What is..... Business Planning?
The most important part of executing a goal is to have a solid plan. In order to make it to your destination, traveling unfamiliar roads, you need a map to get you to your destination. The business plan is your map and/or cheat sheet to passing the test. It is very important to make sure you have this part of the process complete before spending any funds on your idea. A business plan consists of three major components: strategies, actions, and projected financial statements.
Strategic planning is going to be the vision for your business over the next three to four years. This portion of your business plan will really focus on long term goals and objectives. Taking time out to create the goals and objectives will allow you a better chance at surviving in your industry, and it will give you the direction that is needed so you are able to make sound decisions when faced with adversity.
Operational planning will consist of your day to day operations. This portion of the business plan will be the way you plan to achieve the strategic plan. All portions of the business plan correlate, you need one to get the other. The operational plan will focus on short term actions. Neglecting to base operational planning off of strategic plans will run you the risk of making decisions that may be good for today but not for the long run. It is idealistic to prepare a strategic plan before the operational plan.
Financial planning will allow you to assess budgets and project financial statements. This part should be updated continuously as the plans for your strategic and operational plans are tweaked. Finances are the foundation of the business idea and this will determine whether you land on your feet when you take the leap. It is important to have your numbers in order, so when you run into hiccups on down the road you will have prepared for all things that could possibly go wrong. The financial plan is the numerical portion of the strategic and operational plan, so this is how everything correlates and flows together fluently.
Benefits of planning:
Increased opportunity is a huge benefit of having a business plan that’s well put together. When you are attempting to get funding from banks/investors you have solidified your position by showing you have carefully thought out this idea. This enables you to establish a blanket of trust and will open up the doors for a lot more opportunity.
Better guidance is a great result of having a business plan. This is another benefit that will help maintain the culture that you are trying to create within your business. When people have a plan to reference when working there are no excuses for mistakes, because instructions on how to get it done correctly have already been provided.
Action, not reaction is another small benefit that will take your company a long way. Anytime you have a plan already in place it is no longer a reaction, just the plan you’ve already prepared to implement when the time is right. Things will happen, and everything will not always go as planned. However, this is why its important to plan for every situation, good and bad.
A look at the big picture allows you to manage daily the problems that may be recurring. Daily management allows you to sort out a series of problems that could possibly be connected, and planning allows you to discover the root cause of the problem.