will at least make you consciously aware of factors that are running in your business anyway. When you are consciously aware of them you are one step closer to managing your business from an empowered place and you will find that most helpful.

Dennis Roberts helps small business owner/operators start, run and grow their business from conception to exit. He is available for strategic advice, business planning, one-on-one coaching/mentoring, advisory board, interim management and facilitation. Visit www.DennisRoberts.com.au.