Planning for Success

Business plans or better yet, strategic plans are very important for every business. Although they’re very important, most business owners have never actually written one.

So, what’s a business plan? A business plan is composed of two main elements: A narrative that describes your business in detail and a financial summary that shows how your business can profit and grow in the coming years.

Specifically, this document should describe your vision, the product or service you sell, the market for your product or service, and then explain how your business provides and sells the product or service.

Typically, the second element of the business plan includes a budget that forecasts annual profits, annual cash flows, and shows your end-year balance sheet for three to five years. This section should also include historical financial statements, a profit and loss statement, a balance sheet, and cash flow statements, for the last few years of the business’s operation.

If you’re writing your business plan for a start-up company, the financial will be all pro-forma financial statements.

You can take as many pages as needed to describe and document this information. These days, a standard length is probably 20 to 25 pages. This could include as many as half a dozen pages of financial information and around 15 or so pages of the narrative portion.

No business plan

A good business plan does not guarantee success, nor does it guarantee that you won’t experience failure or set backs, but it does reduce the number of things that can go wrong. Many times ideas, products, game plans are changed because of the planning process. The planning process forces us to think through, hopefully to a logical conclusion, the different premises that we are using to start or build our business.

Types of Financial Plans

Planning is a process not a document. The planning process should produce a document, but the document should not be the goal of the planning process. The written document makes it easier to distribute the ideas, facts and figures assembled.  This enables everyone who is a part of the planning process, or the execution of the plan’s ideas, to literally be on the same page. Sometimes, just the exercise of planning gives us the answer to questions or solutions to problems that we didn’t know before we began the planning process.

Personal Financial Plan

In addition to a business plan, it’s important to develop a personal financial plan. This plan should spell out the goals and objectives that you have for your family. The plan takes inventory of where you are currently financially, and measures that against where you want to be. The personal financial plan will tell you if you’re on track, ahead of schedule, or behind. The personal financial plan should also give detail as to how you’ll achieve your personal goals and objectives.

Strategic Plan

Strategic planning are those actions that lead to the definition of your company’s mission, the formulation of its goals, and the development of the specific strategies that will be implemented to meet those goals.

There are four basic characteristics of strategic planning:

1. It involves decisions by managers at all levels.
2. It deals with the allocation of large amounts of resources, such as capital, labor, or capacity.
3. It focuses on the long term, but increasingly, strategic planning focuses on both the short and the long term.
4. It deals with a company’s interaction with its environment.

Strategic planning should be done for five-year periods.

Planning For Success

“None of the rulers of this age understood it, for if they had, they would not have crucified the Lord of glory. However, as it is written: “No eye has seen, no ear has heard, no mind has conceived what God has prepared for those that love him” but God has revealed it to us by his Spirit” 1 Corinthians 2:8-10.

Plans for good, not evil

“For I know the plans I have for you,” declares the Lord, “plans to prosper you and not to harm you, plans to give you hope and a future” Jeremiah 29:11.

God’s plan cannot be thwarted

“I know that you can do all things; no plan of yours can be thwarted.” Job 42:2

Jesus taught on planning

“Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it? For if he lays the foundation and is not able to finish it, everyone who sees it will ridicule him, saying ‘This fellow began to build and was not able to finish.’”

Jesus planned & prepared

“In my father’s house are many rooms; if it were not so, I would have told you. I am going to prepare a place for you. And if I go and prepare a place for you, I will come back and take you to be with me that you also may be where I am.” John 14:2-3.