Business Planning
Planning is a detailed method, formulated beforehand, for managing all or part of a business. It is not something that should be approached haphazardly. While many business owners think of planning simply as a process you need to go through to get funding, there are many other types of planning that may be useful to a small business to help it operate efficiently and effectively. The table of contents gives you an overview of some of the topic areas we cover in this section.
Table of Contents:
The Planning Process looks at what planning encompasses in greater depth. It is a "big picture" look at the planning process.
Then, there are a wide variety of specialized types of planning. The best known is the generic business plan. There are many resources available on putting together a business plan. If you have spent any time trying to put together a business plan, you are aware that there are many different formats for structuring a plan.
If you are writing the business plan to get funding for your business, my advice is to always ask the funding organization what format they prefer. If you are not writing it for funding, you can follow the format that works best for you. The Small Business Administration has their own version, a Business Plan Template to help build a business plan easily.
My personal preference is to write your business plan in a format that describes each part of the business operation. This clarifies for you how you plan to handle each aspect of your business, and shows any potential investors a nice overall picture of your business. The other nice part of putting together your business plan this way is that it shows the interrelatedness of each of the more specific types of planning and lets you develop each section separately as you develop that part of the business.
So, a good business plan will include:
Financial Management Plan
Legal Plan
Management Plan
(which includes Human Resources Planning and Strategic Planning)
Marketing Plan
Office Design Plan
Production Plan
Together they give the total picture of your business, but each can be operationalized and modified as necessary. Making them part of the total business plan, however, keeps you aware of the relationship of the various plans so that you can adjust the other areas of the business as you make changes in the area you are concentrating on at the moment.
Does this sound like a little much? Each piece does not need to be a major document. Write something for each section, put each of them in a notebook with appropriate dividers, and at the end of each month take a look to see how you are doing. Pencil in any changes you have made over the month. You are ready then to once a year revise all the pages based on the penciled in notes each month. It really is pretty easy once you have the system set up.
When you write each of those sections, you may discover you need information about your industry, markets or other external data that you don't readily have available. I have put together a section on Business Plan Resources to provide a resources of data that you might need to help put the plan together.
I have also included information on a fun way to fund your business and get outside input on your business plan - participating in a Business Plan Competition.
One other good resource is Planning as a Business. In it I share an interview with Tim Berry, president of Palo Alto Software. Not only does he produce one of the most user-friendly software packages to help you build a good business plan, but he also provides an extensive set of sample business plans on his website. His sample business plans are free for your use should you want to see how someone else has done one. Additionally, I have compiled a page with links to sample plans that have been posted on the internet.
Finally, I have included some information in this section about Financial Planning and Setting Personal Goals. While technically not a part of business operations, most small business owners need to consider their own personal and financial future in addition to their business' future. The mantra in the world of finance is "diversify" your risks. And, if you are counting on your business to provide your nest egg for retirement, you are playing with fire. Give some serious thought to putting together both personal and financial plans for yourself that include a variety of goals and investments that will provide you security in the long run. Give your own future priority too. You will not regret it.
