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What Is Business Planning?

Why Business Planning Isn't Just for Startups

Susan Ward wrote about small businesses for The Balance for 18 years. She has run an IT consulting firm and designed and presented courses on how to promote small businesses.

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Business planning takes place when the key stakeholders in a business sit down and flesh out all the goals , strategies, and actions that they envision taking to ensure the business’s survival, prosperity, and growth.

Here are some strategies for business planning and the ways it can benefit your business.

Business planning can play out in many different ways. Anytime upper management comes together to plan for the success of a business, it is a form of business planning. Business planning commonly involves collecting ideas in a formal business plan that outlines a summary of the business's current state, as well as the state of the broader market, along with detailed steps the business will take to improve performance in the coming period.

Business plans aren't just about money. The business plan outlines the general planning needed to start and run a successful business, and that includes profits, but it also goes beyond that. A plan should account for everything from scoping out the competition and figuring out how your new business will fit into the industry to assessing employee morale and planning for how to retain talent.

How Does Business Planning Work?

Every new business needs a business plan —a blueprint of how you will develop your new business, backed by research, that demonstrates how the business idea is viable. If your new business idea requires investment capital, you will have a better chance of obtaining debt or equity financing from financial institutions, angel investors , or venture capitalists if you have a solid business plan to back up your ideas.

Businesses should prepare a business plan, even if they don't need to attract investors or secure loans.

Post-Startup Business Planning

The business plan isn’t a set-it-and-forget-it planning exercise. It should be a living document that is updated throughout the life cycle of your business.

Once the business has officially started, business planning will shift to setting and meeting goals and targets. Business planning is most effective when it’s done on a consistent schedule that revisits existing goals and projects throughout the year, perhaps even monthly. In addition to reviewing short-term goals throughout the year, it's also important to establish a clear vision and lay the path for your long-term success.

Daily business planning is an incredibly effective way for individuals to focus on achieving both their own goals and the goals of the organization.

Sales Forecasting

The sales forecast is a key section of the business plan that needs to be constantly tracked and updated. The sales forecast is an estimate of the sales of goods and services your business is likely to achieve over the forecasted period, along with the estimated profit from those sales. The forecast should take into account trends in your industry, the general economy, and the projected needs of your primary customers.

Cash Flow Analysis

Another crucial component of business planning is cash flow analysis. Avoiding extended cash flow shortages is vital for businesses, and many business failures can be blamed on cash flow problems.

Your business may have a large, lucrative order on the books, but if it can't be invoiced until the job is completed, then you may run into cash flow problems. That scenario can get even worse if you have to hire staff, purchase inventory, and make other expenditures in the meantime to complete the project.

Performing regular cash flow projections is an important part of business planning. If managed properly, cash flow shortages can be covered by additional financing or equity investment.

Business Contingency Planning

In addition to business planning for profit and growth, your business should have a contingency plan. Contingency business planning (also known as business continuity planning or disaster planning) is the type of business planning that deals with crises and worst-case scenarios. A business contingency plan helps businesses deal with sudden emergencies, unexpected events, and new information that could disrupt your business.

The goals of a contingency plan are to:

• Provide for the safety and security of yourself, your employees, and your customers in the event of a fire, flood, robbery, data breach, illness, or some other disaster
• Ensure that your business can resume operations after an emergency as quickly as possible

Business Succession Planning

If your business is a family enterprise or you have specific plans for who you want to take over in the event of your retirement or illness, then you should have a plan in place to hand over control of the business . The issues of management, ownership, and taxes can cause a great deal of discord within families unless a succession plan is in place that clearly outlines the process.

Key Takeaways

• Business planning is when key stakeholders review the state of their business and plan for how they will improve the business in the future.
• Business planning isn't a one-off event—it should be an ongoing practice of self-assessment and planning.
• Business planning isn't just about improving sales; it can also address safety during natural disasters or the transfer of power after an owner retires.

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Table of Contents

Every year, thousands of new businesses see the light of the day. One look at the  World Bank's Entrepreneurship Survey and database  shows the mind-boggling rate of new business registrations. However, sadly, only a tiny percentage of them have a chance of survival.   

According to the Bureau of Labor Statistics, about 20% of small businesses fail in their first year, about 50% in their fifth year.

Research from the University of Tennessee found that 44% of businesses fail within the first three years. Among those that operate within specific sectors, like information (which includes most tech firms), 63% shut shop within three years.

Several  other statistics  expose the abysmal rates of business failure. But why are so many businesses bound to fail? Most studies mention "lack of business planning" as one of the reasons.

This isn’t surprising at all. 

Running a business without a plan is like riding a motorcycle up a craggy cliff blindfolded. Yet, way too many firms ( a whopping 67%)  don't have a formal business plan in place. 

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It doesn't matter if you're a startup with a great idea or a business with an excellent product. You can only go so far without a roadmap — a business plan. Only, a business plan is so much more than just a roadmap. A solid plan allows a business to weather market challenges and pivot quickly in the face of crisis, like the one global businesses are struggling with right now, in the post-pandemic world.  

But before you can go ahead and develop a great business plan, you need to know the basics. In this article, we'll discuss the fundamentals of business planning to help you plan effectively for 2021.  

Now before we begin with the details of business planning, let us understand what it is.

What Is a Business Plan?

No two businesses have an identical business plan, even if they operate within the same industry. So one business plan can look entirely different from another one. Still, for the sake of simplicity, a business plan can be defined as a guide for a company to operate and achieve its goals.  

More specifically, it's a document in writing that outlines the goals, objectives, and purpose of a business while laying out the blueprint for its day-to-day operations and key functions such as marketing, finance, and expansion.

A good business plan can be a game-changer for startups that are looking to raise funds to grow and scale. It convinces prospective investors that the venture will be profitable and provides a realistic outlook on how much profit is on the cards and by when it will be attained. 

However, it's not only new businesses that greatly benefit from a business plan. Well-established companies and large conglomerates also need to tweak their business plans to adapt to new business environments and unpredictable market changes. 

Before getting into learning more about business planning, let us learn the advantages of having one.

The Advantages of Having a Business Plan

Since a detailed business plan offers a birds-eye view of the entire framework of an establishment, it has several benefits that make it an important part of any organization. Here are few ways a business plan can offer significant competitive edge.

• Sets objectives and benchmarks: Proper planning helps a business set realistic objectives and assign stipulated time for those goals to be met. This results in long-term profitability. It also lets a company set benchmarks and Key Performance Indicators (KPIs) necessary to reach its goals. 
• Maximizes resource allocation: A good business plan helps to effectively organize and allocate the company’s resources. It provides an understanding of the result of actions, such as, opening new offices, recruiting fresh staff, change in production, and so on. It also helps the business estimate the financial impact of such actions.
• Enhances viability: A plan greatly contributes towards turning concepts into reality. Though business plans vary from company to company, the blueprints of successful companies often serve as an excellent guide for nascent-stage start-ups and new entrepreneurs. It also helps existing firms to market, advertise, and promote new products and services into the market.
• Aids in decision making: Running a business involves a lot of decision making: where to pitch, where to locate, what to sell, what to charge — the list goes on. A well thought-out business plan provides an organization the ability to anticipate the curveballs that the future could throw at them. It allows them to come up with answers and solutions to these issues well in advance.
• Fix past mistakes: When businesses create plans keeping in mind the flaws and failures of the past and what worked for them and what didn’t, it can help them save time, money, and resources. Such plans that reflects the lessons learnt from the past offers businesses an opportunity to avoid future pitfalls.
• Attracts investors: A business plan gives investors an in-depth idea about the objectives, structure, and validity of a firm. It helps to secure their confidence and encourages them to invest. 

Now let's look at the various types involved in business planning.

The Types of Business Plans

Business plans are formulated according to the needs of a business. It can be a simple one-page document or an elaborate 40-page affair, or anything in between. While there’s no rule set in stone as to what exactly a business plan can or can’t contain, there are a few common types of business plan that nearly all businesses in existence use.  

Here’s an overview of a few fundamental types of business plans. 

• Start-up plan: As the name suggests, this is a documentation of the plans, structure, and objections of a new business establishments. It describes the products and services that are to be produced by the firm, the staff management, and market analysis of their production. Often, a detailed finance spreadsheet is also attached to this document for investors to determine the viability of the new business set-up.
• Feasibility plan: A feasibility plan evaluates the prospective customers of the products or services that are to be produced by a company. It also estimates the possibility of a profit or a loss of a venture. It helps to forecast how well a product will sell at the market, the duration it will require to yield results, and the profit margin that it will secure on investments. 
• Expansion Plan: This kind of plan is primarily framed when a company decided to expand in terms of production or structure. It lays down the fundamental steps and guidelines with regards to internal or external growth. It helps the firm to analyze the activities like resource allocation for increased production, financial investments, employment of extra staff, and much more.
• Operations Plan: An operational plan is also called an annual plan. This details the day-to-day activities and strategies that a business needs to follow in order to materialize its targets. It outlines the roles and responsibilities of the managing body, the various departments, and the company’s employees for the holistic success of the firm.
• Strategic Plan: This document caters to the internal strategies of the company and is a part of the foundational grounds of the establishments. It can be accurately drafted with the help of a SWOT analysis through which the strengths, weaknesses, opportunities, and threats can be categorized and evaluated so that to develop means for optimizing profits.

The Key Elements of a Business Plan

There is some preliminary work that’s required before you actually sit down to write a plan for your business. Knowing what goes into a business plan is one of them. 

Here are the key elements of a good business plan:

• Executive Summary: An executive summary gives a clear picture of the strategies and goals of your business right at the outset. Though its value is often understated, it can be extremely helpful in creating the readers’ first impression of your business. As such, it could define the opinions of customers and investors from the get-go.  
• Business Description: A thorough business description removes room for any ambiguity from your processes. An excellent business description will explain the size and structure of the firm as well as its position in the market. It also describes the kind of products and services that the company offers. It even states as to whether the company is old and established or new and aspiring. Most importantly, it highlights the USP of the products or services as compared to your competitors in the market.
• Market Analysis: A systematic market analysis helps to determine the current position of a business and analyzes its scope for future expansions. This can help in evaluating investments, promotions, marketing, and distribution of products. In-depth market understanding also helps a business combat competition and make plans for long-term success.
• Operations and Management: Much like a statement of purpose, this allows an enterprise to explain its uniqueness to its readers and customers. It showcases the ways in which the firm can deliver greater and superior products at cheaper rates and in relatively less time. 
• Financial Plan: This is the most important element of a business plan and is primarily addressed to investors and sponsors. It requires a firm to reveal its financial policies and market analysis. At times, a 5-year financial report is also required to be included to show past performances and profits. The financial plan draws out the current business strategies, future projections, and the total estimated worth of the firm.

