The art of business planning
Senior management has the responsibility of conceiving and implementing an integrated business strategy that
results in profits, growth, and clear direction for the entire organization. The Business Plan is the evidence that this responsibility has been met. In a broad sense, the Business Plan is based on two primary elements: strategic thinking (strategic plan - clearly the most challenging to get right); and, a tactical plan (marketing, operations, finance - details for implementing the plan).
Articulating Mission and Vision
The purpose of the mission statement and vision statement is to set a clear direction for the entire organization. A mission statement must communicate the essence of a business. A business' ability to articulate its mission indicates its focus and purposefulness. A mission statement typically describes a business in terms of its:
Purpose - why the business exists, and what it seeks to accomplish
Business - the main activity through which the business tries to fulfill this purpose
Values - the principles or beliefs that guide a business' employees as they pursue the business' purpose
Whereas the mission statement summarizes the what, how, and why of a business' activities, a vision statement presents an image of what success will look like (in the eyes of its leader). What's in a vision statement? The critical point is that a vision articulates a view of a realistic, credible, attractive futureÃ‚Â forÃ‚Â the organization,Ã‚Â a condition that is better in some important ways than what now exists.
With mission and vision statements in hand, the business has taken an important step towards creating a shared, coherent idea of what it is strategically planning for.
Assessing the Situation
Once a business has committed to why it exists and what it does, it must take a clear-eyed look at its current situation. Part of strategic planning, thinking, and management is an awareness of resources and an eye to the future, so that the business can successfully respond to changes. Situation assessment, therefore, means obtaining current information about the business' strengths, weaknesses, and performance - information that will highlight the critical issues that the business faces and that its strategic plan must address.
The development of the foregoing Strategic Plan is the most difficult portion of the Business Plan to "get right" without the assistance of outside resources. One of the most common mistakes by entrepreneurs is to "stack" the decision-making team with members friendly to their cause. While it may be comforting to know that your position is "secure" regardless of how well or poorly you are executing your duties, it deprives you of the opportunity for an honest, independent performance appraisal. Independent advisors are in the best position to take an unbiased view of the company's and the chief executive officer's performance.
Once an organization's mission has been affirmed and its critical issues identified, it is time to figure out what to do about them: the broad approaches to be taken (strategies) and the general and specific results to be sought (the goals and objectives). This normally results in the creation of the following plans:
- Sales and Marketing Plan
- Operations Plan
- Finance Plan
- Administrative Plan
Each of these plans will focus on goals and objectives related to departmental performance. Budgets, staffing, training, tools and other resources must be identified in each of these plans and a game plan for correcting any deficiencies that could get in the way of achieving departmental objectives must also be included.
A final word
The major business planning challenges are to: think strategically and create a competitive advantage; integrate management's vision with the Business Plan and departmental goals; select those products, services and markets that afford the greatest opportunity for success; and, obtain an enterprise-wide commitment to implementation.
Dorsie Mosher has more than 25 years experience at senior levels in the electronic security industry, including bottom-line responsibility as president of four firms. He has participated in taking two security equipment manufacturers public. He presently works as a consultant in the security industry.
He can be reached at 831-663-1165 or via email at email@example.com.