Who should be involved in preparing a firms business plan
Planning is key to any business throughout its existence. Every successful business regularly reviews its business plan to ensure it continues to meet its needs. It's sensible to review current performance on a regular basis and identify the most likely strategies for growth. Show
Once you've reviewed your progress and identified the key growth areas that you want to target, it's time to revisit your business plan and make it a road map to the next stages for your business. This guide will show how you can turn your business plan from a static document into a dynamic template that will help your business both survive and thrive.
The importance of ongoing business planningMost potential investors will want to see a business plan before they consider funding your business. Although many businesses are tempted to use their business plans solely for this purpose, a good plan should set the course of a business over its lifespan. A business plan plays a key role in allocating resources throughout a business. It is a tool that can help you attract new funds or that you can use as a strategy document. A good business plan reveals how you would use the bank loan or investment you are asking for. Ongoing business planning means that you can monitor whether you are achieving your business objectives. A business plan can be used as a tool to identify where you are now and in which direction you wish your business to grow. A business plan will also ensure that you meet certain key targets and manage business priorities. You can maximise your chances of success by adopting a continuous and regular business planning cycle that keeps the plan up-to-date. This should include regular business planning meetings which involve key people from the business. To find out more, see our guides on how to review your business performance and how to assess your options for growth. If you regularly assess your performance against the plans and targets you have set, you are more likely to meet your objectives. It can also signpost where and why you're going astray. Many businesses choose to assess progress every three or six months. The assessment will also help you in discussions with banks, investors and even potential buyers of your business. Regular review is a good vehicle for showing direction and commitment to employees, customers and suppliers. Defining your business' purpose in your business plan keeps you focused, inspires your employees and attracts customers. What your business plan should includeYour business plan should include a summary of what your business does, how it has developed and where you want it to go. In particular, it should cover your strategy for improving your existing sales and processes to achieve the growth you desire. You also need to make it clear what timeframe the business plan covers - this will typically be for the next 12 to 24 months. The plan needs to include:
If you intend to present your business plan to an external audience such as investors or banks, you will also need to include:
Drawing up a more sophisticated business planIf your business has grown to encompass a series of departments or divisions, each with its own targets and objectives, you may need to draw up a more sophisticated business plan. The individual business plans of the departments and separate business units will need to be integrated into a single strategy document for the entire organisation. This can be a complex exercise but it's vital if each business unit is to tread a consistent path and not conflict with the overall strategy. This is not just an issue for large enterprises - many small firms consist of separate business units pursuing different strategies. To draw up a business plan that marries all the separate units of an organisation requires a degree of co-ordination. It may seem obvious, but make sure all departments are using the same planning template. Objectives for individual departments It's important for each department to feel that they are a stakeholder in the plan. Typically, each department head will draft the unit's business plan and then agree on its final form in conjunction with other departments. Each unit's budgets and priorities must be set so that they fit in with those of the entire organisation. Generally, individual unit plans are required to be more specific and precisely defined than the overall business plan. It's important that the objectives set for business units are realistic and deliverable. However complex it turns out to be, the individual business unit plan needs to be easily understood by the people whose job it is to make it work. They also need to be clear on how their plan fits in with that of the wider organisation. Plan and allocate resources effectivelyThe business plan plays a key role in allocating resources throughout a business so that the objectives set in the plan can be met. Once you've reviewed your progress to date and identified your strategy for growth, your existing business plan may look dated and may no longer reflect your business' position and future direction. When you are reviewing your business plan to cover the next stages, it's important to be clear on how you will allocate your resources to make your strategy work. For example, if a particular business unit or department has been given a target, the business plan should allocate sufficient resources to achieve it. These resources may already be available within the business or may be generated by future activity. In practice this could mean recruiting more office staff, spending more on marketing or buying more supplies or equipment. You may want to provide funds through current cash flow, generating more profit or seeking external funding. In general, it is always better to fund future growth through revenue generation. However, you should do some precise budgeting to decide on the right level of resourcing for a particular unit or department. It's important that resources are prioritised, so that areas of a business which are key to delivering the overall aims and objectives are adequately funded. If funding isn't available this may involve making cutbacks in other areas. Use targets to implement your business planA successful business plan should incorporate a set of targets and objectives. While the overall plan may set strategic goals, these are unlikely to be achieved unless you use SMART objectives or targets, i.e. Specific, Measurable, Achievable, Realistic and Timely. Targets help everyone within a business understand what they need to achieve and when they need to achieve it. You can monitor the performance of employees, teams or a new product or service by using appropriate performance indicators. These can be:
Targets make it clearer for individual employees to see where they fit within an organisation and what they need to do to help the business meet its objectives. Setting clear objectives and targets and closely monitoring their delivery can make the development of your business more effective. Targets and objectives should also form a key part of employee appraisals, as a means of objectively addressing individuals' progress. When and how to review your business planOnce you've drawn up your new business plan and put it into practice, it needs to be continually monitored to make sure the objectives are being achieved. This review process should follow an assessment of your progress to date and an analysis of the most promising ways to develop your business. To find out more about these stages see our guides on how to review your business performance and how to assess your options for growth. This process is called the business plan cycle. In some businesses, the cycle may be a continuous process with the plan being regularly updated and monitored. For most businesses, an annual plan - broken down into four quarterly operating plans - is sufficient. However, if a business is heavily sales driven, it can make more sense to have a monthly operating plan, supplemented where necessary with weekly targets and reviews. It's important to keep in mind that major events in your business' target marketplace (e.g. competitor consolidation, acquisition of a major customer) or in the broader environment (e.g. new legislation) should trigger a review of your strategic objectives. Regardless of whether or not there are fixed time intervals in your business plan, it must be part of a rolling process, with regular assessment of performance against the plan and agreement of a revised forecast if necessary. Original document, Prepare a business plan for growth, © Crown copyright 2009 Our information is provided free of charge and is intended to be helpful to a large range of UK-based (gov.uk/business) and Québec-based (infoentrepreneurs.org) businesses. Because of its general nature the information cannot be taken as comprehensive and should never be used as a substitute for legal or professional advice. We cannot guarantee that the information applies to the individual circumstances of your business. Despite our best efforts it is possible that some information may be out of date. As a result:
Who makes a business plan?A business plan is a document created by a company that describes the company's goals, operations, industry standing, marketing objectives, and financial projections. The information it contains can be a helpful guide in running the company.
Why are owners involved in developing a business plan?A business plan is a very important and strategic tool for entrepreneurs. A good business plan not only helps entrepreneurs focus on the specific steps necessary for them to make business ideas succeed, but it also helps them to achieve short-term and long-term objectives.
Who should prepare the business plan Mcq?The business plan should be prepared by: Entrepreneurs.
What steps are involved in developing a business plan?7 Steps to Develop a Successful Business Plan. Research. ... . Have a Purpose. ... . Craft a Company Snapshot. ... . Detail the Company in Total. ... . Write the Marketing Plan Beforehand. ... . Be Willing to Change the Plan for Your Audience. ... . Include Your Motivation.. |