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The importance of business planning is it simplifies the planning of your company's finances to present this information to a bank or investors. Here are the best business plan software providers available right now:

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Common Challenges of Writing a Business Plan

The importance of business planning cannot be emphasized enough, but it can be challenging to write a business plan. Here are a few issues to consider before you start your business planning:

• Create a business plan to determine your company's direction, obtain financing, and attract investors.
• Identifying financial, demographic, and achievable goals is a common challenge when writing a business plan.
• Some entrepreneurs struggle to write a business plan that is concise, interesting, and informative enough to demonstrate the viability of their business idea.
• You can streamline your business planning process by conducting research, speaking with experts and peers, and working with a business consultant.

Become an Expert Business Planner

Whether you’re running your own business or in-charge of ensuring strategic performance and growth for your employer or clients, knowing the ins and outs of business planning can set you up for success. 

Be it the launch of a new and exciting product or an expansion of operations, business planning is the necessity of all large and small companies. Which is why the need for professionals with superior business planning skills will never die out. In fact, their demand is on the rise with global firms putting emphasis on business analysis and planning to cope with cut-throat competition and market uncertainties.

While some are natural-born planners, most people have to work to develop this important skill. Plus, business planning requires you to understand the fundamentals of business management and be familiar with business analysis techniques . It also requires you to have a working knowledge of data visualization, project management, and monitoring tools commonly used by businesses today.   

Simpliearn’s Post Graduate Program in Business Analysis will help you develop and hone the required skills to become an extraordinary business planner. This comprehensive training program combined with the latest tools and methods can pave the way for you and equip you with the skills and the know-how to tackle any real-world challenges that may arise. Completing this industry-recognized course also earns you a valued certification as tangible proof of your talent. 

What Is Meant by Business Planning?

Business planning is developing a company's mission or goals and defining the strategies you will use to achieve those goals or tasks. The process can be extensive, encompassing all aspects of the operation, or it can be concrete, focusing on specific functions within the overall corporate structure.

What Are the 4 Types of Business Plans?

The following are the four types of business plans:

Operational Planning

This type of planning typically describes the company's day-to-day operations. Single-use plans are developed for events and activities that occur only once (such as a single marketing campaign). Ongoing plans include problem-solving policies, rules for specific regulations, and procedures for a step-by-step process for achieving particular goals.

Strategic Planning

Strategic plans are all about why things must occur. A high-level overview of the entire business is included in strategic planning. It is the organization's foundation and will dictate long-term decisions.

Tactical Planning

Tactical plans are about what will happen. Strategic planning is aided by tactical planning. It outlines the tactics the organization intends to employ to achieve the goals outlined in the strategic plan.

Contingency Planning

When something unexpected occurs or something needs to be changed, contingency plans are created. In situations where a change is required, contingency planning can be beneficial.

What Are the 7 Steps of a Business Plan?

The following are the seven steps required for a business plan:

Conduct Research

If your company is to run a viable business plan and attract investors, your information must be of the highest quality.

Have a Goal

The goal must be unambiguous. You will waste your time if you don't know why you're writing a business plan. Knowing also implies having a target audience for when the plan is expected to get completed.

Create a Company Profile

Some refer to it as a company profile, while others refer to it as a snapshot. It's designed to be mentally quick and digestible because it needs to stick in the reader's mind quickly since more information is provided later in the plan.

Describe the Company in Detail

Explain the company's current situation, both good and bad. Details should also include patents, licenses, copyrights, and unique strengths that no one else has.

Create a marketing plan ahead of time.

A strategic marketing plan is required because it outlines how your product or service will be communicated, delivered, and sold to customers.

Be Willing to Change Your Plan for the Sake of Your Audience

Another standard error is that people only write one business plan. Startups have several versions, just as candidates have numerous resumes for various potential employers.

Incorporate Your Motivation

Your motivation must be a compelling reason for people to believe your company will succeed in all circumstances. A mission should drive a business, not just selling, to make money. That mission is defined by your motivation as specified in your business plan.

What Are the Basic Steps in Business Planning?

These are the basic steps in business planning:

Summary and Objectives

Briefly describe your company, its objectives, and your plan to keep it running.

Services and Products

Add specifics to your detailed description of the product or service you intend to offer. Where, why, and how much you plan to sell your product or service and any special offers.

Conduct research on your industry and the ideal customers to whom you want to sell. Identify the issues you want to solve for your customers.

Operations are the process of running your business, including the people, skills, and experience required to make it successful.

How are you going to reach your target audience? How you intend to sell to them may include positioning, pricing, promotion, and distribution.

Consider funding costs, operating expenses, and projected income. Include your financial objectives and a breakdown of what it takes to make your company profitable. With proper business planning through the help of support, system, and mentorship, it is easy to start a business.

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What is a Business Plan? Definition, Tips, and Templates

Published: June 07, 2023

In an era where more than 20% of small enterprises fail in their first year, having a clear, defined, and well-thought-out business plan is a crucial first step for setting up a business for long-term success.

Business plans are a required tool for all entrepreneurs, business owners, business acquirers, and even business school students. But … what exactly is a business plan?

In this post, we'll explain what a business plan is, the reasons why you'd need one, identify different types of business plans, and what you should include in yours.

What is a business plan?

A business plan is a documented strategy for a business that highlights its goals and its plans for achieving them. It outlines a company's go-to-market plan, financial projections, market research, business purpose, and mission statement. Key staff who are responsible for achieving the goals may also be included in the business plan along with a timeline.

The business plan is an undeniably critical component to getting any company off the ground. It's key to securing financing, documenting your business model, outlining your financial projections, and turning that nugget of a business idea into a reality.

What is a business plan used for?

The purpose of a business plan is three-fold: It summarizes the organization’s strategy in order to execute it long term, secures financing from investors, and helps forecast future business demands.

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Working on your business plan? Try using our Business Plan Template . Pre-filled with the sections a great business plan needs, the template will give aspiring entrepreneurs a feel for what a business plan is, what should be in it, and how it can be used to establish and grow a business from the ground up.

Purposes of a Business Plan

Chances are, someone drafting a business plan will be doing so for one or more of the following reasons:

1. Securing financing from investors.

Since its contents revolve around how businesses succeed, break even, and turn a profit, a business plan is used as a tool for sourcing capital. This document is an entrepreneur's way of showing potential investors or lenders how their capital will be put to work and how it will help the business thrive.

All banks, investors, and venture capital firms will want to see a business plan before handing over their money, and investors typically expect a 10% ROI or more from the capital they invest in a business.

Therefore, these investors need to know if — and when — they'll be making their money back (and then some). Additionally, they'll want to read about the process and strategy for how the business will reach those financial goals, which is where the context provided by sales, marketing, and operations plans come into play.

2. Documenting a company's strategy and goals.

A business plan should leave no stone unturned.

Business plans can span dozens or even hundreds of pages, affording their drafters the opportunity to explain what a business' goals are and how the business will achieve them.

To show potential investors that they've addressed every question and thought through every possible scenario, entrepreneurs should thoroughly explain their marketing, sales, and operations strategies — from acquiring a physical location for the business to explaining a tactical approach for marketing penetration.

These explanations should ultimately lead to a business' break-even point supported by a sales forecast and financial projections, with the business plan writer being able to speak to the why behind anything outlined in the plan.

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Fill out the form to access your free business plan., 3. legitimizing a business idea..

Everyone's got a great idea for a company — until they put pen to paper and realize that it's not exactly feasible.

A business plan is an aspiring entrepreneur's way to prove that a business idea is actually worth pursuing.

As entrepreneurs document their go-to-market process, capital needs, and expected return on investment, entrepreneurs likely come across a few hiccups that will make them second guess their strategies and metrics — and that's exactly what the business plan is for.

It ensures an entrepreneur's ducks are in a row before bringing their business idea to the world and reassures the readers that whoever wrote the plan is serious about the idea, having put hours into thinking of the business idea, fleshing out growth tactics, and calculating financial projections.

4. Getting an A in your business class.

Speaking from personal experience, there's a chance you're here to get business plan ideas for your Business 101 class project.

If that's the case, might we suggest checking out this post on How to Write a Business Plan — providing a section-by-section guide on creating your plan?

What does a business plan need to include?

• Business Plan Subtitle
• Executive Summary
• Company Description
• The Business Opportunity
• Competitive Analysis
• Target Market
• Marketing Plan
• Financial Summary
• Funding Requirements

1. Business Plan Subtitle

Every great business plan starts with a captivating title and subtitle. You’ll want to make it clear that the document is, in fact, a business plan, but the subtitle can help tell the story of your business in just a short sentence.

2. Executive Summary

Although this is the last part of the business plan that you’ll write, it’s the first section (and maybe the only section) that stakeholders will read. The executive summary of a business plan sets the stage for the rest of the document. It includes your company’s mission or vision statement, value proposition, and long-term goals.

3. Company Description

This brief part of your business plan will detail your business name, years in operation, key offerings, and positioning statement. You might even add core values or a short history of the company. The company description’s role in a business plan is to introduce your business to the reader in a compelling and concise way.

4. The Business Opportunity

The business opportunity should convince investors that your organization meets the needs of the market in a way that no other company can. This section explains the specific problem your business solves within the marketplace and how it solves them. It will include your value proposition as well as some high-level information about your target market.

5. Competitive Analysis

Just about every industry has more than one player in the market. Even if your business owns the majority of the market share in your industry or your business concept is the first of its kind, you still have competition. In the competitive analysis section, you’ll take an objective look at the industry landscape to determine where your business fits. A SWOT analysis is an organized way to format this section.

6. Target Market

Who are the core customers of your business and why? The target market portion of your business plan outlines this in detail. The target market should explain the demographics, psychographics, behavioristics, and geographics of the ideal customer.

7. Marketing Plan

Marketing is expansive, and it’ll be tempting to cover every type of marketing possible, but a brief overview of how you’ll market your unique value proposition to your target audience, followed by a tactical plan will suffice.

Think broadly and narrow down from there: Will you focus on a slow-and-steady play where you make an upfront investment in organic customer acquisition? Or will you generate lots of quick customers using a pay-to-play advertising strategy? This kind of information should guide the marketing plan section of your business plan.

8. Financial Summary

Money doesn’t grow on trees and even the most digital, sustainable businesses have expenses. Outlining a financial summary of where your business is currently and where you’d like it to be in the future will substantiate this section. Consider including any monetary information that will give potential investors a glimpse into the financial health of your business. Assets, liabilities, expenses, debt, investments, revenue, and more are all useful adds here.

So, you’ve outlined some great goals, the business opportunity is valid, and the industry is ready for what you have to offer. Who’s responsible for turning all this high-level talk into results? The "team" section of your business plan answers that question by providing an overview of the roles responsible for each goal. Don’t worry if you don’t have every team member on board yet, knowing what roles to hire for is helpful as you seek funding from investors.

