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Exploring Entrepreneurship

9th -  12th  , marketing promotion test review, market research.


Entrepreneurship - Planning & Building a...

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Entrepreneurship - Planning & Building a Business


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Which of the following is NOT a creative thinking exercise entrepreneurs use to generate ideas?

Challenge the Usual

Think Backward

Judge Each Idea as Realistic or Not

Draw Idea Maps

Sharon is thinking about opening a bakery. She knows she wants to set her own hours, reduce her stress and make a profit. But she still has a lot to think through. Which of the following would NOT be a good early step?

Immediately finding a storefront property for her business, putting down a deposit, and signing a lease.

Contacting a mentor who has experience in the restaurant industry.

Creating an initial elevator pitch with her limited information and starting to ask around for advice.

Beginning to estimate her target market for her business.

Sharon realizes that she needs additional research before she approaches potential investors. What kind of research should she do to effectively evaluate her potential business opportunity?

Conduct market research to determine whether her business idea is a business opportunity that meets a consumer need or want.

Discuss the situation with her cousin who has shopped at the local bakery a few times.

Discuss the situation with a family friend who has money and might want to invest in her idea.

Analyze a national chain that sells pies and model her new business after it. This will save time and money that would otherwise be spent on independent research and planning.

What are the four parts of a SWOT Analysis?

Sales, Work ethic, Organization, Training

Strengths, Weaknesses, Obstacles, Threats

Strengths, Weaknesses, Opportunities, Threats

Strengths, Weaknesses, Options, Threats

George and Miguel are considering opening up a shoe store but first need to do market research. Which one of these is NOT part of the market research process?

Identify research objectives and write down the questions they want answered.

Conduct research--both primary and secondary--to hear from people firsthand and determine if there is a need for their business.

Start promoting their shoe store to people in the neighborhood.

Draw conclusions and make decisions for their business based on the research results.

George and Miguel want to know more about their local and online competitors and about the retail industry. What is the best way for them to find all of this information?

Go online to find trade associations, listings of local and national competitors, and any information on financials.

Explore websites of other shoe retail businesses and take notes.

Try to think of friends, family members or acquaintances who have experience in retail and ask them about it.

All of the above

Which of these is NOT part of a consumer profile?




Buying Patterns

Regina is looking to start a knitting business and completes a target market profile to include in her business plan. Identify which item in her target market profile is in the wrong category and where it should be moved.

"Willing to spend a little more for good quality products" …she should move this from Buying Patterns to Psychographics.

"Don't spend money on unnecessary items" …she should move this from Demographics to Buying Patterns.

Everything is in the correct category.

Regina is creating her competitive analysis. She understands why it's important to know her direct competitors, but she's not sure why indirect competitors matter. She asks you if indirect competitors are important to know about. What should you say?

No. Indirect competition isn't something to worry about because they sell different products.

No. Indirect competition is only important to understand if things change and it becomes direct competition.

Yes. Indirect competition is important to understand, since the different product fulfills the same customer need.

Yes. Indirect competition is important. Indirect competitors are competitors who compete in areas other than money, such as in hiring.

Which of the following is a fixed expense for Maria's sandwich food truck?

Salaries for her employees

Truck insurance


Which of the following is a start-up expense for Maria's food truck?

Kitchen appliances and other equipment needed to conduct her business

Cell phone bill

Pete wants to write a business plan for Pete's PB&J Cupcake Cart. He needs to identify all expenses associated with making a peanut butter and jelly cupcake for a Economics of One Unit. What is the most accurate way of determining his expenses?

Estimate the cost to buy all of the ingredients at the store, and divide that by an estimate of how many cupcakes he can make with that.

Go through the detailed process of making the cupcake step by step, measuring the ingredients he uses and calculating the cost per ingredient.

Go online and find a competitor's expenses.

None of the above

Pete's disappointed with the projections of how much his cupcake cart will make in the first month. What could he do to try to improve his net profit?

Increase the prices

Increase the number of cupcakes he sells

Decrease his fixed expenses

Which of the following is NOT one of the four steps to preparing a sales forecast?

Analyze current company and market conditions using a SWOT Analysis.

Select an organizational structure for your company.

Review past sales or past trends in the industry.

Estimate your future sales for a specific time period.

Your friend is developing a marketing plan for her new business. What should she put in this plan?

Where she wants to sell her product

The price of her product

A description of the people in her target market

Which statement is the best description of a Value Proposition?

The cost of creating the product.

A component of the business plan that identifies the target market for the product.

The features and benefits that make the product or business unique.

What is the main purpose of developing a business pitch?

To tell investors all the important details and goals of your business so they don't need to read the business plan.

To provide customers with an in-depth description of how your business was formed.

To briefly share the most important information about your business to people in an engaging way.

To determine whether your business idea is a business opportunity.

Which of the following is probably NOT an important point to include in a business pitch?

A detailed description of the meaning behind the company's name.

The problems that the product or service solves or the demands it meets.

How the product or service is different.

Clear reasons why the potential customers and investors should care about the business.

Why is it important to conduct market research on your target audience before building your marketing plan?

Newspapers and magazines will give you a discount on advertisements if you show them your research.

You need to consider who your potential customers are before deciding on marketing strategies.

Customers enjoy sharing their opinions, so market research will make your product sell more.

It doesn't matter which one you do first.

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The Entrepreneurial Process

Of course, there are many ways to organize the effort of planning, launching and building a venture. But there are a set of fundamentals that must be covered in any approach. We offer the following as a way to break down the basic activities necessary.

It is useful to break the entrepreneurial process into five phases: idea generation, opportunity evaluation, planning, company formation/launch and growth. These phases are summarized in this table, and the Opportunity Evaluation and Planning steps are expanded in greater detail below.

Although it is natural to think of the early steps as occurring sequentially, they are actually proceeding in parallel. Even as you begin your evaluation, you are forming at least a hypothesis of a business strategy. As you test the hypothesis, you are beginning to execute the first steps of your marketing plan (and possibly also your sales plan). We separate these ideas for convenience in description but it is worth keeping in mind that these are ongoing aspects of your management of the business. In the growth phases, you continue to refine you basic idea, re-evaluate the opportunity and revise your plan.

To take this analysis one level deeper, we can break down each of these phases as follows.

Opportunity Evaluation

I t is helpful to think of the evaluation step as continually asking the question of whether the opportunity is worth investing in. You are actually constructing and then continually revising an “investment prospectus.”

  • Is there a sufficiently attractive market opportunity ?
  • Is your proposed solution feasible, both from a market perspective and a technology perspective?
  • Can we compete (over a sufficiently interesting time horizon): is there sustainable competitive advantage ?
  • Do we have a team that can effectively capitalize of this opportunity?
  • What is the risk / reward profile of this opportunity, and does it justify the investment of time and money?

 If you can answer all of these questions affirmatively, then you have persuaded yourself that this opportunity is worth investing in. This is the first step toward being able to convince others, whether they be prospective customers, employees, partners or providers of capital.

These ideas are developed in the Opportunity Evaluation section

There are four main areas of strategy: determination of the target customer set, business model, position and objectives. These are described briefly below and in more depth in the sections devoted to these topics.

Target customers

The target customer is the set of potential buyers who are your focus as you design your company’s solution. The more you know about them, the better off you are. Your characterization should be both qualitative and quantitative . You should investigate any alternatives the customer has for solving or working around the problem or need that you are targeting. You should understand the buying process in detail, including who are the decision makers and who influences the decision.

Business Model

The business model is your theory about how you will make money. It involves a definition of a solution to the customer’s need, an hypothesis about how and how much the customer will pay for that solution. If there are any assumptions required for your theory to be true (such as the existence of complementary product or services, or the customer’s willingness to change business processes) these should also be articulated.

“Position” refers both to how your company is differentiated from any competitors and also how it relates to other companies in the value chain. This is an opportunity to define, at a fundamental level, what your company will do and what it will not do.

An element of position is your company’s vision : how it wants to be known or thought of. A compelling vision is necessary to inspire investors, recruit and motivate employees, and to excite customers and partners.

Milestones / Objectives

As a first step toward creating your operating plan, you should create a set of high level objectives for your business. This should include:

  • Key milestones (prototype, product, customer, partnerships,etc.)
  • Share or penetration into your chosen market

A clear articulation of objectives will allow you to set priorities for your venture, which will be critical as you face the many tough decisions that any entrepreneur must face.

These ideas are developed in the Strategy Development section

Operating plan

Your operating plan is where you spell out all of the things that you plan to do and what they will yield for your business. The activities will cover all areas of the business: marketing, selling, engineering, etc. These activities should yield products by a certain date, possibly partners, customers, etc. These activities will drive the financial performance of the company.

Your operating plan will be a combination of plans , i.e., these people working on this topic for this period of time will produce result X, and forecasts or projections , i.e. predictions about what results will occur. The primary and most important forecast concerns revenue, but predictions about costs of materials and other things may be important as well. The operating plan is the core of your business, and you should make it as good as you can – your plans should be as thorough as possible and your forecasts should be based on the best and most complete evidence you can compile.

Begin with your strategy and break down what needs to be accomplished to achieve your objectives – this is the basis of your plan. The more detailed and fine grained analysis you can develop, the more accurate and reliable your plan will be.

Financing plan

This includes the capital needs of the company, the timing of those needs and the desired/expected sources of that capital.

Planning process

Here are a few important principles:

  • The actual budget, staffing plans, etc. are then driven by estimates of what it takes to accomplish the tasks in the required timeframe.
  • Build a plan that captures everything ( so that you are not hurt by surprises or unexpected expenses)
  • Revenue: detailed bottom up plan, based on best information about customer groupings, conversion rates, sales activity, …
  • Expenses: usually people driven – build in realistic hiring timetables, training, learning curve, benefits, travel, etc.
  • Program expenses: mostly marketing – must support the plan and estimates should be equally comprehensive
  • The plan must close – all pieces tie together.

The plan becomes more manageable when you break it down into major functional areas. The traditional breakdown is as follows, but you don’t have to be bound by this except in so far as you should follow Generally Accepted Accounting Practice.

  • Research and development
  • People management
  • Processes & infrastructure

You should monitor your budget carefully and continually, and make adjustments as needed. A more detailed description of the process of building an operating plan may be found at: Operating Plan Development Process

Execution is organized by the core functional areas of the company

🎯 Finish your 2024 OKRs in 60 days

The strategic planning process in 4 steps, to assist you throughout your planning process, we have created a how-to guide on the basics of strategic planning which will take you through the planning process step-by-step..

Free Strategic Planning Guide

What is Strategic Planning?

Strategic Planning is a process where organizations define a bold vision and create a plan with objectives and goals to reach that future. A great strategic plan defines where your organization is going, how you’ll win, who must do what, and how you’ll review and adapt your strategy.


