BUSINESS PLAN

Steps in preparation of business plan. 

Business plan is a written summary of various elements involved in starting a new enterprise.

1. Market research: The first step in developing a business plan is to conduct market research to find out the needs, wants and demands in the market. It helps to know about competitors. This research helps to do product planning. 

2. Feasibility report: Before executing any task, it is a must to check its feasibility. Before starting the business venture, the entrepreneur must conduct the feasibility study, specially two kinds of feasibilities: (a) ECONOMIC FEASIBILITY, (b) TECHNOLOGY FEASIBILITY 

3. List of proposed products and services: Based on the information received from feasibility report and market research, the entrepreneur makes a list of products and services, which he plans to manufacture or market.

4. Understanding the quality and availability of proposed products and services: After finalising the products and services, the entrepreneur plans about their availability that is how he will make these products available to people and whether he will be supplying in bulk or small lots.

5. Sources of inputs: After finalising the products and services, the entrepreneur plans the arrangement of inputs, specially labour and capital. 

6. Scheme of provision of services: After arranging the inputs, the entrepreneur plans about providing the services to the customers. He plans which services he will be providing and how he will be providing these services. 

7. Costing: A successful entrepreneur always prepares a cost sheet for all his activities. He tries to anticipate the cost involved in all his venture so that the same can be arranged well in advance.

8. Admino graphs: In this step, he prepares a list of administrative activities including policies, strategies and a blue print of organisation's working.

9. Anticipating problems and their management: Entrepreneur tries to anticipate the problems and hurdles which he might have to face in future. He prepares plans and policies to face these threats and overcome them successfully. 

10. Growth profile of the scheme: No entrepreneur like stagnation. Thus, before starting the work, entrepreneur checks the growth prospectus of the venture he is planning to start, so that he can prosper in future with these schemes. 

ELEMENTS OF BUSINESS PLAN

The business plan is made as or the need of the organisation. For example, a manufacturing company may require a detailed business plan whereas a small shop owner will required a small business plan. 

Basically, a plan must define the objectives, strategies, customer satisfaction policies, sales forecast, production services, etc.

The common elements of a business plan are given below: 

1. General Instructions 

  • Name and address of business
  • Name and address of entrepreneur
  • Stakeholders of business
Nature of business and customers 

2. Business Venture

  • Products to be offered
  • Services to be offered 
  • Scale of business operation
  • Types of technology used 
  • Types of employees required

3. Organisational Plan

  • Forms of ownership
  • Administrative structure 
  • Managerial hierarchy and team 
4. Production Plan 

  • Steps involved in manufacturing process
  • Physical infrastructure required
  • Types of plant and machinery 
  • Raw materials required 
  • Requirement of power, water,etc
5. Human Resource Plan

  • Types of staff required
  • Available human resources
  • How many required
  • Times frame for recruitment and selection of employees
6. Market Plan

  • Shape, plan and design of the product
  • Pricing policies
  • Promotional policies 
  • Physical distribution policies
  • Channels of distribution 
7. Financial Plan 

  • Break even analysis
  • Requirement of fixed capital 
  • Requirement of working capital
  • Source of finance 
  • Schedule of procuring finance
  • Procurement of fixed assets 
  • Cash flow projection
8. Miscellaneous/Appendix

  • Market research report 
  • Contracts with vendors 
  • Contracts with financial institutions 
  • Types of business  risk 
  • Contingency plan

EXECUTION OF BUSINESS PLAN   

   Companies must make a good strategy to execute business plan. Many businessmen spend hours and money framing the plan but they underestimate the execution part. A sound and successful plan may fail if it is not executed or implemented rightly. 

Execution is a process and not a single activity. For successful implementation of plan, entrepreneur must link strategy, people and work processes. The plan must be understood by the entire organisation. 

Although there is no single process to manage the execution of business plan, the basic steps which helps in execution of a plan are:

  1. Formulation of goals - Once he board mission, the vision and the strategy for the organisation have been established, specific goals to support the strategy must be formed by focusing on the core competencies. 
  2. Evaluation of human resources: The entrepreneur must evaluate and check whether there are right people, with right skill to do the right job. Do you have right number of employees?, Is there any need for reallocation of resources?, etc
  3. Identify the key actions to achieve the strategy: Identify the key initiatives and broad actions that must be accomplished to achieve the strategy. Clearly one must identify the gap between where we are today and where we plan to be. Every employee must clearly understand his/her individual role in accomplishment some aspect the plan. 
  4. Development of a budget: A budget must be prepared keeping in mind the expected costs and expected revenues. 
  5. Communication- Plan must be communicated to the organisation. There must be a two way communication to take the feedback and suggestions and then the final decision must be taken. Make sure that everyone understand the plan in the right way.
  6. Establish a review process: When the plan is executed, there must be a continuous follow up to review the plan so that if there are any changes in the environment i.e. government or economic or competitor's strategies then, modifications must be made in the plan as per the changes. If changes are many then go back to the beginning, review each step and determine if further changes are necessary. Business plan execution require hard work. Following this process can help the organisation to accomplish the difficult task of effective executing a well thought of plan. 
Align strategy, people and work processes and you can have a great start to successful execution of business plan. 


 

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