When someone mentions business planning we have been conditioned to think about writing a business plan. There are hundreds of books and articles, tons of software, an army of consultants, and a multitude government programs to help you write a business plan. There are virtually no resources to help you set up what today’s business environment really demands – a continuous, ongoing planning system.

A commonly accepted theory is that for a business to survive and prosper it must be flexible and nimble. It must be able to turn on a dime as conditions warrant. Having a written five-year plan is not part of this picture. In fact, trying to follow a long-term plan during rampant change is not logical. It is applying linear thinking to a non-linear situation. It just doesn’t work.

Having a formal, written business plan is so accepted as being crucial to success that there haven’t been many studies or surveys to test this premise. If business plans were such a wonderful thing, there would be a significant and conclusive difference between businesses that have them and those that don’t. Interviews of 100 founders of companies on 1989s “INC 500” list of fastest growing private companies in the U.S. found only 28 percent had “full-blown” business plans. The 1993 AT&T Small Business Study found that 59 percent of small businesses that grew over the previous two years used a formal business plan. A 1994 survey of the country’s fastest growing companies found 23 percent lacked a business plan. “The Relationship between Written Business Plans and the Failure of Small Businesses in the U.S.,” by Dr. Stephen Perry, surveyed 152 failed and 152 non-failed small businesses in 1997. He found that 64 percent of the non-failed firms had no written business plan. He also found that non-failed firms had more extensive written plans than failed firms, 23 percent compared to 9 percent, respectively.

As you can see the results of studies and surveys are all across the board and don’t prove anything. Clearly, a significant percentage of successful businesses don’t have written business plans. None of these studies reveal the nature of the process that created the plan. Was it the result of an annual process with occasional updates or an ongoing, continual process? As Professor Albert Shapero said, “Companies that plan do better than companies that don’t, but they never follow their plan.”

The focus needs to be on the PROCESS not on the plan. If a continual, ongoing planning process is in place, a written business plan is just not important. Writing a business plan without a planning system in place is a massive effort that is done very infrequently. Many businesses write three to five year plans and update them annually. The plans are reviewed periodically during each year to analyze the plan vs. actual variances. Little, if any, thought is given to strategy between the annual updates. Strategy should be the focus everyday. Setting up a planning system allows and sometimes forces you to focus on strategy.

A planning system consists of two functions. One is a goal setting and attaining process and the other is a trend watching or environment scanning process. Setting up a planning system takes several steps. The first and foremost task is to set aside or make time for planning on a regular, ongoing basis. It must become part of your routine, not an occasional event that can be easily postponed. In the evaluation phase, the owner or management team and the company are analyzed. From the analysis, key or critical areas of the business are identified. These areas are filtered down to focus on the most important ones. Performance measures are determined and systems to gather and process the necessary data are set up, if needed. A base of current performance is used to set goals.

Now the regular, ongoing stuff begins. Strategies are formulated, tested, implemented, monitored, and reworked until the goals are achieved. Each planning session is split between working on strategies and trend watching. As goals are achieved, the goal setting and strategy formulation process begins again.

Let’s put the focus back where it belongs on continuous, ongoing planning instead of writing business plans. As Karl Albrecht said in his book Corporate Radar, “The majority is not always right, the conventional wisdom is not always wise, and the accepted doctrine could well be flawed. The more fashionable an idea, the more it is likely to be exempt from critical evaluation. Breakthrough thinking sometimes calls for contradicting the most widely held assumptions and beliefs.”

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Once a business plan has been put it into action and practice, it needs to be continually monitored to make sure the objectives are being achieved and new milestones achieved. This Business plan review should follow an assessment of your progress to date and an analysis of the most promising ways to develop your business.

In some, business plan review maybe a continuous process with the plan being regularly updated and monitored. For most businesses, an annual plan – broken down into four quarterly operating plans is done.  However, in a sales driven business, it can make more sense to have a monthly operating plan, supplemented where necessary with weekly targets and reviews.

It’s important to keep in mind that major events in your business’ target market place (e.g. competitor consolidation, acquisition of a major customer) or in the broader environment (e.g. new legislation) should trigger a business review plan of your objectives.

Regardless of whether there are fixed time intervals in your business plan, it must be part of a rolling process, with regular assessment of performance against the plan and agreement of a revised forecast if necessary.

