Business Planning – Why?

Connection 2In my last blog I introduced the idea of business planning and we look three main areas of consideration when planning for your business.

Vision we said outlined the long term view of the business and what is wanted to achieve within an extended period, such as 10 – 20 years.

Strategy we said look at achievement over a shorter period of say 3-5 years and was more about of how the strategy would be achieved, the practical reality, in light of the actual situation.

And finally we said that the plans provided the tactical and means of achieving the strategy.  The actions that needed to be taken to make the strategy happen.

For many businesses whether they are start-ups or have been in business for a longer time, whenever there is a need for additional resources and particularly where funding is affected, there will be a need to outline for those likely to provide the financial resources, what they will get for their contribution, how likely they are to get their return and interest and what the ROI will be for all concerned, the ROI being the Return on Investment.

So the first benefit for any business for developing and outlining yours is to reassure your investors on their ROI; to reassure your managers and staff, if you have any on their longer stability of the business and to reassure you creditors, suppliers, shareholders and stakeholders of any kind of their beneficial outcome.

A plan does a few things:

  • Provides a set of instructions for how an action will be taken.
  • A plan should be designed to break down a large undertaking into a set of smaller, discrete and measureable tasks
  • A plan should have objectives which can be measured
  • A plan should answer the questions that stakeholders will be asking with regard to the strategic, financial and visionary outcomes the business is expecting to achieve
  • A plan should build in options and contingencies
  • A plan should identify and quantify risks that might be encountered along the way
  • A plan should state how these risks will be minimised or mitigated to overcome any negative consequences.
  • A plan should allow the organisation to make progress and be able to measure it.

With all of this said, although you might find developing a plan tiresome, it is really important and beneficial to produce one, so that you provide:

  • Give confidence and certainty, provide measures and a route map to your stated outcome.
  • Evidence to your stakeholders of forward thinking and preparation on your part, and
  • A map for other to follow in order to be able to help you and your business achieve the strategy and the vision

For managers within a business, the strategy should provide an outline for further development where each department within the business outlines who they will working in their specialist area to help achieve the business strategy.

Most importantly developing a plan will give you more confidence when facing prospective investors, if this should be the case for you, help improve your own knowledge, information and skill for working on your business.

Developing plan will actually help you to become more focused on what steps you need to take now and in the future; who you need to speak with and what help you need to identify the resources, suppliers and contractors, staff, etc., you may need to bring on board to help you achieve your vision for your business and its in position the market place.

And finally the plan will help you better assess your own strengths, weaknesses and threats with regard to your own skills, knowledge and experience as an individual business owner or manager.

Sandra Pollock

Director, Business Coach & Consultant

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