The Importance of Effective Business Planning
Logic and prudence dictate that every business entity should have a well reasoned and regularly updated business plan. The article linked below contains practical suggestions that can enable virtually any business to generate a usable, helpful plan. The article presents specific, relatively simple steps that any business can employ to generate plans that provide more than adequate direction to employees and members of management. Typically, the most useful plans will (a) assess the business environment, (b) adhere to the entity’s designated mission, (c) describe the entity’s strengths and weaknesses, and (d) list specific thresholds/objectives by which to measure success.
The business environment assessment is based on reliable information that can provide sufficient support for defensible decisions the entity’s market, employees, contractors, competitors and industry. A well researched and reasoned analysis should assure that rational, defensible decisions reached in the process are based on facts and data, and not just the opinions and whims of those involved in the planning process. Of course, “gut feelings” and instincts of reliable, experienced participants in the process should not be ignored.
The information gathered during the situation analysis is used as an important input to the SWOT analysis, which is a consideration of the Strengths, Weaknesses, Opportunities and Threats that impact the organization. The SWOT analysis is conducted in a “brainstorming” session during which the participants (a) generate a list of issues regarding for each SWOT item and then reorganize the list in order to identify the most significant items in each category. These will then become the focus for the development of goals, objectives, strategies and tactics.
Developing Goals and Objectives
Goals indicate the broad direction in which the company wishes to head while objectives provide further clarification of the goals so that everybody involved in implementing the plan knows exactly what success looks like. For instance, a business goal might be “to expand into the youth market,” and a related objective might be “to increase market share in the 18 to 25 year age group by 25 percent by the end of the year.”
Developing Strategies and Tactics
Goals and objectives indicate where a company wants to go; business strategies and tactics are designed to show how it will get there. Strategies are broad statements that relate back to the SWOT analysis and indicate how the company will either leverage its strengths and opportunities or overcome its weaknesses and threats. For instance: “Focus on a 100 percent product guarantee in all communication materials to address growing competition.” Tactics are specific action steps that the company will take. For instance: “Tweet about product guarantee,” or “Include product guarantee prominently on all packing slips.”
For more practical information regarding creation and execution of a highly effective Business Plan, please contact Cornerstone Consulting at 813-321-1300.
Based in Tampa, FL, Cornerstone Consulting, Inc. provides leaders of manufacturing, wholesale distribution and online retail companies with high-performance enterprise resource planning systems, powerful analytics, better business intelligence, premium web development, and first-class information technology support services. Not only is Cornerstone an award-winning value added reseller (VAR) of business software, the highly-skilled “dream team” of certified public accountants (CPAs), programmers, web designers, marketing gurus and software trainers provide cutting-edge solutions and tech support for:
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