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PlanWare: How to ... |
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Write a Business Plan |
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A short strategic plan (2-3 pages) can provide a very useful foundation on which to base a more detailed and comprehensive business plan. If you don't have a sensible strategic plan, how can you realistically write a sensible business plan? Write a short strategic plan and use it as the foundation for your business plan. As the prelude to developing a strategic plan, you must clearly identify the current status, objectives and strategies of your existing business or the latest thinking in respect of your new venture. Correctly defined, these can be used as the basis for a critical examination to probe existing or perceived strengths, weaknesses, threats and opportunities. This then leads to strategy development covering the following issues which are discussed in more detail immediately below:
VisionThe first step is to develop a realistic Vision for the business. This should be presented as a pen picture of the business in three or more years time in terms of its likely physical appearance, size, activities etc. Answer the question: "If someone from Mars visited the business, what would they see or sense?" Your vision could start with "By 20xx, XXX Inc. will be ......". MissionThe nature of a business is often expressed in terms of its Mission which indicates the purposes of the business, for example, "to design, develop, manufacture and market specific product lines for sale on the basis of certain features to meet the identified needs of specified customer groups via certain distribution channels in particular geographic areas". A statement along these lines indicates what the business is about and is infinitely clearer than saying, for instance, "we're in electronics" or worse still, "we are in business to make money" (assuming that the business is not a mint !). Also, some people confuse mission statements with value statements (see below) - the former should be very hard-nosed while the latter can deal with 'softer' issues surrounding the business. ObjectivesThe third key element is to explicitly state the business's Objectives in terms of the results it needs/wants to achieve in the medium/long term. Aside from presumably indicating a necessity to achieve regular profits (expressed as return on shareholders' funds), objectives should relate to the expectations and requirements of all the major stakeholders, including employees, and should reflect the underlying reasons for running the business. ValuesThe next element is to address the Values governing the operation of the business and its conduct or relationships with society, customers, employees etc. StrategiesNext are the Strategies - the rules and guidelines by which the mission, objectives etc. may be achieved. They can cover the business as a whole including such matters as diversification, organic growth, or acquisition plans, or they can relate to primary matters in key functional areas, for example:
GoalsNext are Goals. These are specific interim or ultimate time-based measurements to be achieved by implementing strategies in pursuit of the company's objectives. For example, to achieve sales of $3m in three years time, to launch four new products by 20xx or to secure xx% share of a specified market. ProgramsThe final elements are the Programs which set out the implementation plans for the key strategies. It goes without saying that the mission, objectives, values, strategies and goals must be inter-linked and consistent with each other. This is much easier said than done because many businesses which are set up with the clear objective of making their owners wealthy often lack strategies, realistic goals or concise missions.
More HelpFor more information on strategic planning, refer to Developing a Business Strategy (and its accompanying worksheet) and Devising Venture Strategies, and consider utilizing the free On-line Strategic Planner. See also a sample strategic plan - you may wish to print it for reference purposes.
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