10. Funding Requirements

Remember that one of the goals of a business plan is to secure funding from investors, so you’ll need to include funding requirements you’d like them to fulfill. The amount your business needs, for what reasons, and for how long will meet the requirement for this section.

Types of Business Plans

• Startup Business Plan
• Feasibility Business Plan
• Internal Business Plan
• Strategic Business Plan
• Business Acquisition Plan
• Business Repositioning Plan
• Expansion or Growth Business Plan

There’s no one size fits all business plan as there are several types of businesses in the market today. From startups with just one founder to historic household names that need to stay competitive, every type of business needs a business plan that’s tailored to its needs. Below are a few of the most common types of business plans.

For even more examples, check out these sample business plans to help you write your own .

1. Startup Business Plan

As one of the most common types of business plans, a startup business plan is for new business ideas. This plan lays the foundation for the eventual success of a business.

The biggest challenge with the startup business plan is that it’s written completely from scratch. Startup business plans often reference existing industry data. They also explain unique business strategies and go-to-market plans.

Because startup business plans expand on an original idea, the contents will vary by the top priority goals.

For example, say a startup is looking for funding. If capital is a priority, this business plan might focus more on financial projections than marketing or company culture.

2. Feasibility Business Plan

This type of business plan focuses on a single essential aspect of the business — the product or service. It may be part of a startup business plan or a standalone plan for an existing organization. This comprehensive plan may include:

• A detailed product description
• Market analysis
• Technology needs
• Production needs
• Financial sources
• Production operations

According to CBInsights research, 35% of startups fail because of a lack of market need. Another 10% fail because of mistimed products.

Some businesses will complete a feasibility study to explore ideas and narrow product plans to the best choice. They conduct these studies before completing the feasibility business plan. Then the feasibility plan centers on that one product or service.

3. Internal Business Plan

Internal business plans help leaders communicate company goals, strategy, and performance. This helps the business align and work toward objectives more effectively.

Besides the typical elements in a startup business plan, an internal business plan may also include:

• Department-specific budgets
• Target demographic analysis
• Market size and share of voice analysis
• Action plans
• Sustainability plans

Most external-facing business plans focus on raising capital and support for a business. But an internal business plan helps keep the business mission consistent in the face of change.

4. Strategic Business Plan

Strategic business plans focus on long-term objectives for your business. They usually cover the first three to five years of operations. This is different from the typical startup business plan which focuses on the first one to three years. The audience for this plan is also primarily internal stakeholders.

These types of business plans may include:

• Relevant data and analysis
• Assessments of company resources
• Vision and mission statements

It's important to remember that, while many businesses create a strategic plan before launching, some business owners just jump in. So, this business plan can add value by outlining how your business plans to reach specific goals. This type of planning can also help a business anticipate future challenges.

5. Business Acquisition Plan

Investors use business plans to acquire existing businesses, too — not just new businesses.

A business acquisition plan may include costs, schedules, or management requirements. This data will come from an acquisition strategy.

A business plan for an existing company will explain:

• How an acquisition will change its operating model
• What will stay the same under new ownership
• Why things will change or stay the same
• Acquisition planning documentation
• Timelines for acquisition

Additionally, the business plan should speak to the current state of the business and why it's up for sale.

For example, if someone is purchasing a failing business, the business plan should explain why the business is being purchased. It should also include:

• What the new owner will do to turn the business around
• Historic business metrics
• Sales projections after the acquisition
• Justification for those projections

6. Business Repositioning Plan

When a business wants to avoid acquisition, reposition its brand, or try something new, CEOs or owners will develop a business repositioning plan.

This plan will:

• Acknowledge the current state of the company.
• State a vision for the future of the company.
• Explain why the business needs to reposition itself.
• Outline a process for how the company will adjust.

Companies planning for a business reposition often do so — proactively or retroactively — due to a shift in market trends and customer needs.

For example, shoe brand AllBirds plans to refocus its brand on core customers and shift its go-to-market strategy. These decisions are a reaction to lackluster sales following product changes and other missteps.

7. Expansion or Growth Business Plan

When your business is ready to expand, a growth business plan creates a useful structure for reaching specific targets.

For example, a successful business expanding into another location can use a growth business plan. This is because it may also mean the business needs to focus on a new target market or generate more capital.

This type of plan usually covers the next year or two of growth. It often references current sales, revenue, and successes. It may also include:

• SWOT analysis
• Growth opportunity studies
• Financial goals and plans
• Marketing plans
• Capability planning

These types of business plans will vary by business, but they can help businesses quickly rally around new priorities to drive growth.

Getting Started With Your Business Plan

At the end of the day, a business plan is simply an explanation of a business idea and why it will be successful. The more detail and thought you put into it, the more successful your plan — and the business it outlines — will be.

When writing your business plan, you’ll benefit from extensive research, feedback from your team or board of directors, and a solid template to organize your thoughts. If you need one of these, download HubSpot's Free Business Plan Template below to get started.

Editor's note: This post was originally published in August 2020 and has been updated for comprehensiveness.

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1.5 Planning, Organizing, Leading, and Controlling

Learning objectives.

• Know the dimensions of the planning-organizing-leading-controlling (P-O-L-C) framework.
• Know the general inputs into each P-O-L-C dimension.

A manager’s primary challenge is to solve problems creatively. While drawing from a variety of academic disciplines, and to help managers respond to the challenge of creative problem solving, principles of management have long been categorized into the four major functions of planning, organizing, leading, and controlling (the P-O-L-C framework). The four functions, summarized in the P-O-L-C figure, are actually highly integrated when carried out in the day-to-day realities of running an organization. Therefore, you should not get caught up in trying to analyze and understand a complete, clear rationale for categorizing skills and practices that compose the whole of the P-O-L-C framework.

It is important to note that this framework is not without criticism. Specifically, these criticisms stem from the observation that the P-O-L-C functions might be ideal but that they do not accurately depict the day-to-day actions of actual managers (Mintzberg, 1973; Lamond, 2004). The typical day in the life of a manager at any level can be fragmented and hectic, with the constant threat of having priorities dictated by the law of the trivial many and important few (i.e., the 80/20 rule). However, the general conclusion seems to be that the P-O-L-C functions of management still provide a very useful way of classifying the activities managers engage in as they attempt to achieve organizational goals (Lamond, 2004).

Figure 1.7 The P-O-L-C Framework

Planning is the function of management that involves setting objectives and determining a course of action for achieving those objectives. Planning requires that managers be aware of environmental conditions facing their organization and forecast future conditions. It also requires that managers be good decision makers.

Planning is a process consisting of several steps. The process begins with environmental scanning which simply means that planners must be aware of the critical contingencies facing their organization in terms of economic conditions, their competitors, and their customers. Planners must then attempt to forecast future conditions. These forecasts form the basis for planning.

Planners must establish objectives, which are statements of what needs to be achieved and when. Planners must then identify alternative courses of action for achieving objectives. After evaluating the various alternatives, planners must make decisions about the best courses of action for achieving objectives. They must then formulate necessary steps and ensure effective implementation of plans. Finally, planners must constantly evaluate the success of their plans and take corrective action when necessary.

There are many different types of plans and planning.

Strategic planning involves analyzing competitive opportunities and threats, as well as the strengths and weaknesses of the organization, and then determining how to position the organization to compete effectively in their environment. Strategic planning has a long time frame, often three years or more. Strategic planning generally includes the entire organization and includes formulation of objectives. Strategic planning is often based on the organization’s mission, which is its fundamental reason for existence. An organization’s top management most often conducts strategic planning.

Tactical planning is intermediate-range (one to three years) planning that is designed to develop relatively concrete and specific means to implement the strategic plan. Middle-level managers often engage in tactical planning.

Operational planning generally assumes the existence of organization-wide or subunit goals and objectives and specifies ways to achieve them. Operational planning is short-range (less than a year) planning that is designed to develop specific action steps that support the strategic and tactical plans.

Organizing is the function of management that involves developing an organizational structure and allocating human resources to ensure the accomplishment of objectives. The structure of the organization is the framework within which effort is coordinated. The structure is usually represented by an organization chart, which provides a graphic representation of the chain of command within an organization. Decisions made about the structure of an organization are generally referred to as organizational design decisions.

Organizing also involves the design of individual jobs within the organization. Decisions must be made about the duties and responsibilities of individual jobs, as well as the manner in which the duties should be carried out. Decisions made about the nature of jobs within the organization are generally called “job design” decisions.

Organizing at the level of the organization involves deciding how best to departmentalize, or cluster, jobs into departments to coordinate effort effectively. There are many different ways to departmentalize, including organizing by function, product, geography, or customer. Many larger organizations use multiple methods of departmentalization.

Organizing at the level of a particular job involves how best to design individual jobs to most effectively use human resources. Traditionally, job design was based on principles of division of labor and specialization, which assumed that the more narrow the job content, the more proficient the individual performing the job could become. However, experience has shown that it is possible for jobs to become too narrow and specialized. For example, how would you like to screw lids on jars one day after another, as you might have done many decades ago if you worked in company that made and sold jellies and jams? When this happens, negative outcomes result, including decreased job satisfaction and organizational commitment, increased absenteeism, and turnover.

Recently, many organizations have attempted to strike a balance between the need for worker specialization and the need for workers to have jobs that entail variety and autonomy. Many jobs are now designed based on such principles as empowerment, job enrichment and teamwork . For example, HUI Manufacturing, a custom sheet metal fabricator, has done away with traditional “departments” to focus on listening and responding to customer needs. From company-wide meetings to team huddles, HUI employees know and understand their customers and how HUI might service them best (Huimfg, 2008).

Leading involves the social and informal sources of influence that you use to inspire action taken by others. If managers are effective leaders, their subordinates will be enthusiastic about exerting effort to attain organizational objectives.

The behavioral sciences have made many contributions to understanding this function of management. Personality research and studies of job attitudes provide important information as to how managers can most effectively lead subordinates. For example, this research tells us that to become effective at leading, managers must first understand their subordinates’ personalities, values, attitudes, and emotions.

Studies of motivation and motivation theory provide important information about the ways in which workers can be energized to put forth productive effort. Studies of communication provide direction as to how managers can effectively and persuasively communicate. Studies of leadership and leadership style provide information regarding questions, such as, “What makes a manager a good leader?” and “In what situations are certain leadership styles most appropriate and effective?”

Quality control ensures that the organization delivers on its promises.

International Maize and Wheat Improvement Center – Maize seed quality control at small seed company Bidasem – CC BY-NC-SA 2.0.

