Janice Agar

Many business owners find it difficult to take the time to update their business plan, frequently enough for it to remain relevant. I had a client aptly describe this as “working in my business more than working on it”. Strategic planning can also suffer from a bad reputation as being a labour intensive process that produces reports that sit on shelves, untouched and unreferenced.

While strategic planning is high level and considers variable futures, operational planning is the detailed, day-to-day, activity list which implements the strategy. When combined with financial projections, for up to 3 years out, they come together to create the business plan. In a larger organization, strategic planning could be completed by management, operational planning by unit heads and projections by the finance group. Coordinating and updating these plans can add up to large projects for large businesses.

The good news is that, as the owner of a small to mid sized business, you can update your business plan without a week long retreat to the mountains. Spending a day, or even two, to research the Who, Why, What, Where, When & How of your business can provide you with the perspective you need to move forward.

Who & Why – Mission, Vision, and Values

Set your planning date and plan to spend 5% of your time to identify who should be involved in your planning process. If you have key employees (or service providers such as your accountant) that can provide inputs to your plan, let them know what you need from them to complete your analysis, in advance of your planning date. Employee feedback may also be relevant for your internal and external analysis, so make sure they have time available on that date to participate.

Determine your internal capacity for developing the plan. Consultants can be hired to design the planning process for you, to facilitate your discussions and / or to research market or industry conditions.  You can discuss the parameters with them for the length of time they will be involved based on your own strengths and requirements.

Another 10% of time should allow you to revisit your Mission, Values and Vision statements and make sure they are relevant and reflect your organization goals. Mission statements should be concise and identify why your organization exists, what the organization does, and for whom it completes the work. A vision statement is more far reaching and identifies what the organization would be if it achieved it’s mission. Values statements detail how the organization wants to operate to achieve its goals.

What & Where – Porter’s Generic Strategies, SWOT and Porter’s Five Forces

Answering the What and Where questions may take up the bulk of your time, up to 60 to 70 % of your total planning time, though this depends on how complicated your current operating environment is. I have found that the right amount of time spent on analyzing your internal and external environments pays off, both when you are drafting your plan and also when you are implementing it, as the choices are much more obvious when you have researched as many of the influences as possible.

Michael Porter’s Generic Strategies help you classify your business, and it’s competitive advantage in one of four categories. By completing a SWOT analysis for your business in each of the categories, you create an in depth, internally focused, review of your options.

Porter’s Five Forces analysis method can then be used to evaluate where your organization sits relative to industry and other external factors. The combination of this internal and external focus will lead you to identify your critical issues and priorities.

When & How – Business Plan

The remaining 15 to 25% of your time should be spent drafting and validating your business plan. The actionable plan should address your critical issues and priorities in measurable ways, detailing the steps you need to take to meet your goals and when you need to complete them by. Depending on your industry, this plan may span 6 months to a year, for the detailed operational elements and up to three years out for the strategic elements. The operational elements can then be updated to meet your changing needs as your business operating environment changes.

Do and Check – the Final Steps

The most important (and sometimes the hardest) part of a business plan is to actually implement it. The plan’s success lies in executing the ongoing changes to your current environment. Examples of these changes include new product development, technology updates, use of productivity tools or new resources or staff training.

Reviewing the status of the plan on a quarterly basis will be critical to maintaining its relevance. Setting aside 1/2 day on a regular basis to check the progress of the plan, may save you valuable time and money and should also help your annual business planning session to proceed more smoothly.