the business planning process involves

The Business Planning Process: 6 Steps To Creating a New Plan

In this article, we will define and explain the basic business planning process to help your business move in the right direction.

What is Business Planning?

Business planning is the process whereby an organization’s leaders figure out the best roadmap for growth and document their plan for success.

The business planning process includes diagnosing the company’s internal strengths and weaknesses, improving its efficiency, working out how it will compete against rival firms in the future, and setting milestones for progress so they can be measured.

The process includes writing a new business plan. What is a business plan? It is a written document that provides an outline and resources needed to achieve success. Whether you are writing your plan from scratch, from a simple business plan template , or working with an experienced business plan consultant or writer, business planning for startups, small businesses, and existing companies is the same.

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The Better Business Planning Process

The business plan process includes 6 steps as follows:

• Do Your Research
• Calculate Your Financial Forecast
• Draft Your Plan
• Revise & Proofread
• Nail the Business Plan Presentation

We’ve provided more detail for each of these key business plan steps below.

1. Do Your Research

Conduct detailed research into the industry, target market, existing customer base,  competitors, and costs of the business begins the process. You may ask yourself the following questions:

• What are your business goals?
• What is the current state of your business?
• What are the current industry trends?
• What is your competition doing?

There are a variety of resources needed, ranging from databases and articles to direct interviews with other entrepreneurs, potential customers, or industry experts. The information gathered during this process should be documented and organized carefully, including the source as there is a need to cite sources within your business plan.

You may also want to complete a SWOT Analysis for your own business to identify your strengths, weaknesses, opportunities, and potential risks as this will help you develop your strategies to highlight your competitive advantage.

2. Strategize

Now, you will use the research to determine the best strategy for your business. You may choose to develop new strategies or refine existing strategies that have demonstrated success in the industry. Pulling the best practices of the industry provides a foundation, but then you should expand on the different activities that focus on your competitive advantage.

This step of the planning process may include formulating a vision for the company’s future, which can be done by conducting intensive customer interviews and understanding their motivations for purchasing goods and services of interest. Dig deeper into decisions on an appropriate marketing plan, operational processes to execute your plan, and human resources required for the first five years of the company’s life.

3. Calculate Your Financial Forecast

All of the activities you choose for your strategy come at some cost and, hopefully, lead to some revenues. Sketch out the financial situation by looking at whether you can expect revenues to cover all costs and leave room for profit in the long run.

Begin to insert your financial assumptions and startup costs into a financial model which can produce a first-year cash flow statement for you, giving you the best sense of the cash you will need on hand to fund your early operations.

A full set of financial statements provides the details about the company’s operations and performance, including its expenses and profits by accounting period (quarterly or year-to-date). Financial statements also provide a snapshot of the company’s current financial position, including its assets and liabilities.

This is one of the most valued aspects of any business plan as it provides a straightforward summary of what a company does with its money, or how it grows from initial investment to become profitable.

4. Draft Your Plan

With financials more or less settled and a strategy decided, it is time to draft through the narrative of each component of your business plan . With the background work you have completed, the drafting itself should be a relatively painless process.

If you have trouble writing convincing prose, this is a time to seek the help of an experienced business plan writer who can put together the plan from this point.

5. Revise & Proofread

Revisit the entire plan to look for any ideas or wording that may be confusing, redundant, or irrelevant to the points you are making within the plan. You may want to work with other management team members in your business who are familiar with the company’s operations or marketing plan in order to fine-tune the plan.

Finally, proofread thoroughly for spelling, grammar, and formatting, enlisting the help of others to act as additional sets of eyes. You may begin to experience burnout from working on the plan for so long and have a need to set it aside for a bit to look at it again with fresh eyes.

6. Nail the Business Plan Presentation

The presentation of the business plan should succinctly highlight the key points outlined above and include additional material that would be helpful to potential investors such as financial information, resumes of key employees, or samples of marketing materials. It can also be beneficial to provide a report on past sales or financial performance and what the business has done to bring it back into positive territory.

Business Planning Process Conclusion

Every entrepreneur dreams of the day their business becomes wildly successful.

But what does that really mean? How do you know whether your idea is worth pursuing?

And how do you stay motivated when things are not going as planned? The answers to these questions can be found in your business plan. This document helps entrepreneurs make better decisions and avoid common pitfalls along the way. ​

Business plans are dynamic documents that can be revised and presented to different audiences throughout the course of a company’s life. For example, a business may have one plan for its initial investment proposal, another which focuses more on milestones and objectives for the first several years in existence, and yet one more which is used specifically when raising funds.

Business plans are a critical first step for any company looking to attract investors or receive grant money, as they allow a new organization to better convey its potential and business goals to those able to provide financial resources.

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Other Helpful Business Plan Articles & Templates

• 17.2 The Planning Process
• Introduction
• 1.1 What Do Managers Do?
• 1.2 The Roles Managers Play
• 1.3 Major Characteristics of the Manager's Job
• Summary of Learning Outcomes
• Chapter Review Questions
• Management Skills Application Exercises
• Managerial Decision Exercises
• Critical Thinking Case
• 2.1 Overview of Managerial Decision-Making
• 2.2 How the Brain Processes Information to Make Decisions: Reflective and Reactive Systems
• 2.3 Programmed and Nonprogrammed Decisions
• 2.4 Barriers to Effective Decision-Making
• 2.5 Improving the Quality of Decision-Making
• 2.6 Group Decision-Making
• 3.1 The Early Origins of Management
• 3.2 The Italian Renaissance
• 3.3 The Industrial Revolution
• 3.4 Taylor-Made Management
• 3.5 Administrative and Bureaucratic Management
• 3.6 Human Relations Movement
• 3.7 Contingency and System Management
• 4.1 The Organization's External Environment
• 4.2 External Environments and Industries
• 4.3 Organizational Designs and Structures
• 4.4 The Internal Organization and External Environments
• 4.5 Corporate Cultures
• 4.6 Organizing for Change in the 21st Century
• 5.1 Ethics and Business Ethics Defined
• 5.2 Dimensions of Ethics: The Individual Level
• 5.3 Ethical Principles and Responsible Decision-Making
• 5.4 Leadership: Ethics at the Organizational Level
• 5.5 Ethics, Corporate Culture, and Compliance
• 5.6 Corporate Social Responsibility (CSR)
• 5.7 Ethics around the Globe
• 5.8 Emerging Trends in Ethics, CSR, and Compliance
• 6.1 Importance of International Management
• 6.2 Hofstede's Cultural Framework
• 6.3 The GLOBE Framework
• 6.4 Cultural Stereotyping and Social Institutions
• 6.5 Cross-Cultural Assignments
• 6.6 Strategies for Expanding Globally
• 6.7 The Necessity of Global Markets
• 7.1 Entrepreneurship
• 7.2 Characteristics of Successful Entrepreneurs
• 7.3 Small Business
• 7.4 Start Your Own Business
• 7.5 Managing a Small Business
• 7.6 The Large Impact of Small Business
• 7.7 The Small Business Administration
• 7.8 Trends in Entrepreneurship and Small-Business Ownership
• 8.1 Gaining Advantages by Understanding the Competitive Environment
• 8.2 Using SWOT for Strategic Analysis
• 8.3 A Firm's External Macro Environment: PESTEL
• 8.4 A Firm's Micro Environment: Porter's Five Forces
• 8.5 The Internal Environment
• 8.6 Competition, Strategy, and Competitive Advantage
• 8.7 Strategic Positioning
• 9.1 Strategic Management
• 9.2 Firm Vision and Mission
• 9.3 The Role of Strategic Analysis in Formulating a Strategy
• 9.4 Strategic Objectives and Levels of Strategy
• 9.5 Planning Firm Actions to Implement Strategies
• 9.6 Measuring and Evaluating Strategic Performance
• 10.1 Organizational Structures and Design
• 10.2 Organizational Change
• 10.3 Managing Change
• 11.1 An Introduction to Human Resource Management
• 11.2 Human Resource Management and Compliance
• 11.3 Performance Management
• 11.4 Influencing Employee Performance and Motivation
• 11.5 Building an Organization for the Future
• 11.6 Talent Development and Succession Planning
• 12.1 An Introduction to Workplace Diversity
• 12.2 Diversity and the Workforce
• 12.3 Diversity and Its Impact on Companies
• 12.4 Challenges of Diversity
• 12.5 Key Diversity Theories
• 12.6 Benefits and Challenges of Workplace Diversity
• 12.7 Recommendations for Managing Diversity
• 13.1 The Nature of Leadership
• 13.2 The Leadership Process
• 13.3 Leader Emergence
• 13.4 The Trait Approach to Leadership
• 13.5 Behavioral Approaches to Leadership
• 13.6 Situational (Contingency) Approaches to Leadership
• 13.7 Substitutes for and Neutralizers of Leadership
• 13.8 Transformational, Visionary, and Charismatic Leadership
• 13.9 Leadership Needs in the 21st Century
• 14.1 Motivation: Direction and Intensity
• 14.2 Content Theories of Motivation
• 14.3 Process Theories of Motivation
• 14.4 Recent Research on Motivation Theories
• 15.1 Teamwork in the Workplace
• 15.2 Team Development Over Time
• 15.3 Things to Consider When Managing Teams
• 15.4 Opportunities and Challenges to Team Building
• 15.5 Team Diversity
• 15.6 Multicultural Teams
• 16.1 The Process of Managerial Communication
• 16.2 Types of Communications in Organizations
• 16.3 Factors Affecting Communications and the Roles of Managers
• 16.4 Managerial Communication and Corporate Reputation
• 16.5 The Major Channels of Management Communication Are Talking, Listening, Reading, and Writing
• 17.1 Is Planning Important
• 17.3 Types of Plans
• 17.4 Goals or Outcome Statements
• 17.5 Formal Organizational Planning in Practice
• 17.6 Employees' Responses to Planning
• 17.7 Management by Objectives: A Planning and Control Technique
• 17.8 The Control- and Involvement-Oriented Approaches to Planning and Controlling
• 18.1 MTI—Its Importance Now and In the Future
• 18.2 Developing Technology and Innovation
• 18.3 External Sources of Technology and Innovation
• 18.4 Internal Sources of Technology and Innovation
• 18.5 Management Entrepreneurship Skills for Technology and Innovation
• 18.6 Skills Needed for MTI
• 18.7 Managing Now for Future Technology and Innovation
• Outline the planning and controlling processes.

Planning is a process. Ideally it is future oriented, comprehensive, systematic, integrated, and negotiated. 11 It involves an extensive search for alternatives and analyzes relevant information, is systematic in nature, and is commonly participative. 12 The planning model described in this section breaks the managerial function of planning into several steps, as shown in Exhibit 17.3 . Following this step-by-step procedure helps ensure that organizational planning meets these requirements.

Step 1: Developing an Awareness of the Present State

According to management scholars Harold Koontz and Cyril O’Donnell, the first step in the planning process is awareness. 13 It is at this step that managers build the foundation on which they will develop their plans. This foundation specifies an organization’s current status, pinpoints its commitments, recognizes its strengths and weaknesses, and sets forth a vision of the future. Because the past is instrumental in determining where an organization expects to go in the future, managers at this point must understand their organization and its history. It has been said—“The further you look back, the further you can see ahead.” 14

Step 2: Establishing Outcome Statements

The second step in the planning process consists of deciding “where the organization is headed, or is going to end up.” Ideally, this involves establishing goals. Just as your goal in this course might be to get a certain grade, managers at various levels in an organization’s hierarchy set goals. For example, plans established by a university’s marketing department curriculum committee must fit with and support the plans of the department, which contribute to the goals of the business school, whose plans must, in turn, support the goals of the university. Managers therefore develop an elaborate network of organizational plans, such as that shown in Exhibit 17.4 , to achieve the overall goals of their organization.

Goal vs. Domain Planning

Outcome statements can be constructed around specific goals or framed in terms of moving in a particular direction toward a viable set of outcomes. In goal planning , people set specific goals and then create action statements. 15 For example, freshman Kristin Rude decides that she wants a bachelor of science degree in biochemistry (the goal). She then constructs a four-year academic plan that will help her achieve this goal. Kristin is engaging in goal planning. She first identifies a goal and then develops a course of action to realize her goal.

Another approach to planning is domain/directional planning , in which managers develop a course of action that moves an organization toward one identified domain (and therefore away from other domains). 16 Within the chosen domain may lie a number of acceptable and specific goals. For example, high-school senior Neil Marquardt decides that he wants to major in a business-related discipline in college. During the next four years, he will select a variety of courses from the business school curriculum yet never select a major. After selecting courses based on availability and interest, he earns a sufficient number of credits within this chosen domain that enables him to graduate with a major in marketing. Neil never engaged in goal planning, but in the end he will realize one of many acceptable goals within an accepted domain.

The development of the Post-it® product by the 3M Corporation demonstrates how domain planning works. In the research laboratories at 3M, efforts were being made to develop new forms and strengths of cohesive substances. One result was cohesive material with no known value because of its extremely low cohesive level. A 3M division specialist, Arthur L. Fry, frustrated by page markers falling from his hymn book in church, realized that this material, recently developed by Spencer F. Silver, would stick to paper for long periods and could be removed without destroying the paper. Fry experimented with the material as page markers and note pads—out of this came the highly popular and extremely profitable 3M product Scotch Post-it®. Geoff Nicholson, the driving force behind the Post-it® product, comments that rather than get bogged down in the planning process, innovations must be fast-tracked and decisions made whether to continue or move on early during the product development process. 17

Situations in which managers are likely to engage in domain planning include (1) when there is a recognized need for flexibility, (2) when people cannot agree on goals, (3) when an organization’s external environment is unstable and highly uncertain, and (4) when an organization is starting up or is in a transitional period. In addition, domain planning is likely to prevail at upper levels in an organization, where managers are responsible for dealing with the external environment and when task uncertainty is high. Goal planning (formulating goals compatible with the chosen domain) is likely to prevail in the technical core, where there is less uncertainty.

Hybrid Planning

Occasionally, coupling of domain and goal planning occurs, creating a third approach, called hybrid planning . In this approach, managers begin with the more general domain planning and commit to moving in a particular direction. As time passes, learning occurs, uncertainty is reduced, preferences sharpen, and managers are able to make the transition to goal planning as they identify increasingly specific targets in the selected domain. Movement from domain planning to goal planning occurs as knowledge accumulates, preferences for a particular goal emerge, and action statements are created.