A regular <a rel=”nofollow” onclick=”javascript:pageTracker._trackPageview(‘/outgoing/article_exit_link’);” href= http://www.launchfn.com/id302.html >business plan review</a> keeps the business and the angel investor network people related to it updated about the recent developments in and outside the business environment, a check on the deviations, the areas which require immediate attention and also the positives to draw from.

A business operates in an ever changing atmosphere where timely and strategic reviews can only protect a business from perishing as the conditions cannot be taken for granted and a change in condition means an appropriate reactive change in the business and future proceedings.

Reviewing the business continuously will evade the following doubts –

- Uncertain about how well the business is performing

- Unsure if you’re getting the most out of the business or making the most of market opportunities

- Your business plan may be out of date, as you haven’t updated it since you started trading

- Your business is moving in a direction different to the one you had planned

- The business may be becoming unwieldy or unresponsive to market demands

A business review plan within the <a rel=”nofollow” onclick=”javascript:pageTracker._trackPageview(‘/outgoing/article_exit_link’);” href= http://www.launchfn.com/id253.html >angel investor network</a> is an essential requirement also in case of expansion plans.

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For decades businesses large and small have implemented and managed their entire enterprise based on a static business plan. The time has come to say goodbye to your static business plan and welcome a flexible, on-track business planning system.

Now more than ever, the business environment is ever-changing. In order to succeed, a business needs to be flexible and have the ability to adapt to changing technologies and social environments. Deliverability demands of customers are increasingly adapting and changing in line with improved technology and any business that is unable to change with those demands will be left behind.

What is a Business Planning System?

Unlike a business plan, a business planning system is an ongoing strategy aimed at getting the most from the business and always monitoring to ensure the best business performance is being reached. While a business plan focuses on what the business is about and what long term goals are in place for the business, a planning system establishes business goals and the strategies needed to attain those goals.

Once the business goals and strategies have been established within the business planning system, a task begins to figure out how those goals and strategies will be met. In this part of the planning process, specific measurements, guidelines and tasks should be created and implemented to ensure the business outcomes are possible.

The final part of a business planning system is to ensure that the business goals, strategies and outcomes are on track. This requires constant analysis and realignment of business processes and procedures. It also requires a business to be able to adjust quickly to any signs of problems with their plan or goals. In short, a business planning system allows your business to know where it is heading, how it should get there and give you the information to keep it on its journey, along with the ability to make essential changes quickly.

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If you are planning on just lucking into something that works, you better think again. In order to succeed BIG time in a home based business, you need to take it seriously.

I recently built a brand new 4,400 sq.ft home and I realized that planning a new construction is no different than planning a new business. Think about what an engineer needs to build a solid structure. They need a plan, a blueprint…a success model to follow. This goes the same for home based businesses.

Writing out what you want to do, how you want to do it and when you want to do it is key to your action plan. Making money is not hard, but you need a plan before you start.

Usually, traditional business plans are developed for raising capital from banks or financial institutions. But in a home business environment, even if you are not seeking funds, developing a solid business plan will help you determine the feasibility of your idea and goals on paper.

A proper business plan will help you assess if your venture will succeed or fail before moving forward and investing your time and money into it. Another important benefit of writing a business plan is that the process of thinking through and putting your goals and ideas down on paper will help you organize your true goals, predict barriers to your growth and come up with alternate strategies ahead of time.

By writing your goals on paper, you are assured to see them each day and that is one of the most important success elements you can do for yourself. This will help you commit to reaching your goals by giving you a specific time frame and a specific action plan to follow.

A proper business plan will help you monitor your goals and acheive the milestones you have set for your business. It lets you determine if you are meeting the objectives you set out to achieve.

A well-rounded business plan will describe your idea, outline your objectives, forecast financial costs, and give details of your marketing strategies for achieving your goals.

It answers two key questions that you need to ask before launching your venture:

a) Is there a market? If yes, how much can you sell? b) Can the business make a profit?

The key components of a business plan are:

1. Executive Summary: A condensed version of the entire business plan

2. Company Description: An outline of your company’s structure and organization and its business

3. Product / Service Description: Information about your products or services and why your product/service is better than competitors

4. Market Plan: a. Market analysis: Who are your target customers? What is the market size? b. Sales strategy: How to get people to buy your product? c. Promotion Strategy: How to reach the target customers?

