A business can have a detailed budget, a full calendar and an ambitious sales target while still being unclear about its direction. These documents describe spending, activity and desired results. They may leave the central decision unresolved: which choices will move the business towards those results, given the people, resources and knowledge available?
In Business Strategy, Brian Tracy approaches planning through five areas: the present situation, the path that produced it, the desired future, the route forward and the resources required. They provide a useful structure for a small business because they connect ambition with practical decisions. The method below develops those areas into a working process; its examples, worksheets and review habits are practical adaptations rather than claims of a guaranteed result.
Give strategy a job to do
Strategy is a set of connected choices about where to direct effort and how to achieve a worthwhile outcome. A goal says what you want to happen. Strategy explains the route you intend to take, the reasons for choosing it and the activities you will give less attention as a consequence.
Suppose a business wants more repeat orders. That is a useful direction, but it leaves many options open. It could improve product reliability, simplify reordering, change its target customers or offer a different range. Each route assumes a different explanation for the current problem and requires different work.
The first task is therefore to name the decision the plan must support. Perhaps it is whether to specialise, which customer problem to prioritise or how to improve delivery before accepting more work. Naming that decision limits the exercise to something the business can actually resolve.
Keep the budget beside the plan. The budget helps establish what the business can afford; the strategy should explain why particular uses of that capacity deserve priority. If every existing activity continues unchanged, check whether the planning exercise has produced a choice at all.
Establish the present position with evidence
A baseline is a recorded starting position against which later changes can be assessed. For a small business, it need not be a large report. A short description of current customers, demand, delivery performance, available capacity and important constraints is often enough to expose the real planning problem.
Begin with information you can inspect. Orders, support messages, delivery records, customer conversations and the founder’s calendar can reveal different parts of the picture. Keep the period and definitions consistent: a completed order is different from an enquiry, and available workshop time is different from total hours on the roster.
Separate observation from interpretation. Customers asking for delivery updates is an observation. Believing those customers would pay more for faster delivery is an interpretation. The first may support investigation of reliability; the second requires its own evidence before it becomes the basis of a new offer.
| Planning area | Evidence to gather | Decision it can inform |
|---|---|---|
| Customer demand | Enquiries, orders and reasons for choosing or declining | Which problem deserves attention |
| Delivery | Completion dates, rework and recurring delays | What must improve before growth |
| Capacity | Available hours and competing commitments | How much change can be attempted |
| Resources | Existing equipment, skills and spending limits | Which options are feasible |
| Uncertainty | Assumptions without supporting observations | What needs testing first |
Record what is unknown as explicitly as what is known. An empty field is useful when it prevents an unsupported assumption from appearing as a fact in the finished plan.
Review how the business reached this point
History helps explain why the current position exists. Tracy includes this backward look because a future plan benefits from understanding earlier decisions, successes, mistakes and changes in the environment. The aim is to identify causes that may still matter.
Create a short timeline of significant choices. Include changes to the offer, customer mix, production method, sales approach or workload. Beside each choice, record what was expected, what happened and what else changed at approximately the same time.
Be careful about attributing results. An increase in enquiries after a website update does not establish that the update caused it. A referral, seasonal demand or a competing supplier’s delay might also explain the change. When the evidence cannot distinguish between explanations, retain the uncertainty.
Look especially for activities that survived after their original purpose disappeared. A manual check introduced during a product trial may still be consuming time even though the product is now stable. Equally, a check that appears inconvenient may prevent a costly recurring error. Understanding its history helps you decide whether to remove, simplify or retain it.
Finish with a few lessons that affect the present decision. A long chronology is less useful than a clear account of which assumptions held, which failed and which have never been tested.
Describe a future that can guide choices
An objective is a specific outcome you intend to achieve within a stated period. It should describe a meaningful improvement in the business or for its customers, rather than merely the completion of an internal activity.
Launching a new ordering form is an activity. Reducing incomplete orders is an outcome the form might help achieve. Keeping that distinction visible makes it possible to change the method if the intended improvement does not follow.
Start with a longer view of the kind of business you want to build, then select a nearer objective that moves towards it. A founder may want a business that operates with predictable working hours and dependable delivery. The next planning period might focus on reducing last-minute production changes rather than increasing the number of enquiries.
Include boundaries. An objective to shorten delivery time could encourage rushed work unless acceptable quality remains explicit. An objective to increase orders could overwhelm support unless capacity is considered. Guardrails are conditions that must remain acceptable while you pursue the main objective.
