Tuesday, 2 December 2014

Business Planning 101 - Know your Strategy

Our representatives spent last night writing a number of updates for our blog today about what happened at their meeting with the Trust.  After reading through some of them we’ve asked for some translation about what was said.  So for those of you who like us have no idea what the difference is between Strategic, Operational and Financial Planning, we’re going to start off with an overview, so our first update makes sense.  For those of you, who know all this already; do skip this “KISS” overview.

I’ve been asked to write about business planning in layman’s terms.  I’m not sure I can so apologies in advance.

Business Planning
All businesses and organisations need a strategic plan to be able to grow and transform. 
  • Strategic plans are usually long term. E.g 5 years.  They state what the overall goal of the organisation is, what they want to achieve and predict where the business will go.  Strategic plans should be reviewed on a yearly basis to ensure they are still relevant.
  • Operational plans set out how they will achieve the strategic goals and run the business while working towards the goals.  Operational Plans should be created yearly and aligned to the Strategic plan.
  • Investment plans set out how much money is needed to deliver the strategic plan and the operational plans.  These are usually 3 year plans, but should be reviewed regularly.
  • Yearly budget plans set and manage the budget within year and should be reviewed on a monthly basis.

Capital Business Planning
Capital Business Planning is about investment in the business.  Large projects are funded from capital should deliver a clear goal.  Large investment in equipment is also capitalised.

Yearly budget Planning
There are three budgets; Payroll, Income and Expenditure (I&E) and Capital.  Payroll is a type of I&E and is generally the largest yearly spend in an organisation.  I&E is what you need to run the Business and Capital is used for large expenditure.  A basic example of this would be that Nurses are funded from Payroll, Bandages are funded from I&E and a new MRI scanner would use Capital.
All three budgets can fluctuate depending on yearly pressures.

Have you got all that? We think we almost have.  There is a reason for explaining this – more to follow in our next blog post.

No comments:

Post a Comment