A Statement Of Cash Flows What Are Operating Activities Eight Steps To The Next Level – The Business Plan, "The Engine of Small Business Development"

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Eight Steps To The Next Level – The Business Plan, "The Engine of Small Business Development"

This is the second article in a series of articles describing how small business owners and managers can grow and profitably grow their businesses by creating and implementing a business plan.

I know the prevailing view among many small business people is that “planning” is for larger, more important businesses and that “they are too busy running their business to have time for planning”. Indeed, many small business owners are “too busy” to run the business, but at their own peril and neglect to live, “failure to plan is failure.”

I am confident that a small business owner will benefit from participating in this business planning process because of the nature of carefully examining and considering the way their business competes and operates; – and how it fits with their determination of “what profession they want to be in”.

This business planning process results in a stronger, more profitable business that delivers real value to its customers and markets.

The business planning process described in this article is the most logical, practical and practical test of a small business. This process is far from abstract or mystical, but focuses entirely on the small business environment (business, economy, competition, customer needs, wants and desires) as well as the determination and allocation of the firm’s resources.

The Business Planning Process – Eight Key Steps

For the past thirty years, I have successfully used the following business and strategic marketing planning process. The following process consists of eight major steps which are sequential and continuous. I will describe the nature and function of each of these steps.

This process applies to all types of organizations; Regardless of size, products, services, or industry…. I’ve even used this process with a national religious organization.

1. Develop a mission and positioning statement

2. Situation Audit

under a

b External

3. WhatsApp analysis

4. Making assumptions

5. Developing objectives

6. Strategy Development

7. Specify tactics and actions

8. Make estimates/budgets/financial preparations

1. Mission and Positioning Statement

In terms of defining your business purpose and mission, there is only one focus, one starting point; He is the customer or user of your products/services. A user defines any function or business goal. “What is our mission or objective” “What business do we want to be in?” This question can only be answered by looking at your business from a customer or potential customer’s point of view. What a user or customer sees, thinks or believes at any given time should be accepted as objective fact by your business management.

By definition, a consumer buys to satisfy a need or want.

For example, here is a well-known and real example of a business mission that defines the way in which the company operates.

Drill bit manufacturers set their mission to determine “what size holes the customer needs” by focusing directly on the customer’s needs and not on their product specifications. It was customer-centric and very successful.

Once the mission statement is complete, develop a positioning statement for competitive advantage and create a USP – your unique selling proposition. “Why a business is able to deliver more effective solutions and more value than competitors.”

2. Situation Audit- Internal and External

A situational audit is the description and analysis of past, present and future data (information) that provides a basis for pursuing the business planning process. Here is an organized method:

  • Collecting relevant information
  • Explain its impact on the business environment (market conditions).
  • Analysis of significant trends
  • Projecting all relevant factors influencing the company’s activities.

3. WhatsApp analysis

WOTSUP is an acronym for Weaknesses, Opportunities, Threats and Strengths Based Planning. This step flows naturally from the fact base (situational audit). Weaknesses and strengths form an internal analysis, i.e. “What are you good and bad at?”-

On the other hand, opportunities and threats form the external analysis. From this analysis, objectives can be formulated along with specific action plans designed to overcome weaknesses and threats by leveraging business strengths and opportunities.

4. Making Assumptions:

Assumptions make planning possible. Without the use of assumptions, planning would be almost impossible. Since planning is concerned with the “future of present decision-making” and future events, it is almost impossible to predict with precision; – Assumptions make planning possible.

5. Developing objectives

Overall objectives are the true essence of the business and marketing planning process. They deserve every last ounce of time and effort – often frustrating. Objectives form an umbrella under which the overall planning structure is balanced. Because of the central role they play, they should be considered and expressed in the most specific and concrete manner. A goal in simple terms is… “What do you want to achieve?” Objectives are formulated to overcome the weaknesses and threats and exploit the opportunities and strengths developed in the WOTSUP analysis.

6. Strategy Development:

Once the objectives are developed, the next step in the process is to create a strategy. The strategy should explain in broad terms how the objectives will be achieved.

7. Specify the program of action:

After developing goals and strategies, describe the work to be done. Actions must be very specific; What work, by whom, how and when.

8. Estimates/Budgets/Financial Preparation:

Action programs on completion form the basis for budgeting. The cost of each activity and the revenue from the detailed activities create the operating budget and cash flow for the business plan.

Many organizations confuse planning with budgeting. An important purpose of budgeting is to ensure that a business has sufficient financial resources to operate. Budgeting is about not failing, planning for what is possible.

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