Business planning has evolved significantly since the 1980s, and one of the key changes is the shift towards using a one-page business plan for all businesses. This approach, advocated by experts like Tim Berry, emphasizes the importance of creating a lean and practical plan that focuses on achieving business goals effectively.
Here are five fundamental principles of business planning that have remained constant over the years:
- Do only what you’ll use: The essence of lean business planning lies in avoiding waste and focusing only on activities that add value to the business. For most business owners, the primary purpose of planning is to set strategies, execute them, review results, and make necessary revisions. A one-page plan followed by regular reviews and revisions is more practical and useful than a traditional elaborate business plan.
- It’s a continuous process, not just a plan: Business planning is a dynamic and ongoing process, not a one-time task. With growth planning, the business plan is constantly updated to reflect the latest developments and insights. Regularly reviewing and revising the plan ensures that it remains relevant and guides the business towards its objectives effectively.
- It assumes constant change: Contrary to popular belief, planning enhances flexibility and adaptability in the face of change. A well-crafted business plan helps businesses navigate uncertainties by understanding the interdependencies within the organization and adjusting strategies accordingly. Embracing change and using the plan as a tool for managing it is essential for long-term success.
- It empowers accountability: Effective business planning sets clear expectations and holds individuals accountable for their performance. By tracking results, comparing them with expectations, and communicating feedback to the team, businesses can ensure that everyone is aligned with the company’s goals and objectives.
- It’s planning, not accounting: A common mistake in business planning is conflating planning with accounting. While financial projections are a crucial part of the planning process, their primary purpose is to set expectations and establish the relationship between spending and revenue. Regular reviews and adjustments based on projections help businesses stay on track towards their goals.
These principles apply not only to growth planning but to all forms of business planning. By embracing these fundamental principles and incorporating them into their planning process, businesses can build a solid foundation for sustainable growth and success.
Tim Berry, a renowned expert in business planning, emphasizes the importance of these principles in guiding businesses towards their objectives. With a focus on practicality, adaptability, and accountability, businesses can create a roadmap for success that evolves with the changing landscape of the market.