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Business Planning Made Simple

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Business planning can be made simple by remembering four basic principles. These are the same four principles you use when you are planning to drive somewhere in your car so they are things you already know how to do. For successful business planning, you just need to apply what you already know.

The four fundamental principles in business planning are:

  • Know where you are
  • Decide where you want to go
  • Track where you are along the way
  • Improve precision as you go

Know Where You Are Starting From

A commonly overlooked first step in planning is knowing your starting point. If I ask you how long it will take you to drive to Atlanta, you will give me very different answers if you are in Philadelphia or in San Francisco. A still another answer of "well, I'm not sure" if you just woke up and don't know where you are. In business, it's the same thing if I ask you what we have to do to get customer satisfaction scores up to 80%. You need to know whether we're currently at 60% or 79% - or if we're at 85%.

Decide Where You Want To Go

In order to plan any road trip - or any business project - you have to know where you want to go. Sure, I can hop in the car and say, "I'm just going to drive wherever the road takes me." You'll end up somewhere and you may have a lot of fun along the way. Or you may end up trapped in your car for a week on a rutted mountain road, living on one bag of chips while waiting for someone to rescue you. In business, you also can just drift along doing whatever the industry does, taking whatever customers come your way. Or you can decide on a goal and start working toward it.

Get More Precise As You Go

If you decide to drive from your starting point in New York to vacation in Hollywood, all you need to know when you start out is that you're going to head west. Is doesn't really matter whether you go due west or southwest when you start. You just don't want to head out to the northeast. There is nothing that says you can't pick a specific route at the beginning. You can decide to take Interstate 80 West to San Francisco and then Interstate 5 South to Los Angeles or start south on Interstate 95 to Raleigh and then turn west on Interstate 40. It's just important to get moving in a generally westward direction toward your destination.

In business, if the goal is 80% customer satisfaction it doesn't matter if the first step is talking to unhappy customers to find out what they don't like or to satisfied customers to find out what keeps them happy and coming back. It is, however, important to start toward your goal by turning your focus onto your customers.

Know How To Track Your Position

Once you've started driving toward Hollywood you'll want to makes sure you are heading in the right direction and keep track of how quickly, or slowly, you are getting nearer to your destination. You will watch for signs along the way. At first, for example, you might want to see the mileage signs along the way show the distance to Raleigh getting smaller. Later you will watch signs telling you the interim points along Interstate 40 like Memphis, Little Rock, and Oklahoma City are getting closer.

We have the same signposts along the way in business planning. We call them Key Performance Indicators (KPI). For our business goal of increasing customer satisfaction to 80% our most basic KPI will be the customer satisfaction rate itself. We will develop other related KPI as needed and track our progress against them too.

Bottom Line

Business planning is important. The same, familiar step-by-step approach that you would use when planning a vacation by car will make the business planning easier.

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