Your Business Plan as a Management Tool

Business planning can be either extensive or simple.
1. Where do you want to go?
2. How are you going to get there?
3. What resources do you need to accomplish this?
4. How will you know when you are there?
Business planning should focus on controllable, measurable actions, outcomes and accountable performance.
1. How the economy is doing may affect your outcomes, but you cannot control it, so it’s not part of your plan.
2. How many sales calls a week you make, with a goal of 50% closing ratio is controllable and measurable, so it should be a part of the plan.
Many people do an S.W.O.T. analysis as part of their plan. Assess each:
1. Strengths – what do we do well, in our core skills?
2. Weaknesses – what do we not do well and why?
3. Opportunities – what areas of revenue opportunities or people?
4. Threats – forces against us, hindrance to our progress.
Business plan should focus on achievable periods that build toward long term growth.
1. Monthly plan – covering at least a year, in order to show seasonability over an entire year.
2. Yearly plan – the specific results you are looking to achieve built up monthly into a yearly plan.
3. Multiple year plan – to demonstrate the power of time accumulating to create significant growth.
Business plan should focus on the specific drivers that create success and that are measurable.
1. Profitability – success of the plan for the entire company
2. Revenue growth – ability to sell more to more over time.
3. Margin improvement – ability to keep gross margin constant or improving even during price pressure for materials cost.
4. Revenue per employee – ability to manage growth without imbalance in management/administration costs.
5. Customer service and retention – the pattern of keeping customers over time and increasing their purchases, as well.

Constantly monitoring the progress of your business towards these goals makes your planning effort a tool for success.