The Business Plan

The business plan is a succinct document that specifies the components of a strategy with regard to the business mission, external and internal environments and problems identified in earlier analyses. A business plan is not written each time a modification to a strategy is made. It should be written when you develop a new venture or launch a major new initiative. The business plan serves several important purposes:

It helps determine the viability of the venture in a designated market.

It provides guidance to the entrepreneur in organizing his or her planning activities.

It serves as an important tool in helping to obtain financing.

A well-written business plan also will provide broad parameters upon which progress toward goals can be assessed and control decisions made at a later time.

A typical business plan begins with a brief introduction followed by an executive summary. The executive summary is prepared after the total plan has been written. Its purpose is to communicate the plan in a convincing way to important audiences, such as potential investors, so they will read further.

An industry analysis usually follows the executive summary. This section communicates key information--the collection of which was discussed earlier--that puts the venture or plan into the proper context.

The marketing plan is the first step in developing any new strategy. It is developed within the context of the company's goals and should be based on a realistic assessment of the external environment, as discussed earlier. The marketing plan is written first because marketing decisions typically determine resource needs in other areas. Obviously, a decision to seek a large share of a market will require a significant commitment of resources of various kinds. How you choose to promote and distribute your product or service will have clear ramifications for your organizational, production, human resource and financial plans.

The organizational plan details how your business is to be configured to most effectively support the marketing objectives. What kinds of skills are needed to carry out your plan? What sorts of skills do you have among managers and employees? What tasks will be done by which employees? What tasks will be contracted out? Many businesses, for example, hire the services of an advertising firm to improve their product promotions but handle their customer relations internally. Roles and responsibilities of each employee need to be clearly specified, as discussed in the section on goal setting.

Develop the production plan and human resources plan along with the organizational plan. Again, you must decide whether or not you will handle all production internally or contract all or part of it to other firms. What equipment will you need to meet the marketing plan? What will be the costs of manufacturing the product? What will be the future capital needs of the enterprise?

Human resource needs are clearly affected by decisions made in production planning. What human resources do you have? Will they be adequate to handle new or changed plans? What additional skills are needed? Will you seek employees who are already trained, or will you hire less skilled individuals and train them? If the latter, what resources will be needed for training, and how long will it take to obtain the desired levels of productivity?

The financial plan underpins this entire system of plans. Three financial areas are generally discussed. First, forecasted sales and related expenses need to be summarized. Monthly figures generally need to be estimated for a period exceeding one year, although the appropriate period will vary depending on the nature of the product and the stability of the market. Second, cash flow figures need to be estimated over the same period. A business needs to pay its bills in a timely fashion; many successful ventures end when suppliers refuse to extend additional credit to a business that hasn't paid its bills. Finally, a projected balance sheet that shows the financial condition of your business at a specific time needs to be prepared.

Usually an appendix is included in a business plan. This generally contains supporting information, documents and details that would interfere with clear communication in the body of the plan. Examples of this type of information include price lists, economic forecasts, demographic data and market analyses.

Implementing The Strategy

Implementation is usually thought of as something you do at the end of the strategic planning process. "Okay, now we have this strategic plan; let's do it." If you think about what has been discussed in this guide, it becomes apparent that you will be considering the practical problems of implementation throughout the planning process. Frequently, a suggested alternative will be rejected because it would be difficult to implement. Or a preferred approach to marketing or production would be beyond the financial means of you or your investors.

The two primary issues that need to be considered in the final implementation process are communication and scheduling. Successfully implementing a plan depends on effective communication. Employee resistance often can be reduced, if not eliminated, if plans are openly presented and concerns are dealt with up front. In addition, to carry out new policies and procedures effectively, employees need to have a clear understanding of what is happening and what is expected of them. Better informed employees are more likely to do as you instruct them, thereby reducing the need for complex and costly control systems.

One key element in effective communication is involving your employees--those who must carry out the plan--as much as possible in the actual planning process. People who are involved in planning will have a solid grasp of the plan and their part in it when it is implemented. If employees are genuinely involved in the process, they are more likely to accept the result as a plan they helped develop. This result is often referred to as "ownership."

Successful implementation also depends on a realistic schedule for the transition. It is too easy to assume away the difficulties of a major change and to anticipate that everything will be on track and running smoothly. How many times have you seen a news report about schedule and cost overruns on a government project? This kind of error can be disastrous if you are working within tight margins that can be quickly eradicated when costs and sales don't reach expectations on time. Realistic schedules require that you factor in training time, periods of low productivity, increased error rates and slowdowns as you correct organizational oversights. Schedules also should include planned checkpoints for carefully assessing progress toward full implementation.