Overview of the complete strategic planning process:

Getting started: strategic planning introduction.

The strategic management process is about getting from Point A to Point B more effectively, efficiently, and enjoying the journey and learning from it. Part of that journey is the strategy and part of it is execution. Having a good strategy dictates “how” you travel the road you have selected and effective execution makes sure you are checking in along the way. On average, this process can take between three and four months. However no one organization is alike and you may decide to fast track your process or slow it down. Move at a pace that works best for you and your team and leverage this as a resource. For more of a deep dive look into each part of the planning phase, you will see a link to the detailed How-To Guide at the top of each phase.

Strategic Planning Guide and Process

Phase Duration

1-2 weeks (1 hr meeting with Owner/CEO, Strategy Director and Facilitator (if necessary) to discuss information collected and direction for continued planning.)

Questions to Ask:

  • Who is on your Planning Team?
  • Who will be the business process owner (Strategy Director) of planning in your organization?
  • Fast forward 12 months from now, what do you want to see differently in your organization as a result of embarking on this initiative?
  • Planning team members are informed of their roles and responsibilities.
  • Planning schedule is established.
  • Existing planning information and secondary data collected.

Action Grid:


Step 1: Determine Organizational Readiness

Set up your planning process for success – questions to ask:.

  • Are the conditions and criteria for successful planning in place at the current time? Can certain pitfalls be avoided?
  • Is this the appropriate time for your organization to initiate a planning process? Yes or no? If no, where do you go from here?

Step 2: Develop Your Team & Schedule

Who is going to be on your planning team? You need to choose someone to oversee the implementation (Chief Strategy Officer or Strategy Director) and then you need some of the key individuals and decision makers for this team. It should be a small group of approximately 12-15 persons.

OnStrategy is the leader in strategic planning and performance management. Our cloud-based software and hands-on services closes the gap between strategy and execution. Learn more about OnStrategy here .

Step 3: Collect Current Data

Collect the following information on your organization:

  • The last strategic plan, even if it is not current
  • Mission statement, vision statement, values statement
  • Business plan
  • Financial records for the last few years
  • Marketing plan
  • Other information, such as last year’s SWOT, sales figures and projections

Step 4:Review collected data:

Review the data collected in the last action with your strategy director and facilitator.

  • What trends do you see?
  • Are there areas of obvious weakness or strengths?
  • Have you been following a plan or have you just been going along with the market?

Strategic Planning Pyramid

Strategic Planning Phase 1: Determine Your Strategic Position

Want More? Deep Dive Into the “ Evaluate Your Strategic Position ” How-To Guide.

Action Grid

Step 1: identify strategic issues.

Strategic issues are critical unknowns that are driving you to embark on a strategic planning process now. These issues can be problems, opportunities, market shifts or anything else that is keeping you awake at night and begging for a solution or decision.

  • How will we grow, stabilize, or retrench in order to sustain our organization into the future?
  • How will we diversify our revenue to reduce our dependence on a major customer?
  • What must we do to improve our cost structure and stay competitive?
  • How and where must we innovate our products and services?

Step 2: Conduct an Environmental Scan

Conducting an environmental scan will help you understand your operating environment. An environmental scan is also referred to as a PEST analysis, which is an acronym for Political, Economic, Social and Technological trends. Sometimes it is helpful to also include Ecological and Legal trends as well. All of these trends play a part in determining the overall business environment.

Step 3: Conduct a Competitive Analysis

The reason to do a competitive analysis is to assess the opportunities and threats that may occur from those organizations competing for the same business you are.  You need to have an understanding of what your competitors are or aren’t offering your potential customers.  Here are a few other key ways a competitive analysis fits into strategic planning:

  • To help you assess whether your competitive advantage is really an advantage.
  • To understand what your competitors’ current and future strategies are so you can plan accordingly.
  • To provide information that will help you evaluate your strategic decisions against what your competitors may or may not be doing.

Step 4: Identify Opportunities and Threats

Opportunities are situations that exist but must be acted on if the business is to benefit from them.

What do you want to capitalize on?

  • What new needs of customers could you meet?
  • What are the economic trends that benefit you?
  • What are the emerging political and social opportunities?
  • What niches have your competitors missed?

Threats refer to external conditions or barriers that may prevent a company from reaching its objectives.

What do you need to mitigate?

Questions to answer:.

  • What are the negative economic trends?
  • What are the negative political and social trends?
  • Where are competitors about to bite you?
  • Where are you vulnerable?

Step 5: Identify Strengths and Weaknesses

Strengths refer to what your company does well.

What do you want to build on?

  • What do you do well (in sales, marketing, operations, management)?
  • What are your core competencies?
  • What differentiates you from your competitors?
  • Why do your customers buy from you?

Weaknesses refer to any limitations a company faces in developing or implementing a strategy.

What do you need to shore up?

  • Where do you lack resources?
  • What can you do better?
  • Where are you losing money?
  • In what areas do your competitors have an edge?

Step 6: Customer Segments


Customer segmentation defines the different groups of people or organizations a company aims to reach or serve.

Who are we providing value to?

  • What needs or wants define your ideal customer?
  • What characteristics describe your typical customer?
  • Can you sort your customers into different profiles using their needs, wants and characteristics?
  • Can you reach this segment through clear communication channels?

Step 7: Develop Your SWOT


A SWOT analysis is a quick way of examining your organization by looking at the  internal  strengths and weaknesses in relation to the  external  opportunities and threats. By creating a SWOT analysis, you can see all the important factors affecting your organization together in one place. It’s easy to read, easy to communicate, and easy to create. Take the Strengths, Weaknesses, Opportunities and Threats you developed earlier, review, prioritize and combine like terms. The SWOT analysis helps you ask, and answer, the following questions: “How do you….”

  • Build on your strengths
  • Shore up your weaknesses
  • Capitalize on your opportunities
  • Manage your threats


Strategic Planning Process Phase 2: Developing Strategy

Want More? Deep Dive Into the “Developing Your Strategy” How-To Guide.

Step 1: Develop Your Mission Statement

The mission statement describes an organization’s purpose or reason for existing.

What is our purpose? Why do we exist? What do we do?

  • What does your organization intend to accomplish?
  • Why do you work here? Why is it special to work here?
  • What would happen if we were not here?

Outcome: A short, concise, concrete statement that clearly defines the scope of the organization.

Step 2: discover your values.

Your values statement clarifies what your organization stands for, believes in and the behaviors you expect to see as a result.

How will we behave?

  • What are the key non-negotiables that are critical to the success of the company?
  • What are the guiding principles that are core to how we operate in this organization?
  • What behaviors do you expect to see?
  • If the circumstances changed and penalized us for holding this core value, would we still keep it?

Outcome: Short list of 5-7 core values.

Step 3: casting your vision statement.


A Vision Statement defines your desired future state and provides direction for where we are going as an organization.

Where are we going?

  • What will our organization look like 5–10 years from now?
  • What does success look like?
  • What are we aspiring to achieve?
  • What mountain are you climbing and why?

Outcome: A picture of the future.

Step 4: identify your competitive advantages.

A Competitive Advantage is a characteristic(s) of an organization that allows it to meet their customer’s need(s) better than their competition can.

What are we best at?

  • What are your unique strengths?
  • What are you best at in your market?
  • Do your customers still value what is being delivered? Ask them.
  • How do your value propositions stack up in the marketplace?

Outcome: A list of 2 or 3 items that honestly express the organization’s foundation for winning.

Step 5: crafting your organization-wide strategies.


Your strategies are the general methods you intend to use to reach your vision. No matter what the level, a strategy answers the question “how.”

How will we succeed?

  • Broad: market scope; a relatively wide market emphasis.
  • Narrow: limited to only one or few segments in the market
  • Does your competitive position focus on lowest total cost or product/service differentiation or both?

Outcome: Establish the general, umbrella methods you intend to use to reach your vision.


Phase 3: Strategic Plan Development

Want More? Deep Dive Into the “Build Your Plan” How-To Guide.

Strategic Planning Process Step 1: Use Your SWOT to Set Priorities

If your team wants to take the next step in the SWOT analysis, apply the TOWS Strategic Alternatives Matrix to help you think about the options that you could pursue. To do this, match external opportunities and threats with your internal strengths and weaknesses, as illustrated in the matrix below:

TOWS Strategic Alternatives Matrix

Evaluate the options you’ve generated, and identify the ones that give the greatest benefit, and that best achieve the mission and vision of your organization. Add these to the other strategic options that you’re considering.

Step 2: Define Long-Term Strategic Objectives

Long-Term Strategic Objectives are long-term, broad, continuous statements that holistically address all areas of your organization. What must we focus on to achieve our vision?  What are the “big rocks”?

Questions to ask:

  • What are our shareholders or stakeholders expectations for our financial performance or social outcomes?
  • To reach our outcomes, what value must we provide to our customers? What is our value proposition?
  • To provide value, what process must we excel at to deliver our products and services?
  • To drive our processes, what skills, capabilities and organizational structure must we have?

Outcome: Framework for your plan – no more than 6

Strategy Map

Step 3: Setting Organization-Wide Goals and Measures


Once you have formulated your strategic objectives, you should translate them into goals and measures that can be clearly communicated to your planning team (team leaders and/or team members). You want to set goals that convert the strategic objectives into specific performance targets. Effective goals clearly state what, when, how, and who, and they are specifically measurable. They should address what you need to do in the short-term (think 1-3 years) to achieve your strategic objectives. Organization-wide goals are annual statements that are specific, measurable, attainable, responsible and time bound.  These are outcome statements expressing a result expected in the organization.

What is most important right now to reach our long-term objectives?

Outcome: clear outcomes for the current year..

Strategic Planning Outcomes Table

Step 4: Select KPIs


Key Performance Indicators (KPI) are the key measures that will have the most impact in moving your organization forward. We recommend you guide your organization with measures that matter.

How will we measure our success?

Outcome: 5-7 measures that help you keep the pulse on your performance. When selecting your Key Performance Indicators, begin by asking “What are the key performance measures we need to track in order to monitor if we are achieving our goals?” These KPIs include the key goals that you want to measure that will have the most impact in moving your organization forward.

Step 5: Cascade Your Strategies to Operations


Cascading action items and to-dos for each short-term goal is where the rubber meets the road – literally. Moving from big ideas to action happens when strategy is translated from the organizational level to the individual. Here we widen the circle of the people who are involved in the planning as functional area managers and individual contributors develop their short-term goals and actions to support the organizational direction. But before you take that action, determine if you are going to develop a set of plans that cascade directly from the strategic plan, or instead if you have existing operational, business or account plans that should be synced up with organizational goals. A pitfall is to develop multiple sets of goals and actions for directors and staff to manage. Fundamentally, at this point you have moved from planning the strategy to planning the operations; from strategic planning to annual planning. That said, the only way strategy gets executed is to align resources and actions from the bottom to the top to drive your vision.