5. Competitive Analysis: A survey of who your competitors are and what is their market performance.

6. Operating Plan: Description of the physical requirements that your business needs to operate (premises, machinery, computers etc.)

7. Financial Plan: Data regarding the costs of running your business now and in the future, plus a forecast of whether or not your business idea is viable and will be able to generate profits.

It does not have to be hard or take a long time to craft yourself a business plan…but doing so will help you succeed faster than you ever imagined.

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Writing a business plan can seem a daunting challenge. However, this skill is a vital requirement for any entrepreneur or business seeking to increase their chances of securing necessary funding. Here is a list of top ten tips for writing that winning plan:

1. Write from the audience’s perspective.

The starting point for any business plan should be from the perspective of the audience. What is the purpose of the plan? Is it to secure funding? Is it to communicate the future plans for the company? The writer should tailor the plan for different audiences, as they will each have very specific requirements. For example, a potential investor will seek clear explanations detailing the proposed return on their investment and time frames for getting their money back.

2. Research the market thoroughly

The entrepreneur should undertake market research and ensure that the plan includes reference to the market size, its predicted growth path and how they will gain access to this market. A plan for an Internet café will consider the local population, Internet penetration rates, predictions about whether it is likely to grow or decline, etc., concluding with a review of the competitive environment.

3. Understand the competition

An integral component to understanding any business environment is understanding the competition, both its nature and the bases for competition within the industry. Is it a particularly competitive environment, or one that lacks competition? How are the incumbents competing—is there a price leader evident? Finally, including a thorough understanding of the bases on which you intend to compete is vital; can you compete effectively with the existing players?

4. Attention to Detail

Make the plan concise, but include enough detail to ensure the reader has sufficient information to make informed decisions. Given that the plan’s writer usually has a significant role to play in the running of the business, the plan should reflect a sense of professionalism, with no spelling mistakes, realistic assumptions, credible projections and accurate content. The writer should also consider the format of the plan, e.g., if a presentation is required, a back-up PowerPoint presentation should be created.

5. Focus on the Opportunity

If you are seeking investment in your business, it is important to clearly describe the investment opportunity. Why would the investor be better off investing in your business rather than leaving money in a bank account, shares or investing in another business? What is the Unique Selling Proposition (USP) for the business? Why will people part with their cash to buy from you?

6. Ensure all Key Areas are covered in the Plan

Undertake research on what a business plan should contain. Include sections on the Company, Product/Service, Market, Competition, Management Team, Marketing, Operations and Financials. The plan should also take on board the readers’ various preferences for viewing data. While many plans are predominantly textual, the plan should include some simple colour charts and spreadsheets.

7. Do the Sums

The numbers will be subject to particular scrutiny. Costs should be documented in full and sales predictions should be both conservative and realistic. While costs are more certain and predictable, a crucial factor in the success or failure of the business will be the level of sales. If you are not particularly comfortable with maths, have someone assist you in preparing a simple cash flow and break even chart. This will help the reader understand how many sales you must make to cover your costs, and also how much financing you must raise to start up successfully. Remember, at the beginning, there are a lot of start-up expenses in a period of uncertain sales volumes. If sales are on credit (including via credit card) it may take up to 4 weeks for you to receive the cash.

8. Executive Summary

Arguably the most important component of the plan is the executive summary. This is a summary of the entire plan and is usually contained at the start of the plan. It also tends to act as a key qualifier for time-pressed investors–if they like it, they will read on, if not they will go no further. It should be completed at the very end of the business planning process and should have a ‘wow factor’ that entices them to read further. In tandem with this, the writer should also prepare a short ‘elevator pitch,’ a five-minute overview of the key benefits of the new product/service.

9. Review Process

Once you have completed your plan, have it independently reviewed. Select someone detached from the process who can offer constructive criticism on all aspects of the plan. Your local Business Link or Enterprise Agency should be able to assist with this. This review should prompt further questions that will need to be addressed in a revised draft.

10. Implement the Plan

Finally, a plan should always be viewed as a living document and contain specifics regarding dates, deadlines and specific responsibilities. It should be constantly reviewed and updated, as well as being used in regular ‘plan versus actual’ discussions. Business relies heavily on people taking actions and being accountable for them. A winning business plan will help to ensure that the business is fully focused on what is required to achieve the company’s goals.

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