Structural Planning: Key to Small Business Success and Success. Basic Structure Of A Business Plan For Beginners.
Many people think of strategic planning as a strategic concept only for large businesses. However, it is a management mechanism that both small and medium-sized businesses need to consider. Strategic planning matches your business with market opportunities. To do this effectively, you need to collect, screen, and analyze information about the business environment, have a clear understanding of your business and develop a clear mission with attainable goals and objectives.
Strategic planning largely focuses on managing interactions with environmental forces. These include competitors, government, suppliers, customers, various interest groups, and other factors that affect your business. Your ability to deal with these groups will vary widely depending on the group and time. Due to major changes in the business environment, your familiarity with strategic planning and your ability to implement it is important. The more data and usage you have, the better your plan for the future.
Proactive planning and anticipation of future events is important for implementing an effective strategic plan. In proactive planning, decisions are based on predictions of future state of the environment as opposed to reacting to the crises that occur. Think in terms of who, what, when, how and how much. These variables will help fill in the details and make your plan more specific. They also assure the collection of sufficient relevant data to reduce future uncertainty. This kind of foresight will take your business where it needs to be in the next month, year and decade.
The first step in the strategic planning process is the assessment of the market and your own business and its goals. The result of this self-assessment is a mission statement for your business. The key to defining this mission statement is addressing the question: “What business am I in?” In determining the nature of your business, do not tie it strictly to the specific product or service you currently produce, but rather tie it to the results of your production and the competencies developed in production. Next you have to define the basic philosophy of the firm. This will help explain to investors, employees and associates how you envision the operation of your firm.
Set clear, firm goals to direct and sustain the business in line with your mission. To accomplish this requires setting and achieving specific objectives, which must be 1) clear, concise and attainable; 2) be measurable; 3) have a target date to complete; 4) includes responsibility for taking action and 5) should be organized according to priority. In setting appropriate goals, you have to consider the state of the business in your industry and the wider business environment. Some trends that may affect your business include population changes, economic trends, technological development, legislation and activities of special interest groups. There are four approaches to dealing with such fluctuations: 1) Buffering – when vigilance can be relaxed with the belief that your resources are sufficient to accommodate any change, 2) smoothing – when a sector Abundant resources are used to accomplish another, 3) forecasting of forecasted resources – future sales, projection of income or other variables and 4) rationing – income or other ups Delay or foregoing of business goals due to sudden change in expected circumstances.
Establishing an effective information system is related to your mission and goals and to specific environmental factors defined in your strategic objective. Involve employees in determining what information is needed and where and how to obtain it. Now consider a mechanism for conducting internal business analysis. The primary task in this phase is to identify the factors that give you a competitive advantage. These may include holding a patent or exclusive license on a particular product or service, technology used to create your product, or individuals skilled in areas specific to your business. Flexibility is a major advantage Small businesses typically have larger competitors.
When you have identified the areas in which you are ahead, perform an S-W-0-T analysis to assess your business strengths, weaknesses, opportunities and threats. A SWOT analysis to identify and formulate measures to correct potential problem areas, establish an introductory course of action, develop alternative courses of action, and evaluate, change, and make changes to your current actions and immediate goals Develops a success strategy for. With a clear understanding of competitors, customers, suppliers and situations, with a realistic understanding of your own strengths and weaknesses, and a well-written, comprehensive business plan, you can develop a strategic plan that will lead to success. Basic Structure Of A Business Plan For Beginners.
The following is an outline of the SBA recommended business plan;
What goes into a business plan? The body can be divided into four different classes:
1) Description of business
Addenda must include an executive summary, supporting documents and financial estimates.
Although there is no single formula for developing a business plan, some elements are common to all business plans. They are summarized in the following outline: Basic Structure Of A Business Plan For Beginners.
Elements of a business plan
1. Cover Sheet
2. Statement of purpose
3. Table of Contents
A. Description of business
D. Operating procedure
F. Business insurance
II. Financial data
A. Loan application
B Capital Equipment & Supplies List
C. Balance Sheet
D. Breakeven analysis
E. Pro-forma Income Estimate (Profit and Loss Statement)
- Three year summary
- Detail month, first year
- Quarter, second and third year expansion
- Which estimates were based on
- F. Pro-forma cash flow
- Principal’s tax return personal financials for the last three years
- Statement (All banks have these forms)
- For franchised businesses, franchise contracts and a copy of all
- Supporting documents provided by the franchisor
- Copy of proposed lease or purchase agreement for building construction
- Copy of license and other legal documents
- Copy of resumes for all principals
- Copies of letters of intent from suppliers, etc.