The Business Planning Process

Business planning is often mistakenly pushed to the back burner. It’s easy when you are caught up in the day-to-day management of your operation to ignore things that are no longer working – like your brother-in-law or a senior partner who has suddenly become "semi-retired". We often cling to the false hope that because we really want something to work out that it somehow will; or that something that worked previously will continue to work, even though reason tells us otherwise.

But it is a good idea – not to mention healthy – to take stock, review your firm's business plan and your operatons in the light of recent events in the industry or changes within your customer base. At least annually, it's wise to examine how well your firm is working and whether or not a revised or new business plan is necessary.

Building a business plan is not complicated, though it can be time-consuming. Well, it can be complicated but it needn't be so, so strive for simplicity. This 10 step process can act as your business planning guide. For the purposes of our example we will assume that you do not have a plan. If you currently have a business plan, follow these steps with an eye towards reviewing and potentially revising it:

1. Review current operations.
2. Identify your core values, those that are important and will drive decision-making.
3. Describe your vision, your idea of what the business will become, what you do, who you serve, and the benefits that accrue to those you serve.
4. Outline your mission, the purpose of your business and what you are in business to accomplish.
5. Identify your key firm-level objectives, including financial, customer, operations, and learning.
6. Develop annual targets, measures and milestones for each of your firm-level objectives.
7. Identify key initatives that will support each objective.
8. Define annual goals for each member of your executive team and/or all major functions within your firm if all functions are not represented at the executive team level.
9. Develop individual goals for every employee in the firm.
10. Communicate your business strategy in a manner that assures buy-in.

Why Build a Strategic Plan?

In a word, the answer to this question is focus. Strategy creates context for operating decisions. It establishes the playing field and provides guidance for decision-making about the types of experience and skills needed by employees, how marketing and advertising should be positioned, the priority of initiatives, how to structure the organization, and a host of other issues.

If an organization has unlimited resources, a strategic plan would not be necessary. Unlimited resources would provide the ability to invest in whatever came along. But most organizations do not have unlimited resources so a plan is necessary to guide decision-making, channel resources and define direction. Because of that, building a strategic plan should be well worth the time it will take to develop it, debate it and secure agreement on its direction.

Developing a New Strategy

Based on your review, your may determine that an overhaul in your strategic direction is necessary. Building strategy is an exercise that should be guided by the input from the entire management team so that there is commitment to the whole plan.

Strategy is a set of choices that defines the nature, direction and value system of an firm. It is not a document. It is a mindset which should be understood by every person in the organization and used to guide all decision-making. A business plan is not just for big companies. Any firm needs a clearly thought out and articulated strategy to guide the owners and employees in the right direction, making sure everyone is on the same page.

Business Planning Step By Step