Consequences of Goal, Domain, and Hybrid Planning

Setting goals not only affects performance directly, but also encourages managers to plan more extensively. That is, once goals are set, people are more likely to think systematically about how they should proceed to realize the goals. 18 When people have vague goals, as in domain planning, they find it difficult to draw up detailed action plans and are therefore less likely to perform effectively. When studying the topic of motivation, you will learn about goal theory. Research suggests that goal planning results in higher levels of performance than does domain planning alone. 19

Step 3: Premising

In this step of the planning process, managers establish the premises, or assumptions, on which they will build their action statements. The quality and success of any plan depends on the quality of its underlying assumptions. Throughout the planning process, assumptions about future events must be brought to the surface, monitored, and updated. 20

Managers collect information by scanning their organization’s internal and external environments. They use this information to make assumptions about the likelihood of future events. As Kristin considers her four-year pursuit of her biochemistry major, she anticipates that in addition to her savings and funds supplied by her parents, she will need a full-time summer job for two summers in order to cover the cost of her undergraduate education. Thus, she includes finding full-time summer employment between her senior year of high school and her freshman year and between her freshman and sophomore years of college as part of her plan. The other two summers she will devote to an internship and finding postgraduate employment—much to mom and dad’s delight! Effective planning skills can be used throughout your life. The plan you develop to pay for and complete your education is an especially important one.

Step 4: Determining a Course of Action (Action Statements)

In this stage of the planning process, managers decide how to move from their current position toward their goal (or toward their domain). They develop an action statement that details what needs to be done, when, how, and by whom. The course of action determines how an organization will get from its current position to its desired future position. Choosing a course of action involves determining alternatives by drawing on research, experimentation, and experience; evaluating alternatives in light of how well each would help the organization reach its goals or approach its desired domain; and selecting a course of action after identifying and carefully considering the merits of each alternative.

Step 5: Formulating Supportive Plans

The planning process seldom stops with the adoption of a general plan. Managers often need to develop one or more supportive or derivative plans to bolster and explain their basic plan. Suppose an organization decides to switch from a 5-day, 40-hour workweek (5/40) to a 4-day, 40-hour workweek (4/40) in an attempt to reduce employee turnover. This major plan requires the creation of a number of supportive plans. Managers might need to develop personnel policies dealing with payment of daily overtime. New administrative plans will be needed for scheduling meetings, handling phone calls, and dealing with customers and suppliers.

Planning, Implementation, and Controlling

After managers have moved through the five steps of the planning process and have drawn up and implemented specific plans, they must monitor and maintain their plans. Through the controlling function (to be discussed in greater detail later in this chapter), managers observe ongoing human behavior and organizational activity, compare it to the outcome and action statements formulated during the planning process, and take corrective action if they observe unexpected and unwanted deviations. Thus, planning and controlling activities are closely interrelated (planning ➨ controlling ➨ planning . . .). Planning feeds controlling by establishing the standards against which behavior will be evaluated during the controlling process. Monitoring organizational behavior (the control activity) provides managers with input that helps them prepare for the upcoming planning period—it adds meaning to the awareness step of the planning process.

Influenced by total quality management (TQM) and the importance of achieving continuous improvement in the processes used, as well as the goods and services produced, organizations such as IBM-Rochester have linked their planning and controlling activities by adopting the Deming cycle (also known as the Shewhart cycle).

It has been noted on numerous occasions that many organizations that do plan fail to recognize the importance of continuous learning. Their plans are either placed on the shelf and collect dust or are created, implemented, and adhered to without a systematic review and modification process. Frequently, plans are implemented without first measuring where the organization currently stands so that future comparisons and evaluations of the plan’s effectiveness cannot be determined. The Deming cycle , shown in Exhibit 17.6 , helps managers assess the effects of planned action by integrating organizational learning into the planning process. The cycle consists of four key stages: (1) Plan—create the plan using the model discussed earlier. (2) Do—implement the plan. (3) Check—monitor the results of the planned course of action; organizational learning about the effectiveness of the plan occurs at this stage. (4) Act—act on what was learned, modify the plan, and return to the first stage in the cycle, and the cycle begins again as the organization strives for continuous learning and improvement.

Concept Check

• What are the five steps in the planning process?
• What is the difference between goal, domain, and hybrid planning?
• How are planning, implementation, and controlling related?

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Table of Contents

Every year, thousands of new businesses see the light of the day. One look at the  World Bank's Entrepreneurship Survey and database  shows the mind-boggling rate of new business registrations. However, sadly, only a tiny percentage of them have a chance of survival.   

According to the Bureau of Labor Statistics, about 20% of small businesses fail in their first year, about 50% in their fifth year.

Research from the University of Tennessee found that 44% of businesses fail within the first three years. Among those that operate within specific sectors, like information (which includes most tech firms), 63% shut shop within three years.

Several  other statistics  expose the abysmal rates of business failure. But why are so many businesses bound to fail? Most studies mention "lack of business planning" as one of the reasons.

This isn’t surprising at all. 

Running a business without a plan is like riding a motorcycle up a craggy cliff blindfolded. Yet, way too many firms ( a whopping 67%)  don't have a formal business plan in place. 

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It doesn't matter if you're a startup with a great idea or a business with an excellent product. You can only go so far without a roadmap — a business plan. Only, a business plan is so much more than just a roadmap. A solid plan allows a business to weather market challenges and pivot quickly in the face of crisis, like the one global businesses are struggling with right now, in the post-pandemic world.  

But before you can go ahead and develop a great business plan, you need to know the basics. In this article, we'll discuss the fundamentals of business planning to help you plan effectively for 2021.  

Now before we begin with the details of business planning, let us understand what it is.

What Is a Business Plan?

No two businesses have an identical business plan, even if they operate within the same industry. So one business plan can look entirely different from another one. Still, for the sake of simplicity, a business plan can be defined as a guide for a company to operate and achieve its goals.  

More specifically, it's a document in writing that outlines the goals, objectives, and purpose of a business while laying out the blueprint for its day-to-day operations and key functions such as marketing, finance, and expansion.

A good business plan can be a game-changer for startups that are looking to raise funds to grow and scale. It convinces prospective investors that the venture will be profitable and provides a realistic outlook on how much profit is on the cards and by when it will be attained. 

However, it's not only new businesses that greatly benefit from a business plan. Well-established companies and large conglomerates also need to tweak their business plans to adapt to new business environments and unpredictable market changes. 

Before getting into learning more about business planning, let us learn the advantages of having one.

The Advantages of Having a Business Plan

Since a detailed business plan offers a birds-eye view of the entire framework of an establishment, it has several benefits that make it an important part of any organization. Here are few ways a business plan can offer significant competitive edge.

• Sets objectives and benchmarks: Proper planning helps a business set realistic objectives and assign stipulated time for those goals to be met. This results in long-term profitability. It also lets a company set benchmarks and Key Performance Indicators (KPIs) necessary to reach its goals. 
• Maximizes resource allocation: A good business plan helps to effectively organize and allocate the company’s resources. It provides an understanding of the result of actions, such as, opening new offices, recruiting fresh staff, change in production, and so on. It also helps the business estimate the financial impact of such actions.
• Enhances viability: A plan greatly contributes towards turning concepts into reality. Though business plans vary from company to company, the blueprints of successful companies often serve as an excellent guide for nascent-stage start-ups and new entrepreneurs. It also helps existing firms to market, advertise, and promote new products and services into the market.
• Aids in decision making: Running a business involves a lot of decision making: where to pitch, where to locate, what to sell, what to charge — the list goes on. A well thought-out business plan provides an organization the ability to anticipate the curveballs that the future could throw at them. It allows them to come up with answers and solutions to these issues well in advance.
• Fix past mistakes: When businesses create plans keeping in mind the flaws and failures of the past and what worked for them and what didn’t, it can help them save time, money, and resources. Such plans that reflects the lessons learnt from the past offers businesses an opportunity to avoid future pitfalls.
• Attracts investors: A business plan gives investors an in-depth idea about the objectives, structure, and validity of a firm. It helps to secure their confidence and encourages them to invest. 

Now let's look at the various types involved in business planning.

The Types of Business Plans

Business plans are formulated according to the needs of a business. It can be a simple one-page document or an elaborate 40-page affair, or anything in between. While there’s no rule set in stone as to what exactly a business plan can or can’t contain, there are a few common types of business plan that nearly all businesses in existence use.  

Here’s an overview of a few fundamental types of business plans. 

• Start-up plan: As the name suggests, this is a documentation of the plans, structure, and objections of a new business establishments. It describes the products and services that are to be produced by the firm, the staff management, and market analysis of their production. Often, a detailed finance spreadsheet is also attached to this document for investors to determine the viability of the new business set-up.
• Feasibility plan: A feasibility plan evaluates the prospective customers of the products or services that are to be produced by a company. It also estimates the possibility of a profit or a loss of a venture. It helps to forecast how well a product will sell at the market, the duration it will require to yield results, and the profit margin that it will secure on investments. 
• Expansion Plan: This kind of plan is primarily framed when a company decided to expand in terms of production or structure. It lays down the fundamental steps and guidelines with regards to internal or external growth. It helps the firm to analyze the activities like resource allocation for increased production, financial investments, employment of extra staff, and much more.
• Operations Plan: An operational plan is also called an annual plan. This details the day-to-day activities and strategies that a business needs to follow in order to materialize its targets. It outlines the roles and responsibilities of the managing body, the various departments, and the company’s employees for the holistic success of the firm.
• Strategic Plan: This document caters to the internal strategies of the company and is a part of the foundational grounds of the establishments. It can be accurately drafted with the help of a SWOT analysis through which the strengths, weaknesses, opportunities, and threats can be categorized and evaluated so that to develop means for optimizing profits.

The Key Elements of a Business Plan

There is some preliminary work that’s required before you actually sit down to write a plan for your business. Knowing what goes into a business plan is one of them. 

Here are the key elements of a good business plan:

• Executive Summary: An executive summary gives a clear picture of the strategies and goals of your business right at the outset. Though its value is often understated, it can be extremely helpful in creating the readers’ first impression of your business. As such, it could define the opinions of customers and investors from the get-go.  
• Business Description: A thorough business description removes room for any ambiguity from your processes. An excellent business description will explain the size and structure of the firm as well as its position in the market. It also describes the kind of products and services that the company offers. It even states as to whether the company is old and established or new and aspiring. Most importantly, it highlights the USP of the products or services as compared to your competitors in the market.
• Market Analysis: A systematic market analysis helps to determine the current position of a business and analyzes its scope for future expansions. This can help in evaluating investments, promotions, marketing, and distribution of products. In-depth market understanding also helps a business combat competition and make plans for long-term success.
• Operations and Management: Much like a statement of purpose, this allows an enterprise to explain its uniqueness to its readers and customers. It showcases the ways in which the firm can deliver greater and superior products at cheaper rates and in relatively less time. 
• Financial Plan: This is the most important element of a business plan and is primarily addressed to investors and sponsors. It requires a firm to reveal its financial policies and market analysis. At times, a 5-year financial report is also required to be included to show past performances and profits. The financial plan draws out the current business strategies, future projections, and the total estimated worth of the firm.

Best Business Plan Software

The importance of business planning is it simplifies the planning of your company's finances to present this information to a bank or investors. Here are the best business plan software providers available right now:

• Business Sorter

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Common Challenges of Writing a Business Plan

The importance of business planning cannot be emphasized enough, but it can be challenging to write a business plan. Here are a few issues to consider before you start your business planning:

• Create a business plan to determine your company's direction, obtain financing, and attract investors.
• Identifying financial, demographic, and achievable goals is a common challenge when writing a business plan.
• Some entrepreneurs struggle to write a business plan that is concise, interesting, and informative enough to demonstrate the viability of their business idea.
• You can streamline your business planning process by conducting research, speaking with experts and peers, and working with a business consultant.

Become an Expert Business Planner

Whether you’re running your own business or in-charge of ensuring strategic performance and growth for your employer or clients, knowing the ins and outs of business planning can set you up for success. 

Be it the launch of a new and exciting product or an expansion of operations, business planning is the necessity of all large and small companies. Which is why the need for professionals with superior business planning skills will never die out. In fact, their demand is on the rise with global firms putting emphasis on business analysis and planning to cope with cut-throat competition and market uncertainties.

While some are natural-born planners, most people have to work to develop this important skill. Plus, business planning requires you to understand the fundamentals of business management and be familiar with business analysis techniques . It also requires you to have a working knowledge of data visualization, project management, and monitoring tools commonly used by businesses today.   

Simpliearn’s Post Graduate Program in Business Analysis will help you develop and hone the required skills to become an extraordinary business planner. This comprehensive training program combined with the latest tools and methods can pave the way for you and equip you with the skills and the know-how to tackle any real-world challenges that may arise. Completing this industry-recognized course also earns you a valued certification as tangible proof of your talent. 

What Is Meant by Business Planning?

Business planning is developing a company's mission or goals and defining the strategies you will use to achieve those goals or tasks. The process can be extensive, encompassing all aspects of the operation, or it can be concrete, focusing on specific functions within the overall corporate structure.

What Are the 4 Types of Business Plans?

The following are the four types of business plans:

Operational Planning

This type of planning typically describes the company's day-to-day operations. Single-use plans are developed for events and activities that occur only once (such as a single marketing campaign). Ongoing plans include problem-solving policies, rules for specific regulations, and procedures for a step-by-step process for achieving particular goals.

Strategic Planning

Strategic plans are all about why things must occur. A high-level overview of the entire business is included in strategic planning. It is the organization's foundation and will dictate long-term decisions.

Tactical Planning

Tactical plans are about what will happen. Strategic planning is aided by tactical planning. It outlines the tactics the organization intends to employ to achieve the goals outlined in the strategic plan.

Contingency Planning

When something unexpected occurs or something needs to be changed, contingency plans are created. In situations where a change is required, contingency planning can be beneficial.

What Are the 7 Steps of a Business Plan?

The following are the seven steps required for a business plan:

Conduct Research

If your company is to run a viable business plan and attract investors, your information must be of the highest quality.

Have a Goal

The goal must be unambiguous. You will waste your time if you don't know why you're writing a business plan. Knowing also implies having a target audience for when the plan is expected to get completed.

Create a Company Profile

Some refer to it as a company profile, while others refer to it as a snapshot. It's designed to be mentally quick and digestible because it needs to stick in the reader's mind quickly since more information is provided later in the plan.

Describe the Company in Detail

Explain the company's current situation, both good and bad. Details should also include patents, licenses, copyrights, and unique strengths that no one else has.

Create a marketing plan ahead of time.

A strategic marketing plan is required because it outlines how your product or service will be communicated, delivered, and sold to customers.

Be Willing to Change Your Plan for the Sake of Your Audience

Another standard error is that people only write one business plan. Startups have several versions, just as candidates have numerous resumes for various potential employers.

Incorporate Your Motivation

Your motivation must be a compelling reason for people to believe your company will succeed in all circumstances. A mission should drive a business, not just selling, to make money. That mission is defined by your motivation as specified in your business plan.

What Are the Basic Steps in Business Planning?

These are the basic steps in business planning:

Summary and Objectives

Briefly describe your company, its objectives, and your plan to keep it running.

Services and Products

Add specifics to your detailed description of the product or service you intend to offer. Where, why, and how much you plan to sell your product or service and any special offers.

