Influences in establishing an SME (business planning) Flashcards
what is the 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
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
Executive summary (common elements of a business plan)
A brief overview of the plan
Goals
What the business hopes to achieve
Strategies
An overview as to how the business will attempt to achieve the goals
Business description and outlook
An overview of the industry, in which the business will operate, including a situational (SWOT) analysis
Management and ownership
The type and nature of organisational structure
Operational plans
Details the production process and the people required now and in the future
Marketing plans
The product, price, promotion and distribution details
Financial plans
A description on the business’s financial needs and methods for evaluating its performance
Human resource plans
Details both the present and future staff requirements
benefits of a business plan
The planning process acts as a link or bridge between the business owner’s ideas and the actual operation of the business.
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
sources of planning ideas
Having access to up-to-date, relevant and accurate information will allow the business owner to prepare a much superior business plan.
The business owner must account for economic, political, social, technological, geographic and legal factors during the planning stage.
Specialists all provide knowledge to assist a business in its planning (accountants, finance brokers, consultants, bank managers and solicitors).
SWOT
Strengths
Weaknesses
Oppotunities
Threats
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.
Weaknesses
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.
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
threats
refers to external factors that may pose a threat
Identifies future risks
Example: New competitors who copy ideas
What is a vision/mission statement
- states what the business aspires to become in the future
- sometimes called mission statements
- 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
- Avision statementisa long-term, idealistic state of the FUTURE
- A company’smission statementishow the company chooses to pursue its vision.
