BUSINESS PLANNING
BUSINESS PLANNING Those who “fail to plan”, “plan to fail” Frankie Lim S1_Businesss Planning _ Essentials & Concepts 1 Business Planning • Producing a Business Plan is the single most important aspect of an organization ’s activities • The Plan demonstrates careful consideration of all activities: way forward, threats, opportunities have been analysed • A formal document is essential if finance, equity or grants are to be secured Frankie Lim S1_Businesss Planning _ Essentials & Concepts 2 Structure of planning • Mission statement • Vision statement • Clarify organizational objectives • Forecasts • SWOT analysis Frankie Lim S1_Businesss Planning _ Essentials & Concepts 3 Business Planning • Mission Statement What do we do? Who are we and who do we do it for? Where do we do what we do? Why do we do it? How do we do it? Frankie Lim S1_Businesss Planning _ Essentials & Concepts 4 • What are our goods / service? • What do our customers buy? What do we do? Frankie Lim S1_Businesss Planning _ Essentials & Concepts 5 Who are we? Who do we do it for? • We should be clear about who are we, what are our values, our beliefs • Whom do we serve? Frankie Lim S1_Businesss Planning _ Essentials & Concepts 6 Where do we do? What we do? • This might refer to geography but it might also refer to segments • We must be clear about the areas we wish to satisfy Frankie Lim S1_Businesss Planning _ Essentials & Concepts 7 • Money? • Benefit to others? • To make a living? • Thrill? • Status? • Self - actualisation? Why do we do it? Frankie Lim S1_Businesss Planning _ Essentials & Concepts 8 • Processes • Quality • Differentiation • Matching stakeholders ’ values with “ quality ” • Are our values the same as our customers ’? How do we do it? Frankie Lim S1_Businesss Planning _ Essentials & Concepts 9 Organizational Objectives • Specific • Measurable • Agreed • Realistic • Time - bound • Evaluate • Review Frankie Lim S1_Businesss Planning _ Essentials & Concepts 10 Setting Objectives • Profitability / Surplus • Market share and standing • Productivity • Personnel performance • Innovation • Social and public responsibility • Resource utilisation Frankie Lim S1_Businesss Planning _ Essentials & Concepts 11 Forecasts • Make assumptions regarding business conditions and trends • State them clearly • Are they realistic? Frankie Lim S1_Businesss Planning _ Essentials & Concepts 12 SWOT Analysis • Strengths • Weaknesses Product Price Place Promotion People Process Physical Evidence Frankie Lim S1_Businesss Planning _ Essentials & Concepts 13 SWOT Analysis • Opportunities • Threats Political Economic Socio -cultural Technological Legal Ecological Demographic Frankie Lim S1_Businesss Planning _ Essentials & Concepts 14 Frankie Lim S1_Businesss Planning _ Essentials & Concepts 15 Strengths Weaknesses Opportunities SO WO Threats ST WT Strategic Options Structure of Planning • Competitive advantage • Re -define objectives • Strategic options • Evaluate Strategic options • Select Strategy • Action plans • Control and evaluation • Iterate Frankie Lim S1_Businesss Planning _ Essentials & Concepts 16 Internal Appraisal • Product mix • Markets • Research and Development • Finance • Personnel • Management • Structure Frankie Lim S1_Businesss Planning _ Essentials & Concepts 17 Product mix • Product life cycle • Portfolio of products • Synergy • Innovation • Differentiation • Patents • Barriers to entry Frankie Lim S1_Businesss Planning _ Essentials & Concepts 18 Markets • Size and shape • Trends • Evidence of growth rates (or decline!) • Market share – present and expected • Marketing strategies ( Ansoff ?) Frankie Lim S1_Businesss Planning _ Essentials & Concepts 19 Market Penetration Product Development Market Development Diversification M A R K E T S Existing New P R O D U C T S Existing New Marketing strategies – Ansoff Matrix Frankie Lim S1_Businesss Planning _ Essentials & Concepts 20 Research and Development • What are R& D Policies? • How much finance attributed to R & D? • Does this fit with marketing strategies? Frankie Lim S1_Businesss Planning _ Essentials & Concepts 21 Finance • What are our current financial resources? • Are we currently profitable? • How will any further investment/expense affect our balance sheet structure? • Will we need external assistance? • If so, which type will be best? Frankie Lim S1_Businesss Planning _ Essentials & Concepts 22 Personnel • Training needs analysis to ascertain present level of skills • What knowledge do our people have? (Knowledge is different from skill!) • What values do they have? • Do they have the right attitude? Frankie Lim S1_Businesss Planning _ Essentials & Concepts 23 Management • Skill / Knowledge, behaviour, values and attitudes • Leadership qualities • Resource allocation • Entrepreneurial Vision • Disturbance handling • Liaising • Controlling • Negotiating Frankie Lim S1_Businesss Planning _ Essentials & Concepts 24 Structure • Pyramid: appropriate for slow - to - change industries • Flat: appropriate for fast - moving firms Frankie Lim S1_Businesss Planning _ Essentials & Concepts 25 Evaluation and Control • Establish performance targets • Compare results with targets • Analyse deviations • Implement modifications Frankie Lim S1_Businesss Planning _ Essentials & Concepts 26 Why Planning can Fail • Lack of commitment • Resistance to change • Absence of clear objectives • Failure to appreciate scope of plans • Over - reliance on past experience Frankie Lim S1_Businesss Planning _ Essentials & Concepts 27 Why Planning can Fail • Poor and inflexible control techniques • Hostile external environment • Lack of clear delegation • BUT GOOD PLANNING WORKS! Frankie Lim S1_Businesss Planning _ Essentials & Concepts 28 Any Questions ??? Reflections Frankie Lim S1_Businesss Planning _ Essentials & Concepts 29
