A business action plan is a vital tool for all businesses. It ensure your ideas and strategy become reality. A business action plan provides a road map to achieving the goals you want from your business.
A complete business plan will include a business action plan. This will show potential investors that risks will be reduced and returns increased within a set time frame.
A business action plan is also an internal tool for management to ensure business objectives are achieved.
The business action plan is a four-phase process:
- First phase: identify your strategic objectives.
- Second phase: set realistic milestones.
- Third phase: create an action plan.
- Fourth phase: measure performance.
The business action plan should be a continuous process. Use it to implement the ongoing strategic objectives of your business.
The plan must have specific goals that are measurable. The goals must be achievable and realistic. Aim for each goal to be achieved within the time frame outlined in the plan.
The operational section of a formal business plan should include a business action plan. Microsoft Excel is a useful format to create a business action plan. Using a table will clearly illustrate the steps in the plan.
The business action plan will step out the operational milestones you have set for your business. These may include negotiating a contract, or purchasing equipment.
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List the staff member who is responsible in the column next to each milestone. If your business is slightly larger then also include the business unit responsible for the milestone. Allocating responsibilities will minimise duplication of tasks.
The next column should contain the date by which the milestone should be achieved. Measure the performance of your plan by also including a column that shows the actual date it was achieved.
This will measure your performance against target and will make the business action plan a live performance tool for your business.
The action plan should include an estimated budget for each milestone you have set. Once the milestone is achieved then include the actual cost to achieve the milestone compared to budget.
It is a good idea to track estimated budget versus actual to compare the return on the investment versus the expected return on the investment. Tracking time and cost versus budget will also provide a basis for determining whether your milestones are realistic.
Being realistic in your business action plan is critical. Setting unrealistic milestones will be detrimental to your business strategy. It will also hinder potential investment.
Potential investors will assess whether your business action plan is realistic. You increase your chances of investment if your milestones are realistic.
Investors will have greater confidence in your ability to de-risk your business and pay them their money. Or provide them with a good return on their investment.
If the business action plan is being used as an internal management tool to drive the business strategy, then realism is important too.
Management will not be able to execute an unrealistic strategy and the business will not achieve its goals.
Realism is critical.
To find out how to create a compelling and realistic business action plan download the Business Plan Blueprint.