Conduct research on your industry and the ideal customers to whom you want to sell. Identify the issues you want to solve for your customers.

Operations are the process of running your business, including the people, skills, and experience required to make it successful.

How are you going to reach your target audience? How you intend to sell to them may include positioning, pricing, promotion, and distribution.

Consider funding costs, operating expenses, and projected income. Include your financial objectives and a breakdown of what it takes to make your company profitable. With proper business planning through the help of support, system, and mentorship, it is easy to start a business.

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For startups, a well-written business planning document is important to source capital from banks and venture capitalists. A business plan also provides a clear direction for business growth. But how else does planning affect businesses? What does a good business plan contain? Let's look at the answers.Simply put, business planning is the process of developing a roadmap aimed at achieving…

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For startups, a well-written business planning document is important to source capital from banks and venture capitalists. A business plan also provides a clear direction for business growth . But how else does planning affect businesses? What does a good business plan contain? Let's look at the answers.

Business planning definition

Simply put, business planning is the process of developing a roadmap aimed at achieving a business goal. It involves key stakeholders coming together to brainstorm ideas and strategies and collating them into a formal, written document known as a business plan.

A business plan is an official document that outlines a business's core activities, objectives, and roadmap to achieving its goals. For example, if you are starting a new bakery, a business plan would include information about your products, marketing strategies, and financial situation. .

A good business plan helps a business focus on its short-term and long-term goals, and outlines the specific steps needed to achieve them. In summary, business planning is a key process that businesses undertake to achieve their goals and success.

Importance of a business plan

A good business plan is critical for any business, providing a roadmap for achieving success and ensuring that all stakeholders are aligned and working towards the same goals. It helps businesses make more informed decisions, secure funding, and track their progress over time. Here are some points summarising the importance of a business plan:

• A business plan helps a company track its growth and stay in line with its stated business objectives. If something is going off track, the managers can review the business plan and steer things back in the right direction.
• A good business plan notifies investors how the business is operated and if it is worth investing in. It attracts investors and sells them the idea of your business.
• A business plan provides a unified working structure among employees and business owners. It keeps employees and business owners on the same page about strategic actions needed to be taken.
• A well-crafted business plan can help startups attract investment or get loans without a proven financial record. It provides investors and lenders with an understanding of the company's goals, strategies, and financial projections.

Elements of a good business plan

A business plan should include key elements that help to provide a complete overview of the business and its plans for success. Here are some important elements that should be included in a typical business plan:

• Executive Summary
• Business Description
• Market Analysis
• Products and Services
• Marketing and Sales Strategy
• Management and Organization
• Financial Projections
• Funding Requirements

1. Executive summary

This business planning element provides a brief description of the business. It gives information on the business leadership , its employees, operations, and location. It also provides the business mission statement, goals, and vision.

2. Company description

This section provides a detailed description of the business, including its mission, vision, and goals. It should also include information about the industry and target market.

3. Market analysis

Good business planning requires a well-written market analysis showing demand and supply. A SWOT analysis provides detailed information on business strengths and weaknesses along with details on the business competitor and market opportunities available.

A SWOT analysis is a strategic planning tool used by business owners to identify a business's strengths, weaknesses, opportunities, and threats in the market. Conducting a SWOT analysis will guide you on what you do well, identify your weak points, maximize your opportunities, and avoid threats.

An example of a good business plan market analysis is presented in a SWOT analysis carried out by a local shirt production company called 69 Shirts (a fictional company).

Table 1. SWOT analysis example

4. Products and services offered

This element provides a description of the products and services offered by a business. It includes production information, information on patents (if available), research and development, product or services pricing, and consumer benefits.

Blooming Boutique is a retail female clothing brand located in Delaware, US. 1 By following different generations' fashion trends, and monitoring target customers' fashion preferences, the brand intends to produce female fashion wear that is appealing to customers. They also use styles, colours, and different fashion fits to draw attention to the consumer while satisfying their sartorial needs.

5. Marketing and sales strategy

This element provides information on how the business intends to distribute its products and services, for example, what marketing strategies and channels they will use. Fundamentally, it shows how a business intends to build and keep its audience.

Again, let's take the example of 69 Shirts. Here's a possible marketing strategy:

• Using social media marketing and influencer marketing - the business aims to reach the audience by telling the story behind the products and how they can help the customers. The company also focuses on price, product distinction, product promotion, and customers’ feelings.
• Running a guerrilla marketing campaign in train stations and on public transport - this is done with the aim of letting people know as much as possible about the products and how beneficial and memorable it will be for them to own the product.

6. Management and organisation

This section should describe the management team and the organization's structure, including the roles and responsibilities of each team member.

7. Financial plans

Here, the business projections and estimates are included for startups, and for an established business, balance sheets, financial statements , and important financial information should be added. It should also include a break-even analysis , which shows the level of sales needed to cover all expenses. Well-prepared financial calculations can attract investors, banks, and venture capitalists.

If the business needs funding, this section should outline the funding requirements, including how much funding is needed, what the funds will be used for, and how the business plans to repay the funding.

9. Appendices

This section should include any additional information that is relevant to the business plan, such as market research reports, product specifications, and legal documents.

Plan length varies, as does the type of plan, but a document usually ranges from 15 to 20 pages.

Business planning process

A business plan is just one step of the business planning process. The steps of the business planning process below will help you understand it:

• Define the business goals: The first step in business planning is to define the goals that the business wants to achieve. These goals should be specific, measurable, achievable, relevant, and time-bound.
• Conduct market research : The next step is to conduct market research to understand the target market, competition, and industry trends. This research can help the business identify opportunities and threats, and refine its strategy accordingly.
• Identify resources: The third step is to identify the resources that the business needs to achieve its goals. These resources could include finances, personnel, equipment, and facilities.
• Develop strategies: Based on market research and resource assessment, the business can develop strategies to achieve its goals. These strategies should be aligned with the business's strengths and opportunities, and address any weaknesses or threats.
• Create a business plan: The strategies can then be translated into a formal business plan, which outlines the business's core activities, objectives, and roadmap to achieving its goals. The business plan should include detailed information about the products or services, market analysis, marketing and sales strategy, as well as financial projections.
• Implement the plan: Once the business plan is complete, the next step is to implement it. This involves executing the strategies and tactics outlined in the plan, and monitoring progress towards the business goals.
• Evaluate and adjust: The final step is to evaluate the progress towards the business goals and adjust the plan as needed. This ensures that the business remains on track to achieve its goals and adapts to changes in the market or business environment.

Advantages and disadvantages of a business plan

While creating a business plan is a critical step in launching and running a successful business, it's important for managers and business owners to remember that there can be drawbacks. Advantages and disadvantages of a business plan are as follows:

Business planning - Key takeaways

Business planning is a process of developing a roadmap aimed at achieving a business goal.

A business plan is written documen t showing a business's core activities, objectives, and business roadmap to achieving its objectives.

The importance of a business plan can be seen in the organized growth of a business. It allows business owners to track business growth and stay in line with the business objectives.

Some crucial elements needed in business planning are executive summary, business description, market analysis, products and services, marketing and sales strategy, management and organization, financial projections, funding requirements.

Business planning process usually involves the following steps: define business goals, conduct market research , identify resources, develop strategies, create a business plan, implement the plan, evaluate and adjust.

• Blooming boutique, bloomingboutique.com, 2022.
• Jared Lindzon, The importance of a business plan, waveapps.com, 2022.
• Susan Ward, What is business planning, thebalancesmb.com, 2020.
• Staff, Business plan basic elements, bizally.com.au, 2022.
• Rich Longo, Why you need a business plan, sbdc.duq.edu, 2019.
• Staff, Effective business plan, lancasters.uk.net, 2022.

Frequently Asked Questions about Business Planning

--> what is a business plan.

A business plan is an official  documen t showing a business's core activities, objectives, and business roadmap to achieving its objectives. 

--> How to make a good business plan?

To make a good business plan, it's important to research the market and industry trends, set specific and measurable goals, develop a clear strategy, and create a well-organized and detailed plan that includes financial projections, marketing strategies, and plans for potential challenges. It's also crucial to review and adjust the plan regularly to ensure it remains relevant and effective.

--> How is a business plan structured?

A business plan usually has the following structure: 

--> Why is a business plan important?

A business plan is crucial for several reasons. Firstly, it enables companies to secure funding from investors by providing a clear roadmap of the business's goals and strategies. Secondly, it provides a framework for companies to work towards their objectives, monitor progress, and adjust course as needed. Lastly, it helps companies anticipate and address potential challenges that may arise in the course of business operations.

--> What are the three main purposes of a business plan?

The three main purposes of a business plan are:

• To serve as a roadmap for achieving the business's goals,
• To attract funding and investment from investors or financial institutions, and
• To provide a framework for managing and monitoring the business's performance over time.

Final Business Planning Quiz

Business planning quiz - teste dein wissen.

What is business planning?

Show answer

Business planning is a process of developing a roadmap aimed towards achieving a business goal. 

Show question

The document used by stakeholders to collate ideas into a formally written document that summarizes the business current state, the state of the business market, and steps to improve the business performance is called ……

A business plan 

What is a business plan?

A business plan is an officially written document showing a business core activities, objectives, and the business roadmap to achieving its established objectives. 

 Give two importance of a good business plan

A. The importance of a good business plan can be seen in the organised growth of a business. It allows business owners to track business growth and stay in line with the business objectives. 

B. A business plan also gives investors an idea of how the business is operated and if it is worth investing in. A good business plan attracts investors and sells them the idea of your business. 

What is the first element of a business plan?

Executive summary 

What information does the executive summary provide?

This executive summary provides a brief description of the business. It gives information on the business leadership, its employees, operations and location. It also provides the business mission statement, goals and business vision. 

 A business budget usually includes ….,.

A business budget includes cost from paying staff, production processes, marketing, expanding, logistics, development, researching and all other business related expenses. 

What does a SWOT analysis show about a business ?

A SWOT analysis shows a business strength, weaknesses, opportunities and threats to the business. 

A good business plan helps a business focus on its short term and long term goals, and it also helps business owners focus on the specified steps put in place to help the business succeed. True or False?

A business plan is the same for all types of business. 

Financial plans are not a part of business plan.

SWOT analysis is a way to carry out a market analysis. 

Market analysis and marketing strategy can be used interchangeably.

A good business plan can help startups attract investment or get loans without a proven financial record. 

What is the difference between market analysis and marketing strategy?

Market strategy provides information on how a business plans to distribute its products or services while market analysis gives details on business strengths, weaknesses along with market threats and opportunities. 

Business planning is a process of   ________  aimed towards achieving a business goal. 

developing a roadmap 

A business plan is an   ________  showing a business core activities, objectives, and the business roadmap to achieving its established objectives

officially written document 

A good business plan only helps the business focus on its short term goals.

A good business plan can help a company to:

Stay in line with the business objectives

Executive Summary is the description of the products and services offered by a business. 

Good business planning requires a well written market analysis showing demand and supply. 

SWOT analysis stands for  ________ .

strength, weaknesses, opportunities and threats in the market 

________   includes cost from paying staff, production processes, marketing, expanding, logistics, development, researching and all other business related expenses. 

A business budget 

A company generating a revenue of £150,000 from a business with a total cost of £80,000 per year. How much profit does it earn?

£150,000 - £80,000 =  £70,000.  

Variable cost = Output x Variable cost per unit output  

What is not a business variable cost?

 production materials expenses

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5 steps of the strategic planning process

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Strategic planning process steps

• Determine your strategic position.
• Prioritize your objectives.
• Develop a strategic plan.
• Execute and manage your plan.
• Review and revise the plan.

Because so many businesses lack in these regards, you can get ahead of the game by using strategic planning. In this article, we will explain what the strategic planning process looks like and the steps involved.

What is the strategic planning process?

In the simplest terms, the strategic planning process is the method that organizations use to develop plans to achieve overall, long-term goals.

This process differs from the project planning  process, which is used to scope and assign tasks for individual projects, or strategy mapping , which helps you determine your mission, vision, and goals.

The strategic planning process is broad—it helps you create a roadmap for which strategic objectives you should put effort into achieving and which initiatives would be less helpful to the business. 

Before you begin the strategic planning process, it is important to review some steps to set you and your organization up for success.

1. Determine your strategic position

This preparation phase sets the foundation for all work going forward. You need to know where you are to determine where you need to go and how you will get there.

Involve the right stakeholders from the start, considering both internal and external sources. Identify key strategic issues by talking with executives at your company, pulling in customer insights, and collecting industry and market data. This will give you a clear picture of your position in the market and customer insight.

It can also be helpful to review—or create if you don’t have them already—your company’s mission and vision statements to give yourself and your team a clear image of what success looks like for your business. In addition, review your company’s core values to remind yourself about how your company plans to achieve these objectives.

To get started, use industry and market data, including customer insights and current/future demands, to identify the issues that need to be addressed. Document your organization's internal strengths and weaknesses, along with external opportunities (ways your organization can grow in order to fill needs that the market does not currently fill) and threats (your competition). 

As a framework for your initial analysis, use a SWOT diagram. With input from executives, customers, and external market data, you can quickly categorize your findings as Strengths, Weaknesses, Opportunities, and Threats (SWOT) to clarify your current position.

An alternative to a SWOT is PEST analysis. Standing for Political, Economic, Socio-cultural, and Technological, PEST is a strategic tool used to clarify threats and opportunities for your business. 

As you synthesize this information, your unique strategic position in the market will become clear, and you can start solidifying a few key strategic objectives. Often, these objectives are set with a three- to five-year horizon in mind.

2. Prioritize your objectives

Once you have identified your current position in the market, it is time to determine objectives that will help you achieve your goals. Your objectives should align with your company mission and vision.

Prioritize your objectives by asking important questions such as:

• Which of these initiatives will have the greatest impact on achieving our company mission/vision and improving our position in the market?
• What types of impact are most important (e.g. customer acquisition vs. revenue)?
• How will the competition react?
• Which initiatives are most urgent?
• What will we need to do to accomplish our goals?
• How will we measure our progress and determine whether we achieved our goals?

Objectives should be distinct and measurable to help you reach your long-term strategic goals and initiatives outlined in step one. Potential objectives can be updating website content, improving email open rates, and generating new leads in the pipeline.

3. Develop a plan

Now it's time to create a strategic plan to reach your goals successfully. This step requires determining the tactics necessary to attain your objectives and designating a timeline and clearly communicating responsibilities. 

Strategy mapping is an effective tool to visualize your entire plan. Working from the top-down, strategy maps make it simple to view business processes and identify gaps for improvement.

Truly strategic choices usually involve a trade-off in opportunity cost. For example, your company may decide not to put as much funding behind customer support, so that it can put more funding into creating an intuitive user experience.

Be prepared to use your values, mission statement, and established priorities to say “no” to initiatives that won’t enhance your long-term strategic position.  

