The Business Planning Process

I’ve often said that entrepreneurs are a unique and special breed. By nature, we’re passionate, driven, and courageous. Entrepreneurs are the type of people who would charge hell with a water pistol. Despite these many wonderful qualities, many business owners are poor planners. In fact, I believe author and businessman John L. Beckley said it best when he stated, “Most people don’t plan to fail. They fail to plan.”

Far too often, you become so consumed with the daily operation of your business that you forget to plan for the future. This leaves you in a never-ending cycle as you feverishly work to put out fires as they arise within your organization. However, there is hope. By implementing these four steps in your business’s planning process, you can disrupt present weaknesses enough to make them future strengths.

Making Plans

Whether you realize it or not, you make plans every day. Each morning, you decide what you’re going to wear. Likewise, you make daily decisions on what to eat, who’s picking your children up from school, and many other daily activities. It’s easy to become wrapped up in the things that are right in front of you. While these things are important, failing to plan for the future could create much larger problems.?

The same is true of your business. If you’re only focused on the immediate needs and problems, you’ll never create lasting solutions. Moreover, this routine won’t do much to grow the value of your business. If you find yourself stuck in this loop, you’re not alone.?

According to the most recent Business Pulse Survey by The Alternative Board (TAB), the average small business owner spends 68% of their time working in their business rather than on it. Similarly, Corporate Value Metrics, a national corporate consulting firm, states that business owners usually work more on the other seven key areas that drive your organization’s intrinsic value than on planning.

What is Business Planning?

Business planning is defined as, “the process of determining a commercial enterprise’s objectives, strategies, and projected actions in order to promote its survival and development within a given time frame,” by the Business Dictionary. But I believe this definition fails in some regards. Although it’s true business planning is a process that must be done within a time frame, it must also address your available resources.

If you have a vision and map out a plan to make it a reality, that’s great. However, having a vision and a plan doesn’t mean you can afford to act on your plans. Therefore, I would redefine business planning as a basic management function involving the design, steps, and quantified resources needed to achieve the optimum balance of needs or demands with available resources. So, what are the steps involved in the business planning process?

4 Basic Steps in the Business Planning Process

Regardless of where you are in your business — opening, growth, risk mitigation, sale, etc. — all planning begins with a process. You can make the process as lengthy and complex as you’d like. But I’m a simple man and I like simple things. Therefore, I tend to separate the process into these four basic steps.?

Step #1 – Decide what you’re going to do.

Before you can begin planning, you must know what you’re trying to do. You wouldn’t set out on a road trip without knowing where you intended to go. Business planning is no different. So, begin by identifying the goals and objectives you’d like to achieve. This is the first step to creating an effective, quantifiable, and measurable plan.?

Step #2 – Determine how you will do it.

Next, present your objectives to your team. This phase isn’t about whether they agree with your goals. Rather, it is an opportunity to receive input from the hands and feet that will carry out the plans, on the best tactics and action steps to accomplish them. Remember, they’re your boots on the ground and will offer valuable insights into what tactics work best within your existing operations.

I often use a 3>9>27 model. I select three objectives. Each objective has three tactics designed to achieve them. Likewise, each tactic has three action steps that work to accomplish each tactic.

Step #3 – Pick who will accomplish it.

Once you’ve identified your objectives and determined your strategies to achieve them, you must assign specific tasks to departments and team members. Be clear when communicating who is responsible for each task. Break your action steps and tactics up according to the time frame that they should be completed in.?

You must set a time frame that is both realistic and challenging. Expecting the work to be completed in an unrealistic amount of time could result in your team not putting forth an effort to achieve the goals because they know it can’t be done. Conversely, giving too much time could create procrastination.

Step #4 – Take action.

Finally, implement your plans. Direct your team and monitor their steps as they work toward accomplishing each of the action steps, tactics, and ultimately, the objectives laid out in your plans. Be consistent in following up with them. Having regular check-ins can keep them focused on the task and provide opportunities to identify areas that may need further resources to achieve their goals. Similarly, these follow-up meetings will help you to identify and address any problem areas that may need to be adjusted.

Details to Include in the Business Planning Process

When stripped down to their most basic concepts, these four basic steps embody the business planning process. However, while you’re going through the business planning process, you must also include the following items within your plans:

1. Lists of who is involved in the planning process.
2. A current assessment of your business’s strengths and weaknesses.
3. The reasoning behind your plans.
4. Project start and completion dates.
5. Measurements you will use to determine the success or failure of your plans.
6. Locations in which you will take action.
7. How you will take action.
8. A list of resources you will need to take action.

I understand that compiling all of these details can seem tedious. Any business owner who has gone through the planning process can attest that it can be frustrating and difficult. Many times, it will disrupt your business’s operations. However, when you really get into the planning process, you can’t help but to realize that your business — your baby — isn’t as beautiful as you think it is. In fact, you’ll probably realize that your baby is downright ugly.?

As a result, you’ll understand you need to change things. That often creates conflict. But just because it’s hard doesn’t mean it’s bad. Tedium shouldn’t be a deterrent. Conflict can breed positive change. The details listed above should be included for the good of yourself, your team, and your business.

Keep in mind, you can’t affect the future without disrupting the present. I’ve always been fascinated with NASA's space missions and the force necessary to achieve lift-off. When the fuel combines with the oxidizer, the chemical reaction results in combustion (disruption) and creates the necessary thrust to reach the shuttle’s destination. The disruption caused by your planning can be viewed in the same way. As you disrupt your present, you create the thrust that will take your business where you want to be.?