Controlling

Controlling involves ensuring that performance does not deviate from standards. Controlling consists of three steps, which include (1) establishing performance standards, (2) comparing actual performance against standards, and (3) taking corrective action when necessary. Performance standards are often stated in monetary terms such as revenue, costs, or profits but may also be stated in other terms, such as units produced, number of defective products, or levels of quality or customer service.

The measurement of performance can be done in several ways, depending on the performance standards, including financial statements, sales reports, production results, customer satisfaction, and formal performance appraisals. Managers at all levels engage in the managerial function of controlling to some degree.

The managerial function of controlling should not be confused with control in the behavioral or manipulative sense. This function does not imply that managers should attempt to control or to manipulate the personalities, values, attitudes, or emotions of their subordinates. Instead, this function of management concerns the manager’s role in taking necessary actions to ensure that the work-related activities of subordinates are consistent with and contributing toward the accomplishment of organizational and departmental objectives.

Effective controlling requires the existence of plans, since planning provides the necessary performance standards or objectives. Controlling also requires a clear understanding of where responsibility for deviations from standards lies. Two traditional control techniques are budget and performance audits. An audit involves an examination and verification of records and supporting documents. A budget audit provides information about where the organization is with respect to what was planned or budgeted for, whereas a performance audit might try to determine whether the figures reported are a reflection of actual performance. Although controlling is often thought of in terms of financial criteria, managers must also control production and operations processes, procedures for delivery of services, compliance with company policies, and many other activities within the organization.

The management functions of planning, organizing, leading, and controlling are widely considered to be the best means of describing the manager’s job, as well as the best way to classify accumulated knowledge about the study of management. Although there have been tremendous changes in the environment faced by managers and the tools used by managers to perform their roles, managers still perform these essential functions.

Key Takeaway

The principles of management can be distilled down to four critical functions. These functions are planning, organizing, leading, and controlling. This P-O-L-C framework provides useful guidance into what the ideal job of a manager should look like.

• What are the management functions that comprise the P-O-L-C framework?
• Are there any criticisms of this framework?
• What function does planning serve?
• What function does organizing serve?
• What function does leading serve?
• What function does controlling serve?

Huimfg.com, http://www.huimfg.com/abouthui-yourteams.aspx (accessed October 15, 2008).

Lamond, D, “A Matter of Style: Reconciling Henri and Henry,” Management Decision 42, no. 2 (2004): 330–56.

Mintzberg, H. The Nature of Managerial Work (New York: Harper & Row, 1973); D. Lamond, “A Matter of Style: Reconciling Henri and Henry,” Management Decision 42 , no. 2 (2004): 330–56.

Principles of Management Copyright © 2015 by University of Minnesota is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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Strategic Planning in Business

Table of Contents

What is business strategic planning, the strategic planning process in 3 steps, what is a business strategic plan, key components of a business strategic plan, business strategic plan example, strategic plan vs. business plan.

Strategic planning is key for success in business. By planning strategically for the future, a business can achieve its goals. It’s easier said than done, but the more you know about strategic planning, the better chance you have at succeeding.

Business strategic planning is the process of creating a business strategy and an accompanying business strategic plan to implement a company’s vision and achieve its goals over time. The main goal of strategic planning is to take a company from its current state to its desired state through a series of business actions.

The business strategic planning process usually consists of defining business goals, doing a SWOT analysis to assess the company’s business environment and developing a business strategy. The leadership team is in charge of business strategic planning, as it has a very important impact on the overall direction of a company.

To oversee the execution of a business strategic plan, managers need to manage time, costs and tasks. ProjectManager is a project planning tool that allows managers to plan, schedule and manage their team’s work. Plan your work with professional tools such as Gantt charts, kanban boards, task lists and calendars. Then track your progress in real time to stick to your strategic plan. Get started for free.

Strategic planning is very important, but it doesn’t need to be overly complex. Let’s simplify this process by breaking it down into three simple steps.

1. Set Business Goals

A business goal is simply an accomplishment that a company wants to achieve in the short, medium or long term. Business goals can take many forms such as increasing sales, revenue, customer satisfaction levels and brand positioning, among many other things.

2. Conduct a SWOT Analysis

The goal of a business strategy is to leverage the strengths of a business and minimize the impact of its weaknesses. Those two things are internal factors. The strengths of a company can become competitive advantages that can lead to business growth. There are many types of business strengths and weaknesses such as scale, speed, or R&D, just to name a few.

Threats and opportunities refer to external factors such as competitors or an untapped market. A successful business strategy considers all of these factors to define how a product or service will be created, marketed and sold, and a SWOT analysis is a great starting point.

3. Develop a Business Strategy & Strategic Plan

Once you’ve completed your SWOT analysis, you can create a business strategy that’s designed to help position your company in the market. Your business strategy guides how you produce, market and sell your product or service based on internal and external analysis.

Then, you’ll need a strategic plan to explain how you plan to execute that business strategy.

A business strategic plan is an implementation plan that’s meant to turn a business strategy into action items that can be executed over time. Business strategic plans are usually executed over the course of 3-5 years.

How to Develop a Strategic Plan

To develop a strategic plan, you should ask yourself the following three questions.

• Where Is the Business Now? Gather as much information on your business as possible including internal operations and what drives its profitability. Compare the business to competitors and note the similarities and differences in detail. This isn’t a day-to-day operational study, but a broader look at the business in context to itself and its environment. But don’t go crazy; stay realistic in terms of your business goals. Be detached and critical in your analysis.
• Where Do You Want to Go? Now it’s time to decide what your top-level objectives are for the future. Start with a vision statement , objectives, values, techniques and goals. Look forward to five years or more to forecast where you want the business to be at that time. This means figuring out what the focus of the business will be in the future. Will that focus differ from what it is now, and what competitive advantages do have you in the marketplace? This is where you build the foundation and initiate changes.
• How Can You Get There? Once you know where you are and where you want to go, it’s time to plan. What are the changes to the structure, financing, etc., necessary for the business to get there? Decide on the best way to implement those changes, the timeframe with deadlines and how to finance it. Remember, this is looking at the business at large, so consider major endeavors such as diversification, existing growth, acquisition and other functional matters. A gap analysis can be a big help here.

Once you’ve answered the above questions and have a way to achieve the long-term goals laid out in the strategic plan, the next step is making sure you have the right person to manage all of its moving parts. They must be analytical, a creative thinker and able to grasp operational detail.

That doesn’t mean the strategic plan is led by one person. It’s best to not do it alone; seek other opinions. The people in your organization, from bottom to top, are all great resources to offer perspectives from their standpoints. Don’t forget to take in the advice of stakeholders, including customers, clients, advisors and consultants.

To create a strong strategic plan, one must first have a strong understanding of the business that is to expand. How does the business work? Where does the business stand in relation to competitors in the marketplace? A strategic plan is built on the bones of the following foundational elements:

• Mission Statement: The mission statement describes what your company does.
• Vision Statement: The vision statement explains where your company expects to be in the future.
• Core Values: Guiding principles that shape your company’s organizational culture.
• Business Objectives: Consider using the SMART goal-setting technique . This simply means setting up specific, measurable, attainable, relevant and time-bound objectives that your company wants to achieve.
• SWOT Analysis: External and internal factors that make up your company’s business competitive environment.
• Action Plan: A plan outlining steps that will be taken to achieve the business objectives of your organization.
• Financials: A section that shows the financial performance expectations, the budget and the resources that will be required to implement the action plan.
• Performance Measurements: Performance indicators that will be used to measure the effectiveness of the action plan.

Never forget to check your strategic plan against reality. In addition to being achievable, it must be practical for your business environment, resources and marketplace.

Now let’s look at a simple business strategic plan example. This is a strategic plan for a small construction company.

1. Mission, Vision & Core Values

• Mission Statement: To build residential spaces that provide wellbeing for our clients.
• Vision Statement: To offer the best construction experience for our clients and expand our brand throughout the globe.
• Core Values: Sustainable innovation and respect for the environment.

2. Business Objectives

• Business Objective 1: Grow operating margin from 15% to 20% over the next year.
• Business Objective 2: Reduce operating costs by 5% over the next quarter
• Business Objective 3: Increase the number of new contracts generated by 10% over the next year

3. SWOT Analysis

• Strengths: Available financing, brand visibility and know-how.
• Weaknesses: Lack of PPE, human capital and expertise in construction areas such as plumbing, electrical work and masonry, which requires subcontractors.
• Opportunities: Lack of environmentally-friendly construction companies in the market.
• Threats: Larger construction companies compete for contracts in the area.

4. Action Plan

• Business Objective 1: To grow operating margin, new employees with plumbing, electrical work and masonry experience will be hired to cut down subcontractor costs. This must be done by the end of the first quarter.
• Business Objective 2: To reduce operating costs, the company will acquire property, plant and equipment. By doing this, the company will no longer rent equipment from third parties, which will reduce operating costs significantly in the medium and long term.
• Business Objective 3: To increase the number of new contracts generated, the leadership team will invest more in the PR, marketing and advertising departments. The company will also invest in key positions for the construction bidding process such as contract estimators.
• Financials: This section will explain in detail what are the costs associated with the work items in the action plan as well as the expected financial benefits for the company.

Strategic Plan Template

Our free strategic plan template helps leadership teams gather important information about their business strategy, which makes it the perfect tool to start shaping a strategic plan for your business or project.

A strategic plan is a type of business plan, but there are distinctions between the two. Whereas a strategic plan is for implementing and managing the strategic direction of a business, a business plan is more often the document that starts a business.

A business plan is used primarily to get funding for the venture or direct the operation, and the two plans target different timeframes in business history. A strategic plan is used to investigate a future period, usually between three-to-five years. A business plan is more routinely a year out.

A Different Intent

A strategic plan offers a business focus, direction and action to help the business grow from the point it presently resides to a greater market share in the future. A business plan, on the other hand, is more focused on offering a structure to capture and implement ideas that initially define a business.

With a strategic plan, existing resources are prioritized to increase revenue and return on investment. The business plan is different in that it’s seeking funding for a venture that doesn’t yet exist. Where a strategic plan is building a sustainable competitive advantage in the future, a business plan is designed to take advantage of a current business opportunity.

So, a strategic plan is communicating direction to teams and stakeholders in order to achieve future goals. A business plan isn’t talking to staff, which is likely nonexistent or minimal at this point. It’s speaking to banks and other financial supporters.

Strategic planning, like any planning, requires keeping a lot of balls in the air. That means having the right tool to plan, monitor and report on all the various tasks and resources. ProjectManager is online project management software that gives you control over every aspect of creating and implementing a strategic plan. Try it today with this free 30-day trial.

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The Business Planning Process: 6 Steps To Creating a New Plan

In this article, we will define and explain the basic business planning process to help your business move in the right direction.

What is Business Planning?