Questions to Ask

  • How are we going to get there at a functional level?
  • Who must do what by when to accomplish and drive the organizational goals?
  • What strategic questions still remain and need to be solved?

Department/functional goals, actions, measures and targets for the next 12-24 months

Step 6: Cascading Goals to Departments and Team Members

Now in your Departments / Teams, you need to create goals to support the organization-wide goals. These goals should still be SMART and are generally (short-term) something to be done in the next 12-18 months. Finally, you should develop an action plan for each goal. Keep the acronym SMART in mind again when setting action items, and make sure they include start and end dates and have someone assigned their responsibility. Since these action items support your previously established goals, it may be helpful to consider action items your immediate plans on the way to achieving your (short-term) goals. In other words, identify all the actions that need to occur in the next 90 days and continue this same process every 90 days until the goal is achieved.

Examples of Cascading Goals:


Phase 4: Executing Strategy and Managing Performance

Want More? Deep Dive Into the “Managing Performance” How-To Guide.

Step 1: Strategic Plan Implementation Schedule

Implementation is the process that turns strategies and plans into actions in order to accomplish strategic objectives and goals.

How will we use the plan as a management tool?

  • Communication Schedule: How and when will you roll-out your plan to your staff? How frequently will you send out updates?
  • Process Leader: Who is your strategy director?
  • Structure: What are the dates for your strategy reviews (we recommend at least quarterly)?
  • System & Reports: What are you expecting each staff member to come prepared with to those strategy review sessions?

Outcome: Syncing your plan into the “rhythm of your business.”

Once your resources are in place, you can set your implementation schedule. Use the following steps as your base implementation plan:

  • Establish your performance management and reward system.
  • Set up monthly and quarterly strategy meetings with established reporting procedures.
  • Set up annual strategic review dates including new assessments and a large group meeting for an annual plan review.

Now you’re ready to start plan roll-out. Below are sample implementation schedules, which double for a full strategic management process timeline.

Strategic Planning Calendar

Step 2: Tracking Goals & Actions

Monthly strategy meetings don’t need to take a lot of time – 30 to 60 minutes should suffice. But it is important that key team members report on their progress toward the goals they are responsible for – including reporting on metrics in the scorecard they have been assigned. By using the measurements already established, it’s easy to make course corrections if necessary. You should also commit to reviewing your Key Performance Indicators (KPIs) during these regular meetings.

Your Bi-Annual Checklist


Never lose sight of the fact that strategic plans are guidelines, not rules. Every six months or so, you should evaluate your strategy execution and plan implementation by asking these key questions:

  • Will your goals be achieved within the time frame of the plan? If not, why?
  • Should the deadlines be modified? (Before you modify deadlines, figure out why you’re behind schedule.)
  • Are your goals and action items still realistic?
  • Should the organization’s focus be changed to put more emphasis on achieving your goals?
  • Should your goals be changed? (Be careful about making these changes – know why efforts aren’t achieving the goals before changing the goals.)
  • What can be gathered from an adaptation to improve future planning activities?

Why Track Your Goals?

  • Ownership: Having a stake and responsibility in the plan makes you feel part of it and leads you to drive your goals forward.
  • Culture: Successful plans tie tracking and updating goals into organizational culture.
  • Implementation: If you don’t review and update your goaFls, they are just good intentions
  • Accountability: Accountability and high visibility help drive change. This means that each measure, objective, data source and initiative must have an owner.
  • Empowerment: Changing goals from In Progress to Complete just feels good!

Step 3: Review & Adapt

Guidelines for your strategy review.


Restricting the meeting to reporting on measurements can help you stay on task and keep the meeting within 30 minutes, but if you can commit to a full hour, the meeting agenda should also include some time devoted to working on one specific topic or on one of the quarter’s priorities where decisions need to be made. Once agreed upon, this topic should be developed to conclusion. Holding meetings helps focus your goals on accomplishing top priorities and accelerating growth of the organization. Although the meeting structure is relatively simple, it does require a high degree of discipline.

Strategy Review Session Questions:


  • What were our three most important strategic accomplishments of the last 90 days – how have we changed our field of play in the past 90 days?
  • What are the three most important ways we fell short of our strategic potential?
  • In the last 90 days, what are the three most important things that we have learned about our strategy?  (NOTE: We are looking for insight to decision to action observations.)

Step 4: Annual Updates The three words  strategic planning off-site  provoke reactions anywhere from sheer exuberance to ducking for cover. In many organizations, retreats have a bad reputation because stepping into one of the many planning pitfalls is so easy. Holding effective meetings can be tough, and if you add a lot of brainpower mixed with personal agendas, you can have a recipe for disaster. That’s why so many strategic planning meetings are unsuccessful. Executing your strategic plan is as important, or even more important, than your strategy. Critical actions move a strategic plan from a document that sits on the shelf to actions that drive organizational growth. The sad reality is that the majority of organizations who have strategic plans fail to implement. Don’t be part of the majority! In fact, research has shown that 70% of organizations that have a formal execution process out-perform their peers. (Kaplan & Norton) Guiding your work in this stage of the planning process is a schedule for the next 12 months that spells out when the quarterly strategy reviews are, who is involved, what participants need to bring to the meetings and how you will adapt the plan based on the outcomes of the reviews. You remain in this phase of the strategic management process until you embark on the next formal planning sessions where you start back at the beginning. Remember that successful execution of your plan relies on appointing a strategy director, training your team to use OnStrategy (or any other planning tool), effectively driving accountability, and gaining organizational commitment to the process.

Strategic planning frequently asked questions

Read our frequently asked questions about strategic planning to learn how to build a great strategic plan..

Business Strategic Planning is a process where your business defines a bold vision of the future and creates a plan to reach that future. It helps your business define where you’re going, how you’ll get there, how you’ll grow, and what you must do to reach your desired future.

A great strategic plan determines where your organization is going, how you’ll win, what roles each team member has in the execution, and your game plan for reviewing and adapting your strategy. Elements include a current state analysis, SWOT, mission, vision, values, competitive advantages, growth strategy, growth enablers, a 3-year roadmap, and annual plan with goals, KPIs, and OKRs.

Typically, the average strategic planning process takes about 3-4 months, but depending on your organization, it could take more or less time. Every organization is different, so you should work at a pace that works for you.

There are four overarching phases to the strategic planning process that include: determining position, developing your strategy, building your plan, and managing performance. Each phase plays a unique but distinctly crucial role in the strategic planning process.

Prior to starting your strategic plan, you must go through this pre-planning process to determine your organization’s readiness by following these steps:

Ask yourself these questions: Are the conditions and criteria for successful planning in place now? Can we foresee any pitfalls that we can avoid? Is there an appropriate time for our organization to initiate this process?

Develop your team and schedule. Who will oversee the implementation as Chief Strategy Officer or Director? Do we have at least 12-15 other key individuals on our team?

Research and Collect Current Data. Find the following resources that your organization may have used in the past to assist you with your new plan: last strategic plan, mission, vision, and values statement, business plan, financial records, marketing plan, SWOT, sales figures, or projections.

Finally, review the data with your strategy director and facilitator and ask these questions: What trends do we see? Any obvious strengths or weaknesses? Have we been following a plan or just going along with the market?

Determining your positioning entails conducting a scan of macro and micro trends in your environment and industry, identifying marketing and competitive opportunities and threats, clarifying target customers and value propositions, gathering and reviewing staff and partner feedback for strengths and weaknesses, synthesizing the data into a SWOT, and solidifying your competitive advantages.

Developing your strategy includes determining your primary business model and organizational purpose, identifying your corporate values, creating an image of what success would look like in 3-5 years, solidifying your competitive advantages, formulating organization wide-strategies that explain your base, and agreeing on strategic issues you need to address in the planning process. .

Once you get to the strategic plan development process in the planning process, you must begin developing your strategic framework and defining long-term strategic objectives, set short-term SMART organizational goals, and select the measure that will be your KPIs (key performance indicators.)

The last phase of strategic planning is implementation, execution, and ongoing refreshes. This step entails establishing an implementation schedule, rolling out your plan, executing against your key results, and reviewing process and refreshing your plan quarterly. p>

The ideal execution schedule for your strategic plan will differ from team to team or organization to organization, but generally, you should try to set 4 quarterly reviews, a mid-year executive survey, 12 monthly check-ins, and a year-end plan review and annual refresh.

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Reinventing Your Leadership Team

  • Paul Leinwand,
  • Mahadeva Matt Mani,
  • Blair Sheppard

planning and building a business quizlet

Digitization may be necessary for many businesses’ continued success, but in our increasingly complex world, what companies really need to do is build new forms of competitive advantage and transform themselves for the future. And that requires fundamental changes in their top leaders—not just in individuals’ capabilities but in the way they collectively steer the ship.

Drawing on their research at 12 prominent global firms, the authors note the contradictory-seeming skills that leaders are expected to have—being both great visionaries and expert executors, for example. But in this article they focus on the urgent imperative to improve leadership teams, arguing that CEOs should:

  • Identify the roles that are needed at the top to reimagine and then deliver on the company’s purpose
  • Fill those roles thoughtfully, assembling a diverse group of people who think boldly and work together harmoniously
  • Focus the team on driving transformation rather than managing the current business
  • Take ownership of the team’s behavior, fostering trust, collaboration, and a commitment to leading the company forward rather than dwelling on personal advancement

Your organization’s future depends on getting this right.

Idea in Brief

The problem.

To thrive in our increasingly complex world, companies must move beyond digitization and reimagine what they do to create value. But most leadership teams aren’t set up to transform their organizations and position them for success in the future.

The Way Forward

CEOs need to fundamentally rethink their leadership teams so that their top executives focus on advancing meaningful change rather than managing the current business.

The Steps to Follow

CEOs should identify the leadership roles needed to shape the future of the company, put the right people in those roles, emphasize the drive for transformation, and take ownership of their top team’s behavior.

As companies strive to build competitive advantage in a world obsessed with digitizing (which is often a must but rarely differentiating), they find that what they need from their leaders is changing. Their top people must be able to reimagine the company’s place in the world and transform the organization to live up to a more ambitious purpose. That will mean fundamental change not only in the executives themselves but also in how they collectively manage and lead the firm.

