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Business Planning

A Business Plan is like a road map for a long trip, it’s what you would like to happen. The Plan like the map keeps you both focused on what comes next and lets you know when a change of plans is required if we are to reach our goals. The future is almost never what we hoped it would be; but with a Business Plan we are better prepared to react to the surprises.

 A Business Plan is primarily focused inward. It seeks to maximize what the business is in its current context, its present capacity and market.  The main emphasis of the Business Planning process is to identify ways for the business to increase its market share or improve its efficiency. The only important outside considerations are a through understanding of the businesses’ markets and how other such businesses are structured and perform.

 The Business Planning Process

  1. The entrepreneur has a vision of what she/he wants the business to be. The starting point for a Business Plan must be that vision the businesses “Goals” (Goals must be numerical, such as increase market share 2% each of the next three years).
  2. Inventory of the businesses resources.
  3. Conduct sufficient market and industry research to evaluate the current operations and market’s potential.
  4. Analyze the last three years financial performance.
  5. Identify opportunities and problems; and develop “Strategies” (such as increase sales using additional channels) to take advantage of the one while mitigating the other.
  6. Identify “Tactics” (such as direct mail) that support the “Strategies”.
  7. Based on historic financial data develop a financial model to estimate future years performance for various scenarios over a range of market conditions.
  8. Adopt the most promising Strategies and Tactics as the Plan.
  9.  Develop a set of “Action Plans” to implement the adopted “Tactics”. Each “Action Plan” includes: what needs to be done; who will do what; when each part needs to be completed; and in general how the job is to be completed.

 The Document

The Plan analyzes three years of historic financial data and key financial ratios; with a comparison to industry norms and top performers. It defines and analyses the market served; and the competitive structure of the market. The Plan delineates the issues and opportunities the business faces; and the Goals, Strategies, Tactics, and Action Plans adopted to improve market share and efficiency. Finally it estimates three years financial performance for that scenario over a range of market conditions.

 

 
 

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Rutland, VT  05701
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mjbalch@mjbalch.com

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