Planning is a whole area that new and even season business owners will quickly become overwhelmed with. Planning necessarily requires that you take a very neutral look at the company and do away with many of the assumptions that you would have if you were already in bedded their rent. It’s hard to look at yourself from the inside as we all now and planning is such a critical part of the business, probably about 75% of the success of the company is in the planning phase especially if it’s a larger operation.
You will hear me say this over and over again at that planning involves three faces:
- Knowing where you are
- Knowing where you want to be
- And simply connecting the dots
Knowing where you are essentially starts with your current financial statements. Having an accurate set of financial statements is the absolute most important element of the planning process because planning is basically made up of dates and numbers and activities. If you don’t know where you are starting from then you will most surely choose the wrong path to where you are going to
I separate planning out into quantitative and qualitative. Quantitative is basically planning that goes by only dates and numbers such as budgets and qualitative planning goes by written out plans including objectives strategies mission statements, etc.
In order to be successful, your planning must encompass both the qualitative and quantitative elements of your plan.
You need to know where you’re going is the second element of the planning process. This point in the future must necessarily have a qualitative element to it because it needs to be measurable and date specific. I love the acronym SMART objective which includes the following qualities
- Time based
Once you have where you are now and where you want to be then you can fill in the gap with the actual plan itself. Now let’s talk about plans
What are the most important elements of a plan is the time. That it represents. Planning is broken down into two elements:
- Tactical planning
- Strategic planning