  • Paul Leinwand is a principal at PwC U.S. and the global managing director for capabilities-driven strategy and growth at Strategy&. He is an adjunct professor at Northwestern’s Kellogg School and a coauthor of several books, including Beyond Digital: How Great Leaders Transform Their Organizations and Shape the Future .
  • Mahadeva Matt Mani is a principal with PwC US. He leads the transformation platform for PwC and for its strategy consulting business, Strategy&, advising executives on business model transformations and operational value creation and productivity programs. He is a coauthor of  Beyond Digital: How Great Leaders Transform Their Organizations and Shape the Future  (Harvard Business Review Press, 2021).
  • BS Blair Sheppard is the global leader of strategy and leadership for the PwC network. He directs the team that is responsible for articulating PwC’s global strategy across 156 countries and developing current and next-generation PwC leaders. He is also a professor emeritus and dean emeritus of Duke University’s Fuqua School of Business and the author of Ten Years to Midnight: Four Urgent Global Crises and Their Strategic Solutions (Berrett-Koehler, 2020).

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The Different Types of Business Plans Explained

Tim Berry | Oct 27, 2023

Business plans go by many names: Strategic plans, traditional plans, operational plans, internal plans, growth plans, and many others.

Different situations may call for different types of plans. And an effective business plan will match its intended use. Knowing how a particular type of plan works will help you build a better roadmap for the future of your business.

Let’s go over some of the most common business plan formats and walk you through the process of how to choose the right option for your business.

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How to write a business plan

Writing a business plan can be quick and simple. Follow this step-by-step guide to create a great business plan that you’ll actually use.

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Start with a one-page plan

Outline all of your important business details with a brief and focused document that’s incredibly easy to update and expand. You may even find that it’s all you need to run your business.

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Growth plan

A hybrid planning option that adapts the one-page business plan into an ongoing strategic tool for business optimization and growth by tying your forecasts and financial performance closely to your overall strategy.

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Internal plan

Are you not presenting your plan to anyone outside your business? Opt for an internal plan that works great for startups and ongoing management by removing the more formal sections from other plan types.

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5-year business plan

Some investors or stakeholders may request a long-term plan that stretches out up to five years. Learn why this type of planning isn’t useful and how to account for the future without wasting your time.

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Nonprofit business plan

While a nonprofit business plan isn’t all that different from a traditional plan—there are unique considerations around fundraising, partnerships, and promotions that must be made.

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Lean planning

Lean planning is a faster, easier, and more efficient business plan designed to help startups better manage their strategy, tactics, milestones, and operations. Complete it quickly and update based on performance.

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What type of business plan do you need?

With so many business plan options available—which one should you choose? To find the best plan type for your business, work through the following exercise to review and compare each format.

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Scenario Planning: Strategy, Steps and Practical Examples

Scenario Planning: Strategy, Steps and Practical Examples

  • Scenario planning helps decision-makers identify ranges of potential outcomes and impacts, evaluate responses and manage for both positive and negative possibilities
  • There are a number of templates and formalized frameworks for scenario planning, as we'll discuss. What's important is choosing a method that works for your team
  • We'll look at two fictional firms, a software company and a wholesale distributor, to illustrate the planning process

If anything magnifies the value of scenario planning, it's a pandemic — even if most companies didn't have “economy grinds to a halt” in their modeling. In the context of a business, scenario planning is a way to assert control over an uncertain world by identifying assumptions about the future and determining how your organization will respond.

By building organizational awareness of what could happen, leaders may spot warning signs of brewing challenges and respond accordingly. When a worst-case event arises, scenario planning documents add tremendous value by playing out multiple outcomes and listing immediate steps to contain damage. Plans are also valuable for best-case scenarios — say a product goes viral and demand spikes 300% overnight? What if an acquisition opportunity lands unexpectedly? Are you prepared?

Scenario plans, ultimately, tell a story with many possible endings. Crafting the narrative requires a clear set of assumptions about potential business realities and ensuing outcomes.

What Is Scenario Planning?

For businesses, scenario planning enables decision-makers to identify ranges of potential outcomes and estimated impacts, evaluate responses and manage for both positive and negative possibilities. From projecting financial earnings and estimating cash flow to developing mitigating actions, scenario planning is more than just a financial planning tool — it's an integrated approach to dealing with uncertainty.

But it's more than just a way to recognize and mitigate risk or plan for growth situations. Scenario planning is also about visualizing different representations of an organization's future, based on assumptions about the forces driving the market — some good, some bad.

Scenario planning is a process pioneered by the U.S. military , which today runs exercises looking up to 20 years out to guide R&D efforts.

Why Is Scenario Planning Important?

Scenario planning can provide a competitive advantage by enabling leaders to react quickly and decisively — because a situation has been thought through and actions documented, no one has to scramble when in the midst of a crisis.

Scenario planning also gives executives and boards of directors a framework to make nonemergency decisions more effectively by providing insight into plans, budgets and forecasts and painting a clearer picture of key drivers for business growth and the potential impact of future events.

Scenario Planning Advantages and Disadvantages

A comprehensive scenario planning exercise takes time, effort and money. Should you commit?


  • Scenario planning will help executives understand the effects of various plausible events.
  • Finance, operations and other teams can prepare initial responses.
  • There's an element of knowledge management; by having key personnel take part, the company captures their insights and recommendations.
  • If these stakeholders are unavailable during an actual extreme event, the company has documentation to fall back on.


  • Scenario planning is a potentially enormous undertaking. It can be a lengthy process to collect data and driving factors; for large enterprises, plans can take months to create.
  • Factors that impact plans can change quickly. That means scenario planning must be a living process, with constant updates as conditions and assumptions evolve.

We recommend that all companies perform at least rudimentary scenario planning, even if it's in the context of a business continuity exercise. The process itself has real value.

Once you've decided to get started, you need to settle on a format.

Types of Scenario Planning

Quantitative scenarios.

Financial models that allow for the presentation of best- and worst-case versions of the model outputs. These models can be quickly changed by altering a limited number of variables/factors. Quantitative scenarios are also used to develop annual business forecasts . These models assume key variables are known and that relationships among them are fixed.

Operational scenarios

One of the most common types of scenario planning an organization will undertake internally. Operational scenarios specifically explore the immediate impact of an event. The scenario then provides short-term strategic implications.

Normative scenarios

These describe a preferred or achievable end state. These scenarios are less objective planning and more geared toward statements of goals. These goals are not necessarily about an organizational vision, but more about how the company would like to operate in the future. Normative scenarios are often combined with other types of scenario planning as they provide a summation of changes and a targeted list of activities.

Strategic management scenarios

Essentially stories that say little about the company or industry, but more about the environment in which products and services are consumed. These are often the most challenging scenarios for company leaders to put together because they require a broad industry, economic and world view. On the plus side, they give planners freedom to brainstorm decisions and a broad storytelling mandate. In some cases, companies bring in analysts or even so-called futurists .

How to Use Scenario Planning

Typically, macroeconomic expectations are used in conjunction with scenario planning to help the CFO frame near-term expectations for the company and to level-set expectations in departments.

The fundamentals of scenario planning are the same, even if the particulars across industries and within businesses vary. To illustrate this, consider how two fictional companies, a software provider and a wholesale distributor, would approach scenario planning during the COVID-19 pandemic.

Company 1: Gimbloo Software is a young business software company that had been experiencing steady growth until the pandemic. The leadership team hadn't undertaken any scenario planning, but its CFO had lived through both the dot-com bubble and the Great Recession and was ready to act quickly to protect Gimbloo's runway.

Company 2: Before the pandemic, the CFO at established wholesale distributor Tar Heel Direct had prepared three scenarios based on order volume: green, yellow and red. Each scenario encompassed a new set of mitigating actions, using order volume as a metric to trigger when it was time to enact each action sequence. However, the retail freefall meant that Tar Heel Direct found itself operating in the worst-case scenario — red — within a matter of weeks.

Questions both companies considered:

  • What is the issue that we are trying to assess?
  • How far out are we trying to predict?
  • What are the major external factors likely to impact on our scenarios?
  • What are the key internal drivers that we need to address?
  • What are the risks to the scenario?
  • Do we have the right data, technology, bandwidth and skills to develop and maintain scenario plans?

Tar Heel Direct's scenarios are based on order volume and ability to fulfill orders efficiently. Because the negative effects of the pandemic were so sudden, the company decided to set milestones for every 30 days in anticipation of delayed accounts receivable as well as reduced ability of retailers to accept products.

It quickly lost orders from most customers with physical retail locations — infection rates and lockdown orders have a direct impact on sales. Internally, Tar Heel Direct has taken safety precautions for its workers. Social distancing and increased sanitization measures mean that warehouse teams are operating at about 60% capacity. Suppliers and customers are in roughly the same boat, with suppliers being affected too — though not as dramatically as retail outlets. Some incoming product shipments will be delayed, or suppliers may be able to provide only fractions of their normal output.

Tar Heel's leaders are in close communication with suppliers and customers, and the firm monitors government data and industry reports to try to stay ahead of trends; however, the future of retail is uncertain, and it may need to explore new sources of revenue.

Scenario Planning vs. Business Continuity Planning

Scenario planning is often conflated with business continuity planning. While both are structured processes for helping a company navigate the future, scenario planning plays a longer game that considers revenue over time. Business continuity planning is about how your business will react to a disaster, such as a warehouse fire or earthquake.

In both processes, the journey may be as valuable as the final work product. By bringing leaders together to think through what could affect your business, you may head off potential risk.

Meanwhile, Gimbloo's challenges are less dependent on outside stakeholders. Its management and private equity partners met early in the crisis to establish a plan. They came to an agreement that new business and additional sources of funding aren't likely in the next few months, so the key focus is extending runway by cutting discretionary costs and being prepared to adjust headcount. The company's PE partners aren't likely to sit by and watch Gimbloo run out of money, but before providing additional funds, they will want to see that the company has cut wherever possible.

Leadership made the assumptions that recurring revenue would stay largely the same and new deals would surge when the economy reopens. If both hold true, they'd begin scaling back the cost-saving measures. They also added a cushion for churn, down-sells and, in the event of an extreme and protracted downturn, some mid-contract cancellations.

Any significant changes in metrics would trigger another scenario with further cuts.

Scenario Planning Work Approach

Actions to take.

  • Secure commitments from senior management, select team members and organize scenarios around key issues to be addressed and evaluated.
  • Define assumptions clearly, establish relationships between drivers and limit the number of scenarios created.
  • Make sure each scenario presents a logical view of the future.
  • Focus on material differences between scenarios.
  • Indicate KPIs, and refresh scenarios and update assumptions on a regular basis.

Actions to avoid

  • Avoid developing scenarios without defining the issues first.
  • Don't develop too many scenarios – three is a good starting point. Beginning with your best guess at how business will go, add one scenario for things going better and another for things going worse. A good starting point is 50% for best guess, then 25% for things going better and 25% for things going worse.
  • Do not attempt to develop the perfect scenario – more detail does not mean more accuracy.
  • Avoid becoming fixated on any one scenario.
  • Don't hold on to a scenario after it has ceased to be relevant.

