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Business planning: document or process?


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Business planning: document or process?

Julian Lomas

For many organisations business planning is a dull chore undertaken because some management consultant said that you should have one (we have a lot to answer for!). A frequent question is “why are we doing this?”  I have to say that, having helped many organisations prepare business plans, I often ask the same question!

Why have a business plan?

First, I want to draw a distinction between a business plan and a strategic plan. For me a strategic plan is a medium to long term (3-10 years) plan for the high level direction of an organisation (its purpose, aims, etc.) and a business plan is a more detailed plan (objectives, finances, responsibilities, milestones, etc.) for how the strategic plan will be realised in the short to medium term (1-3 years).  Normally a strategic plan will only be revisited every 3-5 years whereas a business plan is usually refreshed every year (at least), which is why it can become a chore.

In my view a business plan is almost always necessary; not because having the document itself matters but because all organisations need a shared understanding and buy-in (at board, leadership and operational levels) of what the organisation is trying to achieve and how it will do that in the next year or so.  And that, for me, is pretty much it!

Document or process?

If shared understanding and buy-in are the point of a business plan then, in my view, this makes the process of preparing a business plan far more important than producing a pretty, glossy document at the end of that process.  Why? – because if you involve the right people in the development of your plans, they will understand what you want to do and more importantly they will understand why you want to do it (as opposed to doing something else). If they understand why, they are far more likely to buy into the plan and work harder to achieve it, even if they don’t necessarily agree with everything you want to do.

I know this sounds resource intensive, but it doesn’t have to be.  Set-piece workshops and consultations are important for strategic planning (e.g. a big change of direction) but once the aims and purpose are settled, dialogue about the business plan can and should be a much more informal process; one that is almost continuous and just “how we do things round here”.  A culture that encourages informal discussion of plans, objectives, resources etc (as well as informal settings like team meetings, Board meetings or individual appraisals), will make it an easy job for someone to write the plan and check it out with managers, staff and the Board. My advice is to think of business planning as a process not a product and embed continuous planning in the culture of your organisation.

Why have a document at all?

In very small organisations it may not be necessary to have a business plan document but I think this is rare.  In my view there are three main reasons to “write it up”:

  • The very act of writing down your plans (and discussing the draft) will help order your thinking and crystallise the plan in a way that general discussion rarely does, especially for assigning resources to planned activities.  As Voltaire reputedly said, “Fetch me a pen, I need to think”.
  • You need to communicate the plan internally to those who need to know (usually everyone!).  A document (with a short summary) is an efficient way to do this, particularly when reinforced through team meetings etc.
  • Sometimes external partners need to see your plans (e.g. when bidding for funding).  This might be a short summary (with commercially sensitive information removed) but in some cases it will be the full plan.

Whatever you do, keep it short and focussed.  For small to medium sized organisations 10 pages is usually enough and 20 pages is plenty (perhaps with technical appendices like a strategic risk register or financial plan).  If it is short more people will read it. In large, complex organisations it may be longer but in my experience even then it isn’t necessary; the detail that would go in a longer plan more properly belongs in team plans and/or personal objectives.

You can read more about the support we offer for business planning or contact us at to discuss further the implications for your organisation.