By Djay Rijneveld at April 29 2019 09:43:14
Another consideration. Should the business plan be a document that is focused on selling an idea for a product or service? For many years I worked in a company that did not want anything in a business plan that could be construed as showing a bias towards or against a project. The mantra was to only present facts in the business plan. The Operations Research Department was there to review the analysis as being unbiased. To handle the "what if" scenarios or sensitivity analysis we prepared a supplemental analysis documents which were mostly financial oriented. Personally, I like a factual approach and use the presentation of the final document to point out the conservative aspects of the content.
So, why is business planning so crucial? In a word, it provides "clarity". Investing time to develop a plan provides precise clarification of the company vision to both employees and customers. In addition, it provides a mechanism to gauge the results of the business and provides the foundation for future growth plans. In the long haul, it enhances the company valuation through fiscal responsibility, which provides the story of opportunity to any future investor or employee. In short, the benefits of planning allow the company to articulate a common vision to align resources and make an efficient use of investment dollars. A company that is perceived to be a "well_oiled machine" is attractive on many fronts _ both externally with investors and internally with employees through job satisfaction and increased tenure.
Once you have a plan in place, it's important that you follow it. If you're achieving your goals you should stick with the plan. If you are not achieving your goals then you will have go back, analyze your plan to find out what is working, what is not working and why it is not working. A plan is not etched in stone. It is subject to change. As time goes on, things change in this world and businesses like everyone else are subject to change. A good plan will reflect changes that a company has to make to keep it competitive and successful.
What is a business plan? A business plan sets out the method for running a specific activity over a specific future period. Why are business plans needed? Business plans are needed essentially for the four following reasons: 1. A formal, explicit document of the planning process; 2. A request for finances; 3. A framework for approval; 4. A tool for operational business management.