4. Execute and manage the plan

Once you have the plan, you’re ready to implement it. First, communicate the plan to the organization by sharing relevant documentation. Then, the actual work begins.

Turn your broader strategy into a concrete plan by mapping your processes. Use key performance indicator (KPI) dashboards to communicate team responsibilities clearly. This granular approach illustrates the completion process and ownership for each step of the way. 

Set up regular reviews with individual contributors and their managers and determine check-in points to ensure you’re on track.

5. Review and revise the plan

The final stage of the plan—to review and revise—gives you an opportunity to reevaluate your priorities and course-correct based on past successes or failures.

On a quarterly basis, determine which KPIs your team has met and how you can continue to meet them, adapting your plan as necessary. On an annual basis, it’s important to reevaluate your priorities and strategic position to ensure that you stay on track for success in the long run.

Track your progress using balanced scorecards to comprehensively understand of your business's performance and execute strategic goals. 

Over time you may find that your mission and vision need to change — an annual evaluation is a good time to consider those changes, prepare a new plan, and implement again. 

Master the strategic planning process steps

As you continue to implement the strategic planning process, repeating each step regularly, you will start to make measurable progress toward achieving your company’s vision.

Instead of constantly putting out fires, reacting to the competition, or focusing on the latest hot-button initiative, you’ll be able to maintain a long-term perspective and make decisions that will keep you on the path to success for years to come.

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Business Planning Process: Everything You Need to Know

The business planning process should envision your business's immediate and long-term goals. 3 min read

Why Is it Important to Develop a Business Plan?

A business plan will serve as a guide for management to run the company. Planning will help avoid problems that can arise from cash shortages, inability to meet customer deadlines, or too few employees. Before planning for the future, companies need to look honestly and critically at the current state of their business by assessing where the company's strengths lie and what needs improvement.

How to Begin the Business Planning Process

To start the business planning process, ask yourself where your business is currently and where you want it to go. A clear vision is the starting point of the business planning process. From there, the process breaks down into more detailed steps.

Develop a Pitch

Start the business planning process with a pitch , which gives a simple outline of your business strategy.

Your pitch should include:

• Your main proposition
• A summary of the problem you are solving
• Your solution to this problem
• Description of who your target customer is
• An overview of who your company's competitors are

Research Your Market and Products

When you have defined your vision, begin researching products and your target market to help you better understand your business and your potential customer base.

Create a Company Bio

Create a company bio to include in your business plan that highlights your company's core mission and values. Answer the question, "Why did you start your business?" Include bios of personnel underlining their experience and expertise, and how they collaborate as a team to run the business.

When you've built a strong identity, you can incorporate this same text into funding applications, materials that you distribute about your company, and your company's website.

Outline Your Business Model

The basic business model should be laid out in four to five paragraphs that clearly explain how your business operates on a daily basis.

This section should outline the following:

• Your products or services
• A profile of who your customer is
• How your business plans to make profits

Create a Basic Marketing Plan

Include a section in your plan document outlining how your company will market itself to bring in new clients or customers. The first strategy that entrepreneurs use is typically paid advertising. However, in this day and age you should consider exploring other strategies, like referrals, word-of-mouth, mailings, and email blasts.

Prepare Your Business's Financial Projections

A section outlining your financial projects is an integral part of your business plan . Keep these projections fairly conservative, especially in your company's first fiscal year. Consider how you expect revenues to pay for company costs and allow for room for growth in the future. Base all financial projections on concrete assumptions, using data to support your projections.

Draft a Document

With your financial projections in place, it's time to actually draft your business plan. After having conducted the research, the drafting process should be fairly easy to fill in.

Set Goals, Track Progress, and Make Adjustments

Assign different tasks and responsibilities to keep track of and manage progress, and to create accountability among your staff.

A monthly review of your progress and strategy is crucial to checking in on your business's progress, tracking your goals and changing directions should things not go as planned.

Develop Your Executive Summary

Often, investors will ask for an executive summary rather than your detailed business plan to get a feel for what your company has to offer.

It's best to write your executive summary last since you'll be able to highlight the essential details of your business plan and exclude the minutiae.

Edit and Proof Your Final Document

To make sure that your plan is straightforward and easy to understand, proofread, and edit your final document. For this step, also hire a professional copy editor to check formatting, proof, and edit your document.

Keep the design of your document professional to give a good visual first impression to potential investors and employees.

Finally, refine the pitch you created at the beginning of the business planning process before presenting to investors.

If you need help with your business planning process, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.

Hire the top business lawyers and save up to 60% on legal fees

Content Approved by UpCounsel

• Creating a Business Plan
• Sample of a Good Business Plan
• IT Company Business Plan
• Business Plan Format: Everything you Need to Know
• Parts of Business Plan and Definition
• Startup Business Plan Presentation Template
• Business Plan Contents Page
• Service Business Plan
• How to Make a Business Plan Format
• Business Plan

What Is the Business Planning Process?

• Small Business
• Business Planning & Strategy
• Business Planning Process
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The Role of Finance in Formulating Business Strategies

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The business planning process is designed to answer two questions: Where are we now? Where do we want to go? The result of this process is a business plan that serves as a guide for management to run the company. Describing the most critical tasks that must be completed and the time frame for completion, a business plan allows companies to allocate resources to accomplish goals.

Where Are We Now?

Companies begin the planning process by taking a critical look at the business' current state. The management team evaluates what the company is doing well and where it is falling short. Objectives could be revenue targets or ascertaining the company’s reputation for reliability in the marketplace. The planning process provides a blueprint for improvement in all areas.

What's the Competition Doing?

Keeping track of competitors is an ongoing process in business, but in the planning cycle this information is used to evaluate the strengths and weaknesses of each competitor. This analysis shows management how to position the company’s products or services to compete more effectively. It may be that the best way to contend with a competitor is by offering better customer service rather than lower prices.

What's the Opportunity?

Success in business is the result of providing products and services that meet customers’ needs in a significantly better way than competitors. Before launching a product or entering a new market, management must determine a strong customer need to solve a problem. Solving the customer's problem must be important and urgent. Because no company has unlimited resources, these decisions about which opportunities are best to exploit are critical to the company’s success.

How Will We Attract and Keep Customers?

The marketing plan details which customer groups will be targeted and how these customers will be convinced to make a purchase. The planning process must produce specific and detailed tactics, not vague generalities. Instead of saying the company will employ Internet marketing, the plan must detail which categories of Internet marketing will be emphasized, which websites will be used, and the cost of advertising. Also included in the plan must be reasons why these strategies are likely to result in success.

How Will We Allocate Budget?

The planning process determines how all the assets of the company will be marshaled to achieve the goals and objectives. Thorough planning allows financial resources to be used wisely, and for the human resources of the company to be as productive as possible. Planning helps avoid problems such as cash shortages, inability to deliver products on schedule, or inadequate staff levels.

What's the Financial Forecast?

A financial forecast, sometimes referred to as a company budget, is produced during the planning process. The forecast numbers are compared to actual results during the year. Discrepancies are analyzed to determine if a change of course is required, or if shifting expenses may be necessary due to a changing economic environment.

• Growthink: The Business Planning Process: 5 Steps To Creating a New Plan
• SME Strategy: What is the Strategic Planning Process?

Brian Hill is the author of four popular business and finance books: "The Making of a Bestseller," "Inside Secrets to Venture Capital," "Attracting Capital from Angels" and his latest book, published in 2013, "The Pocket Small Business Owner's Guide to Business Plans."

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• 1 What Is the Meaning of Corporate Planning?
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Article • 12 min read

The Planning Cycle

A planning process for medium-sized projects.

By the Mind Tools Content Team

The Planning Cycle brings together all the aspects of planning a one-off, medium-sized project into a single, coherent process.

For example, let’s say your business is growing so rapidly that you need to relocate to a larger office. Great news. But the job of planning and organizing the move has fallen to you. Maybe not such great news!

You will need to consider whether the move is viable, and think about criteria for suitable premises. You’ll have to factor in costs, timings, and how to minimize business downtime.

So, where do you start? Try the Planning Cycle.

What Is the Planning Cycle?

The Planning Cycle is an eight-step process that you can use to plan any small-to-medium sized project: moving to a new office, developing a new product, or planning a corporate event, for example.

The tool enables you to plan and implement fully considered, well-focused, robust, practical, and cost-effective projects. It also helps you to learn from any mistakes you make, and to feed this knowledge back into your future planning and decision making.

The Planning Cycle offers a framework for projects up to a certain level of complexity. For larger projects that involve many people over a long period of time, you may need to use a more formal approach.

These approaches have similar structures to the Planning Cycle, but they tend to require more documentation, and are often integrated within a wider organizational context. Our article, Project Management Phases and Processes , tells you more about them.

For shorter projects that need a fast turnaround, you should also consider Agile Project Management .

Figure 1: The Planning Cycle

Project Planning Steps

The Planning Cycle has eight steps, as outlined below.

1. Analyze Your Situation

First, clarify what you need to do. An office move, for example, would require you to find the right premises, with appropriate access and parking.

Gather as much information as possible at this stage. This will help you to formulate a more detailed and robust plan further down the line.

Start by examining your current position, and deciding how you can improve it. There are a number of techniques that can help you to do this.

One option is to carry out a SWOT Analysis . This will identify the strengths and weaknesses of your position, and the opportunities and threats that you face.

Another method is Risk Analysis , which will help you to spot potential pitfalls and weaknesses in your organization that may affect your plan, and identify any external risks. You can then use your findings to plan how you will neutralize or mitigate those risks.

For example, ask yourself whether your project is a response to pressure from customers, competitors, or new technology. Or perhaps your company is growing, and you need to make changes as a result. Pressures may arise from changes in the economy, new legislation, people's attitudes, or government.

You can also pick from a whole range of creativity tools to work out where you can make improvements Simplexity Thinking is a particularly powerful tool that helps to foster creativity and solve even the toughest problems.

2. Identify the Aim of Your Plan

When you've completed a realistic analysis of your situation, and the opportunities for change, the next step is to precisely define the aim of your plan. This sharpens your focus, and stops you from wasting effort on irrelevant issues.

Express your aim in one simple sentence, so that it's clear in your mind. If this proves difficult, try asking yourself questions like:

• What do I want the future to look like?
• What benefit do I want to give to our customers?
• What returns do I need?
• What standards do I want to achieve?
• What are my organization's core values?

You can present this aim as a Vision Statement or Mission Statement .

Vision statements express the benefit that an organization will provide to its customers. For example, Nike’s vision is to "Bring inspiration and innovation to every athlete* in the world. (*If you have a body, you are an athlete.)"

Mission statements explain how the vision will be achieved. For example, the mission statement for The Bristol Myers Squibb pharmaceutical company is "To discover, develop, and deliver innovative medicines that help patients prevail over serious diseases."

3. Explore Your Options

By this stage, you should have a good understanding of your situation and what you want your project to achieve. The next step is to work out how to do it!

At this stage, it's useful to generate as many ideas as possible. Again, creativity tools can help you with this. You may be tempted to grasp at the first idea that comes to mind, but if you spend some time weighing up your options you may come up with less obvious but better solutions. Or you may build on your best ideas by using elements of others.

4. Select the Best Option

When you've explored your ideas, you need to decide which one to pursue. If you have the necessary time and resources, you might decide to do detailed planning, costing, and risk assessment work for each one. But chances are you won't have this luxury.

Instead, use tools like Decision Matrix Analysis and Decision Trees to help you to make the final selection. Use Decision Matrix Analysis to decide between different options when you need to consider a range of different factors. Decision Trees enable you to think through the likely outcomes of following different courses of action.

5. Detailed Planning

With your final decision made, you need to establish the most efficient and effective way to achieve your aim. This determines who will do what, when, where, how, why, and at what cost.

Techniques like Gantt Charts and Critical Path Analysis can be useful when working out priorities, deadlines, and how to allocate resources.

Consider how you will monitor the progress and performance of your plan, too. When robust reporting, quality assurance, and cost controls are in place, you can quickly identify and correct potential deviations from the plan.

A good plan also identifies risks and suggests contingencies. This allows you to respond effectively to setbacks or crises. You should also consider transitional arrangements – how will you keep things going while you implement the plan?

6. Evaluate the Plan and Its Impact

The next stage is to review your plan and decide whether you should implement it. It’s crucial to be objective here – even if you've done a lot of work to reach this stage, it may still not be worth your while to pursue the project.

This can be frustrating, but it's better to reach this conclusion now rather than after you have invested valuable time and resources – and your reputation – in its success. The evaluation stage gives you the opportunity to either investigate better options, or to accept that no plan is needed.

Depending on the circumstances, there are several methods you can use to evaluate your plan.

• Quantitative Pros and Cons is a simple technique that involves listing the plus points in one column and the minus points in another. Each point can be allocated a positive or negative score.
• Use Cost/Benefit Analysis to decide whether the plan makes financial sense. Add up all the costs involved, and compare them with the expected benefits.
• Force Field Analysis gives you a "big picture" view of the factors for and against your plan. This enables you to see where you can make adjustments that will help your plan to succeed.
• A Cash Flow Forecast enables you to ensure that you have sufficient resources for your plan, and to assess whether the project is viable. A good cash flow forecast spreadsheet lets you vary your assumptions and investigate the effects.
• Finally, Six Thinking Hats helps you to get a rounded view of your plan and its implications by asking you to evaluate your plan from six different perspectives: rational, emotional, optimistic, pessimistic, practical, and creative.

If your analysis shows that the plan will not give sufficient benefit, or if the negatives outweigh the positives, return to an earlier stage in the planning cycle to explore other options. Alternatively, you may conclude that the project is impractical and abandon the process altogether.

7. Implement Change

Once you have finalized your proposal, and you're confident that it will deliver, it's time to put it into action.

If you've followed the previous steps closely then your plan should also explain how to implement it! It should also show how you will monitor its progress and execution.

8. Close the Plan and Review

All being well, your project is now complete and it was a huge success! Now it's time to close it down and assess what you've learned. Look back over the planning process and assess it carefully to see what could be improved or refined in the future.

If you'll likely carry out many similar projects, it may be worth developing a standard Post-Implementation Review . This is a list of points to consider during the planning review. It helps to ensure that you don't overlook any important aspects of the process.

The review should address key questions such as: did the project solve the original problem? Could it deliver even bigger benefits? And what lessons did you learn that you can apply to future projects?

The Planning Cycle enables you to make viable, robust plans, and to avoid making costly mistakes. It’s suitable for any small- to medium-sized project, in most business areas. It has eight steps:

1. Analyze your situation.

2. Identify the aim of your plan.

3. Explore your options.

4. Select the best option.

5. Detailed planning.

6: Evaluate your plan and its impact.

7. Implement change.

8. Close the plan.

Follow these steps carefully, and your project stands a good chance of success.

