Business Development

Eight Steps to the Next Level – The Business Plan “The Engine of Small Business Development”, eight steps

This article is the second in a series on articles that will explain how small business managers and owners can help drive business growth and profit through the creation of and implementation of business plans.

The general consensus among small business owners is that “planning is for larger, more substantial businesses” and that they are “too busy running their business to spare time for planning. Many small business owners are too busy running their business. However, they fail to realize that failing to plan is planning for failure.

Because of the nature and importance of carefully considering and thinking through how their business operates, I believe that small business owners will reap the benefits of this business planning process.

This business planning process leads to a stronger and more profitable business that delivers real value to customers and the market.

This article explains the business planning process in detail. It is a practical, logical and pragmatic examination of small businesses. This is not a complicated process. It focuses solely on the realities of small businesses (the market, competition, customers’ wants and needs) and also the allocation of firm resources.

Business Planning Process – Eight Major steps

This is the business and strategic planning process that I have used successfully for the last thirty years. The eight steps in the following process are sequential and continue. I will explain the function and nature of each step.

This applies to all organizations, regardless of their size, products, industry , and services. This process can even be used in conjunction with a national religious group.

1. DEVELOPMENT MISSION AND POSITIONING STATEMENT
2. SITUATIONAUDIT
a. Internal
b. External
3. WOTSUP ANALYSIS
4. MAKING ASSUMPTIONS
5. DEVELOPING OBJECTIVES
6. STRATEGY DEVELOPMENT
7. SPECIFY TACTICS & ACTIONS
8. PREPARE FORECASTS/BUDGETS/FINANCIALS

1. MISSION AND POSITIONING STATEMENT

When it comes to your business’ purpose and mission, there is one point of focus. It is the customer/user of your products/services. The mission of any business function or organization is determined by the customer. The question, “What is our purpose?” “What business are we looking for?”You can answer this question by looking at your business from outside, as if it were a customer or potential customer. Your business management must accept the truth of what the customer or user sees, thinks or believes at any time.

The customer buys the satisfaction of a desire or need.

Here is an example of a real business mission that defined how a company carried out its activities.

Drill bit manufacturers defined their mission as “determining what size holes customers require”. Their focus was on the customer and not their product specifications. They were very customer-focused and extremely successful.

After the mission statement is complete, create the positioning statement to gain competitive advantage. Then prepare your USP – the unique selling proposition. “Why the company is better than its competitors in providing effective solutions and greater value.”

2. THE SITUATIONAUDIT- External and Internal

A situation audit is a review and analysis of past, current and future information (information), which serves as the basis for the business planning process. It is a method that organizes:

  • collecting pertinent information
  • Interpreting the effect of it on the business’s environment (market conditions).
  • analyzing significant trends
  • Projecting all relevant factors that can influence company activities.

3. WOTSUP ANALYSIS

The acronym WOTSUP stands to represent Weaknesses Opportunities, Threats, and Strengths Underlying Plan. This step follows naturally from the fact base, (Situation Audit). Internal analysis consists of analyzing the Strengths and Weaknesses. “What are we good and bad at?””-

An external analysis, however, focuses on threats and opportunities. This analysis allows for the formulation of objectives with concrete action plans to overcome threats and weaknesses by leveraging business strengths and opportunities.

4. MAKING ASSUMPTIONS

Assumptions are a key ingredient in planning. Without assumptions, planning is almost impossible. Planning deals with the “future of current decision-making”, and future events are difficult to predict with 100% accuracy. – Assumptions make planning possible.

5. DEVELOPING OBJECTIVES

The core of any Business and Marketing Planning Process is the overall objectives. These objectives are often difficult and require a lot of effort. The objectives are the framework under which the rest of the planning structure is constructed. Because of their central role, they should be carefully thought out and communicated in a concrete and specific manner. Simply put, an objective is “what do I want to achieve?” Objectives are prepared for the WOTSUP Analysis to uncover weaknesses and threats and to capitalize on opportunities and strengths.

6. STRATEGY DEVELOPMENT

After the objectives have been established, strategies are prepared. Strategie must clearly explain how the objectives are achieved.

7. SPECIFY ACTION PROGRAMS

Once the strategies and objectives have been established, it is time to describe the work that will be done. The actions should be precise. They must detail what work will be performed, by whom, and how.

8. FORECASTS/BUDGETS/FINANCIALS PREPARED:

Once completed, the action plans form the basis of budget preparation. The operating budget and cash flow for the Business Plan are determined by the cost of each action as well the revenue derived from these detailed actions.

Many companies confuse planning and budgeting. The budget serves one important purpose: to ensure that the business has sufficient financial resources to run its operations. Budgeting is not about failing; planning is about what’s possible.

molw.net

We are a team of professionals with each having two decades of experience in start-ups, sales, marketing, finance, HR, large scale project and profit centre management and running mature cross functional operations. At Molw.net we are big believers that knowledge transfer is critical to our industry’s evolution. We love to share our experiences and learnings through our online resources.

Related Articles

Back to top button