Introduction

Business Planning is normally done when a business plan is needed for financing purposes or to use as a guideline on running and growing a business (as a start-up or for the next time frame). Many crucial features of a business need to be addressed and balanced in this planning process. Various options, problems and risks relating to these features will be considered.

Entrepreneurs often assume that one variable has a linear relationship with another (e.g. $x spending on marketing will create $y income in sales). Business is, however, seldom that simple. Many multi-directional relationships tend to occur between the various features. Sales would for instance also be influenced by product quality, price, etc. Sales on the other hand will influence future expansions. To cater for this phenomenon an integrative business planning process is required.

Crucial Issues in Business Planning

Every business is different and the crucial issues in one does not necessary occur in another. What is, however, important is that the business planners ensure that they analyse and plan for all the relevant features for their specific business. This would normally include the issues that is highlighted below.

• The Business – It is essential to ensure that the opportunity, the business concept, its products, services and strategies and the industry that it operates in are sound.
• Marketing – Marketing strategy needs to be considered. This include aspects such as pricing and promotion.
• Market Research – This is a crucial issue that is often neglected. It is important to know and understand the customers, the market size and trends and who the competition is.
• Development – All issues regarding the development of new products, services, markets and facilities need to be planned for.
• Operations – All aspects regarding the what, where and how of operations must be considered.
• The Team – The management team need to match the requirements of a business. It would be preferable to establish what skills/jobs are needed and then to link the people to it. Where there are a lack of skills, training programmes can be implemented and new people can be hired. The whole organigram and composition of board of directors, management teams, etc. need to be planned for.
• Finances – Finances are the ultimate yardstick of the success of a business, but it can not stand on its own. Important financial issues would typically include investment-, financing- and dividend decisions and policies. It is also crucial to plan for turnover (sales), gross profit margins and cost control (of expenses). The relationships between these issues (financial ratios) need further planning to establish if the business will be profitable, liquid and solvent. Return on investment (ROI) and sustainable business growth would for instance be specific aspects to consider.
• Risk Management – The various risks that occur need to be determined, analysed and catered for. Fatal flaws need to be eliminated. Operational- and financial risks can often be hedged. This would incur certain costs and strategies such as manufacturing in various countries and buying and selling futures and options in different currencies.

The Complexity of Detailed Business Planning

A quick review of the brief summary of the crucial issues that need to be considered gives a glimpse of the complexity involved in business planning. If we just look at the financial issues we will see that the price will have an impact on the sales (turnover). The lower the price the more the physical volumes will normally be (except if image requires a high price). Turnover and total profits will, however, not necessary be higher. There is normally a fine balance that exist between the price, volume sales, turnover and profits.

To complicate this even further the turnover, costs and profits and there timings have a direct impact on the cashflow of the company (a very critical issue). This whole aspect is then further complicated by the investment- (capital expenditure), financing- (equity or debt?) and dividend decisions. By spending too much on a plant, having too much debt and paying out too much to shareholders will have a negative effect on the sustainable business growth of the company and this will reduce the targets that are achievable. This scenario shows only a portion of the various aspects that need to balance within the broader financial sphere.

Unfortunately the complication of the example does not stop with the finances. The finances influence many other crucial aspects of the business. On the other hand many of the other crucial aspects also have an effect on the finances as well as on each other.

The financial decisions would for instance have a direct bearing on the growth of the business (e.g. geographical expansions and new product development), marketing spending and people employment and development. All these issues would similar have an impact on the financial issues and on each other.

An Integrative Business Planning Approach

The general tendency in business planning would be to tackle each issue independently and then to just add the pieces together and re-plan if something is not making sense. Business planning often starts with some projected turnover and profit figures in mind. Everything is then worked backwards from there.

A much better option would be to have an integrative business planning approach. In order to do this the following steps are needed:

1. Determine all the salient features of the business.
2. Determine the relationships between these salient features.
3. Try and solve every feature by keeping the casualties and effects with other features in mind.
4. Use “what-if” questions to create better holistic solutions.

Summary

The idea in business planning is not to optimise the one aspect of the business and neglect or ignore some of the others. The various relationships (causes and effects) need to be catered for in an integrative way. One crucial salient feature or relationship that is ignored can put the existence of the whole business in jeopardy.

Copyright© 2008 by Wim Venter. ALL RIGHTS RESERVED.

An increasing number of women are starting small businesses.

The number of small businesses that are starting up with women at the helm is growing and 30% of business owners in the UK are women (Labour Force Survey 2003). The reasons women decide to start their own business vary, with most reporting that they want to be their own boss, choose their working hours and enjoy better work life balance.

However for many of these women the reality of running a small business does not live up to their expectations; it is difficult to fulfill their dreams for their business and they become disillusioned and overwhelmed with the ongoing struggle of running a small business alongside their other roles in life – mother, partner, friend, daughter, chef, chauffeur, socialite – the list goes on!

One area that has been identified as a significant factor limiting the success of women in business is a lack of business planning.

