Business Planning Benefits

What’s the difference between a great idea and a successful business?  Planning. Business planning is the organisational road map.  Without a sound business plan the enterprise will lack direction.  Or even worse, run off the road.

Business planning is a critical process.  It encompasses all elements of business.  Research, financial planning, competitor analysis, operations, product or service development, human resources, marketing and strategic direction.  Business planning delivers the why, what, where and how of your objectives.

It’s unlikely one single person will have all the necessary skills to take on the entire planning exercise.  It’s more likely to be a team of planners with discreet areas of experience.  But it is important the people involved in planning have a mutual respect for each other.

The planning team must recognise the inherent need and value of each other in order to deliver real benefits.  Business planning is a collaborative effort.

A business plan is not a static document.  Its’ authors should continually adapt the plan to reflect current knowledge and respond to the competitive environment. 

Business planning should be undertaken by professionals with a commitment to continuous improvement.  An evolving business plan is part of a healthy ongoing management process. 

It is important to plan for success.  But it is also important to anticipate obstacles to achieving success.  Don’t plan for failure, just the possibility of some corrugations in the road.

One of the benefits of effective business planning is the setting of measurable and achievable goals.  These goals allow you to assess how successfully your business is travelling.

However goal setting must be realistic.  A new business in its growth phase is likely to have high capital requirements.  A goal for a certain return on investment might be unrealistic during such a period.

Two heads are better than one.  An objective team developing the business plan can deliver innovative thinking and fresh ideas.  The business owner has highly subjective views of the business.  A degree of separation, or at least collaboration, allows identification of obstacles and appropriate amendments to the plan.

The real benefit of business planning is its power as a management tool.  Both management and employees have a clearly marked blueprint.  They know what they should be doing.  They understand the dynamics of their market and the characteristics of their customers and competitors.

The financial foundation of the business must also be included in the plan.  What is the funding mix?  What is the time line to profitability?  What must be done to achieve a break-even scenario?  Detailed plans for the repayment of debt are important too.

A well studied staffing and skill set profile ensures the right people are on board for the journey.  How will they be remunerated and what entitlements will they receive?  How will the management team be structured?  Well written policies in the planning phase saves time, money and ultimately productivity.

Well documented and communicated business planning takes the bumps out of the business roller coaster.  There are fewer sharp bends and edge-of-your-seat free falls.  Business planning doesn’t guarantee success but it reduces the odds of failure.