Every business needs to develop systems for measuring and controlling progress toward strategic goals; no matter how loyal your employees or how strong the camaraderie, individual and organizational goals are not always the same. Three features distinguish effective control systems from ineffective systems.

Since the owner of Your own company you deal with issues on an almost daily basis. Being comfortable with effective Problem
Solving Techniques can dramatically alter the growth of your small business.

Even though you Find answers to your problems, many people are not really proficient in the ways of problem solving, and if
solutions neglect, they fault themselves for misjudgment. The problem is usually not misjudgment but rather a lack of ability.

This manual Educates you in some problem solving techniques. Critical to the success of a company faced with problems is the
comprehension of just what the issues are, defining them, finding answers, and picking the best answers for your scenarios.

What's a problem. A dilemma is a situation that presents trouble or perplexity. Issues come in many shapes and dimensions. For
example, it can be:

Something did Not function as it should and you don't understand how or why. Something you need is inaccessible, and something has
to be found to take its place. Employees are undermining a brand new program. The market is not buying. What do you do to survive?
Customers are complaining. How do you manage their complaints?

Where do Problems come from? Issues arise from every aspect of human and mechanical functions as well as from nature. Some
problems we cause ourselves (e.g., a hasty decision was made and the wrong person was chosen for the task ); additional problems
are brought on by forces beyond our control (e.g., a warehouse is struck by lightning and burns ).

Problems are a Natural, everyday occurrence of life, and in order to suffer less from the anxieties and frustrations they cause,
we need to find out to manage them in a rational, logical manner.

If we accept The simple fact that problems will arise on a regular basis, for many different reasons, and from a variety of
sources, we can: learn to approach problems from an objective point of view; find out how to expect some of them; and stop a
number of them from getting larger issues.

To accomplish This, you have to learn the procedure for problem solving. Here, we'll instruct you in the basic methods of
problem-solving. It is a step by step guide which you can easily follow and practice. As you follow this manual, you will
eventually develop some tips of your own that function in concert with the difficulty procedure described within this guide.

Keep in mind, However, as you see this isn't a thorough analysis of the art of problem-solving but rather a sensible, orderly, and
simplified, yet powerful, method to approach problems considering the limited time and information most company owners and
managers possess. Additionally, some problems are so complex that they need the further help of specialists in the area, so be
ready to accept that some problems are beyond one individual's ability, ability, and desire to succeed.

To be able to Appropriately identify the problem and its triggers, you have to do some study. To do so, just list all the
preceding queries in checklist form, and maintaining the checklist useful, go about gathering as much information as you possibly
can. Keep in mind the relative importance and urgency of the issue, in addition to your time limitations. Then interview the
people involved with the problem, asking them the questions on your own checklist.

When You've Gathered the information and assessed it, you'll have a fairly clear comprehension of the problem and what the major
reasons for the issue are. At this point, you can find out more about the causes further through monitoring and additional
interviewing. At this time you should outline the problem as briefly as you can, list all of the causes you've identified, and
record all of the areas the problem seems to be affecting.

Now, You are ready to assess your comprehension of the problem. You have already identified the issue, broken it all down to all
its aspects, narrowed it down, done research on it, and you're avoiding typical roadblocks. On a large pad, write down the issue,
including all of the factors, the regions it affects, and what the effects are. To get a better visual understanding, you might
also want to diagram the problem demonstrating cause and effect.

Study what you Have written down or diagrammed. Call on your employees and talk about your analysis with them. Based on their
opinions, you might choose to revise. Once you think you completely comprehend the causes and consequences of the issue, outline
the issue as succinctly as simply as you can.

Proceed through your Long list of alternatives and cross-out those that obviously won't work. Those notions are not wasted because
they impact on those ideas that stay. To put it differently, the best ideas you pick may be revised based on the ideas that
wouldn't work. Together with the remaining solutions, use what's called the"Force Field Analysis Technique." This is basically an
analysis technique which divides down the solution to its positive effects and negative outcomes. To do so write each solution
you're considering on a different piece of paper. Below the solution, draw a line vertically down the center of this newspaper.
Label one column advantages and one column downsides.

Now, some more Analytical thinking comes in to play. Analyzing each facet of this solution and its effect on the issue, listing
each of the benefits and disadvantages you can consider.

1 way to help You think about the benefits and disadvantages would be to role-play each solution. Call in a few of your workers
and perform out each alternative. Ask them for their responses. Based on what you observe and on their feedback, you will get a
clearer idea of the benefits and drawbacks of each solution you are thinking about.

Once you Complete this procedure for each solution, pick those solutions that have the Many advantages. At this point, you ought
to be considering only two or three.

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