Sunday, 8 January 2012

BUSNESS PLANNING

Bussiness planning business planning is often used very loosely. When people talk and write about business planning different terms may mean the same thing, and a single term can mean different things.

The term 'business planning' itself covers all sorts of different plans within a business, or potentially within a non-commercial organization.

The words 'strategy' and 'strategic' arise often in the subject of buisness planning, although there is no actual difference between a 'business plan' and a 'strategic business plan'. Every business plan is arguably 'strategic'. Everyone involved in planning arguably adopts a 'strategic' approach.

Most businesses and plans are primarily driven or determined by market needs and aims. This increasingly applies to many non-commercial activities (government services, education, health, charities, etc), whose planning processes may also be described as 'business planning', even though such organizations may not be businesses in the way we normally imagine. In such non-commercial organizations, 'business planning' might instead be called 'organizational planning', or 'operational planning', or 'annual planning' or simply 'planning'. Essentially all these terms mean the same, and increasingly the tendency is for 'business planning' to become a generic (general) term to refer to them.

I should clarify that finance is of course a major and unavoidable aspect of business and organizational activities, but in terms of planning, finance is a limiting or enabling factor; finance is a means to an end, or a restriction; finance in itself is not a basis for growth or strategy. Markets/customers, product/service development, and sales, provide the only true basis for businesses to define direction, development, growth, etc., and thereby business strategy and planning.

Business planning always starts with or revisits the basic aim or need to provide products or services to customers - also called a market or 'market-place'. Consequently business plans tend first to look outwards, at a market, before they look inwards, at finance and production, etc.

This means that most business plans are driven by marketing, since marketing is the function which addresses market opportunity and need, and how to fulfil it.

Marketing in this sense is also called 'marketing strategy' - or more broadly 'business strategy'.

In many simple, small, and/or old traditional businesses, 'marketing' is often seen instead to be 'sales' or 'selling' (usually because in such businesses selling is the only marketing activity), in which case a 'sales plan' may be the main driver of strategy and the business plan.

Many people use the words 'sales' or 'selling' and 'marketing' to mean the same thing - basically selling products or services to customers, in the broadest sense. In fact, marketing refers to much wider issues than sales and selling. Marketing involves the strategic planning of a business (or other organizational provider) through to every aspect of customer engagement, including market reserach, product development, branding, advertising and promotion, methods of selling, customer service, and extending to the acquisition or development of new businesses. Sales or selling is an activity within marketing, referring to the methods and processes of communicating and agreeing and completing the transaction (sale) with the customer.

Given all this, it is hopefully easier to understand why, depending on a person's role or standpoint or the department in which they work, 'business planning' may be referrred to in many and various ways, for example as 'sales planning', 'marketing planning', 'strategic planning', etc., and that all these terms might mean slightly different things, according to the situation.

If there is a technically correct definition of 'business planning', then perhaps we can best say that 'business planning' refers to the plan of the overall organization, or to a unit or division within an organization with responsibility for a trade or profit. A business plan technically contains and reflects the individual plans for the different functions within the whole operation, each of which may have its own detailed 'business plans', which might be called business plans, or more correctly departmental or functional plans according to their purpose, such as a marketing plan, sales plan, production plan, financial plan, etc.