3 Steps to Better Scenario Planning

1. identify critical triggers even in the midst of uncertainty:.

When faced with a crisis, finance leaders quickly establish guidelines for how the organization should respond by developing multiple scenarios. These scenarios are built on a set of assumptions around events that affect the survival of the organization and should trigger a series of actions.

In times of crisis, companies need to combine historical data with plausible outcomes to determine ramifications for each part of the organization. Scenario plans can give leaders breathing room to slow down and assess economic, political and environmental factors. These prioritized factors are a critical part of crisis scenarios.

2. Develop multiple scenarios, but keep it simple:

When building multiple scenarios, it's easy for finance teams to feel overwhelmed by the range of potential outcomes. How can anyone properly plan for so many possibilities? Simply put, you can't. That's why it's best to keep it simple. Focus on two to three major uncertainties and build scenarios from there. Finance leaders need to prioritize and develop perspectives about each of the scenarios to help the company navigate.

3. Build a nimble response strategy:

Each scenario should contain enough detail to assess the likelihood of the success or failure of different strategic options. Once this is all in place, finance leaders can create a framework that helps the executive team make decisions. Any decisions made need to be monitored in real-time so the team can be nimble in its ongoing response.

Scenario Planning Matrix

Strategies to manage scenario planning projects.

As has probably become clear, the scope of scenario planning is limited only by leaders' time and imaginations. There must be guardrails on the project to keep the time investment in line with expectations. Here are some key issues in managing scenario planning scope creep:

  • Recognize the importance of the team's time.
  • Spend more time on creation and analysis of problems/questions, less on “what if” tangents.
  • Define important outcomes.
  • Decide how you will put your scenarios to use; that will inform scope.
  • How will you assess success?
  • Recognize an evolving context and narrative.

Tar Heel Direct's models were based on assumptions that didn't work during the pandemic, but the mitigating actions planned in its original scenarios still applied, even with different conditions.

For example, pre-pandemic scenarios used fuel costs as a trigger, anticipating higher prices in a crisis. After spending a few weeks assessing key metrics for the business, the company realized that because diesel fuel is cheap, it can be more competitive on rates and pay truckers better than Amazon — the opposite of what it expected in its original scenario planning. Fuel is so inexpensive, in fact, that sending out partly filled trucks is a more reasonable proposition than it was just a few months ago. Because the company had already planned mitigating steps for scenarios that relied on high fuel costs as a trigger, it was able to work them backwards without additional planning.

Operating at 60% of regular revenue, management assessed what its existing customers needed and got the sales team working on acquiring new customers by thinking out-of-the-box. Tar Heel Direct's next move is to identify small and niche businesses that are operating at reduced capacity and have the sales team contact those that may be having trouble moving partial loads. The projection is that taking these steps will bring revenues up to 80%, which would move the company into a better scenario.

Download Our Scenario Planning Template

This scenario worksheet is designed to be used as a guide through the planning project and should help teams avoid common problems.

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For Gimbloo's part, leaders began running weekly cash forecast scenarios using a variety of inputs, focusing first on collections and hoping for a week-to-week decline in delinquent payments. Next, they examined new bookings, customer churn and customers reducing licenses. The company's forecasts are based on recurring revenue, and factors that affect MRR will trigger new actions.

The company decided to focus on its core value: the service it offers. Leaders decided to take on fewer new customers before making cuts to customer service, cloud services or customer success. It eliminated discretionary expenses, paused hiring and cancelled future marketing events to make up the difference.

If things go poorly and Gimbloo sees a spike of non-renewals and cancellations, leaders plan to seek additional capital from current investors and cut employee costs, such as by furloughs and reducing discretionary bonuses, versus delaying product launches. If it wins new business, the company will begin hiring again and expand its digital marketing footprint.

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Scenario Planning and Modeling: Best Practices

1. assemble the right team:.

In large companies, financial planning and analysis groups should be included. But while finance professionals can certainly lead the scenario planning process, they won't be successful alone. This effort needs to connect leaders from across the organization, including business units and HR.

2. Get the right data:

For finance teams to execute with confidence, they need the right data, going well beyond the general ledger. To create better, more accurate models, finance needs historical and comparative sales data, headcount and expected growth, and of course actuals from the general ledger. They'll also need to understand the costs of producing products and services, which products are foundational and which are additive.

3. Model with basic scenarios:

Finance teams should consider developing basic low, medium and high models. A low scenario is where costs and revenues are challenging. The goal here will be finding cost savings while still delivering quality products in a timely manner. A medium scenario assumes that sales will continue to grow based on last period actuals. This scenario will show how the last period's sales figures compare with forecasts, and what adjustments you need to make on headcount and other departmental spending to maintain trajectory. The high scenario is usually based on demand increasing and sales accelerating due to big changes in the market. The goal is to ramp up capacity without incurring costs that eat into margins.

4. Provide break-even analysis:

This analysis will support, with data, decision-making regarding your cash-flow break-even level. It looks at the minimum sales volume your company needs to keep operating normally and sales compensation plans to see if you need to adjust commissions or bonuses.

Rami Ali is a senior product marketing manager at Oracle NetSuite. Rami has over 10 years of experience in the software industry. Areas of specialized expertise include GTM strategy, product launch, market analysis, competitive analysis, sales enablement, demand generation, content development, project management, digital marketing, responsive web development, SaaS and PaaS. Rami holds a BS in Business Administration and Marketing from Grand View University. He is currently pursuing his MBA.

David Luther is a senior content writer at Oracle NetSuite, covering the latest trends in SaaS, finance and ecommerce. His research and writing have appeared in Forbes, Business Insider, MSN Money, Yahoo Finance and MarketWatch.

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What Is Contingency Planning? [+ Examples]

Flori Needle

Published: January 13, 2023

The COVID-19 pandemic has shown, more than ever, the importance of being prepared with a contingency plan for the unexpected, especially when it comes to business continuity.

business professional creating a business contingency plan

While some unexpected interruptions can be due to situations outside of your control, some issues arise that may be caused by internal errors. Unexpected problems can also be positive, like a sudden influx of interest in a new product.

Download Now: Free Contingency Plan Template

Regardless of the scenario, it's essential to prepare for everything, and contingency planning helps you do so. This post will explain what contingency planning is, outline the steps you can follow to create your own plan, and give examples that you can use for inspiration.

  • Contingency Planning
  • Business Contingency Plan
  • Making a Contingency Plan
  • Contingency Plan Timeline
  • Contingency Plan Example

Contingency Plan Definition

What is a contingency plan? Simply put, a contingency plan is an action plan designed to help organizations respond to a potential future incident. Think of it as a backup plan, or plan B to guide organizations through a worst-case scenario.

Contingency plans are helpful for all types of organizations, from businesses to non-profits, to government organizations. While these scenarios may never come to fruition, it’s important to have a plan in place so that your team isn’t panicking or scrambling to deal with an unfavorable event at the last minute.

What is contingency planning?

Contingency planning is a proactive process of creating a strategy to help you prepare for any scenario that can affect your business, regardless of the likelihood of its occurrence.

These plans shouldn't focus solely on situations that may harm your business. For example, you may experience a significant increase in revenue during a specific period due to changes in market behavior. This is a good scenario, but you will still need to adapt your operations to scale and appropriately meet the new demands of your growing audience.

Contingency Planning vs. Crisis Management

Contingency planning is also different from crisis management , as it is not a reaction to something that has already happened but more so a plan for if and when something may happen. However, a contingency plan can help you with crisis management when issues arise.

Contingency Planning vs. Risk Management

Risk management is the identification, mitigation, and assessment of potential risks that may affect your organization. This process helps an organization prevent losses before they occur and aids in assessing whether or not certain risks are worth taking. Contingency planning can be a component of risk management since that process helps organizations survive these potential risks.

To ensure your business is prepared for everything, it's crucial to understand how to create a contingency plan.

What is a business contingency plan?

A business contingency plan is a strategy that outlines the steps your business’ teams will take in the event of a crisis occurring. It is essentially the backup plan that goes into action when the worst-case scenario occurs. The goal of your contingency plan is to help your business stay up and running after an issue arises.

Business Continuity Plan vs. Contingency Plan

Although their names vary by few letters, business continuity and contingency plans are different concepts. Continuity is the ability of your business to continue functioning after an incident that has disrupted operations occurs. A contingency plan is an action plan that goes into place if an incident were to happen.

Contingency plans can significantly impact whether your business can achieve continuity. Being able to react and take action during a crisis can dictate whether or not your business can emerge from the other side and continue normal business operations.

You can think of it like this: your continuity plans contain five sections: program administration, governance, business impact analysis, strategies and requirements, and training and testing. If your business also uses contingency plans, it could be part of the strategies and requirements section, which dictates how your business will respond to a crisis if it occurs.

Contingency Planning: How to Make a Business Contingency Plan

Creating a contingency plan is responding to the question of "What if?"

What if your storefront floods? Or what if your supplier goes out of business? The responses to the what-ifs are contingency plans. These scenarios aren't necessarily going to happen, but if there is a possibility that they'll affect your business, you're prepared if they do.

Below we'll discuss the steps that go into contingency planning.

Contingency Planning in 7 Steps

1. identify critical business functions..

This first step is the most important aspect of your planning, as it sets the tone for why your plans need to exist in the first place.

During this phase, identify all critical areas essential to keeping your business up and running every day. As these operations are imperative to success, you need to have plans to ensure that these operations continue, regardless of whatever scenarios arise.

You can think of it like this: these critical areas keep your business up and running on a day-to-day basis. Other areas are important, but these are the main functions that keep you afloat. Given this, you want to be prepared for anything and everything that may happen that can affect the critical areas, whether positive or negative. Contingency planning is exactly that.

Identifying these areas helps you move on to the next step as you begin brainstorming possible scenarios that can impact them.

2. Conduct a scenario assessment.

Once you've identified the critical operations of your business, you'll want to conduct a scenario assessment to identify situations that will affect these functions and put stress on your day-to-day operations.

For example, if your business operates out of a storefront, keeping your storefront up and running is a critical area of your business's success. Maybe you launch a new product that attracts more interest than you thought, and you need to deal with higher in-store traffic and a lack of products to satisfy the market. While it is a positive situation that will draw in more revenue, it can still have negative repercussions for your business if you don't deal with it when it happens.

You can think of this stage as similar to a risk assessment, but the possibilities are positive and negative. It may be helpful to meet with people who work in these critical areas and understand what they think may cause interruptions to their job duties and barriers to their success. Ask them how they feel situations will impact them and how they would deal with each scenario.

