Business Planning

Planning for business success!

When you are running a business, it’s natural to get bogged down in everyday issues and forget the bigger picture. However, successful businesses spend their time to create and manage budgets, prepare and review business plans, and regularly monitor finances and performance.
Structured planning can create all the difference in growing your business. It will allow you to focus resources on improving profits, reducing costs, and increasing return on investment.
In fact, even in the absence of a formal process, many companies perform most of the activities related to business planning, such as thinking about growth areas, competitors, cash, and profit.
Converting this into a unified process to manage the development of your business doesn’t have to be complicated or time-consuming. The most important thing is that the plans are made, that they are dynamic and communicated to all concerned.

Benefits.

The significant advantage of business planning is that it allows you to focus on running your business and provides objectives that will help your business grow. It will also give you the opportunity to step back and examine your performance and the factors influencing your business. Business planning can give you:

• A better ability to make constant improvements and anticipate problems.
• Reliable financial information on which to base decisions
• Better clarity and focus
• Greater confidence in your decision-making

What to include in your annual plan?

The main objective of your annual business plan is to establish the strategy and action plan for your business. It should consist of a clear picture of your current and planned financial situation for the coming year.

Your annual business plan should include:

• An overview of the changes you want to make to your business
• An overview of the changes you want to make to your business
• Possible changes in your market, your customers and the competition
• Your objectives and goals for the year
• Your key performance indicators
• Any question or problem
• Any operational change
• Information about your management and your workforce
• Your financial performance and your forecasts
• The details of investing in the business

Business planning is most effective when it is an ongoing process. It allows you to act quickly when necessary, rather than merely reacting to events after they have occurred.

A typical business planning cycle.

• Review your current performance against last year’s or current year’s targets.
• Understand your options and the threats
• Analyze the successes and failures you have experienced in the past year.
• Review your key goals for the coming year and modify or re-establish your longer-term planning.
• Identify and refine the resource implications of your review and establish a budget.
• Define the profit and loss and balance sheet targets for the new fiscal year.

Conclude the plan.

Review it periodically, for example, on a monthly basis, monitoring performance, reviewing progress, and achieving goals.

Why should you write a business plan?

If your business is only present in your head, it will be difficult to convince lenders, investors, and shareholders that it is credible and that you will use the financing they will provide you wisely.
It is the reason why you must establish a business plan. This widely recognized management tool is a written document that basically describes who you are, the project you want to achieve, and how you will manage the risks involved and deliver the expected returns.
People often mistakenly believe that only start-up companies or those seeking financing should establish business plans. In fact, this tool is essential to the proper management of any business.