Archive for the ‘Business Plan tips’ Category
Preparing a strong business plan will require a significant commitment of time, that scarcest resource for the busy manager. However, out of that investment of time for your business will also flow learning opportunities and personal development benefits. Decide to see the time you spend as time invested in yourself. The important aspect of business planning is not always appreciated. Producing an excellent business plan may be your primary objective, but the potential benefits accrue not only to your business but also to you personally as author of the plan. In addition, when your business plan explains your business in a compelling way, it will also highlight your own abilities as it does so. That means that your chances of successfully communicating your enormously. People will buy in to the whole business package because it rings true; the business concept as set out in your plan will dovetail exactly with the person that they see in front of them.
The wise and the cynical know that there are no certain routes to success in business, no infallible get rich quick schemes, but there certainly exist tried and tested ways of developing and exploiting your business’s critical competitive edge. Television has brought to many people’s consciousness a world in which would be entrepreneurs seek to persuade experienced and hard-nosed business people to invest in fledgling business concepts. Few succeed. They are good spectator sport of course, but are also rather instructive. During many of the presentations, the pitches by the hopefuls, flaws emerge. Some are fatal, some not. The weakness may be within basic business concepts and or in the business skills of the individuals behind them. Yet those issues should have become visible when drawing up a business plan, and would have been addressable at the point. Everyone’s task would be much simpler if they had invested time in producing a thorough business plan.
As you take that reflective look at your present position, especially when you take the longer view of your business path to date, you are likely to see some patterns emerging, some consistencies in the ways in which you have approached things, and the choices that you have made in the past. In the business planning courses with which I have been involved the triggers that really started business owners and managers thinking, the events that began to make a real difference, were exercises that let them understand themselves better. For present purposes, the key point is that although we are each unique and no two individuals are, of course, ever the same, research shows that the certain personality traits are shared by successful business people.
Your subjective self-appraisal here at the outset will help you to focus on this area later, what it is that upon the preparation of your business plan and indeed the future success of your business. Different types of personality tests make you understand about yourself more objective in behavioral terms and reveal which elements of your personality tend to match those of successful entrepreneurs, and which do not. In behavioral terms, your basic personality is augmented by your business experience and the management expertise that you have acquired over your career. Nature and nurture both play a part, and understanding your own personality traits in the context of your business will provide some illuminating insights. Time spent reviewing your business motivations is also time well spent, revealing as it will just how committed you are to achieving your goals.
The steps involved in business planning include
1. Establishing verifiable goals or set of goals to be achieved. The business plan is based on the enterprise objectives. These objectives are mostly formulated by the top management, the values and beliefs held by the top management are reflected in these goals.
2. Establishing planning premises: Planning premises include certain assumptions about the future on the basis of which the plan will be ultimately formulated. Planning premises include:
(a) Internal and external premises
(b) Tangible and intangible premises
(c) Controllable and non controllable premises
For smaller businesses, where there just one senior manager is involved or perhaps a few, the successful ones tend to be run by people who possess a strategic view and can see the big picture, but are still able focus upon the detail of operational processes. Management skills of two different orders are required. The first is an ability to handle the big strategic issues, the second a willingness to assimilate find detail. Successful operations management means having enough detailed focus to keep things firmly on track. Some individuals span these extremes, but more tend to be more comfortable with the big picture, or with the detail. A major advantage of any team structure is that it comprises different individuals, each bringing different skills and perspectives. Some will be better at strategy, some at operational delivery. We have arrived right back at the place called ‘know yourself’, of course. For your business plan, the following list of operational issues will get your thought process started:
.What are the premises requirements for production, storage space, and office space? Consider size, location, future expansion issues, period of lease commitment.
. What general and specialized plant and equipment is needed? Is it better to purchase or lease? For specialized equipment, is it readily available?
. Should any operational areas be outsourced, and why? Areas for potential outsourcing go right across the board, and include logistics and transport, storage, finance, IT, human resources, health and safety, sub contract manufacturing, self employed sales agents.
. What legislative and regulatory regime applies to your specific products or services? What is the impact of such regulations?
. How will supplies of vital inputs be secured? These might include the recruitment of a labor force with the necessary specialist skills or knowledge, or an unskilled one that you are able to train, and also the lines of supply for any scarce raw materials required.
. Should the whole business be undertaken by someone else under some form of licensing or franchise arrangement? How would it work? What controls and protections would be needed to protect your business?
Some people evolve into compulsive entrepreneurs, needing their regular fix. They obtain their kicks from taking on big challenges, from solving problems creatively, from out-running the competition, from peer recognition, and from making money too, as a by-product. In running any business, the risks, the problems, the hours, and the potential rewards are different from those of individuals who occupy their days with more regular jobs.
