Business Planning

The business plan serves as a guide for management to run the organisation. The plan looks at what needs to be done during the year to work towards achieving the strategic goals it has set for itself in a timely manner. A business plan allows organisations to outlines key actions, key performance indicators, timelines and measurable targets for the year. The plan should also highlight the resources allocated to accomplish those targets.

Key steps of the business planning process include:

1. The organisation should review its current situation. The executive should evaluate where the organisation is in terms of achieving its strategic goals and its performance, and highlight where it is doing well and where it is falling short. The planning process should provide a blueprint highlighting what the organisation should continue doing and where and how it should improve.

2. The organisation should review its current environment and the current risks and opportunities it may face. This analysis could reveal that the organisation needs to adapt or to position itself in a certain in order to ensure that the organisation can continue to perform effectively.

3. The organisation should identify key performance indicators and targets which will allow to measure the organisation's performance and the effective implementation of the plan. Some indicators and targets may remain the same from year to year but some may need constant tweaking, change or brand new ones may be identified as necessary.

4. The planning process determines how all the resources of the organisation will be managed 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 services on schedule, or inadequate staff levels.

5. Finally, 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.