3. business planning - the business planning process Flashcards
what is the business planning process
- Planning is the preparation of a predetermined course of action for a business.
- It refers to the process of setting objectives and deciding on the methods to achieve them.
- The business plan needs to analyse the whole business by examining all parts of the operation.
- As a result, each part of the business can function effectively and achieve its goals.
what is a business plan
- It is a written statement of the business’s goals and the steps to be taken to achieve them.
- It is a summary and an evaluation of a business idea in written form.
- Each plan will be unique, containing information and strategies that apply to one particular business.
- A business plan for a transnational corporation will be detailed and comprehensive. It will add up to hundreds of pages, having taken much time, effort and money to prepare.
- A business plan for a SME may be only 10–15 pages in length, word processed at home .
common elements of a business plan
Executive summary
Goals
strategies
Business description and outlook
Management and ownership
Operational plans
Marketing plans
Financial plans
Human resource plans
what is Executive summary
a brief overview of the plan
what are goals
What the business hopes to achieve
what are statergies
An overview as to how the business will attempt to achieve the goals
what is a Business description and outlook
An overview of the industry, in which the business will operate, including a situational (SWOT) analysis
what is Management and ownership
The type and nature of organisational structure
what are Operational plans
Details the production process and the people required now and in the future
what are Marketing plans
The product, price, promotion and distribution details
what are Financial plans
A description on the business’s financial needs and methods for evaluating its performance
what are Human resource plans
Details of both the present and future staff requirements
benefits of developing a business plan
1) Helps test the viability of the business
2) Assists the business to be proactive rather than reactive
3) Assists in maintaining the business operation, especially focusing attention on the goals and objectives
4) Indicates the owner’s ability and level of commitment
5) Forces the small business owner to justify their plans and actions
6) Identifies the business’s strengths and weaknesses
what is SWOT
SWOT is the process of analysing a business’s strength, weaknesses, opportunities, and threats
What are ‘strengths’
*refers to the internal aspects of the business.
*Are identified to analyse the advantages associated with the business’s current position.
*Enquires into what the business does well and what advantages it has over its competitors.
*E.g. well-trained staff or good customer knowledge.
what are weaknesses
*refers to the internal aspects of a business.
*Are identified to analyse the limitations and disadvantages associated with your current position.
*Enquires into what the business is not good at, the limitations that a business has, and the advantages that competitors have.
*E.g. limited access to technology
what are opportunities
*refers to external opportunities that may affect the business.
*Opportunities are identified to analyse potential future actions and their associated benefits.
*refer to future plans, rather than to where the business is currently.
E.g. new Govt legislation
what are threats
*refers to external factors that may pose a threat to the business in the future.
*Identifies future risks.
*e.g. new competitors who copy your ideas.
what is a vision statement
- A vision statement broadly states what the business aspires to become in the future.
- The main purpose of the vision statement is to guide and direct the business owners, managers and employees.
- It creates the culture within the business and acts as a benchmark against which to measure all the business’s decisions and operations.
- A vision statement is a long-term, idealistic state of the FUTURE that doesn’t exist yet.
- A company’s mission statement is how the company chooses to pursue its vision. It is more specific and relates directly to the company’s products and services.
vision statement example
*IKEAs vision: “To offer a wide range of well-designed, functional home furnishing products at prices so low that as many people as possible will be able to afford them”
*Cokes mission statement: “to craft the brands and choice of drinks that people love, to refresh them in body & spirit.”