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Business Planning Process and Strategy - Steps & Plan

Starting a business is one thing, but sustaining it requires planning. Business planning strategies and processes are crucial to get ahead of the competition. A business growth plan and strategic development for sustainable growth is significant for business expansion.

Developing a business plan is essential to the strategic management planning process. It helps you to set goals, establish priorities, and develop strategies for achieving them. Business planning involves many critical steps, including market analysis, competitive research, financial forecasting, and risk assessment. With the proper business planning process and business planning strategy, you can build a roadmap for the future and take your business to the next level.

This blog will explain business planning and explore the steps involved in creating a successful business planning process, appropriate business strategy for growth, and a business growth plan. As we explain business planning, we will also discuss business strategic development and how to develop a business development plan that aligns with your goals and objectives.

If you're wondering how to grow a business or looking for ways to improve your business strategy for growth, register with Amazon Business . Amazon Business is a B2B marketplace that provides businesses of all sizes with a convenient way to purchase products and services online. Amazon Business has the best projectors for home & office use , the best Bluetooth speaker , the best water purifier for home & offices , and various other benefits for its users.

What is a Business Plan?

How to explain business planning? All businesses require a business planning strategy. A business planning strategy is the basic step while setting up a business. A business planning process is like a map of a company's success that includes the process of achieving the objectives.

An attempt to understand and explain business planning or business development plans involves systematically analyzing an organization's current state, defining its goals and objectives, and developing a business plan and strategy well-suited to the company's specific needs and circumstances.

For successful business strategic planning, it is essential to follow the steps outlined in the business plan steps. For new entrepreneurs, the business planning process in entrepreneurship is critical. It is also crucial to consider trademark registration . It helps prevent competitors from using similar marks or confusing consumers about the origin of products or services.

Objectives of a Business Plan

When it comes to the business planning process, an entrepreneur must be concerned about every aspect of the business and have clear goals. Any business planning strategy must include the following:

How to Prepare for a Business Plan?

Preliminary investigation.

Businesses must review the available business planning process and look for threats and opportunities to create a new business planning process and business planning strategy.

Business Planning Process

While working on the business planning process, determine the essential goals for your business and create a business planning strategy. Identify the company's strengths and weaknesses and lay down all necessary steps to initiate the proposed business.

Key Components of a Business Plan

Executive Summary

An executive summary is a brief business plan overview highlighting its key points and objectives. It serves as an introduction to the plan and gives a clear understanding of the business, its goals, and how it plans to achieve them. An executive summary serves as a quick snapshot of the entire business plan.

It has a critical role in the business planning process and business level strategy in strategic management. It helps business owners and managers focus on their business plan's essential elements. It helps them to articulate their objectives of business , strategies, and tactics concisely and compellingly.

Company Description

A company description in a business plan is a section that provides an overview of a business. It should include information about the nature of the business, its products or services, target market, competition, management team, and financial outlook. This section aims to give investors or potential partners a clear understanding of what the business does and what sets it apart from competitors.

Strategic management planning and business strategic development require a clear understanding of the company's objectives, which should be outlined in the company description. The objectives of the business should be aligned with the customer acquisition strategies to ensure a successful business process outsourcing.

Market Analysis

Market analysis is a crucial aspect of a business plan that involves researching and understanding the target market for a product or service. It includes identifying the needs of potential customers, analyzing competitors, and evaluating industry trends to create a strategy for market development.

Market analysis helps businesses understand their customers, their requirements, and how to reach them best. A company can develop a more effective market development and growth strategy by conducting a thorough market analysis.

Financial Plan

A financial plan is a detailed projection of a business's economic activities and outcomes over a specific period. It helps business owners plan and manage their finances effectively.

Financial planning is an essential component of strategic planning for small business growth and development. A sound financial plan is critical to overall planning and strategic management for any business.

Steps to a Successful Business Planning Process

Idea Generation

Idea generation is an important step in strategic management planning, integral to planning in business management. Generating new ideas involves several steps in the business planning process for creating a successful business development plan. Idea generation can be a powerful tool for planning in business management and can help in developing a business plan that aligns with the company's vision and mission.

Sources of New Ideas

For generating new ideas for the business planning process, businesses can obtain insights from various sources:

• Market research and development
• Competitors
• Vendors and retailers

These sources can provide a wealth of information to be analyzed and used to develop business plan steps, new ideas, or solutions to existing problems.

Methods of Generating New Ideas

• Data obtained through surveys and questionnaires
• Market research
• Group discussion and brainstorming activities
• Social media research
• Mind Mapping
• Adding value to existing products and services

2. Environmental Scanning

Several internal and external factors impact the success of every business planning process. An environmental scan helps to understand the factors that affect your business directly or indirectly.

External Environment

The external environment can be competitors, customers, suppliers, demographics, socio-political situations, or economic conditions.

Internal Environment

These are factors that exist within the business:

• Raw Material : Identify the availability, quality, and cost of raw materials needed for production.
• Production/ Operation : Assess the production processes, machinery, equipment needed, manufacturing capacity, and production costs.
• Finance : Analyze the financial resources available, including startup capital, cash flow, and potential funding sources.
• Market : Understand the target market, including their demographics, preferences, and buying habits.
• Human Resource : Evaluate the personnel needs, including their skills, knowledge, and experience, as well as their availability and cost.

3. Feasibility Analysis

Feasibility Analysis is one of the most important business plan steps in the business planning process. It analyzes different alternatives to achieving a successful business planning process. A feasibility analysis identifies the best and the worst scenarios in which the company can be.

The different variables included in a feasibility analysis are:

Market analysis provides data on the niche that the business wants to explore. Making the ideal business planning process and business planning strategy is critical.

Technical/ Operational Analysis

It analyzes the operational aspects required to carry on the business successfully. For instance, an idea discussed might have great potential. Still, it may not be feasible when it comes to operational costs. The primary parameters examined during the operational analysis are:

• Material Availability : Evaluate the availability, quality, and cost of raw materials needed for production.
• Plant Location : Assess the location's suitability, including access to raw materials, labor, transportation, and infrastructure.
• Choice of Technology : Analyze the production processes, machinery, equipment needed, manufacturing capacity, and production costs.

Financial Feasibility

The financial feasibility assesses the business's financial issues, including monthly operating expenses, forecasted income statements, cash flow, balance sheet, and capital expenditure.

Functional Plans

The top executives must ensure that functional business strategic planning and process sync with the business goals in a business planning process. Once the feasibility analysis gives the go-ahead, you can draft a business plan.

4. Project Report Preparation

Project report preparation is a critical part of every business planning process. Experts prepare the project report. This report acts as a plan of action that describes the goals and objectives of the business.

Project reports allow the business idea to shape and become a productive venture with a clear-cut business planning strategy. It tracks the progress of the business planning process and compares it with the original plan. It also identifies any risks or challenges and to take corrective action whenever necessary.

5. Plan Your Marketing Strategy

A well-planned marketing strategy and business development plan will help the business reach its target audience.

6. Evaluation, Control, and Review

All the strategies prepared for a business are open to modifications due to internal and external factors. The critical evaluation, control, and review activities include measuring performance based on the current strategy and taking corrective action to enhance or improve the business goal.

What is Business Strategy Planning?

The business planning strategy outlines the goals, objectives, and actions needed to achieve success in a business. It involves analyzing the company's current state, identifying areas for improvement, setting targets, and developing strategies to achieve them.

As part of the business planning process, it is essential to consider the competitive landscape and market trends and the strengths and weaknesses of the business.

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When it comes to the business planning process and planning in business management, having a solid strategy for market development is critical. By identifying and targeting new markets, businesses can expand their customer base and increase revenue. Strategic planning for small businesses is essential, as these businesses often have limited resources and must make every dollar count. Small companies can overcome challenges and succeed by focusing on planning and strategic management.

What does Strategic Planning Involve?

Business planning strategy involves analyzing the company's strengths, weaknesses, opportunities, and threats and identifying the best methods for success.

For example, utilizing dropshipping business in India and GST tax invoice system can be highly beneficial. By taking advantage of these resources, businesses can simplify their operations.

Essentials of Strategy Planning

In planning and strategic management, it is essential to consider the unique challenges facing small businesses. Strategic planning for small businesses should prioritize flexibility and adaptability, as these businesses often operate in highly dynamic environments.

Past and Present Data Analysis

Past and present data analysis is essential for the business planning process and the business planning strategy. By examining historical data and current performance metrics, businesses can gain insights and identify opportunities for growth and development.

For example, past and present data analysis can help to make informed decisions about inventory management techniques and the purchasing process . By analyzing past sales data and inventory levels, businesses can determine which products are most popular among customers and ensure sufficient inventory to meet demand.

Insightful Analysis of Market Dynamics

Insightful analysis of market dynamics is an important component of the business planning process, particularly in the supply chain management process . By analyzing past demand and supply fluctuations, businesses can identify trends and patterns in the market and develop effective strategies for managing their supply chain.

In addition, insightful analysis of market dynamics is also essential when developing a business plan.

Following a Unique Approach to Planning

Following a unique approach to planning is critical to the business planning process, particularly in business strategic development. With a unique strategy, businesses can create a competitive advantage in the market.

Business level strategy in strategic management also plays a key role in following a unique approach to planning. Focusing on a specific market niche or target audience, businesses can tailor their strategy for market development to meet customers' needs.

Scenario Analysis Based on Relevant Inputs

Scenario analysis is an important aspect of the business planning process and is particularly relevant in business strategic development and business level strategy in strategic management. As businesses develop their strategies, they must consider a range of possible future scenarios and their potential impact on the company's value.

This process is also important in the business planning process in entrepreneurship, as entrepreneurs develop their business plans and strategies. By conducting scenario analysis, entrepreneurs can identify potential risks and opportunities and focus on developing a business plan and strategy to mitigate risk and capitalize on opportunities.

Risk Mitigation Measures to Minimize Loss

Risk mitigation measures are crucial in minimizing the losses a company may face due to unforeseen events. These measures help to identify and evaluate potential risks that could negatively impact the company.

Strategic management planning plays a crucial role in identifying potential risks and creating a risk mitigation plan in the business planning process. A risk management plan should be part of the business plan steps.

Business strategic planning should incorporate risk assessment and mitigation as a part of the overall planning process. A comprehensive understanding of potential risks is necessary for a successful business planning process in entrepreneurship. 

BMGI's Approach to Strategy Planning

After working with different kinds of businesses, BMGI has developed a robust process for business strategy planning. It encompasses all the aspects required for the best business strategy planning.

For long-term goals, BMGI focuses on the following three aspects:

• Defining the strategy
• Establish how to implement the strategy
• Implementing the strategy and managing the changes

BMGI has a process in place for businesses to define how to implement their strategy as follows:

External Assessment

BMGI recommends the analysis of-

• Market and Customers
• Competition
• Probable Trends of the Future
• PESTEL (Political, Economic, Social, Technological, Environmental, Legal)

Internal Assessment

Discover your business's SWOT (Strengths, Weaknesses, Opportunities, Threats) and compare them against various scenarios to determine your position.

The assessments mentioned above, along with the understanding of its impact, in the long run, enable businesses to plan their business strategy efficiently.

Impact Areas of Strategic Planning

While the impact areas of strategic planning may vary depending on the organization and industry, here are some common areas where business strategic planning can have an impact:

Organic Growth Strategy

Organic growth strategy focuses on growing the organization's existing business lines.

Business Unit Strategy

This growth route focuses on analyzing and implementing strategies for each business unit.

Corporate Strategy

Corporate strategy requires knowledge of the business level strategy in strategic management. In this strategy, the senior management steers the direction of the entire organization based on its core principles and values.

Emerging Markets Strategy

In this strategy, businesses look out for opportunities in places with the potential for promising growth. Entrepreneurs must have a solid business planning process to successfully enter and expand in new and emerging markets. A well-defined business planning process in entrepreneurship can be the difference between success and failure.

Sustainable Growth Strategy

The sustainable growth strategy is a critical component of the business planning process. This strategy involves taking meaningful steps toward the future while considering the unpredictable changes that may arise.

Measuring the Success of Your Business Plan and Strategy

Here are some key steps you can take to measure the success of your business plan and strategy:

Setting Measurable Goals and Objectives

It is essential to set measurable goals and objectives to measure the success of your business plan and strategy.

• Determine your business goals: First, you need to identify your goals with your business growth plan. It could be increasing revenue, expanding market share, or improving customer satisfaction.
• Define your objectives: Once you have identified your business goals, break them down into specific, measurable, and achievable objectives that are relevant and time-bound.

By setting measurable goals, you can track your progress over time and measure the success of your strategy.

Tracking Key Performance Indicators (KPIs)

Here are some steps to follow to measure the success of your business plan and strategy by tracking KPIs:

• Identify the relevant KPIs: Once you have defined your objectives, identify the KPIs that are relevant to each objective.
• Set targets for each KPI: Once you have identified the KPIs, set targets for each one. These targets should be realistic and aligned with your business objectives.
• Track and analyze the KPIs: Once you have set targets for each KPI, start tracking them regularly.

Conducting Regular Performance Reviews

• Adjust your strategy: Based on your data analysis, adjust your business growth plan or planning in business management as necessary.
• Implement Business Process Outsourcing: Consider implementing business process outsourcing to help you achieve your strategic planning for small businesses. What is Business Process Outsourcing? It is a business practice where a company outsources non-core business functions or processes to a third-party provider.
• Review your performance against benchmarks regularly and adjust your strategy as necessary. This planning and strategic management process will help you stay on track and achieve your business goals.

Soliciting Customer Feedback

• Collect customer feedback: Collect customer feedback through surveys, focus groups, or social media platforms.
• Analyze the feedback: Once you have collected customer feedback, analyze it to identify areas for improvement.
• Implement changes: Use your collected feedback to change your business strategy.
• Measure the impact: Use the same KPIs you used to track your progress before to determine if the changes have positively or negatively impacted your business.
• Adjust your strategy: Based on the impact of your changes, adjust your business strategy as needed.

Examples of Successful Business Planning Process and Strategy

Toyota's US invasion in the '70s

Cars have had an enormous impact on Americans since the good old days. The three biggest American car companies ruled over the car market in the US. However, the Japanese car manufacturer, Toyota, did a market analysis and started selling cheaper and more efficient cars during the '70s.

The US car companies did not worry about Toyota at first. They thought Toyota must lose money exporting their vehicles to the US at such low prices. However, within a few years, Toyota started production in the US.

Toyota soon became the largest car company in the US. But what was their business strategy for growth?

Of course, Toyota was using the cost leadership strategy. However, Toyota's manufacturing process was so efficient that it cost them far less to produce cars than American companies. Besides, Toyota's supply chain management was their business strategy for growth, and it made a crucial difference in Toyota's survival. It was also a part of its business planning process.

The multi-billion-dollar idea began with the founders of Airbnb renting their mattresses to strangers. It was a business space no one had explored before.

They struggled to meet ends initially but saw potential in their idea. So, the founders created a website where people could rent their mattresses to travelers and strangers.