Avoid false precision when the baseline is weak. The first objective may be to establish a reliable measure and test a proposed improvement. That is a legitimate planning outcome when it resolves uncertainty that would otherwise distort a larger commitment.
Generate alternative routes before choosing
Tracy recommends producing multiple possible answers to a planning problem, including through group discussion and individual writing. The useful principle is to give alternatives a fair hearing before the first attractive idea becomes the default plan.
Write the problem narrowly enough to generate actionable options. Improving the business could mean almost anything. Reducing delays caused by incomplete order information directs attention towards the point where change is needed. Possible routes might include simpler product choices, a clearer order form, a confirmation step or a different way of scheduling work.
Allow an initial period of idea generation without immediate rejection. Then assess the ideas against common criteria: relevance to the objective, supporting evidence, required capacity, dependencies and the consequences of being wrong. A dependency is something that must happen, or be available, before another activity can succeed.
Do not confuse the number of ideas with the quality of the decision. A long list is useful only if it reveals materially different routes. Several versions of the same software purchase may overlook the possibility that the underlying process is unnecessarily complicated.
Choose the smallest set of actions that forms a coherent route. If the route depends on an uncertain assumption, put a test of that assumption early in the sequence. The approach in Notes on prototyping early is useful when the uncertainty concerns how a proposed product or process will work in practice.
Identify the resources and the work to stop
The fifth planning area concerns what the chosen route needs. Include skills, people, equipment, information, time and money where relevant. A list of purchases alone will miss the effort required to prepare, learn, test and support a change.
Translate broad requirements into commitments that someone can assess. Access to customer feedback might mean reviewing recent support requests and speaking with a defined group of customers. Better production information might mean collecting actual job times before selecting scheduling software.
Estimate capacity after existing obligations. If a founder has already committed most available hours to delivery and administration, a plan requiring another full working day each week needs an explicit adjustment. The time must come from postponing, simplifying, sharing or stopping something.
Opportunity cost is the value of the next best use of a resource that you give up when making a choice. Recording it makes a strategy more honest. A product improvement may be worthwhile while still delaying a marketing experiment or a second product concept.
Prepare a short list of activities to defer, with reasons and review conditions. This prevents the new strategy from becoming an additional layer of obligations on top of an unchanged workload. It also makes the trade-off visible to anyone who depends on the deferred work.
Worked example: making orders easier to deliver
This is an illustration. A small Australian workshop makes configurable storage products. Over its latest four-week period it completed 40 orders, of which 10 were late. The owner initially proposes more promotion to increase demand, but the delivery records suggest that accepting more work may amplify the existing difficulty.
The workshop’s on-time completion rate is 30 divided by 40, or 75%. Of the 10 late orders, six had missing customer specifications when they entered production. This does not prove that missing information explains every delay, but it identifies a problem worth investigating before expanding demand.
The owner reviews how orders are accepted and discovers that several earlier additions to the product range introduced different information requirements. The team has been relying on experience to spot the gaps. The planning issue becomes how to make the order requirements clear and complete before work is scheduled.
The proposed objective is at least 90% on-time completion in a comparable four-week period, while monitoring quality complaints and hours worked. At a volume of 40 completed orders, 90% means 36 on time and no more than four late. The team also records that a different mix of products could make comparisons less straightforward.
Three routes are considered: purchase a new ordering system, reduce the configurable range or introduce a simple specification check. The team chooses the check as an initial test because it addresses the observed gap without first committing to a larger system change.
| Plan element | Illustrative decision |
|---|---|
| Present position | 30 of 40 completed orders on time |
| Main objective | At least 90% on-time completion in a comparable period |
| Proposed explanation | Missing specifications contribute to delays |
| First action | Check required information before scheduling |
| Available capacity | Six improvement hours each week for four weeks |
| Work deferred | A promotional experiment during the test |
| Review evidence | Late orders, reasons, complaints and hours worked |
Six hours each week over four weeks provides 24 hours. The owner allocates eight hours to drafting and checking the requirements, eight to trying the process with the team, and eight to reviewing exceptions and results. The total is 24 hours, so the planned work fits the stated allowance before any unexpected effort.
