Business plan is a vital document for any type of enterprise. It serves two purposes: one as an internal guidepost and the other as an external statement of purpose. You can easily prepare a business plan if you follow the seven steps listed below:
1. Look Out: The first step in preparing your business plan is to just look out at the environment. You see what is happening in political, economic and social spheres. You find out what your competitors are doing; anyone is closing shop and any new entry into your field. You watch how products similar to yours are performing in the market. All these can be summarised in two words: Opportunities & Threats. Management analysts place a major emphasis on understanding and evaluating opportunities and threats facing a business. Once you get a hang on this subject you can move on to the next step
2. Look In: This step is all about self-examination; the reverse of what you have been doing in the first one. Here you are assessing how you can respond to the status of affairs prevailing in the external environment. How are you positioned; what do you have; what you should get rid of; how do you optimize pluses and minuses. This stream of activities can be summarised in two words: Strengths & Weaknesses. These two are pitted against the opportunities and threats explained earlier. Once you identify and evaluate your strengths and weaknesses you can find a via-media to maximize your strengths and minimize your weaknesses
3. Set Objectives & Goals: You have already learnt much about external and internal aspects. Now it is time to find out what kind of tools you have to make external opportunities work in your favour while at the same time ensuring that you are not unduly threatened by external forces. Moreover, the tool must ensure that you can maximise strengths and minimize weaknesses. This tool is known as ”optimization of business”. In optimization you begin to set objectives and goals. Objectives are set in broader qualitative terms, for example: business must achieve higher market share. Goals on the other hand zoom in the objective into a specific quantitative measurement. For Example: business, must achieve 25% market share. Objectives and goals vary from business to business. Broadly these cover : Quantum of sale; market share, product quality, product differentiation , customer service, diversification, best practises in managing resources within business including human resource, physical assets and financial assets
4. Craft Strategies and Tactics: Once you have set objectives and goals for your business, you must proceed to formulate strategies and tactics. Strategy is a broad area of approaching the objectives whereas tactics are narrowed down field for you to achieve the goals. As an illustration look at your objective of achieving higher market share; here you prefer to use a strategy of advertisement & promotion. Conversely, your goal of achieving 25% market share is best attempted via a campaign tactic focussing on aggressive marketing. By the time you are in the middle of the campaign surely your competitors follow suit. Hence, the usefulness of this measure is just tactical for the moment
5. Put it in Writing: As you get thorough knowledge and understanding you can put your thoughts in writing a business plan for you. This plan highlights all the aspects covered so far and includes all key facts. Additionally, you include mission and vision, monitoring and evaluation of the business plan, sub-plans for critical sectors such as marketing, operations, human resource, information systems etc..
6. Dress it with Figures: The most difficult step in the process of making a business plan is to reduce everything into figures. You are comfortable with facts, bur when it comes to figures you shiver. Not to worry, you can do as much by trying it alone, or following a standard business template or in extreme cases you can hire an accountant to cast figures for you. Remember figures are necessary as they stand as bench mark for you to do monitoring and evaluation later
7. Time it well: The final step is about time; everyone knows time is in essence; time gives you relief. We call this cosmics. There is time for everything. You have to push your button for business plan on the first day of January, barring any holidays. During January, you get a sense of new beginning and time to sit and think about your business plan. Cosmics of time in making business plan is like Christmas; it comes once a year.
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