Jim Blasingame, Small Business Advocate, celebrated his radio show’s 11th anniversary yesterday, and I was proud to be there to share. We also talked about the fundamentals of business planning, and the economic mess we’re in.
We talked about 5 fundamentals for business planning:
- It’s about results. It’s not just the plan, the document, or the format, but the planning process, and how it generates (or doesn’t) better business management for your business.
- Form follows function. You don’t do a whole big formal plan if all you need are the key modules (say, for example, the sales forecast, expense budget, and strategy) to run your business.
- Metrics, tracking, and accountability. You build the plan to establish the metrics, and then you track the results, and you have better management.
- Planning is about change. You don’t plan and then implement mindlessly; you plan, you highlight assumptions, and then you review the results against the assumptions. When assumptions change, the plan changes.
- Planning is not accounting. Accounting is about the past, in detail. Planning is about the future, in estimates and summaries and aggregation. Accounting is about profits, but planning is about cash.