One could argue that the process of business planning is hugely more important than the end plan itself. The activity of business planning is an important management tool that allows an organisation to evaluate the health of its position in the market and industry, and adapt accordingly. We liken the business planning process as being akin to checking yourself into a Medical Clinic and getting series of tests done to evaluate your health. The results of the business check up will trigger a series of changes that should be made to the business. Failure to conduct regular checkups may result in a failure to detect early signs of business problems and may even ultimately lead to a companies demise.
The business planning process should look at the very core of the business model (mission and values, products and services, target markets, key resources and activities), evaluate external forces, review internal systems and process, financial analysis, strengths weaknesses opportunities threats analysis (swot), risk analysis and ultimately result in a new implementation road map.
The business planning process should seek to highlight what you and your business are really good at doing and try to accelerate the growth in those activities, and evaluate what parts of your business present potential value and opportunity. Too many businesses are either afraid of innovation or do not push themselves hard enough to look beyond the here and now. The business planning process should try and identify the golden nuggets in the business and develop them. Look at Amazon.com. It provides a powerful illustration of business innovation. In 2005 Amazon had a major weakness in that it was operating on very low value and low margin products such as books, music CD’s and DVD’s. During the business planning review process it identified that it’s hugely costly but powerful IT infrastructure presented significant opportunities. It decided to go beyond its traditional retail offers and become one of the world’s most important infrastructure providers in e-commerce. With a service called Amazon Simple Storage Systems the company is now using its own IT infrastructure to provide online storage to other companies at rock bottom prices. Patrick Sutton, O’KellySutton, Chartered Accountants and Busienss Advisers, Kildare, Sutton@okellysuttoncrosby.com