elements of a business plan

elements of a business plan

Importance of a Well-Structured Business Plan

1. Executive Summary

The first key point is better business planning; the writer mentions in the subtitle that business planning occupies the thoughts of strategists. This is true and very important to ensure the strategists are aware of what they are doing. The intention can vary, but the writer can say that mostly all kinds of intentions are to enhance the effectiveness of how the company is functioning, especially in making the company successful. Business planning is an art of thinking about the steps that we are going to take for our business. This is resembling the chess game where in every move, a player has a different intention and objective to ensure their position is getting stronger to checkmate their opponent. An analogy can be made that the chess game is the company’s move and the opponent is the market competition.

Based on the reading, it can be stated in summary that this article is covering the importance of well-structured business planning and why it is needed for effective implementation of a strategic business plan. The purpose is to ensure the reader of this article can make a judgment that business planning is a time-consuming event and it should be done with awareness of how important the business planning is and what the implications are when a company has better business planning compared to no business planning at all. This article has 3 key points and is followed by its explanation.

2. Company Description

Business description section should include information about the nature of your business and the present business condition of your business. It should tell the user about the product and services your business is planning to provide. While writing business description you should explain about your business in detail. Clearly define what type of business you are running or planning to run. What is the status of your business? For example, if you are a new business starting, growing, or preparing to merge. What are your plans and vision for the future of your business? After that, you should write about the nature of services you are providing. What kind of industry is your business involved in? What are the needs of the customers? How are you planning to fulfill these needs with your products and services? Try to provide a clear picture about your business to the reader.

3. Market Analysis

To perform a market examination on the Malaysian power devices industry, we will fundamentally dismember a practical business part which will be the battery-fueled gadgets business segment (specifically 18v class). This is in light of the fact that such as superior to average starting late factors in the development of the battery these days, it is an intriguing business part for a power devices affiliation and it is one of the later business portions in the power devices industry. This proposed business fragment has a not all that awful level of benefit. This is correct exhibited by an examination done by Proton. Proton was intending to get tied up with a near business part in the automotive business and did an adequacy examination on the vehicle battery market.

The economic variable is a fundamental part within a market examination of a specific business divide. This is considering the way that it is significant for a relationship to just participate in business sections which offer unfathomable likely for advantage. The best methodology to push toward this is to look at the GDP (real aggregate), rate of advancement, compensation course of action and cost adaptability of the potential clients. This is such an alluring quality pointer of a market since it will affect a business’ level of advantage. We start by looking at the power devices industry in Malaysia with an overall perspective on the business segment.

This is the main element of marketplace technique. The market analysis is to help affiliation to light up the present condition of the business focus and what’s to come. This will assist relationship with deciding the consistency of the business areas. There are 5 essential concentrations to look at do decide a business fragment attractiveness and there are: economic, market size, business part advancement, future prospects, and command parts. This in perspective of the crucial focus rivals. Subordinate upon the state of the business divide, an affiliation can settle on how assets are to be accustomed to every business part. This will in switch engage relationship to develop an upper hand and reinforce the odds of benefit earning. This is a general market examination of the force device industry in Malaysia.

4. Marketing and Sales Strategy

This section should describe the marketing and sales strategies your business will use to bring the product to market, and how it will be priced, distributed, and sold. You should describe the promotion tactics you will use to interest customers in your product or service and how you will implement these into sales. The aim is to increase sales by effectively reaching the target market and convincing them to purchase your product. This will need to be an ongoing strategy to keep up with the changing market and the competition. Pricing is also an important aspect of the marketing and sales as this is a key factor in the customer’s decision to purchase a product. You will need to research and consider consumer demand when setting the price, taking into account the features and benefits that your product has over the competition. Setting the right price can be the difference between success and failure in the sales of a product. A lower price may initially provide increased sales but could mean lower profitability; this can be counteracted with reducing the cost of production. Simulation pricing is also used at times to assess the optimum price in a changing market. A skimming strategy can be used if your product is expected to have high demand, with a high price set initially and decreasing over time, or a penetration strategy can be used – the opposite of skimming.

5. Financial Projections and Funding

The following example is a more advanced system that could be used to estimate resource cost but is quite a radical idea and not recommended for all small projects. The method involves creating a virtual market for project resources. Each different type of resource has a cost and an availability. The price that you would expect to pay to hire this resource is the cost multiplied by the availability. The type of resource can be equated to a skill level. Although this is highly theoretical, it is an interesting tried on global QoS resource allocation and is an improved way of the cost sticking human resources, which is often an inflated expense in the IT industry.

Many funding sources may want to see plans for cost allocation and time between their investment in your company. Slightly different from project cost analysis, it focuses on when money will be spent on an alternate funding source. In theory, if an investor can see a clearly defined plan showing the money, a good idea is to use the estimated project’s time-based cost siege and apply the funds to give a correlated picture of the investor’s will provide a confidence and an ideal situation is that sufficient funding exists for each stage of the project, meaning the investor can clearly see value for what he is investing and won’t be asked for more funds than originally agreed.

No matter how zealously you plan, no opinion is made on business details without talking money. All activities have a monetary consequence. If your customer benefit goal is met, it has to be translated into daily activities with estimated expenses. Any deviation from bad estimates can have drastic consequences. Unfortunately, there is no method of elaborate cost accounting. The first approach is to break the activity into well-defined work packages. Then you estimate the time this will take in days, weeks, or, more favorably, the days. Then take into account your daily costs. The costs are the easy bit, but allocating them to the project is more difficult, and a regular more of timesheet that cost entry is required to get that right. The costs are often placed in a structured view and can be correlated against project progress by charting cost overruns at the work package level. Both showing where you’ve gone wrong and areas where things have gone to plan and the task was easier than first thought. A time-based system can also be used to estimate when money will be spent and its alternative use, and a good online Gantt chart tool is ideal to make these visual. This helps determine cash flow for the project and can make it clear if adequate funding exists for the activity. With simple planning, you can compare actual costs and time with expected values and learn from mistakes in future projects.