Many women entrepreneurs and small business owners fail to set aside the time to develop (and regularly re-visit) their business vision and strategy. As the old quote goes, ‘if you fail to plan, you plan to fail’. It is generally agreed that if you want your small business to succeed, you have a much greater chance if you have a clear vision and an action plan for bringing that vision about.

So what stops women who are starting a small business from developing an inspired and effective business plan?

After all, we know that we should have a business plan but despite the best of intentions to succeed in our business, many of us don’t! Why is this? What is it that stops us sitting down and writing a clear plan and strategy for our business, especially when we know that we are more likely to succeed if we do it?

We believe it is partly because writing a business plan is boring! Let’s face it, it feels like a chore so we don’t do it. We may get the resources together that we need, we may even get part of the way through writing it, but it is the rare few that actually complete a comprehensive business plan outlining a clear vision, strategy and action plan for their business. Often, we are chomping at the bit to get our product or service out into the world and figure we can simply skip the boring planning bit altogether right? We can certainly relate to this feeling because we struggled with business planning in the early days – we gave it a try but never seemed to get further than a few pages in!

It is our view that traditional models of business planning do not cater for women in business!

We believe that traditional models of business planning and strategizing don’t recognise that women in business have a life outside of work – that they have a partner, friends and family to think about and are not prepared to compromise on health and relationships to have a successful and profitable business. Women today want the best of both worlds; we think it is possible and that they deserve to have it!

Conventional business planning and management approaches are grounded in the belief that work and personal life should be kept separate, a task impossible for most women today. This makes it very difficult for them to create and sustain a business that acknowledges their business ambition AND empowers them to bring about great relationships and a healthy and balanced lifestyle for themselves and their loved ones.

So how can business planning be tailored to meet the needs of women in business?

Whether you are starting out in business or you are well-established, we encourage you to prioritise business planning in order to ensure a strategic approach to business growth and success.

• Set aside the time and space to make this happen in your business now.
• Acknowledge that traditional models of business planning may be a great starting point, but that they may not address your needs as a business woman who also values health, relationships and having a life outside of work.
• Think outside the square and discover ways to plan your business that relieve stress rather than increase it. Look for tools that empower you to bring all aspects of yourself to the planning process – personal and professional – because the reality is that for women in business the two are intertwined and to be successful in one you must pay attention and care for the other!
• Get creative in your approach – both to the process of business planning and also to the way you can incorporate the other aspects of your life into your successful business strategy.
• Take action to implement your strategy so that it comes to life for you.
• Commit to re-visiting with your business plan on an ongoing basis to ensure.

Business planning is vital to the success of your business, and can also encompass all the aspects of your life.

You do not have to sacrifice your health and relationships to be a successful business owner and entrepreneur. Take action now and plan for your success in business and in life.

Most people find creating a business plan one of the hardest things to do when setting up a business but it doesn’t need to be. Like everyone else it’s not one of my favourite things, so I decided to look of ways at making it easier. Having written and reviewed many plans over the years I discovered that if you have the right formula then the planning process becomes much easier.

This article is dedicated to explaining the right formula and giving the 3 key steps for easy success in writing business plans.

1. Find a template

Don’t try and do it all yourself. There are now loads of templates on line so that you at least have a starting point. It can be as basic as a word template or you may move up to a sophisticated on line tools. Whatever your preference this resource will enable you to at least start with the end in mind

2. Get an industry specific sample template

It is now easy to find sector specific templates and ones which have a sample filled in. Imagine if you have a photography business and you have a business plan template with a sample business plan of a photography business. I guess this would speed up the process of doing your business plan. It certainly has with mine. Make sure the template has the following elements

Executive Summary: Overview summary of the strategic objective of the business. Typically looking at 1-5 years and should be no more than 2 pages as it should be an overview of the rest of the document and give a clear picture of your business.

Company Description: Legal establishment, history, start-up plans, etc.

Product or Service Analysis: Describe in some detail the different services or products you have and how these will specifically benefit the end user – the customer.

Market Analysis: This should include market stats, segmentation of market based on your products/services, who are your target customers and how are you going to market to them.

Strategy: Make sure it’s Specific.Measurable.Achievable.Realistic.Timed/trackable. What is the strategy and how are you going to achieve it, using what methods.

E- Strategy: These days whether you are an eBusiness or not then I would suggest you need to have some king of strategy. Even it is a s basic as just discussing your website, development costs, content and target audience

Management Team: Who are your key management team members and exactly what are their responsibilities. How will they be measured.

Financials: Probably self explanatory but you need to cover projected budgets and sales, cash flow, profit and loss and balance sheets. Again there are really low cost and in some cases free software which can help you set all this up. Even better they will also track the information and help you build manage your invoicing procedure

Now hopefully you know more about your business than anyone else so filling in these sections shouldn’t prove difficult. Make them information simple, clear and action based. However never be afraid to delegate, it doesn’t have to cost much, find someone who is a better writer than you, give them the template and the information and let them loose. (of course make sure it is someone you implicitly trust )

3. Review – the idiot test

Once you have completed the document get it reviewed by someone who doesn’t understand the business, if they can understand it then you have written a clear, concise business plan that will work.