While some entrepreneurs and business leaders are purely instinctive in their approach, the vast majority rely on proper planning. They need to think ahead and iron out all the kinks first.
In this post, we take a brief look at the five main types of business planning you need to master if you want to lead your brand to success.
Imagine if something catastrophic went wrong at your firm. How would you react? Would you have to come up with a solution there and then? Or could you fall back on something you’d already devised?
Naturally, being able to do the latter is better. Contingency planning is all about figuring out what you’ll do if something goes horribly wrong. For instance, how will you operate if there’s a power cut? Where will you get suppliers from if a partner you work with goes out of business? What backups will you use to restore your data after a hack?
Tactical planning is about “winning in the short-run.” It’s all the little things you need to do to get to your long-range goals.
Tactical planning involves many factors. In most cases, you need to break down your plans into smaller chunks and then ask questions such as, “what will happen if we institute policy X?” Your job is to brainstorm and develop ideas for how it might affect you.
Financial planning is all about trying to figure out where your business is likely to be, financially speaking, at a given point in the future. It’s important because it tells you how much cash you’re likely to have on hand at any given time.
For instance, imagine if you’re doing business tax planning and trying to figure out how much money you’ll need to pay to the authorities next quarter. Financial planning allows you to see the impact of that transaction on your cash flow and how it might affect the operation of your business. You might have plenty of surplus cash, which is excellent, but you could also be heading to a liquidity crunch if too many expenses come out of your account at the same time.
Strategic planning is all about planning the high-level overview of your firm. It’s a playbook for how you’re going to win in the long term, and beat out your rivals.
In many cases, strategic planning focuses on the long-term. It tries to predict where the company needs to be in the future to remain competitive and relevant. In some cases, it can stretch out as far as ten years if you believe that you have that much room to run.
Lastly, there is operational planning. Operational planning is all about how things need to run for the company to fulfill its objectives.
As a leader, you are involved in the company’s day-to-day running. You’ll do things like set specific rules and observe various regulations. You’ll also provide team members with processes they need to follow to complete tasks for customers and the business itself.