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4 types of business management planning you need to know

As a passionate start-up business person, it may be tempting to jump straight into selling your product or service without firstly doing much detailed “paperwork”. But, to quote Benjamin Franklin, “failing to prepare is preparing to fail”, coupled with the fact that 60% of new businesses fail, putting this legwork in to start with really does give your start-up the best start.

Besides your business plan, there are four other types of business management planning to understand and fit into your business:

 

Strategic > Tactical and Operational > Contingency, each of which we explore further below.

 

Strategic

A strategic plan is top-level, covering the whole business. Often created for the long-term (sometimes up to 10 years), strategic planning will dictate how long-term decisions will be made across all aspects of the organisation and will feed into your overall business plan, including vision, mission and purpose.

Due to the overarching nature of the plan, it can take some time to initially create but then can often be left without updates for considerable amounts of time, unless the overall business aims or marketplace changes.

Forbes details this six-step process when creating your strategic plan, some of which you will already have in your business plan (depending how up to date it is):

  • Assess the market and your place in it.
  • Conduct a SWOT analysis of your business.
  • Define / update your business mission and vision.
  • Define your business goals (find out how, here).
  • Drill down to the operational objectives.
  • Determine the financial aspects.

Read the full article here.

 

Tactical

Supporting the Strategic Plan, tactical planning breaks down the strategic plan into short-term chunks, often under one year in length. Tactical plans can be created, updated or scrapped regularly in response to any business or market changes. They are often created in the first place to respond to an issue or achieve a goal, such as winning clients from a competitor.

Tactical plans are often delegated to the most suited team or department to ensure it is completed successfully and timely, and detail timescales, resources and any specific actions needed to succeed.

In this article, Indeed breaks down the areas of tactical planning into:

  • Goals – break down the steps needed to achieve a business goal.
  • Tactics – general actions needed to allow you to achieve the goal.
  • Actions – specific steps needed to achieve the goal.
  • Resources – things needed in order to complete the steps above.
  • Timeline – essential to succeeding in timely manner and keeping those involved on track.

 

Operational

Supporting both strategic and tactical business plans, operational planning relates to the way the business operates day to day and includes any rules or regulations, budgets, policies and processes in place to achieve business goals. They’re detailed enough to pinpoint what is failing and why, allowing the business to pivot quickly to changes.

Often managed by middle-management, operational planning assists business leaders to keep their finger on the pulse of the organisation.

BIT.AI has this 8-step plan for creating an operational plan:

  • Create a title page.
  • Write an executive summary.
  • Define mission and objectives.
  • Provide KPIs.
  • Include a financial summary.
  • Create a hiring plan.
  • Determine key assumptions and risks.
  • Include next steps.
  • Proof-read.

 

Contingency

Contingency planning is for when something unexpected impacts on your business – both positive and negative. While standard business plans will consider everyday changes, contingency plans for the unforeseeable, such as the current Covid-19 pandemic.

These plans are designed to get the business through the challenges by proactively mapping out the steps required to address unpredictable situations. Examples include an unexpected sudden surge in sales requiring increased stock and workforce, a complete network failure bringing your business to a standstill, or the pandemic where the UK shutdown for months at a time.

While it may seem impossible to predict the unpredictable, these plans don’t need to be so specific that you need to be able to see the future. Involving the different areas of your business in the process will help you build a picture of both critical areas and what risks the employees in those areas can foresee.

Hubspot recommends, in this article, the following steps:

  • Identify the critical functions within your business.
  • Conduct scenario assessments that would impact on those critical areas.
  • Create plans to respond to these scenarios.
  • Test the plans and update regularly.

Business planning is just one area of support you receive as part of our fully-funded incubator programme. Find out more about us, or apply now for our next cohort to be in for a chance to have your start-up part of DCI.

The next application deadline is Friday 6th May 2022

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