building a business plan

building a business plan

Building a Successful Business Plan

1. Introduction

Business and its practices are continually evolving, and so is the implementation of a business plan. It is an ongoing process with no definite start or finish. Chances are the focus of the business will change over time, and as a result, the business plan will change. But the process of design and implementation is always more successful when a well-understood structure is applied. This book introduces a guide to the way in which a business plan is built, step by step. It is complemented by the work of the workshops, in which you develop and implement your own business plan. At the very heart of the book and the workshop is the goal that you will follow a standard process to make your business focused and effectively improve your business rate of success. We want you to look at the business plan as a series of projects. Every time a significant change is made, the plan becomes the means of communication for those projects. Building a good business plan is a learning process. The plan is your guide and tool, and the process must be taught, learned, and executed. This is a teaching guide for new or young businesses.

This book is designed to introduce you to a systematic way to understand, design, and implement a successful business plan. The substance of this book is about the process that is to be followed in order to design and build a business plan. It is not about the planning and is not intended to teach a comprehensive understanding of all the business’s operational functions. This is a significant point and purpose of difference from business planning books that are available elsewhere. This book, although quite generic, is designed to be particularly relevant to small consulting or service-oriented businesses. It is a structured way to think about business planning that is particularly relevant in an early stage enterprise.

2. Market Analysis

Figure 2 presents a market analysis matrix that represents the most critical areas that will affect the success of your well-being/fitness business. Fill in each box accurately to give an overview of your market. You will have more than one competitor, and some market segments may not be worth targeting. This is designed to be quick, simple, and practical. Now the idea is to work out where the main competitive threat is. Usually, the firm that chooses to compete in the same segment and has similar resources will be a direct competitor. Any segment without a product offering from a competitor is still a competitor and potential entry from a strategic alliance. Customers may just choose to switch to save time and effort to purchase a similar product. The aim is to compete in a segment offering high growth and return on investment. Usually, a segment that is unattractive will be one with low barriers to entry, low bargaining power of buyers/suppliers, threats of substitute products, and rivalry amongst competitors. Step four links to segmenting your market with a different approach with the same theory.

3. Business Strategy

Target Market The business strategy will also discuss the industry that we will be involved in. The business will be in the retail industry, specifically a shoe retail business. The main focus in the business industry that we are targeting is to make sure the business will last longer. The reason we choose the shoe retail business is because we see that the current trend in the market is developing from time to time. We also looked at the fact that the business has quite a good opportunity to operate in the long term. This is because shoes nowadays are not only considered as a need, but most people see shoes as part of their fashion. This is a great opportunity for our business as it is still new in the market. This will also mean that the business must be done slowly from time to time and it is suitable with our business tagline: “Step by step towards success”. The people now are very concerned about the types of shoes they want to use depending on where they want to use them. For example, formal shoes for working, casual shoes for hanging out, and sports shoes for certain activities. This has become our great opportunity to provide various types of shoes with different categories. We want to ensure every demographic can get their desired shoes in our store. With the current trend, there are also some shoes with limited edition or hard to find in the market. We will also provide that kind of shoes and also we will launch some of the limited edition shoes to attract more customers. This will also build a good relationship between us and the customers and will make them keep coming back to our store. Then for the long term, we will put some extra budget to open a new business in used shoes as a platform to let customers sell back their used shoes. This is an alternative way to make sure our business can operate until the end.

4. Financial Planning

At the outset of creating a new venture or revisiting the business plan for an existing business, the owner must become involved in financial planning for two reasons. First, in the absence of a plan, there may not be enough money to move the business to the next stage, or the plan will damage the company’s financial health. For example, the plan might be to grow the business to a level that generates a positive cash flow, sustains the owners, and is able to pay back the debt that will be taken on. If that is the end goal, sufficient resources have to be available to execute the plan with some reasonable probability of success. Next, assuming either a start-up or an established small business, lenders and investors will require a plan as a part of the loan application regardless of whether the entrepreneur’s plans to borrow money to cover the development of the business or not. Money is a tangible input, and lenders/investors want to know how and why a borrower will be able to repay them. The second reason to get involved in financial planning is, it is the best way to judge the performance of a manager. Specific goals and objectives can be judged against the plan and progress can be measured and corrective steps can be taken if there are deviations from the plan. This is a perfect segue into the significance of financial statements.

5. Implementation and Execution

Implementation is the process that turns strategies and plans into actions in order to accomplish strategic objectives and goals. Ideally, the overall objective of an implementation process is to fulfill the goals and strategies outlined in a business plan. An effective implementation process generates a clear indication that the plan is in motion and the goals are being achieved. This is the stage where your plan is being executed. High involvement by the top-level management in this stage is a prerequisite for the successful implementation of the plan. High involvement assumes great knowledge of the field in which the plan is being executed and the ability to facilitate or change the plan if necessary. In the case of a new plan, a lower level manager may have the skills to carry out the plan. If a manager has the proper skills, the plan will likely be executed effectively. If he/she does not, the manager will need to assess what skills need to be developed in order to increase the chance of plan success. An effective manager assessment can facilitate an evaluation of manager impact on the plan and can make the manager responsible for the success and the failure of the plan. This is a step of great importance for high level managers, which can utilize various assessment tools to evaluate their leaders. Due to the extensive time and money expended in the creation of a business plan, the final step in the implementation phase will involve a review of the plan and measurements of the success of the implementation against the goals and objectives outlined in the business plan. Oftentimes, there will be a change of plans or objectives in a review, as the assessment of the original plan has unanticipated results and often will point to something entirely different. At any rate, the measure of success in this phase is the transition to the objective of the plan and the achievement of the outlined goals. This phase is comparative to an exploratory movement to find the end of a tunnel; for if you stick the walls with a series of holes and you find the objective with one of them, your plan will have succeeded.