<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=290086984736480&amp;ev=PageView&amp;noscript=1">
Search
word-map-thumb

The Alternative Board Blog

Strategic Plan Using A 36 Month Planning Horizon

Nov. 25, 2014 | Posted by The Alternative Board Worldwide
road in mountains

 

Strategic plan planning horizons. Are yours as short and chopped up as a horizon between downtown buildings, or are they like an open prairie that lets you see for miles and miles?



Imagine this:
A business contact of yours calls you and says, “I have a great opportunity that is going to present itself in the second quarter of next year. I need to know, quickly, whether you want to participate in this. It will take about a half-million dollars, but it is a golden opportunity.” As he outlines the opportunity, it does sound good. But you say to him, “My budget isn’t ready for next year.  We’re just in the budget process right now. I don’t know if I’m going to have room in my budget to participate in this venture.”

If your budget is an annual calendar budget that runs through Dec. 31, you have no way of objectively testing the impact—financial or operational—of an opportunity that won’t arise until the second quarter of the next calendar year. Your strategic plan planning horizon is too short.

Start putting together a 36 month rolling horizon for your strategic plan goals. Don't limit your planning horizon to budgets, but also set a three-year rolling horizon for staff, markets, capital formation—everything that has importance to your strategic plan goals.

At the end of the first three months, the details for the next 12 months are adjusted or revised with a new starting point. You are always maintaining between 12 and 15 months of a detailed plan, and you add an additional 24 months of a non-detailed plan beyond that. If you never have a horizon of less than 36 months overall, you will be able to test the impact of your decisions before you make them.

How do you test the impacts? If you have a financial model of your business, you plug the decisions into the modeling. You project the investment level the decision will require; you project whether you can afford those dollars in your capital structure; you project whether your cash flow is sufficient. Try out the decision in your operation plan to see whether it would take people away from other critical parts of your operation to the detriment of those operations.

Your planning team should create options that supplement the goals set forth in your company’s strategic plan. The team must identify each of its members’ responsibilities. Collectively, these responsibilities should integrate into all the activities needed to achieve your company goals. Once the planning team has reached a consensus on the goals that collectively make up the strategic plan, the team can focus on the specific activities needed for each area of the company to reach those goals.

Your planning team must identify the critical success factors required to reach each goal. Each proposed success factor must be challenged as to why it is critical in attaining its specific goal. There must also be clear time frames for achieving each success factor. Otherwise, there is no way to monitor whether you are making adequate progress toward your company goals.

Read our 19 Reasons You Need a Business Owner Advisory Board

DOWNLOAD

Written by The Alternative Board Worldwide

Related posts

Prepare Employees for the Future of Work
Sep. 3, 2019 | Posted by The Alternative Board Worldwide
No one can say with certainty what the future of work will look like. But many elements are already in place, and employers should think long and hard about how their workplace will evolve as the...
What's the Difference Between Business Development and Sales?
Jul. 18, 2019 | Posted by The Alternative Board Worldwide
At first glance, there doesn’t appear to be much distinction between business development and sales. Aren’t both activities geared towards generating more profit for the organization? Isn’t a sales...
5 Tips to Effectively Scale Business Growth
Jun. 27, 2019 | Posted by The Alternative Board Worldwide
All businesses need to grow, but at what pace and how quickly should they scale that growth? These questions intrigue (and sometimes torment) business owners, because there’s no single “right” answer...
How to Generate Word-of-Mouth Sales Referrals
Jun. 25, 2019 | Posted by The Alternative Board Worldwide
Think about how you choose to make your purchase. There’s research you do online, or perhaps you’ve bought a product or service from a particular company before, and you’re comfortable doing so...
Are You Looking to Expand Your Business?
Jun. 4, 2019 | Posted by Phil Spensieri, TAB York Region
Over the years, I’ve coached many business owners as they’ve worked to expand their business. Whether it’s the physical expansion of your office space, expanding your workforce, or investing in new...
When You're the HR Department for Your Business
Apr. 23, 2019 | Posted by Phil Spensieri, TAB York Region
Human Resources (HR) is an area that seems to cause most business owners the highest amount of stress. Unfortunately, without an HR Department, HR issues become the responsibility of you, the...
How to Manage Your Small Business' Cash Flow
Apr. 9, 2019 | Posted by Phil Spensieri, TAB York Region
In the past 30 plus years I’ve spoken to many business owners who have encountered cash flow issues over the course of running their businesses. The proper management of your cash flow can help you...
Are You Ready For Your Exit? Creating Your Exit Strategy
Mar. 26, 2019 | Posted by Phil Spensieri, TAB York Region
As a business owner, at some point, you will start thinking about what’s next; very often this thinking results in creating an exit strategy (or exit plan). Many business owners that I work with...
How to Plan a Pivot Strategy to Grow Your Business
Mar. 12, 2019 | Posted by The Alternative Board Worldwide
“Failure” is a word no CEO or business owner is comfortable with. But inevitably, failure occurs all the time (in lesser or major ways) in the business world. Small companies can’t get a foothold in...
How to Plan for Your Company’s Expansion
Mar. 5, 2019 | Posted by The Alternative Board Worldwide
Successful business growth doesn’t happen accidentally. While there are times when rapid expansion occurs due to unforeseen factors such as large-scale market changes or shifts in demographics, for...