Planning Amidst Uncertainty – is it Worth it?

Modern Business Concept

Markets are up one day and down the next. Commodity prices are unpredictable and all over the map – mainly heading south! Can we actually plan and budget with such uncertainty? Is the business plan worth the paper it is written on? It depends on how you do your planning – if you are looking for perfection and an exact science that predicts certainty, probably not. However, if you clearly identify your vision, mission, values and your business model (how you will make money) and base your projections on reasonable assumptions, it’s definitely worth it! If you are looking for financing your bank will require it, and if you want to sleep at night, you will want to know how your business will perform in different scenarios. Make certain that you are planning for at least five different scenarios: optimistic, neutral, pessimistic, break even and a loss scenario. You need to know your cash flow for each scenario and the plan to address any gaps. Try to project three years out utilizing different assumptions for each scenario. When planning remember to look at the big picture and ensure you are giving consideration to the following:

  • What sets your organization apart from others – how do you leverage this?
  • What is your business model – how do you make money and what are your profit margins? How do you maintain them?
  • What are your strengths, weaknesses, opportunities and threats? Are you leveraging your strengths and opportunities and are you managing your weaknesses and threats?
  • Are you being realistic in your goals and the assumptions you are making with respect to what your business and your people can achieve? Are you setting stretch targets that are obtainable?
  • Are you analyzing all aspects of your business to include financial, business processes, your clients and your people (learning, growth and innovation)?
  • Have you asked for input from members of your management team and also other stakeholders who know your business? Have you asked them to challenge your assumptions?
  • Who will be accountable for following up on the goals and ensuring you are doing what you say you will do? Have you assigned someone to be accountable?
  • What will be the timeline for revisiting the plan and what will be the process for review?
  • Have you communicated your plan to your staff?

Planning is an art and a science – it is not exact. You do the best you can based on the assumptions you make given the market you are in. Keep it simple – a short, clear and concise plan will be read and more likely referred to often. Revisit your plan often and change it as you learn more about the markets and adapt to the changing environment. Celebrate the fact that you know how your business will perform given the ups and downs of our ever changing economy and have confidence in knowing that you will survive and thrive as the economy turns around!

Call Salopek & Associates at 403-681-1232 or email to obtain information on our strategic planning services as you prepare for 2016 and HR services, such as outplacement and career transition support, training and other people programs that support your teams and organization.

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