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5 Ways to Maximize Planning Benefits For Minimum Resources

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5 Ways to Maximize Planning Benefits For Minimum Resources

By Tim Berry, Guest Blogger
Published: September 21, 2011

<p>&nbsp;</p><p>I&rsquo;m sorry to see how many people miss the potential benefit of business planning because they respond not to planning as management but rather the business plan as a lengthy document that&rsquo;s only useful to businesses seeking loans or investment. In the real world, most businesses, even the one-person business that will never borrow money or go for investment, can benefit from good planning as a way to steer the business.</p><p>It&rsquo;s the management that counts, not the document, the writing, phrasing, or the formatting. Good business planning provides a tool for setting strategy, steps towards the strategic goals, and details to track and manage to assure progress in the right direction.</p><p>Here are my five tips to make planning a valuable tool for your business:</p><p style="margin-left:.25in;"><strong>1.&nbsp;&nbsp;&nbsp;&nbsp; It&rsquo;s planning, not just a plan.</strong></p><p>Don&rsquo;t do a business plan document unless you have to have one for a real business purpose, like to show to outsiders, such as bankers, investors, or partners. Do a business plan, yes, but expect to leave it on your computer for management purposes. It should contain a summary of strategy, important assumptions, a review schedule, milestones and tasks and responsibilities, and basic business numbers including projected sales, cost of sales, expenses, payroll, profits, balance sheet, and cash flow. &nbsp;And nothing else unless you&rsquo;re going to actually use it for management, not just show.</p><p style="margin-left:.25in;"><strong>2.&nbsp;&nbsp;&nbsp;&nbsp; Dates and deadlines, amounts and assignments.</strong></p><p>Focus your planning on concrete specific information that spreads tasks and responsibilities into specific dates, deadlines, budgets, and related amounts for costs and revenues. While you may have some conceptual points in your strategy summary, for all of the rest of your plan, test yourself: if it can&rsquo;t be tracked in terms of progress towards goals, and if it doesn&rsquo;t have specific people responsible for measurable results, then it isn&rsquo;t really business planning.</p><p>The review schedule is most important: Set a monthly meeting for reviewing plan vs. actual results, addressing problems, and revising the plan as needed to keep it live, useful, and specific. If your plan doesn&rsquo;t include important numbers you can track, then your plan isn&rsquo;t doing you much good.</p><p style="margin-left:.25in;"><strong>3.&nbsp;&nbsp;&nbsp;&nbsp; Do only what you&rsquo;ll actually use, not the whole thing.</strong></p><p>Be aware, throughout your planning process, of your specific business use. If you&rsquo;re using planning to manage the business better, then you don&rsquo;t include summaries and descriptions for outsiders. For example, while creating a good executive summary is critical for some specialty uses of business planning, in the real world of planning as management, there&rsquo;s no reason. The traditional business plan describes the company and company history, but your real-world plan doesn&rsquo;t have to. And why write about the background and experience of the management team, another common business plan document component, if your team members are the audience. They already know their backgrounds.</p><p>A business plan isn&rsquo;t measured by pages or quality of writing or formatting. It&rsquo;s measured by the business decisions it causes. It&rsquo;s about actual management results and business performance. Measure it by how much money your business has in the bank, with the plan, compared to what it might have been without the plan.</p><p style="margin-left:.25in;"><strong>4.&nbsp;&nbsp;&nbsp;&nbsp; Strategy is focus, not flowery phrases.</strong></p><p>The best reason to include a strategy summary in every business plan is because strategy is about focus and priorities and normal people want to do everything that comes up. Small business requires saying no to some new opportunities sometimes, but not always. So you want a quick and available reminder of your key strategy points, which might include your company&rsquo;s unique identity, its target market focus, and its business offering. Strategy is often about what you&rsquo;re not doing, and who isn&rsquo;t in your target market.</p><p>You can describe strategy for yourself or for you and your team in a few bullet points that will serve as reminders in real time later on. Keep it short and readable. I&rsquo;ve seen strategy done in a series of pictures, and that worked beautifully.</p><p style="margin-left:.25in;"><strong>5.&nbsp;&nbsp;&nbsp;&nbsp; Use your business planning time effectively</strong></p><p>Budget your planning time. Take two to three hours per month at the most to review plan vs. actual results and make adjustments. It&rsquo;s hard to know what to change in the plan and when, but one key factor is whether or not assumptions have changed.&nbsp;</p><p>Even the important discussions need time limits. Don&rsquo;t stretch strategic discussions over days when a couple of hours will do. I&rsquo;ve seen repeatedly that 2-3 hours is better than 2-3 days for most critical strategic discussions.</p><p>And once a year take a day or two, but spread into two-hour periods over a month or two, to give your plan an annual freshening. Start with the existing plan, recognize that things change, and review your assumptions, competition, market trends, and business offering.&nbsp;&nbsp;</p>

About the Author:

Tim Berry

Guest Blogger

Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 44 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including The Plan As You Go Business Plan, published by Entrepreneur Press, 2008.

Comments:

Good planning in business will certainly set the wheel for a good fortune, having a systematic diagram of the things needed or simply those priorities should be on top. Having a timeline of things is also important as it keeps things organized in form. Houses in the Philippines

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