There were some scattered online bookings, but they needed to be more to be sustainable. The founders conducted an operational analysis and discovered the problem with poorly presented listings.

They visited all the nearby locations where people were renting out their mattresses. They moved things around to make them look more pleasing and clicked photos. After adding images to their website, the bookings started pouring in.

Then, they hired professional photographers to click photos of all the listings and their owners. The online orders kept skyrocketing. The founders of Airbnb analyzed data to discover the one problem keeping them from succeeding in their revolutionary idea. Airbnb is now valued at over 100 billion Dollars!

A clear understanding of the business planning process and a well-developed plan can help set the foundation for growth and profitability.

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What questions should be asked in a business plan?

The vital questions to ask in a business plan are as follows:

• What makes you different?
• Who is your audience?
• How will you make profits?
• How will you promote your business?
• How will you get started?

What is the most important part of your business plan?

The executive summary is the most important part of your business plan. It contains the overview of your entire business plan and everything it encompasses.

How many years should a business plan cover?

It is recommended to have a business plan of at least one year to 3 years to address your business goals and possible objections.

How do you overcome lack of planning?

• Automate repetitive tasks such as data entry
• Set up a network between all your software so that your position is constantly getting updated
• Improve the communication between all the departments in your company
• Deploy cloud-based technologies for effectively sharing information

What are the barriers to planning?

Here is a list of things that become barriers to planning:

• Incompetent leaders
• Continuous distractions
• Limited resources for task completion
• Impractical expectations in senior management

How to define companies Vision and Mission?

A company's vision statement lists what an organization wants to represent in society. A mission statement lists the things a company does to achieve its vision.

What financial projections should I include in my business plan?

Common financial projections that most business plans consist of are sales forecast, profit and loss statement, cash flow statement, balance sheet, break-even analysis, and capital expenditure budget.

How do I revise and update my business plan as my business evolves?

To revise and update your business plan:

• Set aside time for review
• Analyze your financial performance and other key performance indicators (KPIs).
• Identify new opportunities for growth and challenges that may require adjustments to your business plan.
• Use the insights you have gained from your evaluation to update your business plan.
• Communicate changes with stakeholders
• Set new targets and milestones for your business.

How do I identify my target audience and develop a marketing strategy?

·        Identify your target audience's demographics, preferences, behaviors, and needs through market research.

·        Use the insights from your market research to create detailed profiles of your target audience.

·        Determine your unique selling proposition (USP)

·        Define your marketing goals.

·        Choose your marketing channels.

·        Tailor your marketing content to your target audience and communicate your USP.

·        Test and refine your marketing strategy to optimize your results.

Who benefits from a good business strategy?

A good business strategy can benefit both the business and the consumers.

Product Updates

8 Foundational Components that Drive Up Your Business’s Intrinsic Value

The Strategic Planning Process: Steps to Clarity and Direction

4 steps to help make your business planning process successful.

By nature, entrepreneurs are passionate, driven, and courageous , ready and willing to charge hell with a water pistol. Yet, many business owners are poor planners. Author and businessman John L. Beckley said it best: “Most people don’t plan to fail. They fail to plan.” Oftentimes, you’re so consumed with daily business operations that you don’t take time to plan for the future. Inevitably, you experience setbacks and failures that keep you in a hamster wheel of day-to-day worries. But there’s hope. By instituting these 4 stages of the business planning process within your company, you can disrupt your present weaknesses enough to make them tomorrow’s strengths.

Follow Along With The Financially Simple Experience!

Podcast Time Index for “Business Planning 101”

• Business Planning 101
• Buying a Car vs. Saving for Retirement
• Entrepreneurs Planning Habits
• Planning gets the least attention
• So what exactly is Business Planning?
• The Ultimate Definition
• Planning with Military Precision

This article is the first in a mini-series about Planning within a larger series about the 8 Foundational Components That Drive Up Your Business’s Value . 

“By instituting business planning processes within your company, you can disrupt your present weaknesses enough to make them tomorrow’s strengths.” – Justin Goodbread, CFP®, CEPA®, CVGA®

Making Plans

Everyone plans. What are you wearing today? What will you eat for dinner? Who’s watching the kids? Many times, you concentrate on your short-term plans more than your long-term plans. You prepare for life’s immediate concerns instead of preparing for future prosperity. But, as an American statesman, entrepreneur, inventor, and author, Benjamin Franklin said, “By failing to prepare, you are preparing to fail.”

As a small business owner, you tend to do the same thing. You fret about immediate needs and issues in your business more than you plan for the future of your business. In a press release about The Alternative Board’s (TAB) latest Business Pulse Survey , reporter Richard Carufel notes that “the average entrepreneur spends 68.1% of the time working ‘ in”  their business—tackling day-to-day tasks, putting out fires, etc.—and only 31.9% of the time working ‘ on’  their business—i.e. long-term goals, strategic planning.” Additionally, Corporate Value Metrics , a national corporate consulting company, says that business owners typically work harder on the other seven  fundamental components that drive up your business’s intrinsic value than they do on planning.

What is Business Planning?

Knowing that most business owners fail to plan properly, what exactly is business planning? According to the Business Dictionary, business planning is “ The process of determining a commercial enterprise’s objectives, strategies and projected actions in order to promote its survival and development within a given time frame .” I agree that business planning needs to be done within a time frame. I also agree that it’s a process. However, this definition fails to address available resources. Just because business owners layout plans doesn’t mean they can afford to act on them. Therefore, I would revise the definition of business planning as follows:

Business planning is a basic management function involving the design, steps, and quantified resources needed to achieve the optimum balance of needs or demands with available resources. So, what are the steps involved in the business planning process?

4 Basic Steps in the Business Planning Process

Ultimately, the definition of business planning can be seen in the business planning process . Whether you’re planning your business’ opening, growth, projects, risk mitigation, sale, closing, or anything else, all planning begins with a process . Although you can make the planning process as long or as complicated as you’d like, I tend to break the process into 4 Basic Steps.

Step #1 – Decide what you’re going to do.

Identify goals or objectives to be achieved. It has been said that if you aim at nothing, you will hit it every time. The same is true for your business plans. In order to create an effective, quantifiable, and measurable plan, you must clearly define your goals. A plan without a goal is like charting a course for nowhere. You will just continue working in perpetuity to reach a goal that doesn’t exist.

Step #2 – Determine how you will do it.

Formulate strategies to achieve the goals or objectives. Once you’ve defined your goals, create a set of tactics and action steps to reach them. It’s a good idea to include your team in this process, as they will likely be the boots on the ground that are working through your strategy. Likewise, they may be able to help you find the best way to achieve your goals because they will have first-hand knowledge of what tactics work within your existing operations.

Step #3 – Pick who will accomplish it.

Arrange the people required to work on the strategies to achieve the goals. Be clear in communicating who is responsible for what. Additionally, you need to set a timeframe that is both realistic and challenging. If you ask for the work to be done in an unrealistic amount of time, the group may not put any effort toward accomplishing it because they know that it can’t be done. Likewise, giving too much time could breed procrastination.

Step #4 – Take action.

Implement, direct, and monitor the steps of the action plan. Once your team is set and they understand what is expected of them and when it is expected to be done, then you need to be consistent in following up with them. Regular check-ins keep the task fresh on their minds and enable you to offer additional resources if things are falling behind. Similarly, these follow-up meetings will help you to identify and address any problem areas that may need to be adjusted.

Details to Include in the Business Planning Process

I think that’s the way any type of business planning works. Those are the actions business owners, managers, and employees must take to make a business plan. Yet, while you’re going through the business planning process, you must include the following items within your plans:

• Lists of who is involved in the planning process
• A current assessment of your business’s strengths and weaknesses
• The reasoning behind your plans
• Project start and end dates
• Measurements you will use to determine the success or failure of your plans
• Locations in which you will take action.
• How you will take action.
• A list of resources you will need to take action.

Remember, in order to affect the future, you must disrupt the present. You have to create some turmoil to make improvements. Think about a rocket ship. In order for a rocket ship to go upward into orbit, it must have combustion or “disruption.” Similarly, planning often disrupts business because it makes you stop and think about what you’re doing well or poorly, giving you a chance to improve upon and fix things.

Be sure to join me in my next article within this planning mini-series where I deal with, the Strategic Planning Process – the next step in business planning you must do to give your team direction and accomplish long-term goals!

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Boundless Management

Strategic management, the planning process, defining strategic planning, learning objectives, key takeaways.

• To determine the direction of the organization, it is necessary to understand its current position and the possible avenues through which it can pursue a particular course of action.
• There are many approaches to strategic planning, but typically either the situation-target-proposal approach or the draw-see-think- plan approach is used to generate a plan's structure.
• The primary purpose of planning is to create universal buy-in and understanding of the objectives, and to put operational processes in place to guide the organization towards their achievement.
• allocate : To distribute according to a plan.
• plan : A set of intended actions, usually mutually related, through which one expects to achieve a goal.
• strategy : A plan of action intended to accomplish a specific goal.
• What do we do?
• For whom do we do it?
• How do we excel?

Components of a Strategic Plan

Business plan : This image summarizes some of the factors that should be considered in the creation of a business plan, such as a company's mission and purpose, personnel, financial resources, market and customer base, competition, and strengths and weaknesses.

Planning Process

Situation-target-proposal.

• Situation: Evaluate the current situation and how it came about.
• Target: Define goals and objectives (sometimes called ideal state).
• Proposal: Map a possible route to the goals and objectives.

Draw-See-Think-Plan

• Draw: What is the ideal state or the desired end state?
• See: What is today's situation? What is the gap between today's situation and the ideal state, and why?
• Think: What specific actions must be taken to close the gap between today's situation and the ideal state?
• Plan: What resources are required to execute these specific actions?

Benefits of Strategic Planning: Focus, Action, Control, Coordination, and Time Management

• Planning is a management process concerned with defining goals for a company's future direction and determining the resources required to achieve those goals. Managers may develop a variety of plans ( business plan, marketing plan, etc.) during the planning process.
• Achieving a vision requires coordinated efforts that adhere to a broader organizational plan. This is enabled through consistent strategies that are supported by staff at all levels.
• Planning enables increased focus on, and coordinated action toward, competitive strategies, while minimizing wasted time and ensuring there are benchmarks for the control process.
• Planning typically offers a unique opportunity for information-rich and productively focused discussions between the various managers involved. The plan and the discussions that arise from it provide an agreed context for subsequent management activities.
• time management : The management of time in order to make the most of it.
• business plan : A summary of how a business owner, manager, or entrepreneur intends to organize an endeavor and implement activities necessary and sufficient to achieve success.
• planning : The act of formulating a course of action.

Integrated business plan : This business plan takes aspects of a business and identifies clear goals for each: e.g., for the technology to move from being weak and non-integrated to enabling workflows, and for the business's focus to transition from being inwardly to outwardly focused.

Coordinated Action

Time management, the process itself, overview of inputs to strategic planning.

• In most corporations, there are several levels of management, including the corporate, business, functional, and strategic levels.
• Strategic management is the highest of these levels in the sense that it is the broadest—it applies to all parts of the firm and incorporates the longest time horizon.
• A marketing plan is a written document that details the actions necessary to achieve one or more marketing objectives.
• A business plan is a formal statement of a set of business goals, the reasons they are attainable, and the plan for reaching them.
• Available business resources for creating a plan include industry experts, consultants, and stakeholder input, which can help enable an objective and comprehensive view of internal and external factors.
• tactical planning : An organization's process of determining how to optimize current resources and operations.

Strategy Hierarchy

• Corporate strategy refers to the overarching strategy of the diversified firm.
• Business strategy refers to the aggregated strategies of a single business firm or a strategic business unit (SBU) in a diversified corporation.
• Functional strategies include marketing strategies, new-product development strategies, human resource strategies, financial strategies, legal strategies, supply-chain strategies, and information-technology management strategies. The emphasis is on short-term and medium-term plans and is limited to the domain of each department's functional responsibility. Each functional department attempts to do its part to meet overall corporate objectives, so to some extent their strategies are derived from broader corporate strategies.

Business Plans

Marketing plans.

The seven Ps : In marketing, the general process of identifying and approaching a target market is captured through the seven Ps: Place, Price, Promotion, People, Process, Physical Evidence, and Product.

Tools for Planning

• Industry experts : Whether internal employees or external consultants, a few individuals with extensive experience in a given industry are valuable resources in the planning process. These industry experts can move beyond the PESTEL and Porter's Five Forces frameworks, making intuitive leaps as to the trajectory of the industry.
• Consultants : Consultants are commonly brought in during strategy formulation and for a variety of other reasons. Most important of these would be providing an objective lens for internal affairs. It is difficult to see the whole house from inside the house, and upper management can utilize an external opinion to ensure they are seeing operations clearly and objectively.
• Inclusion of stakeholders : Upper management will want as much information as possible from everyone involved. Some examples include consumer surveys on satisfaction, supplier projections for costs over a given time frame, consumer inputs on needs still unfilled, and shareholder views. The inclusion of stakeholders offers a variety of tools, each of which may or may not be a useful input depending on the context of the plan.

Responding to Uncertainty in Strategic Planning

• Strategic management is having a clear view, based on the best available evidence and on defensible assumptions, of what is possible to accomplish within the constraints of a given set of circumstances.
• Initial ideas about corporate objectives may have to be altered if there is no feasible implementation plan that will meet with a sufficient level of acceptance among stakeholders, or if the necessary resources are not available, or both.
• Scenario planning starts by separating things believed to be known, at least to some degree, from those considered uncertain or unknowable.
• uncertainty : A state of having limited knowledge such that it is impossible to exactly describe an existing state or future outcomes or to determine which of several possible outcomes will happen.
• qualitative : Described in terms of characteristics and attributes rather than numbers and quantities.

Uncertainty

Fault tree : Fault trees can help outline possible outcomes. This fault tree visually lays out all the different steps at which something could go wrong in a spacecraft's flight, from the spacecraft itself spinning too fast to motor failure to a valve being stuck open.

Responding to Uncertainty

Be iterative, use scenario planning, accept uncertainty, licenses and attributions, cc licensed content, shared previously.

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Question and Answer forum for K12 Students

Planning Process: 8 Important Steps of Planning and Examples

The compilation of these Planning  Notes makes students exam preparation simpler and organised.

Planning Process

Planning is the first primary function of management that precedes all other functions. The planning function involves the decision of what to do and how it is to be done? So managers focus a lot of their attention on planning and the planning process. Let us take a look at the eight important steps of the planning process.

The planning function of management is one of the most crucial ones. It involves setting the goals of the company and then managing the resources to achieve such goals. As you can imagine it is a systematic process involving eight well-thought-out steps. Let us take a look at the planning process.

