The business planning cycle is concerned with reassessing the overall strategies and efficiency of the business achieving it's main objective, after all a "business plan" is essentially a living document where revisions through its are inevitably necessary. Furthermore, a business planning cycle typically occurs annually, as this is ideal in determining what objective is to be realized through following fiscal year.
There are five main components involved in a business planning cycle: strategic planning, consultation-and-scrutiny, financial planning, employee appraisal, and a decision making criteria.
Strategic Planning
Strategic planning is concerned with maintaining: objectivity when performing risks assessments, assessing the current economical climate impacting the business's mission, clarifying or revisiting a companies main objective, and formulating a step-by-step action strategy specific to the unique benefits and challenges predicted for the next fiscal year. Simply put, a business's planning cycle implements a strategy concerned with creating a hierarchy list of priorities required for the business to achieve its goals.
Financial Planning
Financial planning is concerned with the total costs involved in the business’s operations and ultimately all financial commitments in achieving its main goal. Moreover, a business planning cycle involves revisiting the business’s financial plan by objectively assessing significant changes in the industry, and the economy itself prompting any reversions to the financial strategy needing to be made. Lastly, financial planning includes three main components: a cash flow statement, income statement, and balance sheet.
Employee Appraisal
A business planning cycle is typically preformed annually invoking an extensively reassessment of the the performance of its employees. Often called an employee appraisal. An employee appraisal is concerned with objectively evaluating the performance of an employee's talent, quality, and time-cost. Also, during an employees appraisal, employees themselves may also provide feedback to the managers, assisting mangers with gauging workplace morale and the competences level of the management team.
Consultation and Scrutiny
Consultation and scrutiny is a procedure concerned with reviewing and critiquing specific hindrances and benefits related to the business achieving its goals: competitive analysis, business environment analysis, and acquisition planning are some examples of what's reviewed . Furthermore, consultation-and-scrutiny may involve having a third party (consultation firm) objectivity evaluate the overall performance of the business and necessary expectations pertaining to its mission statement.
Decision Making Criteria
A balanced scorecard involves measuring if the business activities and operational costs corresponds to the ultimate vision, mission, and agenda of the business; this is part of establishing a decision making criteria. A decision making criteria is an essential component of an annual business planning cycle guiding the business specific to its mission statement. Other examples involved in a decision making criteria are: a break even analysis, internal rate of return, and a net present value; this are all terms involved in gathering business data vastly contributing to the decision making process.
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