Annual Business Planning Process

It is almost impossible to predict what next week is going to be like, much less accurately predict the economic and market forces that will affect your business over time. Writing your business plan is only the beginning of what should be a regular review and updated exercise. Most companies do this on an annual basis at the end of the year to set and plan how to meet their goals for the following year.

Function

Review your costs and market price points in your annual business planning project.

Your annual business planning project accomplishes two important tasks: it forces you to review and evaluate past year performance including the quality of management decisions, and it presents the opportunity for you to apply what you learned toward improving your performance in the coming year. Your experiences during the past year are all learning experiences and are extremely valuable in honing your company management, production and marketing activities to their best possible qualities. Your company's future depends on how you apply this knowledge. It also depends on preparation for foreseeable situations so you can better handle the surprises.

Features

Annual business planning is comprised of a prior year review, a positioning session, a planning session and the updating of your business plan. The review examines production, marketing, fulfillment, inventory management, financial management, legal compliance and administrative operations. The positioning session defines the reality of your company's current health, risks and potential for success. Take the results of your review and positioning session and apply them to planning your goals and strategies for the coming year, updating your business plan to provide a roadmap of actions that can be referred to as the year progresses.

Procedure

Gather your financial, sales, production, marketing and administrative records. Evaluate the results of decisions made in these areas, paying particular attention to cost containment and profit protection. For your positioning session gather together executives, managers and key staff. Discuss in detail your company goals, how well they are being met and the direction the company should take in the coming year. The positioning session is a good place to review your business plan and decide the changes needed. When updating your business plan, create benchmarks for planned strategies and a timeline so you can track progress.

Benefits

Going through the annual planning process will provide you with many new ideas for how you can produce your product, market to and service your customers, manage your costs, best your competition and grow your business. It will also help you streamline your daily routine so you don't waste valuable time on processes and procedures that should be changed or eliminated. An annual business planning project is like a new start on life for your company and can create renewed enthusiasm and effort.

Considerations

Annual business planning should be a company-wide effort. If you leave out general staff or specific departments, you will not see improvement and growth in those areas. You may even experience resistance and a morale problem as you attempt to implement elements of your new strategic plan and revised internal procedures. The more you involve your whole company and lower levels of staff, the more realistic and detailed your feedback. Realism is your greatest tool in planning for successful operations.

References

• National Business Association: Assessing the Year
• Business Link: What to Include in Your Annual Business Plan
• USAToday: Strategies: Your 2008 Plan for Success