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Managing a Business Plan Action Plan

By: Garry Pierrepont - Updated: 24 Sep 2012 | comments*Discuss
 
Business Action Plan Manage Objectives

Action plans in a business plan are built from a top-down approach. In that way they will remain relevant to the vision, values and strategy of the business, and contribute to its success – as long as they are achieved, of course.

An action plan in the business plan will be developed in the following way.

Vision And Values

First come the vision and values of the business. The vision of a business is what it sees itself aiming for a period of time. An example might be:

  • Within the next three years AB Co. will grow into a successful regional cabinet maker with annual revenue of £5m, providing bespoke kitchen and bedroom furniture to wealthy clients in the South East of England.

Values of the business will come from the owners’ own values, and will encompass their own attitude to money, family and friends, and may include values related to technology, quality, innovation and the environment.

Strategy

From the vision and values of the business will come its strategy. The strategy, or a number of strategies, will set the general direction for the company and establish a business model and best practices. These strategies will provide a framework for key decisions.

Strategies are broad statements which help to define long-term direction and focus for the business. When questions and queries come up, the strategies – backed by the vision and values – will help provide guidance to come up with the right answers.

Strategies can cover a number of different areas such as: target markets, growth, products, acquisition of clients, company culture, technology, staffing. There are many areas. One example might be:

  • Grow the business by attracting wealthy clients by professional networking connections.

Objectives

Objectives turn the strategies into achievable targets. Objectives should follow the SMART acronym (Specific, Measurable, Achievable, Realistic, Timed) which means measuring them, and therefore managing them, becomes more straightforward.

Objectives should have measurable, graphable (visible) results. This makes them very powerful, as they become targets for departments or individuals within the company to achieve. Achievement of objectives could be the subject of some kind or reward. AN example of a SMART objective might be:

  • Increase sales by £250,000 in 2008.

Action plan

It is fairly easy to see how the action plan will be drawn up from the objectives. With a number of objectives (say between 10 and 20) listed these can often be a one-to-one match for a list of actions. Of course, each action should be allocated to a department or an individual with one individual responsible for making sure the action is implemented and – hopefully – achieved.

Increase sales of bedroom furniture by £50,000 in 2008. Action: JKIncrease sales of kitchen furniture by £200,000 in 2008. Action: RS

These also follow the SMART acronym, and have the addition of an individual responsible for their delivery. That individual should manage that action point.

Action plans are built up, using a top down approach so that fit in with the overall vision and values of the business, down through the strategies and then the objectives of the business. This should mean that action plans are always relevant to the business and will contribute to its success. Building action plans bottom up would only create a list of actions for their own sake, and not necessarily for the good of the business.

Managing The Action Plan

Managing the action plan should be responsibility of the owners of each action point, and creating targets long the way is a good way of staying on track. In the above example for kitchen furniture, RS might divide his target for the year by four, giving him a target of an increase in sales of £50,000 in the first quarter, and for each other quarter too. Thus, if sales of kitchen furniture the previous year were £500,000, that’s an average of £125,000 per quarter. RS would therefore be aiming for sales of £175,000 by the end of March. (Seasonal variations are ignored for the sake of simplicity here.)

Clear action plans will help a business to achieve success, as long as the objectives upon which they are built adhere to SMART principles.

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