Archive for the ‘Decision Making’ Category
Economic influences: The effects of national and international changes in the economic environment in which business operate. Examples include movements in interest rates, changes in people’s levels of personal wealth, including changes in their perceptions of their levels of wealth and disposable incomes, and the consequent changes that occur in their willingness to spend money. People who feel positive tend to make bigger risks, and spend more money on luxury items, for example. Many people believe that the buoyancy of the UK housing market is a major influence, given the high proportion of Homeowners in the UK.
Social influences: Cultural and sociological changes in society have a major impact on business. Changes, for example, in the age profile of the population, changes in the average age at which children leave home, changes in the amount of people’s leisure time, and indeed changes in their perceptions of what comprises a fair work life balance changes in numbers of individuals who work from home.
The business planning process gives you the chance to be innovative, to think outside of the existing constraints, and at the same time it then forces you to be disciplined, working within real world boundaries of what is possible and what is not. Producing a business plan is essentially a creative process, generating and accommodating new ideas, and seeing existing situations from new perspectives, but one which must have its roots planted firmly in reality. That sense of reality, the art of the possible, is what shines out of the best business plans. Thinking slightly laterally is essential, tempered by the fact that being in business is very rarely about taking huge leaps, making single large decisions that change the world. Being in business is much more about taking many small steps, each one of which builds on the ones that went before in order to move things incrementally in a chosen direction.
The compounding of good business decisions is like that of compound interest in its cumulative effect, and over the course of time the results of the compounding process can become very impressive. Sound decisions, big strategic ones and smaller operational ones, all made within the context of clearly understood business objectives will pile up on each other to build a sound and rapidly growing business. The most effective predator in the tropical rainforest is not the tiger, no matter how powerful any single individual animal is. The really effective predatory species is the army ants that sweep across the forest floor in broad columns, consuming everything edible in their path. Each individual insect effectively comprising a tiny part of a huge and hugely voracious predator.