Business planning is the process whereby an organization’s leaders figure out the best roadmap for growth and document their plan for success.

The business planning process includes diagnosing the company’s internal strengths and weaknesses, improving its efficiency, working out how it will compete against rival firms in the future, and setting milestones for progress so they can be measured.

The process includes writing a new business plan. What is a business plan? It is a written document that provides an outline and resources needed to achieve success. Whether you are writing your plan from scratch, from a simple business plan template , or working with an experienced business plan consultant or writer, business planning for startups, small businesses, and existing companies is the same.

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The Better Business Planning Process

The business plan process includes 6 steps as follows:

• Do Your Research
• Calculate Your Financial Forecast
• Draft Your Plan
• Revise & Proofread
• Nail the Business Plan Presentation

We’ve provided more detail for each of these key business plan steps below.

1. Do Your Research

Conduct detailed research into the industry, target market, existing customer base,  competitors, and costs of the business begins the process. You may ask yourself the following questions:

• What are your business goals?
• What is the current state of your business?
• What are the current industry trends?
• What is your competition doing?

There are a variety of resources needed, ranging from databases and articles to direct interviews with other entrepreneurs, potential customers, or industry experts. The information gathered during this process should be documented and organized carefully, including the source as there is a need to cite sources within your business plan.

You may also want to complete a SWOT Analysis for your own business to identify your strengths, weaknesses, opportunities, and potential risks as this will help you develop your strategies to highlight your competitive advantage.

2. Strategize

Now, you will use the research to determine the best strategy for your business. You may choose to develop new strategies or refine existing strategies that have demonstrated success in the industry. Pulling the best practices of the industry provides a foundation, but then you should expand on the different activities that focus on your competitive advantage.

This step of the planning process may include formulating a vision for the company’s future, which can be done by conducting intensive customer interviews and understanding their motivations for purchasing goods and services of interest. Dig deeper into decisions on an appropriate marketing plan, operational processes to execute your plan, and human resources required for the first five years of the company’s life.

3. Calculate Your Financial Forecast

All of the activities you choose for your strategy come at some cost and, hopefully, lead to some revenues. Sketch out the financial situation by looking at whether you can expect revenues to cover all costs and leave room for profit in the long run.

Begin to insert your financial assumptions and startup costs into a financial model which can produce a first-year cash flow statement for you, giving you the best sense of the cash you will need on hand to fund your early operations.

A full set of financial statements provides the details about the company’s operations and performance, including its expenses and profits by accounting period (quarterly or year-to-date). Financial statements also provide a snapshot of the company’s current financial position, including its assets and liabilities.

This is one of the most valued aspects of any business plan as it provides a straightforward summary of what a company does with its money, or how it grows from initial investment to become profitable.

4. Draft Your Plan

With financials more or less settled and a strategy decided, it is time to draft through the narrative of each component of your business plan . With the background work you have completed, the drafting itself should be a relatively painless process.

If you have trouble writing convincing prose, this is a time to seek the help of an experienced business plan writer who can put together the plan from this point.

5. Revise & Proofread

Revisit the entire plan to look for any ideas or wording that may be confusing, redundant, or irrelevant to the points you are making within the plan. You may want to work with other management team members in your business who are familiar with the company’s operations or marketing plan in order to fine-tune the plan.

Finally, proofread thoroughly for spelling, grammar, and formatting, enlisting the help of others to act as additional sets of eyes. You may begin to experience burnout from working on the plan for so long and have a need to set it aside for a bit to look at it again with fresh eyes.

6. Nail the Business Plan Presentation

The presentation of the business plan should succinctly highlight the key points outlined above and include additional material that would be helpful to potential investors such as financial information, resumes of key employees, or samples of marketing materials. It can also be beneficial to provide a report on past sales or financial performance and what the business has done to bring it back into positive territory.

Business Planning Process Conclusion

Every entrepreneur dreams of the day their business becomes wildly successful.

But what does that really mean? How do you know whether your idea is worth pursuing?

And how do you stay motivated when things are not going as planned? The answers to these questions can be found in your business plan. This document helps entrepreneurs make better decisions and avoid common pitfalls along the way. ​

Business plans are dynamic documents that can be revised and presented to different audiences throughout the course of a company’s life. For example, a business may have one plan for its initial investment proposal, another which focuses more on milestones and objectives for the first several years in existence, and yet one more which is used specifically when raising funds.

Business plans are a critical first step for any company looking to attract investors or receive grant money, as they allow a new organization to better convey its potential and business goals to those able to provide financial resources.

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Other Helpful Business Plan Articles & Templates

Business Planning Guide

What is a business plan?

• Types of business plans
• How to write
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What is a Business Plan and Why is it Important?

Tim Berry | Mar 22, 2023

If you’ve ever jotted down a business idea on a napkin with a few tasks you need to accomplish, you’ve written a business plan—or at least the very basic components of one. Let’s go over what a business plan is and why you need one to prepare you to successfully write and use it for your business needs.

A business plan is a strategic roadmap for any new or growing business or startup venture. It captures the opportunity you see for your company: it describes your product or service and your business model, the target market you’ll serve. It also includes details on how you’ll execute your plan: how you’ll price and market your solution, and your financial projections.

Why do you need a business plan?

What is the purpose of a business plan? Should you really spend your time writing one? While it may seem like a daunting exercise or waste of time, there are plenty of tangible benefits to consider.

The scientific benefits of business planning

What does scientific research have to say about the impact of business planning on small business success? We’ve tracked down and compiled all relevant information to answer that very question.

When should you write a business plan?

There’s truly no wrong time to create a business plan. But there are specific business planning events that require one if you hope to find success.

How long should your business plan be?

The length of a business plan can range from a short napkin-sized list, a single page, or a detailed 40+ page overview of your business. The point is, there’s no standard size and it depends on your needs.

Start with a business plan outline

What are the key elements that make a good business plan? Start by reviewing a standard business plan outline to understand the primary and optional components to include.

Business vs operational vs strategic plan

There are many types of goal-oriented documents to create for your business. While business, operational, and strategic plans have similar names and are often used interchangeably—they serve wildly different purposes.

Business plan vs business model

One common misconception is that the business model and business plan are the same things. While one should be covered by the other, they are vastly different parts of the startup and management process.

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Business Jargons

A Business Encyclopedia

Definition : Planning is the fundamental management function, which involves deciding beforehand , what is to be done, when is it to be done, how it is to be done and who is going to do it. It is an intellectual process which lays down an  organisation’s objectives and develops various courses of action , by which the organisation can achieve those objectives. It chalks out exactly, how to attain a specific goal.

Planning is nothing but thinking before the action takes place . It helps us to take a peep into the future and decide in advance the way to deal with the situations, which we are going to encounter in future. It involves logical thinking and rational decision making.

Characteristics of Planning

• Managerial function : Planning is a first and foremost managerial function provides the base for other functions of the management, i.e. organising, staffing, directing and controlling, as they are performed within the periphery of the plans made.
• Goal oriented : It focuses on defining the goals of the organisation, identifying alternative courses of action and deciding the appropriate action plan, which is to be undertaken for reaching the goals.
• Pervasive : It is pervasive in the sense that it is present in all the segments and is required at all the levels of the organisation. Although the scope of planning varies at different levels and departments.
• Continuous Process : Plans are made for a specific term, say for a month, quarter, year and so on. Once that period is over, new plans are drawn, considering the organisation’s present and future requirements and conditions. Therefore, it is an ongoing process, as the plans are framed, executed and followed by another plan.
• Intellectual Process : It is a mental exercise at it involves the application of mind, to think, forecast, imagine intelligently and innovate etc.
• Futuristic : In the process of planning we take a sneak peek of the future. It encompasses looking into the future, to analyse and predict it so that the organisation can face future challenges effectively.
• Decision making : Decisions are made regarding the choice of alternative courses of action that can be undertaken to reach the goal. The alternative chosen should be best among all, with the least number of the negative and highest number of positive outcomes.

Planning is concerned with setting objectives, targets, and formulating plan to accomplish them. The activity helps managers analyse the   present condition to identify the ways of attaining the desired position in future . It is both, the need of the organisation and the responsibility of managers.

Importance of Planning

• It helps managers to improve future performance , by establishing objectives and selecting a course of action, for the benefit of the organisation.
• It minimises risk and uncertainty , by looking ahead into the future.
• It facilitates the coordination of activities . Thus, reduces overlapping among activities and eliminates unproductive work.
• It states in advance, what should be done in future, so it provides direction for action.
• It uncovers and identifies future opportunities and threats .
• It sets out standards for controlling . It compares actual performance with the standard performance and efforts are made to correct the same.

Planning is present in all types of organisations, households, sectors, economies, etc. We need to plan because the future is highly uncertain and no one can predict the future with 100% accuracy, as the conditions can change anytime. Hence, planning is the basic requirement of any organization for the survival, growth and success.

Steps involved in Planning

By planning process, an organisation not only gets the insights of the future, but it also helps the organisation to shape its future. Effective planning involves simplicity of the plan, i.e. the plan should be clearly stated and easy to understand  because if the plan is too much complicated it will create chaos among the members of the organisation. Further, the plan should fulfil all the requirements of the organisation .

Related terms:

• Strategic Planning
• Human Resource Planning Process
• Controlling
• Succession Planning
• Gap Analysis

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The article was written by Surbhi S. on December 3, 2016

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Planning is considered the first primary function of management. In this function, managers define the organizational goals and allocate resources of the organization to achieve such goals. So planning will also define all the future functions of management. Let us study it further.

• Introduction, Meaning, Importance, Features & Limitations of Planning
• Planning Process
• Types of Plan

Which class are you in?

• List of Commerce Articles

Planning Process

Planning process: 7 vital steps of planning, meaning of planning.

Planning is ascertaining prior to what to do and how to do. It is one of the primary managerial duties. Before doing something, the manager must form an opinion on how to work on a specific job. Hence, planning is firmly correlated with discovery and creativity. But the manager would first have to set goals. Planning is an essential step what managers at all levels take. It requires making decisions since it includes selecting a choice from alternative ways of performance.

Also Check:  What is the Importance of Planning?

As planning is an activity, there are certain reasonable measures for every manager to follow:

(1) Setting Objectives

• This is the primary step in the process of planning which specifies the objective of an organisation, i.e. what an organisation wants to achieve.
• The planning process begins with the setting of objectives.
• Objectives are end results which the management wants to achieve by its operations.
• Objectives are specific and are measurable in terms of units.
• Objectives are set for the organisation as a whole for all departments, and then departments set their own objectives within the framework of organisational objectives.

A mobile phone company sets the objective to sell 2,00,000 units next year, which is double the current sales.

