This is the most fundamental part of any business planning process. It requires the business to look at how it handles all aspects of its business and requires input from staff and workers at all levels, as the viewpoint, and concerns, of the shop floor are often radically different from those of the boardroom, but can often have just as serious an impact on customers. Whilst it is possible for this task to be handled internally, it can prove difficult to find a suitable individual who will not be suspected, whether reasonably or not, of having to divulge who said what to senior management. It is, probably, better to use an outsider who can be stubborn, about his or her sources, to engender suitable confidence.

SWOT Analysis

The ground to be covered in this stage is quite large. It involves discussion with all the key members of the company and a suitable, representative, selection from the remainder. The discussions are aimed at producing a ‘SWOT’ analysis (‘Strengths, Weaknesses, Opportunities, and Threats’). From this, it should be possible for the business to exploit its Strengths and Opportunities, correct its Weaknesses, and seek to minimise the Threats.

A discussion paper, analysing all the points raised in the SWOT analysis, and commenting on them, is usually raised and passed to management for correction and comment, but NOT for editing. It is not uncommon for management to feel that the workforce has totally misunderstood an issue. If that is the case, then there is, at least, a weakness in communications.

PEST Analysis

This is similar to the SWOT analysis, but covers factors affecting the environment within which the organization operates, namely Political, Economic, Social & Technological. Undertaken with the SWOT analysis, it involves discussion with all the key members of the company and a suitable, representative, selection from the remainder. From this, it should be possible for the business to identify the factors affecting the business environment in which it operates.

A discussion paper, analysing all the points raised in the PEST analysis, and commenting on them, is usually raised and passed to management for correction and comment.

Other Issues and Analyses

Accompanying the SWOT analysis, a number of other issues need to be addressed, and many business planning guides will identify a variety of such issues. In our experience, there are a number of issues which are critical to virtually all businesses, whilst there are others which can be specific to certain sectors. As this is a general guide, we are not discussing those here but you should think carefully to see if there are specific issues which need addressing. General issues include:

– the market in which the business operates and its competitive situation, possibly including an analysis of the customer base;

– the resources available to the business, the constraints on the use of those resources, and how they are utilised. This includes finance, personnel, premises, equipment etc.;

– the role and style of management.

In addition, two related issues, which could affect the business, should be considered, namely environmental impact, and potential regulatory issues.

Depending on the organisation whose future is being planned, this section may need to be expanded. For instance, an organisation employing a lot of people may wish to look more closely at its human resources, including their recruitment, motivation, training, development, appraisal methods etc. This might lead to the Plan including elements of the Investors in People scheme. Similarly, production planning techniques might be a constraint in equipment-intensive companies and the need for approval to ISO 9000 (Quality) or ISO 14000 (Environmental standards) might be a constraint elsewhere. These additional sections are sometimes included with the SWOT and PEST analyses, for comment, and, sometimes, circulated separately.

Next Steps

Once the points raised have been considered, discussed, and, more or less, agreed, we can move on to the future. Extracts from a typical SWOT discussion document are included in Appendix I of our downloadable guide. If you wish to download a copy of the guide, please click here Download Strategic Planning Guide.