5 Business Plan Types and 2 Tools That Every Manager Needs

I am sure that you have heard the adage, Failing to Plan is Planning to Fail.  Yet too many businesses don’t have practical working business plans.  Most have a fanciful fairy tale they use for the bank, filled with rosy projections.   I am talking about plans that will guide their response to the ever-changing business environment. I am talking about real plans with actions to take for the entire company.  A plan will serve as a real roadmap to the success you want to achieve for your company. There are seven subjects we will discuss in this series.  I will give a brief description in this section, and we take a deep dive into each in later chapters.

Disaster Plan This is the plan that you hope you never need, but I am placing it first in the list because if you need it, your company’s survival will probably be at risk.  Failure to have a good plan, when something happens, can cause you to lose years of progress and good will. PEST Analysis I am not talking about calling the exterminator. This is detailed look at the business environment in 4 areas that may impact your businesses future.  P is for the political environment.  The impact of the political environment is more variable than the others.  Some business can be hugely affected, other business may not be affected at all. E is for the economic environment.  2020 and the pandemic have shown us that events can have severe, long lasting impacts on the economy and on most business sectors.  You will want to take a long look at what the experts are saying about the economy and forces acting on it. S is for the social environment.  There are constant shifts in what people think and feel, and those changes could impact the sector of the economy that your business operates in.  We can think about the increasing concerns about global warming and how that is changing the business environment for multiple sectors, some for the good and some for the worse. T is for the technology environment.  We can all think of items and businesses that have faded away because of innovation in technology.  For example, the cell phone has eliminated phone booths.  Printers and computers have decimated the typewriter industry.

SWOT Analysis This is analysis of both the internal and external forces that will shape your future.  Completing the PEST Analysis first will help you be more thorough in your SWOT Analysis. I highly recommend doing SWOT Analysis on a regular basis.  It is especially important if you are looking at adding new products or services. S is for your company strengths.  W is for your company weaknesses.  O is for opportunities.   T is for threats.   Five Year Plan Having accomplished the analysis, then it is time to stick a pin in the map for your businesses destination.  One of the premises in the Seven Habits of Highly Effective People by Steven Covey is to “Begin with the end in mind” So decide what you want your business to look like in five years.  How many customers will you have, what will your revenue look like, what products will your sell and service? 1 Year Plan Now that you know where you want to be in 5 years, the question is what do you need to accomplish this year to be on course for my 5 year plan.  What has to change in the next 12 months to get where you want to be?

Link to The 7 Habits of Highly Effective People (30th Anniversary Edition)

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