‘How to Develop a Business Plan’
Most successful organisations have a clear vision or sense of purpose. They also have well defined objectives to aim for and a way of measuring their performance. These are the vital ingredients of a Business Plan. Some of the benefits of business planning are that it: • Forces people in the organisation to stand back, and review business performance and the factors that are affecting the business • Encourages people to consider strategic options and make informed decisions • Improves communication and builds commitment by involving people throughout the organisation • Can be captured in a single document and communicated to everyone involved.
Business Planning is a process
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It indicates the values and beliefs of the organisation and it lays down guidelines for the way in which the organisation carries out its business. To create a mission statement, consider the following questions: • What business do you want to be in? When Parker Pens tried to define their business, they thought their customers were buying pens to write with, and that their competitors were selling other types of pens such as cheaper biros. Market research showed that most fountain pens are bought as gifts. Their competitors were not makers of other pens but manufacturers of other gifts, for instance, leather wallets. • What is your distinctive competence or source of competitive advantage? The Warrington Guardian, for example, competes against national newspapers in the region, but its distinctive competence is in reporting issues that affect the residents in Warrington. • What are your values or beliefs? It’s obviously important to understand where your organisation will compete, but it’s equally important to consider how you and your staff are expected to behave. For example, the Body Shop was founded on the principle of producing cosmetics that do not harm the environment or animals. To be useful, mission statements need to provide enough detail to guide the preparation of the Business Plan. Finally they need to be an accurate reflection of your organisation - statements that your staff and customers