(2) Developing Planning Premises

• Planning is essentially focused on the future, and there are certain events which are expected to affect the policy formation.
• Such events are external in nature and affect the planning adversely if ignored.
• Their understanding and fair assessment are necessary for effective planning.
• Such events are the assumptions on the basis of which plans are drawn and are known as planning premises.

The mobile phone company has set the objective of 2,00,000 units sale on the basis of forecast done on the premises of favourable Government policies towards digitisation of transactions.

(3) Identifying Alternative Courses of Action

• Once objectives are set, assumptions are made.
• Then the next step is to act upon them.
• There may be many ways to act and achieve objectives.
• All the alternative courses of action should be identified.

The mobile company has many alternatives like reducing price, increasing advertising and promotion, after sale service etc.

(4) Evaluating Alternative Course of Action

• In this step, the positive and negative aspects of each alternative need to be evaluated in the light of objectives to be achieved.
• Every alternative is evaluated in terms of lower cost, lower risks, and higher returns, within the planning premises and within the availability of capital.

The mobile phone company will evaluate all the alternatives and check its pros and cons.

(5) Selecting One Best Alternative

• The best plan, which is the most profitable plan and with minimum negative effects, is adopted and implemented.
• In such cases, the manager’s experience and judgement play an important role in selecting the best alternative.

Mobile phone company selects more T.V advertisements and online marketing with great after sales service.

(6) Implementing the Plan

• This is the step where other managerial functions come into the picture.
• This step is concerned with “DOING WHAT IS REQUIRED”.
• In this step, managers communicate the plan to the employees clearly to help convert the plans into action.
• This step involves allocating the resources, organising for labour and purchase of machinery.

Mobile phone company hires salesmen on a large scale, creates T.V advertisement, starts online marketing activities and sets up service workshops.

(7) Follow Up Action

• Monitoring the plan constantly and taking feedback at regular intervals is called follow-up.
• Monitoring of plans is very important to ensure that the plans are being implemented according to the schedule.
• Regular checks and comparisons of the results with set standards are done to ensure that objectives are achieved.

A proper feedback mechanism was developed by the mobile phone company throughout its branches so that the actual customer response, revenue collection, employee response, etc. could be known.

1 Mark Questions:

Q. “To See Whether Plans Are Being Implemented and Activities Are Being Performed According to Schedule,” is a Step of Planning Process. Identify the Step.

Follow up action.

Q. Which is the Most Crucial Step in the Planning Process?

Setting objectives.

Q. What is meant by ‘follow Up’ as involved in the Planning Process?

It means to ensure the actual work is taking place as per the planned work.

Frequently Asked Questions on Planning Process

What are the steps involved in the planning process.

The steps involved in the planning process are as follows:

• Developing of objectives
• Developing tasks that are required to meet those objectives
• Determining resources needed to implement those tasks
• Creating a timeline
• Determining tracking and assessment method
• Finalising the plan
• Distributing the plan to everyone involved in the process of planning

What are the classification of plans?

Plans can be classified into three types:

• Operational planning
• Strategic planning
• Tactical planning

What are the features of Planning?

• Planning is a primary function
• Planning is goal-oriented
• Planning is continuous
• Planning is futuristic or future oriented
• Planning focuses on achieving the objectives

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10 Simple Tips to Write a Successful Business Plan In the new book "Write Your Own Business Plan," business expert Eric Butow takes the anxiety and confusion out of planning and offers an easy-to-follow roadmap to success.

By Entrepreneur Staff • Sep 26, 2023

"The absolute biggest business plan mistake you can make is to not plan at all." So writes Noah Parsons in his helpful blog post 17 Key Business Plan Mistakes to Avoid in 2023 . But how does one pull together all of the necessary components of a cohesive plan? It can feel overwhelming.

Eric Butow, CEO of online marketing ROI improvement firm Butow Communications Group, has teamed up with Entrepreneur Media to update the second edition of our best-selling book Write Your Business Plan to provide you with a simple, step-by-step process for creating a successful business plan. In the following excerpt, he gives ten tips to gather all of the critical information you will need to succeed.

1. Know your competition.

You need to name them and point out what makes you different from (and better than) each of them. But do not disparage your competition.

2. Know your audience.

You may need several versions of your business plan. For example, you may need one for bankers or venture capitalists, one for individual investors, and one for companies that may want to do a joint venture with you rather than fund you.

3. Have proof to back up every claim you make.

If you expect to be the leader in your field in six months, you have to say why you think that is. If you say your product will take the market by storm, you have to support this statement with facts. If you say your management team is fully qualified to make the business a success, be sure staff resumes demonstrate their experience.

Order Write Your Own Business Plan Now and Get 1 Month of Free Access to Business Planning Software Liveplan Premium

• Easy step-by-step business plan generator
• Built-in financial calculators
• 500+ sample plans and templates

4. Be conservative in all financial estimates and projections.

If you feel certain you'll capture 50 percent of the market in the first year, you can say why you think so and hint at what those numbers may be. But make your financial projections more conservative. For example, a 10 percent market share is much more credible.

5. Be realistic with time and resources available.

If you're working with a big company before you buy a business, you may think things will happen faster than they will once you have to buy the supplies, write the checks, and answer the phones yourself. Being overly optimistic with time and resources is a common error entrepreneurs make. Being realistic is important because it lends credibility to your presentation. Always assume things will take 20 percent longer than you anticipated. Therefore, twenty weeks is now twenty-four weeks.

6. Be logical.

Think like a banker and write what they would want to see.

7. Have a strong management team.

Make sure it has good credentials and expertise. Your team members don't have to have worked in the field. However, you need to draw parallels between what they've done and the skills needed to make your venture succeed. Don't have all the skills you need? Consider adding an advisory board of people skilled in your field and include their resumes.

Write Your Own Business Plan is available now at Entrepreneur Bookstore | Barnes & Noble | Amazon

8. Document why your idea will work.

Have others done something similar that was successful? Have you made a prototype? Include all the variables that can have an impact on the result or outcome of your idea. Show why some of the variables don't apply to your situation or explain how you intend to overcome them or make them better.

9. Describe your facilities and location for performing the work.

That includes equipment you use to create your products and/or services. If you'll need to expand, discuss when, where, and why.

10. Discuss payout options for the investors.

Some investors want a hands-on role. Some want to put associates on your board of directors. Some don't want to be involved in day-to-day activities at all. All investors want to know when they can get their money back and at what rate of return. Most want out within three to five years. Provide a brief description of options for investors, or at least mention that you're ready to discuss options with any serious prospect.

To dig deeper, buy Write Your Own Business Plan and get 1 month of free access to business planning software Liveplan Premium.

Entrepreneur Staff

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What Is Succession Planning?

• How It Works

Special Considerations

Succession planning and diversity.

• Succession Planning FAQs
• Business Essentials

Succession Planning Basics: How It Works, Why It's Important

Yarilet Perez is an experienced multimedia journalist and fact-checker with a Master of Science in Journalism. She has worked in multiple cities covering breaking news, politics, education, and more. Her expertise is in personal finance and investing, and real estate.

Investopedia / Julie Bang

The term succession planning refers to a business strategy companies use to pass leadership roles down to another employee or group of employees. Succession planning ensures that businesses continue to run smoothly and without interruption, after important people move on to new opportunities, retire, or pass away. It can also provide a liquidity event , which enables the transfer of ownership in a going concern to rising employees. Succession planning is a good way for companies to ensure that businesses are fully prepared to promote and advance all employees—not just those who are at the management or executive levels.

Key Takeaways

• Succession planning is a business strategy for passing leadership roles on to one or more other employees.
• The strategy is used to ensure that businesses run smoothly after employees retire and leave the company.
• Succession planning involves cross-training employees to help them develop skills, knowledge, and an understanding of the business.
• Plans can be long-term, which are meant to account for future changes, or for emergencies whenever anything unexpected arises.
• There are many benefits to succession planning, including inclusivity if companies have a strong plan to diversify their workforce.

Understanding Succession Planning

Succession planning is a contingency plan. It is not a one-time event. Rather, it should be reevaluated and updated each year or as changes dictate within the company. As such, it evaluates each leader’s skills, identifying potential replacements within and outside the company and, in the case of internal replacements, training those employees so they’re prepared to assume control.

In large companies, the board of directors typically oversees succession planning in addition to the chief executive officer (CEO), and it affects owners, employees, as well as shareholders. A larger business may train mid-level employees to one day take over higher-level positions. For small businesses and family-owned companies, succession planning often means training the next generation to take over the business.

The process takes a lot of time and effort. As such, it requires:

• Recruitment or Proper Hiring: The goal is to choose candidates who are capable of rising through the ranks in the future. For example, an experienced person from another company might be courted and groomed for a higher position.
• Training: This includes the development of skills, company knowledge, and certifications. The training might include having employees cross-train and shadow various positions or jobs in all the major departments. This process can help the person become well-rounded and understand the business on a granular level. Also, the cross-training process can help identify the employees that are not up to the task of developing multiple skill sets needed to run the company.  

Businesses may want to create more than one type of succession plan. An emergency succession plan is put in place when a key leader needs to be replaced unexpectedly. A long-term succession plan, on the other hand, helps the company account for anticipated changes in leadership.

According to human resources (HR) experts, succession planning involves preparation rather than pre-selection. This means that those responsible must identify the skills, practices, and knowledge. Although it may seem like a complex process, it doesn't have to be, especially if businesses and leaders are able to organize and plan ahead of time. The whole process can take anywhere between 12 to 36 months.

In small companies, the owner alone may be responsible for succession planning.

One way to succession plan in a business partnership is for each partner to purchase a life insurance policy that names the other partner as the beneficiary. This type of succession plan is called a cross-purchase agreement and allows the surviving partner to continue operating the business.

Here's how it works. If one partner dies at a time when the surviving partner would not otherwise have enough cash to buy the deceased partner’s ownership share, the life insurance proceeds make that purchase possible.

Succession planning is also commonly known as replacement planning and often involves passing on ownership of a company to someone else.

Benefits of Succession Planning

There are several advantages for both employers and employees to having a formalized succession plan in place:

• Employees know that there is a chance for advancement and possibly ownership, which can lead to more empowerment and higher job satisfaction.
• Knowing there is a plan for future opportunities reinforces employees' career development.
• Management's commitment to succession planning means that supervisors will mentor employees to transfer knowledge and expertise.
• Management keeps better track of the value of employees so positions can be filled internally when opportunities arise.
• Leadership and employees are better able to share company values and vision.
• A new generation of leaders is needed when there's a mass exodus of people from the workforce into retirement.
• Proper succession planning benefits shareholders of public companies, especially when the next candidate for CEO is involved in business operations and is well respected years before the current CEO retires. Also, if investors observe a well-communicated succession plan, they won't sell the company's stock when the CEO retires.

