Planning Techniques for Business

Planning is a critical business responsibility that is often overlooked, particularly by smaller companies with limited time and personnel resources. However, the reason for this oversight is often the result of management's lack of planning techniques. Learning useful planning methods and factors eliminates this knowledge gap. Business planning is just as critical as having a map when traveling to an unfamiliar location. Without it you may never reach your destination.

Primary Planning Types

Business planning types come in various flavors depending on the company size and industry. However, there are three basic plans that apply to all businesses, large or small. Business, strategic and marketing plans are important to every for-profit and nonprofit organization. Understanding the goals and components of each offers businesses the tools to create effective plans using the most basic or sophisticated techniques.

Business Plans

Typically used for starting up or financing a company, business plans are the cornerstone of the planning function. Components of a business plan include an executive summary, market analysis, product/service descriptions and financial/operations projections for a minimum of three to five years. In start-up situations that need initial financing, creators should paint a vivid, yet conservative, picture of the founders and the rationale for believing the business will succeed. When seeking growth-financing, management should highlight past company performance and carefully project the impact of the new funding on improving net income. Always include debt service, which is the amount needed to repay the new loan, in income and expense projections.

Strategic Plan

Strategic plans should be created by business owners and/or senior management only. Unlike business plans, which are based on historical data and future projections, strategic plans are more conceptual. These plans should include defining your organizational goals, identifying your available options to achieve your objectives and considering new short-term opportunities you believe will exist to improve your business's results. You may want to incorporate specific industry trends into your planned strategy. Strategic plans are not long-term creations, but should address taking advantage of available opportunities in the next 12 to 24 months.

Marketing Plans

All the fabulous business and strategic plans ever devised will fail if you don't market and sell your product or service. A solid marketing plan will help you achieve gross income and sales goals. A SWOT (strengths, weaknesses, opportunities, and threats) analysis is an effective technique for creating a winning marketing plan. SWOT is also useful in strategic plan creation as a foundation technique. You can also combine a SWOT analysis with the four P's--product, price, publicity, and place--of effective marketing. Even if you have invented the "better mousetrap", you need a superior marketing plan to get results. These techniques will give you the ammunition you need.

Universal Techniques

To make business planning come alive and succeed there are three simple practices that must be always be employed. First, set realistic, measurable goals. Second, understand and communicate with your customer base. Third, attract and retain the best employees your company can afford. Without these three components, your business planning, however sophisticated, risks failure on a massive scale. Using these three simple techniques, your business plans should deliver the results you want.