If you come up with a long list of threats, you can prioritize them based on their likelihood of occurring and how significant their impact would be on your business.

3. Create contingency plans for each scenario.

During this phase, you'll create contingency plans. Begin with the highest priority "threats," or those most likely to occur and most likely to cause significant stress to your business.

Outline the scenarios, people to inform, and the roles and responsibilities involved parties will have when they respond. We'll go over an example below, but a helpful template to follow can be:

  • Outlining the scenario,
  • Determine the probability of it occurring,
  • Explain how you'll prepare ahead of time,
  • Detail what the response will be if and when it happens.

Once you've created your plans, distribute them to key stakeholders in each scenario, so everyone understands what they are responsible for and can prepare ahead of time.

4. Get your plan approved.

Once you’ve come up with a desired plan of action, it’s time to get approval from stakeholders and management. If you’re creating both department-level and company-wide plans, this is especially important. Your plan won’t be a success unless there is buy-in from key members of your team and management. Once all parties agree that the course of action described in the contingency plan works for everyone, you can move forward with confidence.

5. Share the plan with your team.

Once your plan is approved, it’s time to distribute it. Putting it in a shared folder accessible to everyone creates transparency and makes it readily available if the time comes.

Make sure the parties involved know what they’re responsible for in the plan, that way you can execute the plan seamlessly should the worst-case scenario occur.

6. Test your plans.

As with all plans, it's essential to continuously test (more on that in the next section) and update them over time. As businesses scale and change, your business needs will likely change, and specific scenarios will no longer have as significant of an impact. There may also be new scenarios to plan for that you hadn't anticipated or thought of when you were a smaller operation.

It can be helpful to create a timeline that you'll use to spend dedicated periods reviewing your plans, testing them, and communicating with the necessary stakeholders about any changes you've made to the plans.

7. Update your plan as needed.

Consider your contingency plan a work in progress. You’ll need to adapt it as new risks arise and to ensure it still makes sense for your business needs. Whenever a new manager or executive joins the team, be sure to share it with them as needed so they know what (if anything) is expected of them.

Contingency Planning Timeline

As planning is always an involved process, you may be wondering how much time you should devote to each step. Let's discuss a timeline below.

Week One: Identify Key Operations

Give yourself about a week to identify the operational areas essential for business function. You likely already know what these areas are, but you want to do enough research to identify them all.

Weeks Two & Three: Brainstorm Scenarios

Take two to three weeks to brainstorm the scenarios you're going to create plans for. Spend as much time as possible speaking to the necessary stakeholders to understand their ideas about the scenarios and how they'd like them dealt with. You'll want to conduct probability assessments and market research to understand if your competitors have ever dealt with something similar. You want to make sure you have all the necessary information before drafting your plan, so this step should be the longest.

Week Four: Draft Plan

Give yourself a week to draft your plans. The first two steps should give you all the information you need, so the third step is simply fine-tuning your research and creating the final plan. You can also share what you've created with your stakeholders and iterate on what you have based on their feedback.

The final step to creating your plan, maintaining and testing, is a continuous effort. As mentioned above, your business will likely be impacted by different things at different times, so it's always important to review plans and ensure they still relate to your needs. For example, maybe you plan to do quarterly reviews and training so new hires, and existing employees, are all on the same page.

Contingency Planning Example

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It may be helpful to have an example of a contingency plan, so we'll go over one below. The examples are of a positive and negative situation, so you can get a sense of how a plan applies to both.

Contingency plan example

Contingency Planning Mistakes to Avoid

Even with the best intentions, your contingency plan may get off to a rocky start. Here are some common mistakes to avoid when creating one of your own.

Not securing executive buy-in first.

Before you can get your team or department onboard, you must get buy-in from the executive team. Otherwise, you risk creating a doomed plan from the start.

Get their feedback on potential risks and other factors that may impact guidelines in the plan. Having executive support from the start ensures the plan put forth is approved and also can motivate those at the department level to buy-in as well.

Failure to cover multiple scenarios.

When assessing potential risks and scenarios, it’s important not to cut corners or slack. Scenario planning is key to your contingency plan’s success. All potential risks should be taken into account. You can rank them by likelihood, but you should by no means leave less likely events out. Otherwise, you leave yourself vulnerable should the event happen.

Think about how many businesses were affected by supply chain issues during the pandemic. Most probably never predicted such a catastrophe, but the ones that had a plan in place for such an obstacle were better prepared.

Set it and forget it.

It’s really easy to get comfortable once your contingency plan is in place — after all, if you did your due diligence from the start, you’re ready to tackle any obstacle thrown your way.

Unfortunately, it’s not a one-and-done process. A contingency plan should be looked at as a living document and updated as needed. Your business needs will change over time and so will its obstacles and risks.

Create Business Contingency Plan

All in all, contingency plans help you prepare for a host of what-if scenarios, whether they happen or not. As you never want to be caught in a challenging situation, being prepared is the best thing you can do to ensure your business continues to succeed, regardless of whatever happens along the way.

As the saying goes, better safe than sorry .

Editor's note: This post was originally published in November 2021 and has been updated for comprehensiveness.

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Use this contingency plan template to communicate risk, prevention, and mitigation measures in your company.

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Capacity Planning: Strategies, Benefits and Best Practices


Production capacity planning is an issue of supply and demand: one that can decide the fate of your project or production line. Read on to learn about the capacity planning strategies and capacity management best practices you can use to plan your resources  and make sure your team members are working on the right task at the right time.

What Is Capacity Planning?

Capacity planning is a process that balances the available resources to meet customer demand or the project capacity requirements. Capacity, in project management and manufacturing terms, is the most work that can be done over a certain timeframe.

In project management, the capacity planning process is very important because it’s related to critical project management knowledge areas such as:

  • Resource management
  • Time management
  • Team management
  • Work management

Production capacity, strategic planning and project planning go hand-in-hand. Planning is how one schedules the hours of the team members so that the work gets done on time. Capacity management isn’t a rigid process. All companies are different and demand can be volatile, so there are different capacity planning strategies that project managers can use to adapt to different scenarios.

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Resource Plan Template

Use this free Resource Plan Template for Excel to manage your projects better.

Capacity Planning In Operations Management

As defined, capacity planning is used to determine the amount of work an organization can do over a specific time period. Operations management is about the planning, organizing and controlling of resources to deliver products and services.

Therefore, capacity planning is a critical aspect of operations management as it helps determine what must be done to meet the demand for that product or service. It also sets up a company to grow, while avoiding idle resources and underused capacity.

Capacity Planning In Project Management

Project management is the planning, managing and controlling of work over a determined time that results in a deliverable. This is achieved through the execution of tasks that require both human and non-human resources.

Capacity planning is a critical component of project management as a project schedule and budget are created. It helps project managers figure out the necessary capacities in terms of those resources, especially team members, to meet the project deadline and stay within budget.

Capacity Planning In Production Management

Production management is the process of turning raw materials, human resources and capital into a production output. It involves planning and controlling industrial processes to make sure production runs smoothly.

Capacity planning fits into this process in three ways. There’s production capacity planning to make sure you have enough product or materials for deliverables. Workforce capacity planning deals with your human resources and work hours, while tool capacity planning ensures that your workers have what they need to do their jobs.

Why Is Capacity Planning Important?

Capacity planning is important as it ensures a business has what it needs when it needs it to fulfill demand. It allows for flexibility to help make a wide range of products and, done properly, it’ll make sure that no extra money is spent on the effort.

Budgeting and scaling are both guided by capacity planning, which helps to identify optimal levels of operations. For example, you can determine who services are offered and what the timeframe and staffing requirements will be so you can cover your operational costs.

Beyond those reasons, capacity planning helps managers make more informed decisions. It also helps employees by avoiding burnout or boredom on the job. As mentioned, it’s crucial to help a company grow and assists in making better staffing decisions.

ProjectManager is the one project management software that has everything you need for capacity planning. With robust Gantt charts and resource management tools, you can build a project schedule that incorporates real-time team availability. Your team can then execute the work in multiple views and you can track what matters with dashboards and project reports. Get started today for free.

ProjectManager is ideal for capacity planning

What Does a Capacity Planner Do?

Capacity planning is usually the responsibility of a capacity planner. They’re the ones who plan, analyze, balance and allocate resources as needed to meet the requirements and priorities of the organization. They also respond to customer demand, determining the workforce and timeframe of production to meet that demand.

Depending on the size of the organization, this position can be folded into a project manager’s responsibilities. If it’s a standalone position, however, the capacity planner works with the executive team and other stakeholders. They require excellent communication skills to work well with these different departments.

The capacity planner is a results-oriented person, with strong statistical and reporting skills. They have to collect and understand project data as well as know the trends that are impacting their industry to do their job well.

What Is a Capacity Plan?

A capacity plan is used to achieve the goals of the overall capacity planning of an organization. One of the purposes of a capacity plan is that it can help to avoid scope creep in a project. Scope creep is when the requirements of a project increase over time.

When you create a capacity plan for one project, it can often be used as a template for other projects you’re planning. It helps you quickly identify what you do and don’t need, rather than trying to always go back to forecasting capacity requirements from scratch.

Since capacity planning is about the supply and demand of resources, your capacity plan can help you know when demand will increase or decrease so you can adjust the plan accordingly. Your capacity plan and resource plan will be very much related.

Capacity Planning Process

We’ve explained what capacity planning is and why it’s important. The next step is to understand the process. Capacity planning is done differently from company to company and industry to industry, but it always follows these four basic steps.

Capacity Forecasting

The first step is to understand the demand in order to start planning your capacity to meet that demand. You’ll need to make estimates on what needs to be done for an upcoming project. Use expert advice, historical data and anything else that’ll help you know the capacity you need to complete your project .

Capacity Scheduling

Once you’ve forecasted capacity, you’ll begin the process of creating a production plan . It should include all operations needed to meet customer demand. To do this means scheduling resources, whether raw materials, labor, machinery, etc., to ensure you have the resources needed to complete the project.

Capacity Tracking

To keep to your capacity schedule, you’ll need to track your resources as you go into production. This involves monitoring your non-human resources and making sure you have the inventory needed for the jobs coming up, but also knowing the availability of your human resources so they can be assigned work to complete those orders.

Capacity Reporting

To help with tracking and keeping stakeholders informed of progress, capacity reporting is necessary. A capacity report shows the capacity to deliver and take on new work. These metrics are shown in hours or as a percentage. Reports will also compare your planned capacity with your actual capacity to help you stay on track.

Types of Capacity Planning

There are three types of capacity planning: workforce capacity planning, product capacity planning and tool capacity planning. Each focuses on a different aspect of your project resources. The definition of each of these is listed below.

