Business Planning - Knowing Where You Have To Go

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Business Plans and Planning - An Overview

Business plans aren't just the documents a business prepares when it has to apply for a loan or credit, or to provide information to those outside the organization.

They are WAY more important. In fact, a well crafted business plan helps businesses:

Prepare for the future in an organized, mission and goal oriented way.
Develop contingency plans by anticipating the future, taking into account market factors, competition, and other business critical factors.
Focuses employees on what is important, and helps people understand the fundamental goals of the organizations.
Know where they have to go by looking at both the present, past and future.

Avoiding Poor "Seat of the Pants" Decision-Making

Particularly for small businesses and micro businesses, business plans help prevent decision-making that is based on reaction, rather than proaction. That is, while it's sometimes necessary to make business decisions "off the cuff", it's far better to develop a longer range strategy that anticipates decisions required in the future. The reason is simple. Business decisions, particularly those that are impactful, need to be executed consistent with an overall strategy.

Business Plan Vs. Strategic Plan

Business plans can take many forms, and they tend to be a little different from strategic plans. In particular, they tend to be more near-future oriented, and more detailed in terms of financial information. Strategic plans are more future centered, because they look not just at the present and the next year or two, but at longer periods of ten, even as long as five to ten years. Business plans tend to be more tactical, while strategic plans tend to be...well...more strategic.