Succession planning can also cultivate a new generation of leaders, thereby providing an exit strategy for business owners who want to sell their stake.

One of the key drivers to success for any company (whether it's a small business or a large corporation) is how inclusive it is. Companies are now recognizing the need to diversify their work environments in order to remain competitive and successful. Not only does it boost employee morale, but it also aims to broaden the pool of talent and make attempts to fight bias.

But how do companies do this? This involves a well-structured succession plan that includes hiring individuals from different backgrounds, those who have different leadership abilities, and people who bring different experiences to the table. The plan should also include removing any barriers that may exist internally for employees of all levels and ensuring a comfortable work environment for all employees.

This only works if succession plans are put into place wholeheartedly rather than to boost corporate images.

How Does Succession Planning Work?

Succession planning is used by businesses to streamline the process involving a change of leadership or ownership. It involves recognizing internal employees who merit career advancement and training them to assume new roles within the company. These plans only work if companies take the steps necessary to prepare. Plans are often long-term to prepare for inevitable changes in the future. Emergency plans can be set in place to account for unexpected changes.

What Is Succession Planning in Business?

Succession planning is an important part of any business to help it run smoothly and without interruption whenever there needs to be a change in leadership. Changes can be the result of people leaving the workforce (changing companies, switching careers, or retiring) or if there are unexpected circumstances, such as the death or displacement of a team member.

What Are Some of the Common Mistakes Companies Make During Succession Planning?

Succession planning requires careful organization and (as the name suggests) planning. Companies may miss opportunities or make missteps if they can't communicate their vision with employees, don't adopt a formal agreement or plan (including a shortlist of candidates and conducting regular reviews of positions and employees), assume their talent has the skills and knowledge to advance and succeed, fail to use succession plans for all employees, and ignore the need to diversify their talent pool.

SHRM. " Engaging in Succession Planning ."

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Definition of planning

Examples of planning in a sentence.

These examples are programmatically compiled from various online sources to illustrate current usage of the word 'planning.' Any opinions expressed in the examples do not represent those of Merriam-Webster or its editors. Send us feedback about these examples.

Word History

1730, in the meaning defined above

Phrases Containing planning

• city planning
• family planning
• natural family planning

Dictionary Entries Near planning

planning board

Cite this Entry

“Planning.” Merriam-Webster.com Dictionary , Merriam-Webster, https://www.merriam-webster.com/dictionary/planning. Accessed 30 Sep. 2023.

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Thesaurus: All synonyms and antonyms for planning

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What is Business Planning? The 6-Step Procedure To Create A Business Plan

“A goal without a plan is just a wish.” – Antoine de Saint-Exupéry .

A business plan can be described as the roadmap, a blueprint of your business journey.

Assume, you are planning to drive from New Delhi to Chandigarh, which is a distance of 260 km. How will you start?

The first word which comes to mind is a map. Either a physical, on-paper map or Google Maps/Apple Maps on your car’s navigation system or mobile. What if you don’t have a map to reach Chandigarh from New Delhi? Either you will never reach your destination, or take double, triple time thereby wasting your most precious resource: Time. And here comes the importance and relevance of your business plan.

So, What is B Plan? What is a business plan in entrepreneurship?

What is Business Planning?

A business plan can be described as the roadmap, a blueprint of your business journey. Be it a startup or an already running business, everyone needs this roadmap to reach the goal. It acts as a guide, a map which shows you the direction: Where you are currently, what you wish to achieve, how you will achieve it, and when.

And most importantly, a clearly defined business plan will showcase why you are embarking on this exciting journey?

A business plan is a strategic guide for the entrepreneur, which helps to provide all these answers.

What is Business Level Strategy?

A clearly drafted business plan provides a business-level strategy to any entrepreneur and helps all key stakeholders to be on the same page. Whether you are a one-person company or a hundred people team, everyone needs this clarity.

List of reasons why a business plan is required:

1. 360-Degree View of the Business

Not only the founder and co-founders, but all employees and investors can get a clear picture of the business goals, and the means to achieve them.

2. Priorities are Set

The business plan should clearly show what the priorities of the business are, and what is the order of priority of tasks. This brings more clarity.

3. Manage Profitability

What is a corporate-level strategy? It’s a refined blueprint, an advanced business plan which suggests ways and means, to manage profitability which is the sole purpose of any business.

An important read about – Decoding Profits: How To Find High-Profit Margin Business?

4. Measuring Growth

With the business plan in place, and the entrepreneur being aware of the goals, priorities, and means to achieve those goals, measuring growth becomes seamless. Unless you know what you are about to achieve, how can you measure success?

5. Raising Funds

If you want to raise funds from a bank or NBFC or any VC or Private Equity, they will wish to see your business plan first. Anyone before giving their money to you wants to see if you are going to utilize the funds properly with a plan. The business plan gives confidence to investors that as an Entrepreneur you are ready to grow.

Read more about –   9 Elements of a Business Plan to remember if You Are Looking to Raise Funds

How to do Business Planning?

Every business is unique in itself, with unique goals, strengths, weaknesses, and measurement of success. While more units manufactured can be the success metric for a manufacturing company, getting more software clients can be the measure of success for a development company.

But one thing is common for all businesses: Increasing revenues, and boosting profits.

There can be hundreds of templates and blueprints for creating a business plan, depending on the business and its goals.

Read more about – Fast-track your Business Set-Up with Free Business Templates

However, we will share a 6-step procedure to create a business plan, which is easy to do and applicable to all businesses. Use this as a basic template, a foundation for elaborating your business goals and objectives, a stepping stone in your endeavor to understand: What is Business Planning.

So, here we go…

Step 1: What is the Business Opportunity?

In this section, mention the business opportunity which has inspired you to start the business in the first place. Some management gurus describe this step as understanding the pain points of your target audience: What problem are you going to solve with your business? In short, the biggest USP of your business, and its relation vis-a-vis the market demand. Having a clear understanding of your target audience is very crucial for this step.

An important read about – What Is Business Forecasting: Importance Of Business Forecasting

Step 2: How Will You Execute it?

And then comes the ‘How’ part of your business plan. How do you plan to execute your business plan? How will you convert the opportunity into a viable business, and make money out of it? You can describe in detail the business processes, how these processes will be interlinked and solve the problem of your target audience.

Step 3: Summary of Your Management Team

No business in the world can survive and thrive without a team. In this 4th step of creating your business plan, explain everything about your team and the management:

• Who they are
• What expertise they bring in
• How they plan to convert an opportunity into a business
• Which team member will manage which aspects of the business, and more

Step 4: What is the Finance Plan?

Step 5 is about finance, and one of the most important aspects of creating a business plan. In this section, mention your goals to raise funds, or if self-funded, then how and when you will raise money. It can also include forecasting and predictions about sales, revenues, profits, and expenses. In short, your financial plan should have an overview of everything about money and the future.

Step 5: How Will You Measure Success?

And lastly, the metrics you will use to measure success. Every business and every entrepreneur has different yardsticks to measure success. The metrics are created based on your business goals, financial structure, team, target audience, and sale forecasts. For new businesses and startups, creating 4-5 critical metrics are recommended, which are easy to track and monitor on a monthly or weekly basis. Depending on the success metrics, you can alter your business plan, add new elements, and reduce them.

Read more about – 5 Proven Techniques of Performance Management System for Early-stage Companies

Step 6: Write an Executive Summary

And the last step in creating a Business Plan is a Summary. Write down an executive summary of your business, in one or two pages. A toned-down, bare-bones document that clearly and crisply tells the reader what is your business all about, and what you are going to do about it. If your entire business plan is stripped down to the essentials, then this executive summary should suffice on its own.

Still, have doubts related to business planning and wondering where to start? MSMEx business operations experts are here to help you! MSMEx is a leading startup advisory platform , where business veterans and experts provide live mentoring and coaching to new startups, MSMEs, and established businesses.

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What is Business Planning?

Business planning is a process that involves the creation of a mission or goal for a company, as well as defining the strategies that will be used to meet those goals or mission. The process can be very broad, encompassing each aspect of the operation, or be focused on particular functions within the overall corporate structure. Often, it involves the use of resources within the company as well as engaging the services of consultants to assist in designing and implementing the plan.

There are several points in the life of a business when the process of business planning is an essential task. Starting up a new company involves performing at least rudimentary planning to address such factors as defining the goals of the company, obtaining operating licenses, incorporating the business if appropriate, and defining the basic structure for the new business . Along with these factors, business planning will also address the issue of what goods and services to offer and how to go about producing those core products.

A second stage when business planning comes into play is when an existing company wishes to expand operations. This will determine what is needed in order to manage the expansion process, especially in regards to financing new facilities, expanding sales and marketing efforts, or designing a new communications infrastructure to meet the needs of the expansion. It is not unusual for consultants to be called during this type of planning, as the process often involves a drastic overhaul of the company’s operations.

Business planning may also be advantageous in the event of acquisitions. For example, Company A decides to buy Company B and integrate their operations into the overall company structure. This will often mean developing a business plan that addresses issues such as negotiating new service contracts with vendors to include the acquired company, combining some functions or physical locations in order to maximize efficiency, and rearranging departmental functions and the personnel who will staff those departments. As with expansion, it is not unusual to call in consultants that specialize in various areas to help give the business planning a logical flow and develop a plan for completing the merger of facilities and other assets in a timely manner.

In general, any type of business plan requires investigation, careful evaluation of all known factors, and projecting potential results of different options that are open to the company. This open-ended process can take on a number of forms, some of them relatively simplistic, while others are extremely detailed and complicated. However, the basic task of business planning is necessary for the entrepreneur starting a new business, as well as the established company that wishes to expand through the launch of new products or by acquisition of competitors.

After many years in the teleconferencing industry, Michael decided to embrace his passion for trivia, research, and writing by becoming a full-time freelance writer. Since then, he has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also appeared in poetry collections, devotional anthologies, and several newspapers. Malcolm’s other interests include collecting vinyl records, minor league baseball, and cycling.

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Discussion Comments

The tips i have drawn from your above summary on how to plan the business are of great importance in my business life. keep it up!

Subway11-I know that some people use business planning software to help them determine the cost of doing business and when their company is likely to turn a profit.

Starting a new business is exciting, but business strategic planning is essential to its success. This is why 90% of businesses fail within the first three years.

Many people fail to take planning into consideration and may not have the capital to sustain the business.

This is a common mistake and the reason why many businesses fail. People get so excited about the idea of the business that they forget to build the foundation for the business first.

Also, it is important that if you want to open a business in a certain industry, you should try working a job in that industry for about six months to see if that is something that you will enjoy.

This experience will also offer you valuable industry experience that you can expand upon when you open your own business. This will make strategic business planning easier especially with the use of business plan software.

Cafe41- I just wanted to say that there is an organization called SCORE that offers help on small business planning.