Workforce Capacity Planning

Workforce capacity planning deals with your human resources. It requires you to figure out the total hours you’ll need to work on a project per week. To find this number, multiply the number of workers you have on the project by the number of hours they work per week. Use this capacity planning formula: (Workers) x (Shifts) x (Utilization) x (Efficiency).

Product Capacity Planning

Product capacity planning is used to figure out production capacity to meet the changing demand for a product. It allows you to make sure you have the materials and labor on hand to create the number of products necessary to respond to the market demand and change production to respond as demand goes up or down.

Tool Capacity Planning

Tool capacity planning helps to forecast how many resources you’ll need and how to allocate those resources at the right time. In short, it makes sure you have the right tools and the right amount of tools necessary to do your job. These tools can include machinery, vehicles, assembly line parts, etc.

Capacity Planning Example

To get a better handle on capacity planning let’s imagine that you’re a retailer and the holidays are approaching. You’ll need to plan in accordance with the expected increase in demand. That will mean a number of things.

First, you’ll look at past seasons to see how many items you sold and compare that to market demand presently to forecast your expected demand. Once you have that figured out, you’ll need to reach out to suppliers and make sure you have access to the increased amount of items you need to stock for that demand.

Now, you’ll want to look at your labor force. You may need to increase workers. It’s not uncommon for retailers to hire seasonal workers to handle the expected influx of customers over a holiday period.

Finally, you’ll want to make sure you’re tracking the items sold and the items you have warehoused. This will help you get a more accurate reading on demand and will help you restock before you run out of inventory, which could lead to lost sales.

Capacity Planning Strategies

There are three capacity planning strategies to help you meet demand, cover your resource requirements and increase your team members’ productivity.

Lag Strategy

The lag strategy consists of having enough resources to meet actual demand, not projected demand estimates. This capacity planning strategy is beneficial for smaller organizations that have low capacity requirements.

Lead Strategy

The lead strategy consists in having enough resources to meet demand planning forecasts. This capacity planning strategy is beneficial when demand increases, as your excess capacity can cover the increased demand.

Match Strategy

This strategy is a mix of the lead and lag capacity planning strategies. In this case, project managers need to monitor actual demand, demand planning forecasts and market trends to adjust capacity accordingly.

Capacity Planning Benefits

Production capacity planning is an important strategic planning process for many reasons. Here are some of the main benefits of effective capacity planning.

  • Reduces costs
  • Prevents stock-outs
  • Reduces production lead time
  • Eliminates excess capacity
  • Helps with supply chain management : A clear understanding of your project capacity requirements helps you get the right amount of resources, which benefits your supply chain.
  • Helps with resource management: Having the right production capacity to meet your capacity requirements is key to optimizing resource planning and resource allocation.

Capacity Planning vs. Resource Planning

While the terms “capacity planning” and “ resource planning ” are sometimes used interchangeably, they’re not the same. To understand the differences, we’ve listed them below.

Capacity Planning

  • It’s a strategic planning process designed to help determine if the organization has the production capacity required to meet the demand
  • It looks at resource availability at the skill set/team level
  • Then it facilitates the decision-making process to hire resources or defer/approve/cancel projects
  • Capacity planning is about supply and demand

Resource Planning

  • It’s a strategic planning process that coordinates and allocates actual resources to project tasks based on resource requirements
  • It provides a plan to project managers, which resources they can plan to use for their projects and when
  • Resource planning focuses on resource allocation

Related: Free Resource Plan Template

Capacity Planning vs. Capacity Requirements Planning

Capacity requirements planning is the step before capacity planning. It’s the process when an organization decides how much it needs to produce and whether it has the production capacity to be capable of doing so.

Capacity Planning Best Practices

Here are some tips and capacity planning best practices to help you manage your resources and teams.

  • Establish a cross-functional team: To collaborate and communicate about production capacity and resource management, you want a cross-functional team with different levels and different functions.
  • Calculate resource capacity: Before you can create a production capacity plan, you need to have an idea of your current capacity and your available resources.
  • Determine resource requirements: For each project, look at the scope and what resources are required to do the task for the project.
  • Prioritize projects: Which projects are most important, and which can be put aside for the time being? You can’t do everything at once.
  • Allocate resources based on project priority: Now allocate those prioritized projects and ensure they’re aligned with the goals of the organization.
  • Keep the lines of communication open: Communicate between executives, project management leaders and stakeholders.
  • Document known risks: Monitor risks such as union strikes, weather and government regulations that stop a project or create new ones unexpectedly.
  • Plan for how to handle too much capacity: Understand where it is and how to resolve it (such as reassigning), or not enough capacity (again, where/how).

ProjectManager Is a Great Capacity Planning Tool

Capacity planning requires the right resource management tools to give managers insight into their production capacity. ProjectManager is online project management software that gives them real-time data to make real-smart business decisions.

Our resource management tools provide a window into your team’s resources and help you plan better on our online Gantt charts. To get a full picture of the costs involved, you can add hourly rates for your teams and contractors across your project or portfolio. As team members log their hours, their actual costs are automatically calculated and can be compared to the costs that were planned.

Capacity Planning Video

Want to learn more about capacity planning? Watch the video below from Jennifer Bridges, PMP. Although her video focuses on IT teams, capacity management lessons can be applied to any industry.

Here’s a screenshot for your reference!

how to create a capacity plan

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Business Continuity Planning

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Organize a business continuity team and compile a  business continuity plan  to manage a business disruption. Learn more about how to put together and test a business continuity plan with the videos below.

Business Continuity Plan Supporting Resources

  • Business Continuity Plan Situation Manual
  • Business Continuity Plan Test Exercise Planner Instructions
  • Business Continuity Plan Test Facilitator and Evaluator Handbook

Business Continuity Training Videos

The Business Continuity Planning Suite is no longer supported or available for download.

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Business Continuity Training Introduction

An overview of the concepts detailed within this training. Also, included is a humorous, short video that introduces viewers to the concept of business continuity planning and highlights the benefits of having a plan. Two men in an elevator experience a spectrum of disasters from a loss of power, to rain, fire, and a human threat. One man is prepared for each disaster and the other is not.

View on YouTube

Business Continuity Training Part 1: What is Business Continuity Planning?

An explanation of what business continuity planning means and what it entails to create a business continuity plan. This segment also incorporates an interview with a company that has successfully implemented a business continuity plan and includes a discussion about what business continuity planning means to them.

Business Continuity Training Part 2: Why is Business Continuity Planning Important?

An examination of the value a business continuity plan can bring to an organization. This segment also incorporates an interview with a company that has successfully implemented a business continuity plan and includes a discussion about how business continuity planning has been valuable to them.

Business Continuity Training Part 3: What's the Business Continuity Planning Process?

An overview of the business continuity planning process. This segment also incorporates an interview with a company about its process of successfully implementing a business continuity plan.

Business Continuity Training Part 3: Planning Process Step 1

The first of six steps addressed in this Business Continuity Training, which detail the process of building a business continuity plan. This step addresses how organizations should “prepare” to create a business continuity plan.

Business Continuity Training Part 3: Planning Process Step 2

The second of six steps addressed in this Business Continuity Training, which detail the process of building a business continuity plan. This step addresses how organizations should “define” their business continuity plan objectives.

Business Continuity Training Part 3: Planning Process Step 3

The third of six steps addressed in this Business Continuity Training, which detail the process of building a business continuity plan. This step addresses how organizations should “identify” and prioritize potential risks and impacts.

Business Continuity Training Part 3: Planning Process Step 4

The fourth of six steps addressed in this Business Continuity Training, which detail the process of building a business continuity plan. This step addresses how organizations should “develop” business continuity strategies.

Business Continuity Training Part 3: Planning Process Step 5

The fifth of six steps addressed in this Business Continuity Training, which detail the process of building a business continuity plan. This step addresses how organizations should define their “teams” and tasks.

Business Continuity Training Part 3: Planning Process Step 6

The sixth of six steps addressed in this Business Continuity Training, which detail the process of building a business continuity plan. This step addresses how organizations should “test” their business continuity plans.

Last Updated: 11/08/2023

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Chancellor backs business and rewards workers to get Britain growing

Tax cuts for working people and British business headlined Chancellor Jeremy Hunt’s ‘Autumn Statement for Growth’ today, Wednesday 22 November.

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  • Plan for stronger economy will reward hard work, putting £450 back into the pocket of the average worker earning £35,400 a year thanks to National Insurance tax cut from 12% to 10% for 27 million working people from January.
  • Tax to be cut and simplified for 2 million of the self-employed, abolishing an entire class of NICs and cutting the rate of the NICs top rate from 9% to 8% – with an average total saving of around £350 for someone earning £28,000 a year.
  • Biggest permanent tax cut in modern British history for businesses will help them invest for less and boost investment by £20 billion per year over the next decade.
  • Triple lock maintained for pensioners, benefits to rise in line with inflation and Local Housing Allowance increased to continue supporting families with the cost-of-living.
  • Government is making work pay. National Living Wage rise represents boost of £1,800 to the average annual earnings of a full-time worker, and the Back to Work Plan will help over a million people start, stay, and succeed in work while ensuring tougher consequences for those choosing not to.
  • Great British pubs, breweries and distillers backed by freezing alcohol duty for six months to August.
  • Public finances in a better position than in March thanks to government action, with borrowing and debt as a share of the economy down on average across the next five years.
  • Autumn Statement gets the economy growing, debt falling and helps return inflation to its 2% target – long-term decisions to build a brighter future.

Aimed at building a stronger and more resilient economy, the Chancellor set out a plan to unlock growth and productivity by boosting business investment by £20 billion a year, getting more people into work, and cutting tax for 29 million workers – the biggest tax cut on work since the 1980s.

With higher revenues resulting from stronger growth than previously projected and the pledge to halve inflation having been met, the government has stabilised the economy through taking sound decisions. As set out by the Prime Minister this week, the stronger outlook means taxes can now be cut in a serious, responsible way.

To that end, Mr Hunt announced that a 2 percentage point cut to Employee National Insurance from 12% to 10% will come into effect from January 2024.

For the average worker earning £35,400 a year, that amounts to an over £450 annual tax cut - almost immediately improving living standards for millions of people and rewarding hard-work as the government builds an economy for the future.

Taxes for the self-employed will also be cut and reformed. From April 2024, Class 4 NICs for the self-employed will be reduced from 9% to 8% and no self-employed person will have to pay Class 2 NICs, saving the average self-employed person on £28,200 a year £350 in 2024/25.

Taken together, this is a tax cut of over £9 billion per year and represents the largest ever cut to employee and self-employed National Insurance. The independent Office for Budget Responsibility (OBR) says these reductions will lead to an additional 28,000 people entering work.

Cutting National Insurance will not lead to any change in NHS funding or pension payments. Services will remain unchanged and continue to be funded as they are now.