1. Recognizing Need for Action An important part of the planning process is to be aware of the business opportunities in the firm’s external environment as well as within the firm. Once such opportunities get recognized the managers can recognize the actions that need to be taken to realize them. A realistic look must be taken at the prospect of these new opportunities and SWOT analysis should be done.

Say for example the government plans on promoting cottage industries in semi-urban areas. A firm can look to explore this opportunity.

2. Setting Objectives This is the second and perhaps the most important step of the planning process. Here we establish the objectives for the whole organization and also individual departments. Organizational objectives provide a general direction, objectives of departments will be more planned and detailed.

Objectives can be long-term and short-term as well. They indicate the end result the company wishes to achieve. So objectives will percolate down from the managers and will also guide and push the employees in the correct direction.

3. Developing Premises Planning is always done keeping the future in mind, however, the future is always uncertain. So in the function of management certain assumptions will have to be made. These assumptions are the premises. Such assumptions are made in the form of forecasts, existing plans, past policies, etc.

These planning premises are also of two types – internal and external. External assumptions deal with factors such as political environment, social environment, the advancement of technology, competition, government policies, etc. Internal assumptions deal with policies, availability of resources, quality of management, etc.

These assumptions being made should be uniform across the organization. All managers should be aware of these premises and should agree with them.

4. Identifying Alternatives The fourth step of the planning process is to identify the alternatives available to the managers. There is no one way to achieve the objectives of the firm, there is a multitude of choices. All of these alternative courses should be identified. There must be options available to the manager.

Maybe he chooses an innovative alternative hoping for more efficient results. If he does not want to experiment he will stick to the more routine course of action. The problem with this step is not finding the alternatives but narrowing them down to a reasonable amount of choices so all of them can be thoroughly evaluated.

5. Examining Alternate Course of Action The next step of the planning process is to evaluate and closely examine each of the alternative plans. Every option will go through an examination where all its pros and cons will be weighed. The alternative plans need to be evaluated in light of the organizational objectives.

For example, if it is a financial plan. Then in that case its risk-return evaluation will be done. Detailed calculation and analysis are done to ensure that the plan is capable of achieving the objectives in the best and most efficient manner possible.

6. Selecting the Alternative Finally, we reach the decision-making stage of the planning process. Now the best and most feasible plan will be chosen to be implemented. The ideal plan is the most profitable one with the least amount of negative consequences and is also adaptable to dynamic situations.

The choice is obviously based on scientific analysis and mathematical equations. But a manager’s intuition and experience should also play a big part in this decision. Sometimes a few different aspects of different plans are combined to come up with one ideal plan.

7. Formulating Supporting Plan Once you have chosen the plan to be implemented, managers will have to come up with one or more supporting plans. These secondary plans help with the implementation of the main plan. For example plans to hire more people, train personnel, expand the office, etc are supporting plans for the main plan of launching a new product. So all these secondary plans are in fact part of the main plan.

8. Implementation of the Plan And finally, we come to the last step of the planning process, the implementation of the plan. This is when all the other functions of management come into play and the plan is put into action to achieve the objectives of the organization. The tools required for such implementation involve the types of plans- procedures, policies, budgets, rules, standards, etc.

Question: _______ involves scientific analysis of the decision process. a. Linear Programming b. Risk Analysis c. Operations Research d. None of the above Answer: The correct option is “c”. Operation research is the application of scientific and mathematical methods to study and analyse problems involving complex systems. It is a powerful tool for decision-making.

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The 4 Main Steps in the Business Planning Process

Priyanka Bhadani

4 steps to the business planning process.

Business planning is defined as the process of identifying an organization's strategies, objectives, and projected actions in order to optimize development and success over a specific time frame. Proper business planning is absolutely crucial to an organization's success and overall bottom line profitability. In order for a business planning process to optimally benefit an organization, it must be both realistic and achievable. For this reason, some experts actually define the business planning process as a management function that involves the steps, design, and quantified resources necessary in order to achieve the optimized balance between demands and needs utilizing available resources. One study shows that the average entrepreneur business owner dedicates around 68% of time spent working in their business on daily tasks and addressing short term issues. The same study shows that only around 32% of the time a business owner spends at work is dedicated to strategic planning and long term goals. Clearly, there is a pressing need for both small business owners and business management professionals at larger corporations to focus on the business planning process. Before starting business planning processes, professionals must make sure they properly understand them. Most human resource and business management professionals agree that there are 4 basic steps within the business planning process. The 4 main steps in the business planning process include-

1. Identification

The first of the planning process steps is the identification of objectives and business goals to be accomplished. Business goals may be either short term or long term in nature. In fact, many organizations list many different short term and long term goals during this step. Identifying business goals and objectives to accomplish is necessary in order to actually achieve goals at an organization. Additionally, well established business goals help business management team professionals and human resource staff members to better perform their roles. Alternatively, without the establishment of well defined business objectives, anything from marketing strategy to customer service oriented goals would not be achievable. The best business goals and objectives will follow the SMART goal acronym which stands for specific, measurable, achievable, realistic, and timely. These SMART business goals and objectives will help business owners and their employees create and maintain a competitive advantage in the industry. Securing a competitive advantage will likely result in a larger market share and cash flow increases.

2. Formulation

After short term and long term business goals are established, the next process steps can be undertaken. The second of the planning process steps is the formulation of strategies in order to achieve set business goals and objectives. Creating action steps and developing techniques for specific business goals will help business professionals to achieve previously set objectives. Best practices for this step of the planning process include the involvement of team members. Team members can contribute invaluable advice and insights as a result of their first hand experience and knowledge. Additionally, team members can help business leaders better understand if any portions of business goals are unrealistic or unachievable.

3. Deligation

Once the business strategy and business goals are understood, the management team and other involved parties can move on to the next step. The third of the planning process steps is the designation of employees to roles and tasks. It is crucial that individual team members understand their responsibilities comprehensively. For this reason, best practices suggest that business management professionals make sure to ask team members if they have any questions regarding their role in the business planning process. One important consideration during this process step is for the management team to make sure they are establishing realistic time frames for tasks delegated. Providing too much time or too little time can result in devastating business planning consequences. If supplied with too much time to accomplish delegated responsibilities, employees may procrastinate. On the other hand, if supplied with not enough time, employees may become demoralized about the possibility to achieve goals and give up.

4. Execution

The last of the planning process steps is the implementation, direction, and monitoring of business planning action items. The management team should not be content with team members merely understanding their role but must also actively monitor employee task progression. Best practices recommend consistent follow ups between management team professionals and employees in regards to their progress. Consistent follow ups can not only increase employee morale but also helps to identify issues early on. For example, if an employee needs additional resources to complete their tasks, the management team and human resource department can immediately address that issue. Alternatively, the human resource department and business management professionals may have not learned of the issue until even more significant issues developed.

Key Takeaways

• Business planning consists of 4 main steps- identification, formulation, designation, and execution.
• Tools helpful for the business planning process include SMART goals and SWOT analysis techniques.

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Business Planning Process

Business planning is the collection of steps necessary for business success. 

Your business planning uses your business plan as a reference document. A business plan helps you stay the course. A business plan also increases your chances of getting investment , funding, debts, etc. 

Every business executives meeting is a part of business planning as they discuss the business’s current situation and make a plan on how to improve that situation. 

Three Types of Business Planning Necessary for Long-term Business Success

• Do Research For Your Business Idea
• Develop Business Strategy
• Forecast Financials
• Create a Business Plan
• Revise Business Plan
• Create a Business Plan Presentation

Business success is a moving target and your business plan will need to change as the business circumstances change. A business plan will need to change for different goals too. 

Hit the moving target of business financial success with these three business planning tools. 

Sales Forecasting Plan 

The sales forecast gives an estimate of the good and product sales for a certain time and the estimated revenues. 

Sales forecasts tend to change with industry trends, changes in the economy, and changes in customer buying preferences. 

Cash Flow Analysis Plan 

If we can say it in one line, ‘never run out of cash’. 

Plan on how you will maintain business cash flow. Having large orders in line is not enough. If you have to spare resources for that project, you may run out of cash by the time you can invoice for that project. 

Make a schedule of refreshing cash flow projections and have a contingency plan for any cash shortages with a business financing or debt. 

Business Contingency Plan 

A business contingency plan is how you’ll handle crises and disasters like fire, flood, or building collapse. 

Your contingency plan protects you, your customers, and your employees against a disaster. It will also help you resume operations after a crisis as soon as possible 

6 Step Business Planning Process

In the following sections, we provide more detail on each key step.  

Free: Business Plan Template

Download the Ultimate lender proven Business Plan Template and complete your business plan and financial model in hours.  

Do Research For Your Business Idea 

Your research for verifying your business idea starts with the target market research . 

For example, you are planning on starting a florist business. Start with doing a local survey and see how many florist shops are there in your locality.

Check how many new florist shops were opened or closed in the last year. You’ll understand some dynamics of your target market with only this data. 

Do you plan to go beyond the block and create a florist shop that will attract customers from every nook and corner of the city? Look into the products your competition offers and work on creating innovation. 

You can use market surveys, customer feedback, reviews, industry reports, or any credible source of information available for your industry. 

Further, document your research. You can use online tools like Google Docs, Dropbox Paper, Evernote, etc. This research will help you draft your business plan and will serve as the bases of your business strategy.

Pro Tip: Here is step by step guide on how to find the right business idea .

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Develop Business Strategy 

What is business strategy? Here is how Harvard Business Review defines it.

“A business strategy is a set of guiding principles that, when communicated and adopted in the organization, generates a desired pattern of decision making”.

A simpler definition of business strategy can be that this is the way you should allocate resources to achieve your business goals. 

When developing a business strategy, consider your short-term goals and long-term goals. Your strategy will be different for each. 

To separate business strategy from business planning, a strategy is a direction, planning is the collection of steps you will take to move in that direction. Stay the course but you can change how you walk. 

Since this is your pre-launch phase, you can look into different business strategies and pick the most suitable one for your business. 

Forecast Financials 

Your business financial forecast includes the expected investments or expenses and expected revenues. 

The crux of a financial forecast for your business plan is to give a simple, straightforward financial growth plan. 

One big hallmark of your business growth is making breakeven. When your business is making a break-even, you have made progress. 

Here is how you can calculate breakeven . 

Put forecast numbers in your business financial model and prepare an income statement that will help you determine how much funding you’ll need in the first year to survive. 

Your projected financial statements give insight into business operations and performance. You can measure business performance for a quarter, a year, or any period you want. You can also see the details of assets and liabilities and business financial position. 

Create a Business Plan 

You have the knowledge and data to write a business plan . You have also created projected financial statements. Now is the time to draft your business plan. 

Start drafting your business plan from business overview to appendix (write an executive summary at the end). You have everything already, now you just have to put the pieces together. 

Creating a business plan seems like a hard task!

Hire our experienced business plan writers and get your business plan ready as soon as a week. 

Revise Business Plan 

When you have written your business plan, make sure to proofread and revise it for any grammatical or factual errors. 

Also, revising a business plan gives you a chance to go over your business idea and its execution once again. You may come up with a new idea or a new way to do something. 

If you can, ask someone you trust with business experience to review your business plan. Many times, their insights are valuable and can help you improve your plan. 

Create a Business Plan Presentation 

Half of the work in securing funding for your business idea is a killer presentation. 

Simple ideas stick to our minds. Follow the K.I.S.S principle (K.I.S.S is ‘keep it simple, stupid).

One part of the business plan presentation is the graphics work. If your document or slides are designed by a professional designer, you’ll have a better shot at success. 

Use these five tips for improving your business plan presentation. 

• Know your audience and their backgrounds and tailor your presentation to that
• Keep your presentation simple, strip it to the most essential details only 
• Address weaknesses openly and give your contingency plan for them
• Know and verify numbers 
• Research your competitors to show you understand the market 

Recommended: If you want to design a cover page for a business plan by yourself you can follow business plan cover page . It has professional cover page examples to simply download and use. However, If you want to design it by a professional business plan designer then here is our business plan template design service. You can also hire our business plan writing services .

The business planning process is a systematic approach to developing a strategic plan for a business. It involves analyzing the current business environment, setting goals and objectives, identifying strategies, creating an action plan, and regularly reviewing and adjusting the plan as needed.

The business planning process is important because it provides a roadmap for the business’s success. It helps business owners and managers align their efforts, make informed decisions, identify potential risks and opportunities, and allocate resources effectively to achieve their goals.

The key steps in the business planning process typically include conducting a situational analysis, setting SMART goals and objectives, conducting market research, developing strategies, creating an action plan, implementing the plan, and regularly monitoring and evaluating progress.

The duration of the business planning process can vary depending on the size and complexity of the business and the scope of the plan. It can range from a few weeks for a simple plan to several months for a more comprehensive strategic plan.

Ideally, the business planning process should involve key stakeholders such as business owners, managers, department heads, and relevant employees. It can also be beneficial to seek external expertise or involve consultants, industry experts, or advisors to gain valuable insights and perspectives.

Heya i’m for the first time here. I found this board and I find It really useful & it helped me out much. I hope to offer something back and help others such as you helped me.

Keep it up! Your blog is very informative and Explains the process thoroughly.

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What is Business Planning?

Business planning is a process that involves the creation of a mission or goal for a company, as well as defining the strategies that will be used to meet those goals or mission. The process can be very broad, encompassing each aspect of the operation, or be focused on particular functions within the overall corporate structure. Often, it involves the use of resources within the company as well as engaging the services of consultants to assist in designing and implementing the plan.

There are several points in the life of a business when the process of business planning is an essential task. Starting up a new company involves performing at least rudimentary planning to address such factors as defining the goals of the company, obtaining operating licenses, incorporating the business if appropriate, and defining the basic structure for the new business . Along with these factors, business planning will also address the issue of what goods and services to offer and how to go about producing those core products.

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A second stage when business planning comes into play is when an existing company wishes to expand operations. This will determine what is needed in order to manage the expansion process, especially in regards to financing new facilities, expanding sales and marketing efforts, or designing a new communications infrastructure to meet the needs of the expansion. It is not unusual for consultants to be called during this type of planning, as the process often involves a drastic overhaul of the company’s operations.

Business planning may also be advantageous in the event of acquisitions. For example, Company A decides to buy Company B and integrate their operations into the overall company structure. This will often mean developing a business plan that addresses issues such as negotiating new service contracts with vendors to include the acquired company, combining some functions or physical locations in order to maximize efficiency, and rearranging departmental functions and the personnel who will staff those departments. As with expansion, it is not unusual to call in consultants that specialize in various areas to help give the business planning a logical flow and develop a plan for completing the merger of facilities and other assets in a timely manner.

In general, any type of business plan requires investigation, careful evaluation of all known factors, and projecting potential results of different options that are open to the company. This open-ended process can take on a number of forms, some of them relatively simplistic, while others are extremely detailed and complicated. However, the basic task of business planning is necessary for the entrepreneur starting a new business, as well as the established company that wishes to expand through the launch of new products or by acquisition of competitors.

