Core Competencies

• Effective planning helps companies determine their next steps.checkmate in the dark 01 image by Yasen Pramatarov from Fotolia.com
  
  Business planning is a way for start-up companies to define the service or product that is offered and then build the systems to ensure the company can compete effectively. Established companies can plan to ensure the organization is sticking with what it does best and is not getting sidetracked.
  
  

Creating Blueprints

• Start-up companies need to use business planning to create a blueprint for how they will operate and to write a business plan for the purpose of seeking funding. A business plan helps new companies determine their break-even point. Established companies can use business planning to break out the components to decide where to make improvements: making production efficient; satisfying customers; keeping financial records straight; and ensuring the marketing message is on target.
  
  

Third Party Surveys

• Business planning is a way to incorporate useful data from third party surveys to improve management knowledge and implement improved company practices. The website Strategyplus.org links to an extensive 16 year survey from Bain and Company and found that "Eight of 10 executives agree that 'innovation is more important than cost reduction for long-term success.'" A company can use this information to invest in more innovative practices instead of only cutting costs.
  
  

Competitor Knowledge

• Use business planning as a way to learn knowledge about competitors that "can have a significant impact on your own plans," states the Ultimate Small Business Guide. Competitor information can help a company owner or management team determine its own strengths and areas needed for improvement.
  
  

Setting Prices

• Business planning is needed to help companies cover all the costs and achieve profitability "when it develops a new product . . . and when it enters bids on new contract work," according to marketing strategist Philip Kotler. Companies can then determine what similar competitors charge and how to give the company a unique distinction in its marketing message.
  
  

Regulations and Compliance

• Businesses will also use planning to understand how regulations will impact the delivery of their products and services. Businesses need "to have a solid understanding of federal and state labor laws covering everything from benefits and wages to discrimination and harassment", according to Business.gov.