Suppose the next comparable period produces 36 on-time completions from 40 orders. That reaches the numerical target, but the review should still check whether the apparent improvement came from easier orders, extra overtime or unresolved quality issues. The decision to extend the process should consider those explanations alongside the headline result.
Turn the decisions into a usable working document
A strategy document should make decisions easier to retrieve. Start with the problem, the baseline, the objective and the selected route. Follow with the assumptions being tested, resource limits, deferred work and next review. Add detail only where it changes what someone needs to do.
For each immediate action, name one person who will coordinate it and an observable completion condition. Improve order quality is difficult to hand over. Review the required fields with the people who schedule and make the products is more concrete, especially when completion means the requirements have been checked against recent orders.
Distinguish progress measures, which indicate whether the planned work is happening, from outcome measures, which indicate whether the desired result is changing. Finishing a checklist is progress. Fewer preventable order delays is an outcome. Both matter, but they answer different questions.
Store the document somewhere the people doing the work can find it, and keep the current version clear. The value comes from using it to resolve competing priorities. A polished plan that nobody consults during ordinary decisions has limited practical effect.
Review assumptions as well as results
Choose review timing that matches the speed of the work and the availability of evidence. A short implementation check may be useful each week, while an outcome review may require a longer period. Reviewing too early can produce conclusions from noise; reviewing too late can prolong an ineffective approach.
At the review, distinguish three possibilities. The action was not completed, the action was completed but did not work as expected, or the surrounding conditions changed. These require different responses. More effort may help the first; the second may need a different explanation; the third may require revisiting the objective itself.
Record the decision to continue, adjust, pause or stop, together with the evidence and next review condition. Keep the original expectation visible so that a disappointing outcome does not quietly become what the team claims it intended all along.
This is also where a larger change of direction can emerge. If repeated evidence shows that the chosen customer problem is unimportant or the delivery approach cannot work within available resources, incremental improvements may be insufficient. The plan should permit reconsidering the route rather than treating the original choice as permanent.
Applying the method before a business has customers
A new founder may have no orders, delivery history or settled offer. The same planning structure still works, but the present position consists of capabilities, constraints and assumptions rather than operating results. Describe these honestly instead of filling the gaps with imagined demand.
The nearer objective can be a decision supported by evidence: whether a particular customer problem deserves further development, for example. The route might involve problem interviews, observation and a rough prototype. Record what would justify continuing and what would cause the idea to be set aside.
Australian geography may matter when a concept depends on physical delivery or in-person work. A nearby trial can answer a question about use while leaving freight, distance and support coverage unresolved. Keep the scope of the evidence explicit so that a local result is not treated as proof of a workable national operation.
The practical limit is the founder’s real capacity, including existing employment or other commitments. Choose a planning period and investigation workload that can actually be sustained. A modest investigation completed carefully gives a stronger basis for the next decision than a larger programme left unfinished.
Common mistakes that weaken the plan
One mistake is to combine every desirable outcome into a single priority. Growth, reliability, a wider range and fewer working hours may all be attractive, but their immediate requirements can conflict. State which outcome governs the next set of decisions and which constraints still apply.
Another is to select a favourite tool before diagnosing the problem. Software can improve a clear process, but buying it does not establish why customers leave or why orders arrive incomplete. Describe the problem in terms that remain meaningful without mentioning the proposed solution.
A third is to treat a target as a forecast. A target expresses intent; a forecast estimates what may happen under stated assumptions. Keeping them separate makes it easier to discuss shortfalls without pretending that ambition itself provides evidence.
Finally, avoid measuring only completed tasks. A busy team can deliver every planned activity while the customer problem remains. The review must ask whether the route is producing the intended change and whether the next commitment is still justified.
Questions to ask
- What decision must this plan help us make?
- Which observations support our description of the present position?
- What outcome matters most, and what conditions must remain acceptable?
- Which alternative routes have we considered?
- What will we defer to create the capacity required?
- What evidence would make us change or stop the chosen route?
Bringing it together
A workable strategy links an honest starting position with a worthwhile outcome, a chosen route and the resources to act. Reviewing the past helps explain the present; considering alternatives prevents the first idea from becoming the plan by default.
Keep the resulting commitments specific enough to use and open enough to revise. The test is whether the plan improves real decisions about customers, priorities and capacity, then changes when the evidence gives you a sound reason to do so.
Source: Brian Tracy, Business Strategy. Methods and examples are practical adaptations. Figures in this article are illustrations, not data. This article is general business information.
