BUSINESS PLANNING

BUSINESS PLANNING

Those who

“fail to plan”, “plan to fail”

Frankie Lim S1_Businesss Planning _ Essentials & Concepts 1

Business Planning

• Producing a Business Plan is the single most

important aspect of an organization’s

activities

• The Plan demonstrates careful consideration

of all activities: way forward, threats,

opportunities have been analysed

• A formal document is essential if finance,

equity or grants are to be secured

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Structure of planning

• Mission statement

• Vision statement

• Clarify organizational objectives

• Forecasts

• SWOT analysis

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Business Planning

• Mission Statement

What do we do?

Who are we and who do we do it for?

Where do we do what we do?

Why do we do it?

How do we do it?

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• What are our goods / service?

• What do our customers buy?

What do we do?

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Who are we?

Who do we do it for?

• We should be clear about who are we,

what are our values, our beliefs

• Whom do we serve?

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Where do we do?

What we do?

• This might refer to geography but it

might also refer to segments

• We must be clear about the areas we

wish to satisfy

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• Money?

• Benefit to others?

• To make a living?

• Thrill?

• Status?

• Self-actualisation?

Why do we do it?

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• Processes

• Quality

• Differentiation

• Matching stakeholders’ values with

“quality”

• Are our values the same as our

customers’?

How do we do it?

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Organizational Objectives

• Specific

• Measurable

• Agreed

• Realistic

• Time-bound

• Evaluate

• Review

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Setting Objectives

• Profitability / Surplus

• Market share and standing

• Productivity

• Personnel performance

• Innovation

• Social and public responsibility

• Resource utilisation

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Forecasts

• Make assumptions regarding business

conditions and trends

• State them clearly

• Are they realistic?

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SWOT Analysis

• Strengths • Weaknesses Product

Price

Place

Promotion

People

Process

Physical

Evidence

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SWOT Analysis

• Opportunities • Threats

Political

Economic

Socio-cultural

Technological

Legal

Ecological

Demographic

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Strengths Weaknesses

Opportunities SO WO

Threats ST WT

Strategic Options

Structure of Planning

• Competitive advantage

• Re-define objectives

• Strategic options

• Evaluate Strategic options

• Select Strategy

• Action plans

• Control and evaluation

• Iterate

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Internal Appraisal

• Product mix

• Markets

• Research and Development

• Finance

• Personnel

• Management

• Structure

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Product mix

• Product life cycle

• Portfolio of products

• Synergy

• Innovation

• Differentiation

• Patents

• Barriers to entry

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Markets

• Size and shape

• Trends

• Evidence of growth rates (or decline!)

• Market share – present and expected

• Marketing strategies (Ansoff?)

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Market

Penetration

Product

Development

Market

Development Diversification

M

A

R

K

E

T

S

Existing

New

P R O D U C T S

Existing New

Marketing strategies – Ansoff Matrix

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20

Research and Development

• What are R& D Policies?

• How much finance attributed to R & D?

• Does this fit with marketing strategies?

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Finance

• What are our current financial resources?

• Are we currently profitable?

• How will any further investment/expense affect our balance sheet structure?

• Will we need external assistance?

• If so, which type will be best?

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Personnel

• Training needs analysis to ascertain

present level of skills

• What knowledge do our people have?

(Knowledge is different from skill!)

• What values do they have?

• Do they have the right attitude?

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Management

• Skill / Knowledge, behaviour, values and attitudes

• Leadership qualities

• Resource allocation

• Entrepreneurial Vision

• Disturbance handling

• Liaising

• Controlling

• Negotiating

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Structure

• Pyramid: appropriate for slow-to-

change industries

• Flat: appropriate for fast-moving firms

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Evaluation and Control

• Establish performance targets

• Compare results with targets

• Analyse deviations

• Implement modifications

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Why Planning can Fail

• Lack of commitment

• Resistance to change

• Absence of clear objectives

• Failure to appreciate scope of plans

• Over-reliance on past experience

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Why Planning can Fail

• Poor and inflexible control techniques

• Hostile external environment

• Lack of clear delegation

• BUT GOOD PLANNING WORKS!

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Any Questions ???

Reflections

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