Guidance becomes the critical success factor required by the tasking authority or persons asking you to do business planning. Examples of tasking authorities may be the board of directors, corporate headquarters, or the company ownership. Guidance may cover a number of areas. Some examples are:
- Budget Constraints. What are you allowed to do with financial resources? For instance, you may be directed to place a hiring freeze on the workforce for the next year with a possible extension for three years. Knowing this piece of information would certainly be helpful in planning your resources.
- Product or Service Range. This refers to what you can and cannot sell. For example, you may be told to increase your product line by generating 20 percent of your long-range profits with new business lines.
- Political Restrictions. In certain geographical areas or industries, rules, regulations, and laws often make significant differences to your bottom line. For example, you may be directed to avoid locating a new service facility in a certain state because the state government is basically anti-business with punitive tax rules.
- Critical Success Factors. This is a common piece of guidance because it defines what you will be measured on at intermediate and long-term points of the plan. For example, the board of directors may define exactly how much money is returned per share of stock, per quarter.
- Expected Performance. You may be given a revenue goal and told to reach that goal. This may be both short term (i.e., next year) and long term (i.e., for the life of the plan). For instance, you may be directed to grow the business from $100 million today to $1 billion in revenue by the end of ten years.
- Time Requirements. Often the guidance giver has a time frame in mind to see specific targets accomplished. For example, you may get guidance to enter five new countries, one every other year for the life of the plan.