Businesses will also benefit from the biggest business tax cut in modern British history. As signalled at Spring Budget, the Chancellor announced permanent Full Expensing: Invest for Less for those investing in IT equipment, plant, and machinery.

Full Expensing: Invest for Less is an effective permanent tax cut of £11 billion a year, boosting business investment by £14 billion across the forecast period and helping to grow the economy. With the tax cut now permanent, the UK will continue to have both the lowest headline corporation tax rate in the G7 and the most generous capital allowances in the OECD group of major advanced economies, such as the United States, Japan, South Korea and Germany.  Since the introduction of the super deduction – the predecessor to full expensing – in 2021, investment in the UK has grown the fastest in the G7.

To further ensure that work pays, Mr Hunt confirmed that the National Living Wage will increase by nearly 10% to £11.44 an hour from April 2024, the largest ever cash increase. The Chancellor also reinforced the new £2.5 billion Back to Work Plan for those with long-term health conditions, disabilities and difficulties finding employment, which includes tough new sanctions for those who can work but choose not to.

The Chancellor also announced that the government will honour its commitment to the triple lock in full, with the state pension to increase by 8.5% in April in what is the second biggest ever cash increase. Universal Credit and other working age benefits will also be boosted by 6.7% in April, in line with September’s inflation figure as is convention.

Further action to help families includes increasing the Local Housing Allowance rate to cover the lowest 30% of rents from April – benefiting 1.6 million households with an average gain of £800 in 2024/25 - and an alcohol duty freeze to 1st August 2024, following common-sense changes of the duty system made possible by Brexit. Measures today take the government’s total support for the cost-of-living between 2022-25 beyond the £100 billion mark, to an average of £3,700 per household.

Accompanying forecasts by the OBR confirm that today’s measures will make the economy permanently bigger, with growth every year of the forecast period. Borrowing and debt as a share of the economy are lower than in Spring this year and next year, with borrowing also lower on average across the forecast by comparison. They also confirm that inflation is expected to return to target in line with the Prime Minister’s economic priorities.

With inflation halved and debt forecast to fall, Mr Hunt delivered on the government’s commitment to cut taxes – rewarding and incentivising work as part of its long-term plan to grow the economy.

  • The main rate of Employee National Insurance will be cut by 2 percentage points from 12% to 10%, coming into effect from January 2024 - delivering the benefit of a tax cut quickly for 27 million workers.
  • The combined rate of income tax and National Insurance for employees paying the basic rate of tax will therefore fall from 32% to 30% - the lowest combined basic rate since the 1980s.
  • The rate of Class 4 NICs on all earnings between £12,570 and £50,270 will be cut by 1p, from 9% to 8% from April 2024.
  • The weekly Class 2 NICs – the flat rate compulsory charge which is currently £3.45 paid by self-employed people earning more than £12,570 - will effectively be abolished, with no-one required to pay from April 2024. Access to contributory benefits will be maintained and those currently paying voluntarily will still be able to do so at the same rate.
  • The cuts to Class 4 and Class 2 together amount to a tax cut of £350 a year for the average self-employed person on £28,200, with around 2 million individuals to benefit.

Measures to back British businesses big and small will remove barriers to investment and help to bridge the productivity gap between the UK and its G7 peers – unlocking £20 billion extra business investment per year over the next decade.

  • Permanent Full Expensing will create the certainty that businesses need to confidently invest for less. A company can now permanently claim 100% capital allowances on qualifying main rate plant and machinery investments, meaning that for every pound invested its taxes are cut by up to 25p.
  • A business rates support package worth £4.3 billion over the next 5 years will help high streets and protect those small businesses that are the backbones of communities. This includes a rollover of 75% Retail, Hospitality and Leisure relief for 230,000 properties and a freeze to the small business multiplier, which will protect around 90% of ratepayers for a fourth consecutive year.
  • Pension reforms, including through establishing a new Growth Fund within the British Business Bank, will help unlock an extra £75 billion of financing for high-growth companies by 2030 while providing an extra £1,000 a year in retirement for the average earner saving from 18.
  • SMEs will be supported with tougher regulation on late payers to improve prompt payments, the expansion of Made Smarter in Great Britain and continued funding for Help to Grow.
  • The existing R&D Expenditure Credit and Small and Medium Enterprise Scheme will be merged from April 2024, simplifying the system and boosting innovation in the UK.
  • The rate at which loss-making companies are taxed within the merged scheme will be reduced from 25% to 19%, and the threshold for additional support for R&D intensive loss-making SMEs will be lowered to 30%, benefiting a further 5,000 SMEs.
  • The Climate Change Agreement Scheme will be extended, giving energy intensive businesses like steel, ceramics and breweries around £300 million of tax relief every year until 2033 to encourage investment in energy efficiency and support the Net Zero transition.

Work and welfare reform

Mr Hunt set out steps to reward work, help make work pay, and reform welfare in recognition of the need to expand the workforce and get those out of work back into work to deliver growth. The OBR expect that the measures announced at Autumn Statement will support a further 78,000 people into work by 2028-29, on top of the 110,000 resulting from action taken at Spring Budget.

  • From 1 April 2024, the National Living Wage will increase by 9.8% to £11.44 an hour for eligible workers. For the first time this will include 21- and 22-year-olds. This represents an increase of over £1,800 to the annual earnings of a full-time worker on the NLW and is expected to benefit over 2.7 million low paid workers.
  • The government will also substantially increase the National Minimum Wage rates for young people and apprentices: for people aged 18-20 by 14.8% to £8.60 an hour, for 16-17 year olds and apprentices by 21.2% to £6.40 an hour.
  • The government is reforming the Work Capability Assessment to ensure that people who can work are supported to do so via the welfare system. Changes to the activities and descriptors will better reflect the greater flexibility and reasonable adjustments now available in the world of work, preventing some individuals from being deemed not fit for work and ensuring they will be better supported into employment.
  • The boosting of four key programmes – NHS Talking Therapies, Individual Placement and Support, Restart and Universal Support – will benefit up to 1.1 million people over the next five years.
  • The government is exploring reforms of the fit note process to provide individuals whose health affects their ability to work with easy and rapid access to specialised work and health support.
  • Mandatory work placements will boost skills and employability for those who have not found a job after 18 months of intensive support. Those who choose not to engage with the work search process for six months will have their claims closed and benefits stopped.

Infrastructure and levelling up

The Chancellor unveiled a raft of supply-side measures and funding packages to benefit businesses and local communities.

  • £4.5 billion of funding for British manufacturers in the high-growth industries of the future, including £960 million earmarked for the Green Industries Growth Accelerator to support clean energy.
  • The government has published its full response to the Winser review and Connections Action Plan, which will cut grid access times for larger projects by half, halve the time to build major grid upgrades and offer up to £10,000 off electricity bills over 10 years for those living closest to new transmission infrastructure.
  • Three advanced manufacturing Investment Zones will be established in Greater Manchester, East Midlands, and West Midlands – together generating £3.4 billion of private investment and creating 65,000 high-quality jobs within the next decade.
  • The Investment Zones programme and freeport tax reliefs will be extended from 5 years to 10 years, and a new £150 million Investment Opportunity Fund will support Investment Zones and Freeports to secure specific business investment opportunities.
  • Four new devolution deals across England have been agreed. Mayoral deals with Greater Lincolnshire and Hull and East Yorkshire, and non-mayoral deals with Lancashire and Cornwall, will boost investment right across the country and deliver on the Prime Minister’s commitment to levelling-up.
  • £500 million of funding over the next two years will help establish two more Compute innovation centres, supporting the development of artificial intelligence as a growth opportunity for Britain.
  • The life sciences will also be supported as one of the Chancellor’s key-growth sectors, with £20 million to speed up the development of new dementia treatments coming as part of the government’s full response to the O’Shaughnessy Review of commercial clinical trials in the UK.
  • To prioritise those who want to invest in the UK’s future, the government has accepted in principle the headline recommendations of Lord Harrington’s review into increasing foreign direct investment. This includes additional resource for the Office for Investment, allowing it to deepen its world-class concierge offer to strategically important investors.

Further information

  • The Chancellor’s speech can be found later this afternoon here.
  • Other documents published alongside the Autumn Statement today can be found here.
  • The OBR’s Economic and Fiscal Outlook verifies that the two fiscal rules outlined by the Chancellor at last year’s Autumn Statement are met. Underlying debt falling as a percentage of GDP is met in the target year with £13 billion of headroom. The rule that public sector borrowing must be below 3% of GDP is met three years early.

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Planning commissioners consider ‘escape room’ business

Map from Escape 36 LLC, via Community Development, showing the floorplan for a proposed ‘escape room’ business in an existing building on North Carson Street.

Map from Escape 36 LLC, via Community Development, showing the floorplan for a proposed ‘escape room’ business in an existing building on North Carson Street.

By Scott Neuffer

Monday, November 27, 2023

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A new form of recreation could be coming to downtown Carson City depending on the decision of planning commissioners Wednesday.

At their regular meeting, which begins at 5 p.m. in the community center, planning commissioners will consider a special use permit for “escape rooms” proposed for an existing building at 716 N. Carson St.

The Merriam-Webster Dictionary defines an escape room as “a game in which participants confined to a room or other enclosed setting (such as a prison cell) are given a set amount of time to find a way to escape (as by discovering hidden clues and solving a series of riddles or puzzles).”

According to agenda materials, Jennifer Smith of Escape 36 LLC is proposing to establish the use for up to three rooms in the same building that currently houses Visit Carson City and other tenants. The property, zoned downtown mixed-use (DT-MU), is known as Carson City Square.

A staff report states that when city code does not specify a proposed use, the Community Development director makes a determination “based on the purpose statement of the zoning district.”

“The director has determined the proposed use to be closely related to an amusement arcade use which is a conditional use in DT-MU use district (CCMC 18.04.125) and must receive approval of a SUP prior to establishing,” reads the report.

According to Smith’s application, two of the rooms could accommodate up to 10 guests each, and one room up to six guests. Each room would have one employee present, and bookings would be by appointment.

In the findings section of the application, the business owner maintained the new use would be consistent with the Carson City Master Plan.

“The vision in the Master Plan states in part that Carson City is a city which takes great pride in its role as Nevada’s state capital and strives to offer its residents a balanced community with a diverse range of housing, employment, educational, shopping and recreational activities,” reads the application. “The addition of Escape 36 to Carson City Square brings a new recreational opportunity to both tourists and residents of Carson City that can be enjoyed during all seasons.”

Besides approval of board minutes, the escape-room proposal is the only action item scheduled for Wednesday’s meeting. Community Development Director Hope Sullivan is also scheduled to give a presentation on the city’s planning division and processes.

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