How to Establish a Business-Plan Time Frame
When developing a business plan, your time frame represents how far out into the future you want to plan. You want your business to grow successfully for years and years into the future, but that goal doesn’t mean your current business plan goes all the way to forever.
Each business plan covers a unique planning period. Some are designed to get a company to a defined sales level, a funding objective, or the achievement of some other growth goal. A good business plan covers a time frame that has a realistic start and finish, with a number of measurable checkpoints in between.
Commit to a business plan schedule
How far out should your planning horizon go? Your answer depends on the kind of business you’re in and the pace at which your industry is moving.
Some ventures have only six months to prove themselves. At the other end of the spectrum, organizations that have substantial endowments, such as nonprofits, are in for the long haul with business plans that look at five- or ten-year horizons. Typical business plans, however, tend to use one-year, three-year, or five-year benchmarks. (Odd numbers are popular, for some reason.)
Business planning is an ongoing process. From year to year — and sometimes more often than that — companies review, revise, and even completely overhaul their plans. As you establish your time frame, don’t worry about casting it in cement. Instead, think of your schedule as something you commit to follow unless and until circumstances change and you make a conscious decision to revise it.
Define business plan milestones
Setting goals and establishing measurable objectives is a critical part of business planning. But knowing your goals and objectives isn’t enough. You can’t just say you’ll get around to achieving them; you need to establish and hold yourself accountable to a schedule that includes specific milestones along the way.
This example shows how a retail store specializing in digital equipment (cameras, recorders, and other devices) answered five basic questions in order to establish a reasonable time frame for its expansion plans. Based on their answers, the owners determined that the business would need one year to open new stores and achieve profitability. Over that yearlong planning period, they defined a number of milestones:
Month 1: Complete business plan.
Month 2: Secure business loans.
Month 3: Begin search for retail space.
Month 5: Lease and develop retail space; begin hiring.
Month 7: Open shops; run holiday ads.
Month 8: Holiday shopping season begins.
Month 12: New stores become profitable.
Use this same questionnaire to establish a time frame for your business plan. Your responses to the questions will help you set a time frame that includes your key milestones and takes into account your business trends and cycles and the competitive and financial realities of your business.