In recent days, the business culture around the world has been completely changed. For those who choose to pursue the challenge of building their own business, on their own account or with others, the enjoyment of doing it and the likelihood of business success are both greatly improved by devising a strong, workable business plan, and then implementing it. In the real world, as a business entrepreneur your task, your business’s task, is to supply the needs of the people that you want as customers by simply being better than the opposition.
That is nearly always possible if you are determined enough. So, think for yourself, do your homework, put in the hours and produce a professional and compelling business plan. You will end up producing a document that is quite simply better than most other business plans, fact. Good Luck.
If you have reached this point then the likelihood is high that you are committed to producing an excellent business plan for a strong and viable real world business. The most important word there is ‘you’. The production of a top-quality plan will test your ability to make time, and your ability to marshal your thoughts in order to derive logical, sensible conclusions from them that will stand up to external scrutiny if needed. In terms of your input, two factors are needed for success. The first has been mentioned already, forcing the planning process to happen by making enough space between your day-to-day fire fighting activities to give yourself the time needed to plan.
The second factor is directly related to that, your degree of determination. Lack of determination sound like it might be a problem that afflicts only new business often allows new entrants the space to set up and grab a slice of the action. To grow your business you must want to grow it, really want to grow it. It is not something that you can approach in a piecemeal way, or pick up and then put down again. Producing a plan will not, somehow, magically, make your business grow. Only you are able to do that.
Completing your business plan is actually a beginning in itself of course. Your business’s success will come out of the many decisions that follow: big ones and small ones, sometimes wrong but the majority right, made day after day, week after week. The secret of success is being able to pile good decisions upon good secret of success are being able to pile good decision upon good decisions as the business progress towards its desired objectives. You will maximize your business’s chances of business success, of getting those decision right, if you continually keep your business plan under review. Successful business keep fine tuning all aspects of their activities to do better what they do that meets customer’s needs. Those needs change and evolve over time, and that means keeping them clearly in view, together with your competitors’ own responses to them.
Focus always on what your customers want, not what you have, and keep innovating in order to keep ahead, running faster than your competitors. That approach enshrines the fundamental attitude for success in business life, a way of being, and a mindset to possess. Research and management theory contribute an enormously valuable academic discipline to business, but successful businesses are always be underpinned also by native wit and resource as well, and by individuals sheer determination to succeed. The real world never exactly fits any business model, because it contains far too many of humanity’s glorious imperfections. You will make things happen if you are determined enough to make things happen, and payback for business success is high, well beyond any financial reward.
It is worth mentioning business plan software. Business plan software packages seek to minimize the time needed to prepare a business plan, to streamline process. Time is usually in short supply in business, but in reducing the time needed, a fine aim in itself, the risk is that software also reduces one of the main benefits of producing a business plan, the time spent in careful reflection and in original thought. This is not to say that business planning packages lack merit. It is to say that using them tempts people under time pressure to take short-cuts. If the software provides a join-the-dots approach to planning, wholly or in part, and missing pieces are added to pre-set formulations, then the completed plan will almost inevitably lack depth of analysis. It will certainly lack originality and despite possessing a superficial gloss the final product may end up feeling somewhat mechanized and formulaic.
Your business plan is about setting out the process by which desired business objectives will be achieved, identifying the resources needed, and explaining how they will be marshaled. Producing a strong business plan will in itself maximize the chances of business success by focusing attention on supplying what customers really want, by identifying and addressing weakness, and by providing a clear route map to show the way. Business plan permit informed business decisions to be made in the light of the imperfect and incomplete data that is available, and the focus provided by a good business plan will ensure the quality to those decisions is consistently higher than the generated by the stream of inconsistent and ad hoc decisions that is the alternative.
Wherever things stand for you at present, I hope this blog will help you to produce your business plans as well as allow you to organize your thoughts within a bigger business framework. And also to develop your ideas in a way that will give your business the very best chance. The challenge is to create order out of the fire-fighting and haphazard decision making that will otherwise prevail. In business, as in life, there are many ways of getting things wrong, but very few of getting them right. Your business plan will be what you product it to be revealing the quality of your business concept and reflecting your own skills and ability. However, the process is a circular one, preparing a good business plan also enhances your management skills.
In business, the perspective is generally one of partial insights and glimpsed opportunities, surrounded by factors that are uncertain, not easily controllable, and in some situations unknowable. The odds are stacked against success; in fact, there are always many more ways for things to go wrong than for them to go right. The role of all business plans is to provide structure in that situation, imposing order and a workable framework for rational and consistent decision-making by management. Every business has objectives and values, explicit or implicit. These will have been set as the result of careful consideration, or they may perhaps simply have evolved over time. All businesses have process that require management review and control, and most need to bid for scarce funding resources, whether from outside investors and bankers, or from internal corporate budgeting and bidding process. Every business has blind spots, and all face the unknown. Preparing a business plan puts you more in control, gives you more controls in fact, more ways of shaping events and seizing the opportunities that arise.