Principles of Business Planning
A successful business cannot be built and run spontaneously. Planning is essential, and not just an initial business plan but regular, ongoing evaluations and updated strategies. Use good principles of business planning and you'll be creating a good plan on which you can build a prosperous business.
Planning never ends. "Everyone's business changes every year, and often every six months," says Dan Debelak in his book "Successful Business Models." You can't create an initial plan and expect it to remain accurate as competitors, customers, business methods and the economic environment all change. Good business planning must occur on a regular basis.
Know and incorporate your competitive advantage into your business planning. Businesses don't operate in a bubble. You can have a business model that looks great on paper, yet still fail in running it because your competitors have managed to be a little faster, cheaper, better or more innovative than you. Get to know your competitors, and evaluate the advantage you have or can create over them. Include that advantage as a key component in your planning.
Short-term goals and long-term vision combined result in a good plan. A one-sided plan dooms you to failure; don't make the mistake of focusing only on present issues, the current crisis of the moment or annoying problems as they crop up. Instead, deal with problems as they arise, but include your long-term vision with corresponding goals in your planning as well. A solid business must do more than survive the crisis of the moment; it must continually be making progress.
Numbers matter. Good business planning has to add up to a better bottom line. Figure out how your plans will improve sales, increase efficiency and/or reduce costs. If your plan can accomplish at least one of those objectives, it can be helpful. If you can create a plan that manages to accomplish two out of three, run with it.
A plan without real strategy is incomplete. A plan tells you what you want to do; a strategy details how to do it. Without real action points and measurable results, which a good strategy contains, a plan simply functions as a nice document to pass around, but it won't help your business prosper.
The customer does not care about your plan, so your plan had better care about your customers if you want to keep them. According to Debelak, "Great customers are probably the most important element for a highly profitable business." Make sure that your plans relate to real customer needs and result in increased customer satisfaction.