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Pre-Planning Your Business Planning

Believe it or not, one of the most important tasks before you start any Business Planning is to plan for how you will actually conduct your planning.

If you start without doing this, you are likely to go awry during your planning process.

To me, this is similar to how you decide on your holiday before you make plans for your holiday.

You have to make certain foundational decisions like when you want to take the holiday and where you want to go.

Without this information, your planning of the holiday could go sideways – you might book the wrong dates that clash with something else, or book somewhere inappropriate for the season!.

The first step in any Business Planning process is to “Get Ready To Plan.”

So let’s go through the decisions you have to make in order to make your Business Planning process smooth and efficient.

There are 5 major decisions you need to make to get ready for your Business Planning.



Decide why you want to prepare your Business Plan.

This might sound like a silly question, but a Business Plan may be used for different purposes:

  • You could be preparing a Business Plan to help you sell your business;
  • You could be preparing a Business Plan ready to go to the bank for a loan;
  • You could be preparing a Business Plan to interest a potential investor to take shares in your business;
  • You could be preparing a Business Plan to guide you on how to grow your business;
  • You could be preparing a Business Plan so that key members of your staff can follow the parts that concern them and guide their performance;
  • You could be preparing a Business Plan to launch a new product or enter a new market.

If you do not have a clear purpose for writing your Business Plan, you could spend some of your precious time discussing the wrong things.

For example, if you forget that the main purpose was to delegate some strategies to staff and during the discussion, it became “interesting” to consider what would happen if you went to the bank for a loan, you might get seriously side-tracked discussing the financial performance the bank would need to see and how you could achieve it.

If you are not clear about its purpose, as you write your Business Plan you may waste time writing about things not required for the purpose.

Say you wanted a Business Plan to guide your own direction and priorities, but you forgot and started to write about the history of the business, you could waste a lot of time detailing things you already know that might be useful for a third party Business Plan, but not necessary for an internal document.

As a busy small business owner, you need the Business Planning process to be efficient and not waste time on unnecessary ideas. You want to write the Business Plan for the audience – internal or external.

What will be the term of the plan – how far ahead do you want to plan?

It is important to decide how far you want to look and plan ahead before you start.

You could write a long-term or “strategic” plan (greater than 5 years), medium-term (2 to 5 years) or short-term (commonly 12 months) Business Plan.

Each has a different purpose and need different information and planning decisions.

Generally, the longer the term of the plan, the less certain you can be about outside influences and the effects of your strategies to cause change. So, strategic planning, for example, usually provides only an overhead view of where you intend to go and broad strategies without a great deal of detail. Long-term plans set long-term direction.

The shorter the term of the plan, the more predictable the circumstances and immediate the results. Hence a 12-month Business Plan can be quite tactical and detailed, often accompanied by step-by-step Action Plans to be carried out.

Your decision here combines with your decision about the purpose of the Plan, so, for example, you could decide that what you need is an internal plan to guide you through the growth of your business over the next 10 years, so you set a Vision of where you want to be then, and broadly list the goals and strategies that will be achieved and worked on over a 10 year period to guide you.

If you are not clear about the term of the Plan, your discussions during the planning process could end up without sufficient detail that you wanted, because there just isn’t enough information to make detailed decisions, or you could be off-track and forget to add detail to your desired step-by-step tactical plan because you got caught up over big-picture 10-year goals.

Decide who should be involved in the planning team.

This will largely be dictated by the purpose, however, a good rule is to ask “who can contribute to the information, discussion and suggestions in a positive way?”

If you are the sole owner of the business, and you don’t employ anyone, it may seem that you don’t need to make this decision, and maybe you don’t.

But it’s still worthwhile to ask the question because the answer may surprise you.

Working on your own, you may appreciate the contribution from your spouse – a reality check about what you want to do and how that will affect your family.

You may benefit from involving a mentor or your accountant or business advisor or coach. An independent outside view could be very useful.

If you do employ staff, the planning team could include “old hands” who have direct experience of some of the things that have been tried in the past or know how the coalface works. You would obviously include senior people and managers because of their involvement in their sections of the business.

Who you choose to invite will depend on the purpose of the plan, who you need to obtain buy-in from, who knows the facts, who has good ideas, and so on.

Once you’ve decided, make sure they know you have decided to invite them into the planning team, what you hope to achieve, and how they could contribute.

Decide when and where you will hold meetings to discuss the plan.

The more complicated your business (and the loftier your ultimate goal), the longer the planning process will take because you will need to take into account a number of complex options.

I have facilitated Business Planning discussions taking a day or two here and there over several weeks, if not months.

However, for most small businesses, I would set aside two full days to discuss your goals, strategies and action plans, and perhaps a day to write them up.

I believe that if you are guided and kept focused, most small businesses could complete their discussions in a long day and if done right, could simply collate their discussions in a few hours the next day.

As to where you should go to discuss your Business Plan, I highly recommend that you do not do it in your usual workplace. You need to be focused and concentrate on the planning, not be interrupted by telephones and people asking for your attention.

I highly recommend that you book a meeting room in a hotel or conference centre, or even do it in a quiet room at home.

Choose the most convenient dates when everybody in your team is available and can set the day aside, then book the date and the venue and make sure it is in everyone’s schedules.

Decide on what information you have to get ready.

Your discussions during the planning session may require some background information.

The more tactical and detailed your purpose, it is likely the more detailed your information will need to be.

Think ahead. If you follow my recommended steps in the planning process, your planing session will consist of, in order:

  • Discussion about where you want to go in the long term – the purpose of your business, a vision of what the business will look like then, descriptions of staff, customers, systems and finances in this ideal picture;
  • Discussion about where you are now – looking into the reality of the business and all its component parts like the finances, the product and costs, your customers and suppliers, your employees, your business systems;
  • Discussion about what you need to do to bridge the gaps between where you want to go and where you are now, including the parts of the business that will need improvement and suggestions on how to do this;
  • Discussion about how you are going to monitor and measure your strategies and the results of their implementation, and what you will look for as measures of success.

Looking forward to these discussions you can make some decisions about what information you prepare and provide ahead of the session, as well as what you bring with you. These might include:

  • Company and product brochures and catalogues;
  • Summary of staff structures and profiles;
  • Customer lists and information such as their buying frequency;
  • Information about suppliers including prices and purchase quantities;
  • Flowcharts about your business systems and responsibilities;
  • External information like industry reports and competitor information.

Choose information that you think will help the discussion – but, don’t worry if, on the day, you find you had something missing. There will be plenty of opportunity after the planning day to review and adjust.

Preparation is the key

Like planning itself, preparation is the key.

This step, as the start of your planning process, should set you up so that your Business Planning process is efficient and focused, and you get the best outcomes for the time you invest.

I have written a free Guide and Checklist on Business Planning which will explain all of the steps in the process. You can download it here.

In the next few weeks, in this blog, I will take you through each of the subsequent steps:

  • Defining where you want to go;
  • Understanding where you are now;
  • Bridging the gap;
  • Implementing, monitoring and evaluating.

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See you next week!





Cover image by Bruce Mars on Unsplash

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