Stages people go through in Business Planning?

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Business planning can be too hard starting with a blank page and doing it by yourself.

 

When all is said and done – more is said than done.

Business Planning is about envisioning the future and developing the necessary procedures and operations to achieve that future. As you sow, so shall you reap?

Where is the business with its planning? It is important to recognise the stage and get them moving on it as it won’t be too long before they are being asked for a copy of their business plan from funders, partners and other supporting organisations. They need to have the production of a business plan high on their priorities.

Accelerated achievement and quick outcomes become the order of the day. Everyone starts looking for results as soon as there is mention of a business starting up, even though they rarely have any concept of what a business is or the amount of the work involved.

Most people are slow achievers but for some reason many of them expect others to get things done more quickly than they can themselves. There are people who can cause achievement and outcomes to happen more quickly than others; these are the people to look for and have on your team and they are probably the planners, doing it behind the scene.

 

“An enterprise built by wise planning becomes strong through common sense and profits wonderfully by keeping abreast of the facts”.  Proverbs

 

You will find that a business generally goes through a number of stages before they get their planning right and the business starts to work well all day, every day.

  1. The No Plan Stage

When businesses are first organised, their people are so busy looking for funding, people, equipment and materials that they have little time to plan.  People are engrossed in the day-to-day operations that are required to get going and simply survive.

They are driven by enthusiasm and egos, as very few have any idea about what a business plan is or does and even fewer have had any experience with planning and how it can positively impact both a new and an existing business.

  1. The “Let’s Talk About It” Stage

During this stage, the management and some of the team start to realise that they need to be more specific about the future operation and direction of their business.  Arguments tend to develop as the various members start to talk about their aspirations and how they propose to go about achieving them.  After much heartache and discussion, they also realise that they must put pen to paper and compare notes; which is where things tend to stop.

  1. Budgeting Stage

The business starts to run out of the limited cash that they had scraped together and eventually start a rudimentary system to improve control of the cash flows.  They start to guess at the total revenue for the coming year and the associated expenses.  Section leaders are asked to prepare budgets for their section; in most cases, they too have very little experience.

These budgets are mostly to do with what they know, not what is possible and their first efforts start to produce some feel good attitudes, even though they have not made anywhere enough inputs and given the kind of thought that goes into producing reliable budgets.

Budgets should not be confused with business plans. A plan without both figures and words is not a business plan, it is just a bunch of figures with little hard-nosed relationship to reality.

  1. Annual Planning Stage

The business eventually is required to produce a business plan for a partner or to get some funding, and all hell breaks loose. They slowly start to recognise the need for a longer term business plan and adopt one of three possible approaches. In the first approach, top-down planning, the manager sets goals and plans for all the various sections. This model is used in military organisations, where the generals prepare the plans and the troops carry them out.

The second approach, bottom up planning; the various sections of the business prepare their own goals and plans based on what they think they want to do and send them to the management for approval.

 

“If you don’t know where you want to go, it doesn’t much matter which way you go”.  Alice in Wonderland

 

Most successful businesses use a third approach known as the objectives down, plans up approach. Here, management looks at the business’s opportunities and requirements and sets objectives for the year.

The various sections of the business are then responsible for getting involved in developing the plans to help the business reach these objectives.  These plans, when approved by the management, become the official annual plan.

Whichever approach they take at least they feel they are able to tick the boxes for the funder, hoping it will meet with their approval.

A business must allocate time to run the business and allocate time to plan its path to sustainability.

  1. It Doesn’t Work Stage

This is the stage most business managers will go through at some point during their tenure. “I tried it, spent a lot of time on it and that was the end of it; it just doesn’t work, I asked my friends and colleagues and they came to the same conclusion”. It is at this stage that a business and its management must receive more input on planning knowledge and techniques from some external source.

As in golf, it is the way you follow through that counts. Planning is a continuous process and the document produced is only part of it. In actual fact, good planning processes can be of more value to the business than any actual documents.

  1. Longer-Term Planning Stage

Management realises that a longer-term plan should be prepared first and that the annual plan should be a detailed version of the first year of the long-term plan. They realise that if they are going to build a valuable and sustainable business, then they have to think out three to five years.

The plan is reworked each year, taking into account the environment and other changes as well as reviewing any long-term planning assumptions that are made.

  1. Strategic Planning Stage

Eventually, the business’s managers realise that most of their planning has only been relating to how the business operates and which activities the business should stay in and which opportunities it should pursue.

They now start to design the business to be pro-active and take advantage of opportunities in the constantly changing environment. The big issue with strategic planning is that is becoming a little ‘fluffy’ for some as they are only interested in the physical nuts and bolts.

Strategic Planning is about defining clearly the purpose, vision, mission, values along with setting objectives and determining the strategies for the future direction, of the business and all its stakeholder’s, Strategic planning, is often called long-range planning.

 

 

[read more=”Personal Experience” less=”Personal Experience”]

Personal Experience:

Planning has many forms and it is hard to predict the future in these turbulent times, but without planning, you are flying in the dark.

End most of your frustrations now. Focus on the key areas of a business plan; your purpose, vision, objectives, strategies and actions.  Start with a One-Page Business Plan until you are happy you have these parts right.

You should stay with the planning process until everything falls into place. Once the plan starts to take effect, your motivation and enthusiasm for planning will increase quite dramatically and your will be accomplishing more in less time, and it will feel like your business can run itself.

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