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Why Are Action Plans Important in Business?

written by: Regina Woodard • edited by: Wendy Finn • updated: 1/10/2011

If you're interested in learning more about the inner workings of business or you're going into a business career, you may hear about something called strategic planning. Actions plans are a part of this planning, but why are action plans important in business?

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    For businesses today, it is important to go through some strategic planning, in which an owner, or those involved in the company, sit down and figure out where the business is going, in terms of the next year, or even five years from the present. You need to look at how the business will get there, and how everyone will know when the business has (or has not), reached the target they had initially projected.

    Part of strategic planning is that of making an action plan, but what are action plans important in business? If strategic planning is done, what is the use of the action plan?

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    Action Planning

    What are action plans? An action plan (as opposed to a risk management action plan), is part of the strategic plan, in which actions are added to the completed plan. It is basically a list of tasks that need to be achieved, in order for the goals to be reached by the company. For example, if a business says there is going to be regional corporation within year two, an action plan would list the different tasks that need to be done in order for the company to be regionally known.

    So why are action plans important in business? Action plans are an important part of strategic planning for project management, but unfortunately many Why are Action Plans Important in Business? businesses tend to stop after the strategic plans have been laid out. But without having a way to achieve these goals, the initial planning that went into the first stages of building a business may have been for nothing. Think of it like making a resolution for a new year - you may state that you plan on losing weight or that you want to try for a promotion - however you don't add in the details on how you will achieve these goals.

    • How will you lose weight? Will you work out on a daily basis? Will you join a gym?
    • How will you go about getting a promotion? Will you work harder? Talk to your boss?

    The same can be said about making a strategic plan for your business, but not adding in the details for it. Going with the above example, your business goal in a year is to bring your local business to that of a regional business. This is a part of the strategic plan.

    • How will the business grow from a local company to that of a regional one?
    • Will the business just be regional, in the sense of serving only the home state of the business, or will it build businesses in other states?
    • How much money will it take?
    • Where will the business get the money?

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    These questions should be asked and answered within the action plan. For example, let's say that as the owner, you want the business to grow regionally within your home city and it's suburbs (if your city has suburbs, such as Denver or Phoenix). For the moment you just want to build the business in the home city or home state, but that in a few years if the business is doing well, you will move to that of serving a neighboring state.

    Money is also an important issue, so the action plan should address this. In order to grow regionally, will the business need to open another office? Will you need to hire extra staff?

    Why are action plans important in business? Having an action plan supplements the strategic plan by adding in the needed details for achieving the goals that are brought up with the strategic plan.

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