By Jeff Mandel
RISMEDIA, Dec. 6, 2007-The end of every calendar year is synonymous with great holidays, parties, probably some football, and oh yeah, that dreaded thing called budget planning. Understandably, people take as much time as possible to enjoy the holidays, parties, and football but try to get through the budget process as fast as possible.
This challenge is further compounded because most companies don’t typically provide enough focus during the budget process on strategic planning. Allocating an adequate amount of time to strategic planning every year is an essential best practice that helps set the foundation for your company’s next fiscal year. A thorough strategic plan should align your company’s vision with a detailed strategy of the “who, what, when, where, why and how” you are going to complete and when it’s complete, it should provide you and your organization an outline of an integrated action plan.
- Market Assessment-An analysis of the various economic, regulatory, political, etc., variables as well as changes in business dynamics that may impact your business and result in either opportunities or risks.
- Competitive Assessment-An assessment of your competitors, their strategies and weaknesses, and then compare this information to your company to see how your competitors compare to your competitive strengths and weaknesses.
- Internal Assessment-includes a two-step process: 1) assessing your prior year’s strengths and weaknesses compared to your prior year’s objectives, and 2) reviewing how your current business strategy aligns with the current industry opportunities and competitive landscape.
- Risk Assessment-A summary of the key financial, operational, market, reputation, legal and regulatory risks associated with your business in the forthcoming year and your risk mitigation strategy to mitigate their potential impacts.
- Key Business Objectives-A summary of your key short- and long-term business objectives.
- Key Performance Metrics-A summary of the key performance metrics in which your entire operation will be measured.
- Financial Projections/Budgets-Once the categories listed above are completed, you should then have all of the requisite information to develop meaningful and realistic financial projections and budgets.
A couple of additional tools that I highly recommend you incorporate into your analysis are a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis and resource planning assessment.
Given our current economic environment, the slowdown within the overall real estate markets, and the continued shakeout within the financial services markets, there is no better time than this year to expand your planning and budgeting process for 2008.
Jeff Mandel is the founder and president of Prism Professional Solutions (Prism).
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