These are retired business executives and small business owners that offer business financial planning assistance free of charge.

SCORE is part of a nonprofit organization that helps would be business owner’s work with experienced and established business owners in order to encourage them to create new businesses. These counselors are paired up with new business owners of similar industries in order to make the help more beneficial.

This really helps the new business owner avoid common pitfalls of their chosen industry. The organization also offers bimonthly meetings and weekly workshops.

It is important to write a business plan when starting a business. A small business plan involves the types of goods and services that a business will sell along with the target market of this business.

A business plan example will also include the break even analysis and the point at which profitability will occur.

There is also a set of fixed expenditures along with variable expenses that have to be accounted for. In addition, a cash flow analysis has to also be considered as well as competitive information regarding the company’s competitors.

This may include pricing information as well as product or service offerings and locations in which the competitors do business. An appropriate adverting mix is also required along with possible staffing plans. All of this small business planning is required in order to give the company a chance at success.

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the act or process of making a plan or plans .

Origin of planning

Words nearby planning.

• planned economy
• planned obsolescence
• Planned Parenthood
• planning blight
• planning permission
• plano-concave

Dictionary.com Unabridged Based on the Random House Unabridged Dictionary, © Random House, Inc. 2023

How to use planning in a sentence

It’s not an enterprise resource planning platform though some growers use it as such for the sake of simplicity.

Nearly 80% of wedding planning is done online, according to WeddingWire’s Newlywed Report, and wedding professionals often share, anecdotally, that couples want to hire vendors who feel like friends.

However, the descriptions in the planning documents match up well with two vaccines currently undergoing phase 3 clinical trials that each include 30,000 volunteers, according to the Times report.

Unfortunately, management loved my planning skills so much they overworked me.

Media planning can implement this understanding of distinct cultural areas that improve communications.

And increasingly smart navigation aids in the cockpit brought far greater precision and efficiency to route planning .

News clips, sound bites, and planning details were shared on those platforms.

South Korean activists are already planning to loft them over the Demilitarized Zone in balloons.

Hearst is to be released from prison and is planning to marry.

Today many in the economics and urban planning professions consider such factors close to irrelevant.

All the miserable stratagems they had been guilty of to win him; the dishonest plotting and planning .

Darry and Burd were planning another trip on the Marigold, and so had little time to give to the girl chums of Roselawn.

I wanted to jump and shout, but I compromised by taking Dr. Hudson down for a gleeful drink and planning our next tactic.

When he discovered the monster who was planning this crime, he pleaded so eloquently that pussys life was saved.

He put his folly from him and-went on, seeking to hold his mind to the planning of his to-morrow's journey and its business.

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A Shutdown Is Looming. What Comes Next?

Many federal agencies have plans in place to weather a shutdown, but a disruption would still affect critical government services.

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By Zach Montague

Reporting from Washington

Follow our live updates for a potential government shutdown .

The House of Representatives on Friday rejected a late bid by Speaker Kevin McCarthy to keep the government open past this weekend as more than 20 hard-right Republicans joined Democrats in voting down a stopgap funding bill.

With the midnight Saturday deadline to avert a shutdown approaching, the White House reiterated warnings to federal agencies to prepare for a shutdown, and scores of government employees scrambled to plan how to do their jobs next week while many colleagues are furloughed or halt their work altogether for the time being.

The United States has experienced 21 gaps in government funding since 1976, leading to varying degrees of disruption. Under a worst-case scenario, the White House is wary of a repeat of 2018, the longest and most recent shutdown, which sidelined roughly 800,000 of the federal government’s 2.1 million employees for 34 days.

While much remains uncertain about how long the coming shutdown might last, the broad contours of how it would play out are well-worn territory in Washington, and most agencies have readied plans for working through the tumult.

What exactly would be shut down?

A government shutdown amounts to a suspension of many government operations until Congress acts to restore funding.

For hundreds of thousands of federal employees, that means either being furloughed while the government is closed, or continuing to work without pay.

For the public, that typically means dealing with interruptions to a variety of government services and facing a range of disruptions to daily life.

In recent days, the White House has spotlighted several government programs that could cause more severe issues if suspended, in particular the nutrition and immunization assistance given out through the Special Supplemental Nutrition Program for Women, Infants and Children. If funding lapses, the White House has said nearly seven million women and children could lose critical access to food, and the federal contingency fund to keep the program running could run dry within days.

“If we have a shutdown, WIC shuts down, and that means the nutrition assistance to those moms and young children shuts down,” Tom Vilsack, the agriculture secretary, told reporters on Monday.

Closures of national parks and museums are often one of the most visible impacts of a shutdown for the public, as well. In some cases, they can produce significant losses for the communities that depend on tourism.

Gov. Katie Hobbs of Arizona, for instance, has vowed to draw on revenue from the Arizona Lottery to keep Grand Canyon National Park open. In 2021, the park drew more than 4.5 million visitors to the state, according to the National Park Service.

Even many workers in the private sector are often forced to adjust.

During the most recent shutdown, inspections of chemical factories, power plants and water treatment plants ground to a halt as the Environmental Protection Agency furloughed thousands of workers. The Food and Drug Administration also paused routine food safety inspections of seafood, fruits and vegetables, putting extra pressure on restaurants and grocers.

In addition, many government labs and research projects are frequently closed during prolonged shutdowns, hampering scientific work.

As the deadline to fund the government approaches, the White House has sought to stress the sheer variety of programs and services that would suffer while blaming House Republicans for the standoff.

“A government shutdown could impact everything from food safety to cancer research to Head Start programs for children,” President Biden said on Saturday .

What services would continue?

Many agencies whose employees carry out critical services do not suspend operations.

That includes a large number of federal prosecutors and investigators, postal workers and Transportation Security Administration employees.

Most of those employees will continue to work without pay until funding is restored. In rare cases, some may work in positions that are funded outside the annual appropriations process.

Benefits such as Medicare and Social Security also continue uninterrupted because they are authorized by Congress in separate laws that do not need to be renewed every year. Medical care of veterans also goes on unaffected.

But even in instances where federal workers may stay on the job, planning and operations supporting them can be suspended, making the work harder.

For instance, while air traffic controllers would largely continue to work, training for new staff members would cease, exacerbating shortages .

Who decides which workers are essential?

Having weathered multiple shutdowns already, most agencies have in place detailed contingency plans for determining which employees should keep working.

But those plans can vary widely.

According to its contingency plan , the Department of Health and Human Services plans to retain about 58 percent of its employees during a shutdown, while the Justice Department would direct closer to 85 percent of its employees to continue working.

The determinations for each agency are often based on workers’ roles and how precisely their jobs are deemed “necessary to protect life and property.”

Shutdowns have become so commonplace in Washington that the Office of Management and Budget publishes guidance for federal employees on what to expect when one is approaching.

Do members of Congress still get paid?

In Article I, Section 6 of the Constitution, compensation for members of Congress is differentiated from that of most federal workers.

“The senators and representatives shall receive a compensation for their services, to be ascertained by law, and paid out of the Treasury of the United States,” that section reads.

In addition, the language of the 27th Amendment, which prohibits any law “varying the compensation for the services of the senators and representatives” until the next election, is often interpreted as a constitutional requirement that lawmakers be paid on time.

Salaries for members of Congress are funded by a permanent appropriations account that does not require renewal every year.

Like federal agencies, lawmakers also have some limited discretion to keep staff members working in cases where their role is directly tied to human health and safety. This typically applies only to staff members whose work is “required to support Congress with its constitutional responsibilities or those necessary to protect life and property,” according to the Congressional Research Service .

Will furloughed employees eventually be paid?

Furloughed employees will receive back pay once Congress passes and the president signs a new appropriations bill or a continuing resolution, a guarantee enshrined in 2019 when Congress passed the Government Employee Fair Treatment Act .

Employees who worked overtime or earned other premium pay can typically also claim those extra wages once the shutdown ends.

For contractors, including many cleaners, maintenance workers and cafeteria workers, however, the situation is more precarious.

Federal contractors are not guaranteed back pay under the 2019 law, even though some who are deemed essential might still be required to work. In some cases , contractors may be unable to return to their workplace while federal sites are closed.

In most situations in which contract workers are furloughed or unable to work during a shutdown, however, many are entitled to unemployment compensation.

Zach Montague is based in Washington. He covers breaking news and developments around the district. More about Zach Montague

What happens to Social Security payments if the government shuts down

If the federal government shuts down Sunday, numerous publicly funded agencies will stop work and their employees won't be paid, but Social Security checks will still go out.

Social Security is considered a mandatory program, and it isn't funded by the shorter-term appropriations bills passed by Congress and signed by the president. That means its operations and funding don't stop when the government shuts down.

That's important for a large proportion of Americans, as about 67 million people receive monthly Social Security benefits, according to the Social Security Administration. Those benefits go primarily to retirees but also to people with disabilities, as well as dependents of deceased beneficiaries. 

Medicare and Veterans Affairs benefits also continue to be distributed during a shutdown.

Federal workers’ pay at risk in potential government shutdown

The federal government will shut down at 12:01 a.m. ET Sunday if Congress does not pass a bill to provide more funding. The GOP has a narrow majority in the House, and a group of hard-line conservatives is holding out from the rest of Republicans and demanding deep cuts in government spending.

President Joe Biden and the Democrats, who control the Senate, oppose those cuts.

In the event of a shutdown, "nonessential" actions would stop, and 4 million federal employees would not receive paychecks.

Some, including members of the military, would work without pay and would receive back pay later on, after a new funding bill is passed and signed into law. Other federal employees would be furloughed and would not report to work.

And a shutdown would stop many other federal programs and services. The Biden administration said Monday that the Special Supplemental Nutrition Program for Women, Infants, and Children, or WIC, will stop operating one or two days into a shutdown, although Agriculture Secretary Tom Vilsack said some states might be able to keep their programs running a bit longer than that.

WIC is a program intended to help low-income pregnant and postpartum women, as well as children under age 5, access healthier food. According to the Agriculture Department, more than 6 million people received WIC benefits each month in 2022, including about 39% of all U.S. infants.

A long shutdown could harm the economy, as well. The longest shutdown lasted for 35 days, from Dec. 22, 2018, to Jan. 25, 2019, and the Congressional Budget Office estimated that it cost the U.S. economy at least $11 billion directly, with indirect costs that were harder to quantify.

Federal government just days away from potential shutdown

A government shutdown should not be confused with a debt ceiling standoff. The U.S. reached its borrowing limit, called the debt ceiling, earlier this year. That standoff could have prevented Social Security checks from going out had it lasted long enough, but after a protracted impasse, congressional Republicans and Democrats agreed on a deal to prevent it.

Marley Jay is a business news reporter for NBC News Digital.

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