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 to manage the expansion process, especially pertaining 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.