Planning

Wikipedia again, provides an apt definition of planning as it pertains to the business or organization setting. Forecasting (the topic of a previous blog) can be described as predicting what the future will look like, whereas planning predicts what the future should look like. Planning ...the psychological process of thinking about the activities required to create a desired goal on some scale. As such, it is a fundamental property of intelligent (management) behavior."

In business, two of the fundamental building blocks that help insure successful business outcomes are a business plan and a marketing plan. You should never start a business without these and other well thought-out plans.

Whether you follow a process similar to that of the Fieldstone Alliance, depicted in the diagram to the right or a simpler planning process, one thing is continuously made clear by business in general, whatever the type or size. Insufficient attention to the planning process, up front, before capital is expended or customers sought spells doom for the business, its investors and its customers. Without a clear understanding of the environment, the products and services of the business and the receptivity of its products and services by the customer, there can be little chance of a positive outcome.

Personally, I prefer a much simpler planning process than the one pictured above. The Social Security Administration uses a very simple process, depicted in the diagram shown below.

In this case, the government has it about right.

Whatever your planning process, several key factors must be considered. Businesses, even small businesses who bypass this important process inevitably overlook a major critical path that goes unsatisfied and leads to business failure.

In the case of our dead golf club, any move to reopen must understand and plan for the following:

• Define the environment, potential customer base, analyze and conclude on how the club will attract potential customers to this club.
• Define the product and services that will be made available to potential customers. Describe in detail the products and services, the potential benefits to customers (members and per round), and the cost of each of the offerings.

• Determine and arrange gain commitments for the start up finances that will sustain the club until necessary revenues are sufficient to ensure ongoing viability of the club.
• Determine the skills and numbers of skills necessary for the organization and staff to implement the plan.
• Implement the plan.

Small businesses are notorious for ignoring the planning process. Typically, an individual or group of individuals have an idea. They do a little brainstorming on the idea ...get out the calculator and begin to calculate the revenue that will come in ...usually high-balling it. They estimate the expenses ...here it is usually low-balled. They calculate the number of customers at some rate of pay that will give the desired results ...and wouldn't you know, they start a business ...a business that history shows will likely fail.

Business start-up is tricky business. Frequently, it is done quite successfully. More frequently, businesses crash somewhere down the line. Lack of up-front competent planning will insure that failure comes sooner rather than later.