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

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Discussion Comments

The tips i have drawn from your above summary on how to plan the business are of great importance in my business life. keep it up!

Subway11-I know that some people use business planning software to help them determine the cost of doing business and when their company is likely to turn a profit.

Starting a new business is exciting, but business strategic planning is essential to its success. This is why 90% of businesses fail within the first three years.

Many people fail to take planning into consideration and may not have the capital to sustain the business.

This is a common mistake and the reason why many businesses fail. People get so excited about the idea of the business that they forget to build the foundation for the business first.

Also, it is important that if you want to open a business in a certain industry, you should try working a job in that industry for about six months to see if that is something that you will enjoy.

This experience will also offer you valuable industry experience that you can expand upon when you open your own business. This will make strategic business planning easier especially with the use of business plan software.

Cafe41- I just wanted to say that there is an organization called SCORE that offers help on small business planning.

These are retired business executives and small business owners that offer business financial planning assistance free of charge.

SCORE is part of a nonprofit organization that helps would be business owner’s work with experienced and established business owners in order to encourage them to create new businesses. These counselors are paired up with new business owners of similar industries in order to make the help more beneficial.

This really helps the new business owner avoid common pitfalls of their chosen industry. The organization also offers bimonthly meetings and weekly workshops.

It is important to write a business plan when starting a business. A small business plan involves the types of goods and services that a business will sell along with the target market of this business.

A business plan example will also include the break even analysis and the point at which profitability will occur.

There is also a set of fixed expenditures along with variable expenses that have to be accounted for. In addition, a cash flow analysis has to also be considered as well as competitive information regarding the company’s competitors.

This may include pricing information as well as product or service offerings and locations in which the competitors do business. An appropriate adverting mix is also required along with possible staffing plans. All of this small business planning is required in order to give the company a chance at success.

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Business Planning Process: Create a Business Plan That Works

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Radhika Agarwal

If you are planning to start or grow your business , you might have heard about the importance of the business planning process countless times. And yes, it is necessary to have a plan. After all, it’ll be your roadmap to success.

But how would you go about it? Where will you start? And most importantly is there a tried and tested process that can make your job easier? What if we told you there is such a process?

And through this article, we’ll walk you through everything from what is business planning to the steps of the business planning process .

What is Business Planning?

Business planning is the process of giving structure to your business idea. It acts as a roadmap to your business journey, helps you get through obstacles, and maximizes opportunities.

It also helps you set realistic goals and pursue the same with a structured action plan.

Moreover, through a business plan, you can analyze your company’s strengths and weaknesses, and understand how that would impact your company while dealing with market competition and how your strengths would help you achieve your goal.

Above all, doing business with a well-written business plan increases your chances of success.

Steps of the Business Planning Process

Although there’s no sole right way to go about the process of planning your business, here’s a compilation of steps that’ll make your planning process faster and easier.

1. Carry out your research

The first step to creating a business plan is to do thorough research about the business and industry you are trying to get into. Tap into all the information you can get about your target audience, potential customer base, competitors, market and industry trends , cost of business, etc.

You can give a form to your research by asking yourself the following questions:

• What are your goals?
• Where does your business stand currently?
• What are the prevailing market trends?
• What strategies is your competitor following?

You can find your answers by conducting market surveys , talking to customers and industry experts, designing good questionnaires, reading articles, blogs, and news updates about your industry and related ones, and so on.

Also, it is a good practice to conduct a SWOT analysis for your company to understand how your company’s strengths and weaknesses would help you stand apart from your competitors based on the current market statistics.

2. Make a Framework

Once you’re done with your research the next step is to make a framework or a set of strategies for your business based on your research and business goals. You can either design strategies from scratch or reframe previously tried and tested successful strategies to fit your business goals.

But remember that you’ll have to tweak strategies to fit your unique competitive advantages and goals. Hence, strategies that are already being used can act as a good foundation, but it is essential to remember that you’ll have to expand upon them or improvise them for your business.

This step can be completed by taking a deep dive into your customer’s buying motivations and challenges that your product can help solve. Based on that, make a marketing plan , operations plan , and cost structure for your business at least for the first few years of your business.

3. Formulate your Financial Forecasts

No matter how tedious finances might seem, they are an integral part of any business. When you map out your finances it is essential to note down all the costs you’ll incur as you grow and run your business for the next five years and what would be your potential revenue , and if or not it would leave room for profit.

You can get your financial forecast by adding your financial assumptions to a financial system which will give you your cash flow statements and give you an idea of what amount of funds you’ll need to start and run your business for the first year.

This step is especially helpful if you want to acquire funding for your business. Nonetheless, it helps you prepare to deal with the financial aspects of your business.

A financial statement essentially provides details of a company’s expenses and profits. It also provides an overview of the company’s current financial stance, including its assets and liabilities .

Through this section try to write down and explain how you plan to use your investments and how would the same give a return.

4. Draft a Plan

As you’re done with creating business strategies and planning your finances, it is time to draft your business plan and compile everything into a single document. As you are done with all the technical aspects, this step should feel relatively easy.

But if you need help drafting a business plan and making it look presentable, you can subscribe to business plan software that comes with predesigned templates and tools to make your work easier .

5. Recheck and Improvise

Now as you’re done with writing your plan, it is a good idea to give it enough time to edit it. Check for any unclear sentences, irrelevant phrases, or confusing terms.

Take suggestions from your team members who are familiar with the functioning of your business. Finally, proofread for any grammar or punctuation errors. One of the most popular and useful pieces of editing advice is to put your work aside for a while and then look at it with fresh eyes to edit it better.

6. Create an Impressive Business Plan Presentation

Now, as you’re done with writing your business plan it is time to create a presentation that leaves an excellent impression on your audience. Highlight all the important and relevant points.

Also, add references for your investors like your financial reports, resumes of your key team members, snippets of your marketing plan, and past sales reports to have a well-rounded presentation.

It is true that starting a business is intimidating. It includes a bunch of emotions, chaotic ideas, and a will to take risks. ( Risks are a part and parcel of starting a business, no matter how much you plan, but yes planning helps you prepare for it.) But in the end, all of us know that all of it is worth it if you have a profitable business in the end.

And business planning is something that takes you one step closer to your idea of success. Moreover, a plan keeps you going in the face of challenges and adversities, and helps you push yourself a little harder to achieve your dreams when things get tougher.

Above all, a business plan helps you take action and turn ideas into a real and functioning business. So, what are you waiting for? Go ahead and start planning !

And while you’re at it do check out Upmetrics’s business planning software to make business planning easier and faster.

About the Author

Radhika is an economics graduate and likes to read about every subject and idea she comes across. Apart from that she can discuss her favorite books to lengths( to the point you\'ll start feeling a little annoyed) and spends most of her free time on Google word coach.

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Question : 1) The business planning process involves making decisions about A) Prices, : 1972534

1) The business planning process involves making decisions about

A) Prices, suppliers and products

B) Competitors, consumers and capital

C) Markets, risks and consumer behaviour

D) Objectives, strategies and tactics

E) a ten-year goal

2) Objectives are statements that outline

A) specific details of implementation

B) necessary resources

C) a mission statement

D) what is to be accomplished

E) a marketing strategy

3) In the business planning process, another term for execution is

A) Concepts

C) Objectives

D) Strategies

4) Senior management formulates the overall strategic direction for the organization and establishes the financial objectives that the company should aspire to, such as

A) media budget

B) print budget

C) return on investment

D) budget allocation

E) agency selection

5) Marketing plans consider such matters as the

A) personal selling

B) marketing mix

C) public relations

D) event marketing

E) sponsorship

6) Advertising can be further divided into

A) direct response and interactive

B) sales promotion and public relations

C) creative plans and media plans

D) public relations and events

E) marketing and communications

7) A mission statement is the foundation of

A) the marketing plan

B) the advertising plan

C) the media plan

D) the corporate plan

E) the public relations plan

8) Corporate objectives take their direction from

A) the marketing strategy

B) the customer

C) the mission statement

D) the business plan

E) senior management

9) Good objective statements are written in quantifiable terms so that

A) opportunities can be identified

B) they can be used in short-term planning

C) they are easier to understand

D) their success can be measured

E) they can be part of a manifesto

10) A mission statement is the foundation of

A) the vision statement

B) the corporate plan

C) the price of a company’s products

D) an advertising campaign

E) a company’s weakest link

Solution 5 (1 Ratings )

• 11) To increase market share from 25 per cent to 30 per cent in 2011 is an example of A) a mission statement B) a marketing...
• 21) When talking about a market background or situational analysis, an example of an external influence is: A) new-product success rates B) sales volumes C...
• 31) The Listerine campaign designed to differentiate the brand from scope and featuring the action hero for your gums is an example of A) new...
• 41) Which element of the marketing communication mix helps achieve trial and repeat purchase objectives? A) sales promotion B) public relations C) sponsors...
• 51) A sales promotion section should be included in the marketing communications plan when A) competitors launch new products B) incentives are to be integrated ...
• 61) Strategic business planning involves making decisions about objectives, strategies and tactics. A) True B) False 62) A firm will look a...
• 71) Kraft Foods sold its Post Cereals unit as part of a strategic alliance. A) True B) False 72) A situational analysis is sometimes called...
• 81) The first stage in the budgeting process is the allocation of funds among the activity areas in the marketing plan. A) True B) False 82...
• 88) Describe each of the following corporate strategies to achieve growth and give an example for each: penetration strategy, new products strategy, and strategic alliance. ...
• 91) Why is a situation analysis included as a section in a marketing plan and what type of information does it contain? 92) Why is important...

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What the business planning process involves: Approved checklist

What the business planning process involves: Approved checklist – For a business plan to be successful, it must follow the business planning process steps to the finish. However, to assist your business in moving in the right direction, we will define and explain the fundamental business planning procedure in this article.

Furthermore, the six (6) steps in business planning will help you to know the importance of business plan in today’s business. Read through What the business planning process involves: Approved checklist

• 1.1 What the business planning process involves: Approved checklist
• 1.2 The Business Plan
• 1.3 What is Business Planning?
• 1.4 What the business planning process involves: Approved checklist
• 1.5 1. Do Your Research
• 1.6 What the business planning process involves: Approved checklist
• 1.7 2. Strategize
• 1.8 3. Calculate Your Financial Forecast
• 1.9 What the business planning process involves: Approved checklist
• 1.10 4. Draft Your Plan
• 1.11 5. Revise & Proofread
• 1.12 6. Nail the Business Plan Presentation
• 1.13 What the business planning process involves: Approved checklist
• 1.14 Read Also:
• 1.15 Summary:
• 1.16 Like this:

Cessummit.com business tip:

This is our after-services support service because we do a lot of business planning and feasibility analysis for our many clients. We share various business advice with our readers and customers. Again, Standard Business Plans are abundant on this website. You can search for any business idea or clause you want by using our search button on this page.

The Business Plan

Because it enables a new organization to better convey its potential and business goals to those who can provide financial resources, business plans are an essential first step for any company that is looking to attract investors or receive grant money.

What is Business Planning?

Business planning is the process whereby an organization’s leaders figure out the best road map for growth and document their plan for success.

Also, writing a new business plan involves a detailed process with a number of stages, some of which can overlap. Whether you are writing your plan from scratch, from a simple business plan template, or working with an experienced business plan consultant or writer, business planning for startups, small businesses, and existing companies is the same.

The business plan process includes the following:

• Do Your Research
• Calculate Your Financial Forecast
• Draft Your Plan
• Revise & Proofread
• Nail the Business Plan Presentation

We’ve provided more detail for each of these key steps below.

1. Do Your Research

Conduct detailed research into the industry, target market, existing customer base, competitors, and costs of the business begins the process. You may ask yourself the following questions:

• What are your business goals?
• What is the current state of your business?
• What are the current industry trends?
• What is your competition doing?

There are a variety of resources needed, ranging from databases and articles to direct interviews with other entrepreneurs, potential customers, or industry experts. The information gathered during this process should be documented and organized carefully, including the source as there is a need to cite sources within your business plan.

You may also want to complete a SWOT Analysis for your own business to identify your strengths, weaknesses, opportunities, and potential risks as this will help you develop your strategies to highlight your competitive advantage.

2. Strategize

Also, you will use the research to determine the best strategy for your business. You may choose to develop new strategies or refine existing strategies that have demonstrated success in the industry. Pulling the best practices of the industry provides a foundation, but then you should expand on the different activities that focus on your competitive advantage. This is What the business planning process involves: An approved checklist

However, this step of the planning process may include formulating a vision for the company’s future, which can be done by conducting intensive customer interviews and understanding their motivations for purchasing goods and services of interest. Also, dig deeper into decisions on an appropriate marketing plan, operational processes to execute your plan, and human resources required for the first five years of the company’s life.

3. Calculate Your Financial Forecast

All of the activities you choose for your strategy come at some cost and, hopefully, lead to some revenues. Sketch out the financial situation by looking at whether you can expect revenues to cover all costs and leave room for profit in the long run. What the business planning process involves: Approved checklist

However, begin to insert your financial assumptions and startup costs into a financial model which can produce a first-year cash flow statement for you, giving you the best sense of the cash you will need on hand to fund your early operations.

Furthermore, a full set of financial statements provides the details about the company’s operations and performance, including its expenses and profits by accounting period (quarterly or year-to-date). Financial statements also provide a snapshot of the company’s current financial position, including its assets and liabilities. This is one of the most valued aspects of any business plan as it provides a straightforward summary of what a company does with its money, or how it grows from initial investment to become profitable.

4. Draft Your Plan

With financials more or less settled and a strategy decided, it is time to draft through the narrative of each component of your business plan. However, with the background work you have completed, the drafting itself should be a relatively painless process.

If you have trouble writing convincing prose, this is a time to seek the help of an experienced business plan writer who can put together the plan from this point. This is What the business planning process involves: Approved checklist

5. Revise & Proofread

Revisit the entire plan to look for any ideas or wording that may be confusing, redundant, or irrelevant to the points you are making within the plan. You may want to work with other management team members in your business who are familiar with the company’s operations or marketing plan in order to fine-tune the plan.

Finally, proofread thoroughly for spelling, grammar, and formatting, enlisting the help of others to act as additional sets of eyes. You may begin to experience burnout from working on the plan for so long and have a need to set it aside for a bit to look at it again with fresh eyes.

6. Nail the Business Plan Presentation

The presentation of the business plan should succinctly highlight the key points outlined above and include additional material that would be helpful to potential investors such as financial information, resumes of key employees, or samples of marketing materials. It can also be beneficial to provide a report on past sales or financial performance and what the business has done to bring it back into positive territory.

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Finally, on What the business planning process involves: Approved checklist. This article becomes very important for your business plan and feasibility analysis development. Do you need a business plan with a feasibility analysis for your business? Then, contact us today at +234 905 313 0518, or [email protected]. Thanks for reading through What the business planning process involves: Approved checklist

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