Key Components of A Business Plan
As a Business Coach one of my essential roles is to assist you in determining what the key components of your business plan should be. My experience is that many companies do a poor job of creating their plans, costing them serious growth in revenue and profits. If you are like most leaders I’ve worked with, your annual planning process may be broken. Often I find that leaders spend too much time focusing their attention on goals rather than on the components of their plan that will cause them to achieve those goals. Two indications that you have a problem:
- You do not find the need to visit your plan weekly, monthly and quarterly with your executive team to make sure you are following your plan.
- You are not consistently hitting your revenue and profit numbers on a monthly basis.
The main reason to create a business plan is to find the simplest path for your company to produce maximum results. A good plan creates focus, sets priorities, causes alignment throughout your organization, and provides a means for accountability. As a facilitator of hundreds of monthly, quarterly, and annual planning sessions, I have found that most organizations fall well short of achieving these objectives. Lack of prioritization is by far the most common issue I see causing companies not to reach consistent performance. While most leaders like to blame external conditions, it is usually an internal shortcoming. The leadership team fails to say “no” often enough, chooses to chase fires rather than identify and address their real issues, and thus makes their organization work twice as hard to produce less.
In order to accomplish focus, prioritization, alignment, and accountability, your business plan must have the following components:
- Tell everyone how they must operate (core values) and why you exist (purpose).
- Clarify how you will make money.
- Distinguish how you will be different from your competition.
- Be specific and measurable in terms of goals so everyone knows what success looks like on a monthly basis for the company.
- Identify the 3 to 5 absolutely essential annual priorities – these are the very difficult changes that need to be made in terms of products and services, systems and process, and people so that you can accomplish the above.
- Identify the 3 to 5 quarterly company priorities that will drive the annual priorities.
- Identify the 3 to 5 quarterly personal priorities for every leader that aligns with the company priorities and functional priorities.
- Create very specific action plans to make the priorities happen.
- Establish a measurement system so that everyone can be held accountable.
The One Page Strategic Plan created by Verne Harnish has all the key components of a business plan, and the Four Decisions Process can help simplify this whole process for you. We can maximize your team’s success. Contact us for a free consultation to learn how Business Coaching can help your organization, or check out the testimonials page for stories from other leaders we have coached.