Analysis of Business Planning - Research Paper Example

 Analysis of Business Planning Introduction Planning is an essential component in the operations of the current corporate world. Numerous categories of planning exist including business plans. The concept of business planning entails the preparation of definite aspects about the business organization. These aspects ensure that several issues, for example, logistical challenges do not arise during the operations of the respective organizations. It is significant because it allows corporations to maximize their profit levels during operations. Planning is also significant because it facilitates desirable order in the existing organizations. Business plans have both weak and strong components that are unique to respective plans and businesses. Description of Business Plans Trend Setters Hair Studio Business Plan The plan focuses on a beauty and hair salon called Trend Setters Hair Studio. It begins by presenting an executive summary of the salon business. The mission and motto of salon is equally mentioned (B Plan, 2012). After the introduction, the plan provides essential keys to the successes of the salon business. A summary of the company that includes a summary of how the company began operations is present in the summary. The business plan on Trend Setters Hair Studio later reveals the products and services within the business. These include hair (weaves, and relaxers), nails (manicured and sculptures) and skin care (waxing and massages). The plan also offers a summary of the strategy and implementation of diverse strategies of the company. This aspect of the plan mentions the approaches that management should take to address the problems that may arise from competitors. The management of the salon equally presents figures of their projected sales in the next three years (Becherer & Helms, 2009). The business plan presents milestones of the salon business that includes details of salon activities. The milestones are presented according to the time that they will start. They also include the managers who will be accountable of respective plans throughout the time of operation of the salon. There is a summary of the overview of the administration of the salon after the presentation of concepts in the plan. Significant aspects of funding the business salon are provided in this business plan. For example, necessary finances in the running of the salon business are mentioned. The projected cash flow in the salon business is equally presented in the plan. Finally, the plan has an appendix that explains most of the figures in the business plan (Bangs, 2002). Brian's Book Barn Business Plan This plan focuses on a book barn business that dates from May 1998. The plan begins by describing the business in a clear manner. It states that the business is a store that deals with books and magazines (Canada / British Columbia Business Services Society, ND). It is located in Ladbrokes and aims to promote the culture of reading to members of this community. The plan also suggests that the community where such an organization is situated lacks such a business. This means that the business is likely to flourish because of minimal competition. The plan reveals the ownership and management of the book business. The owners are a couple, Brian Paige and Novella Reid. According to the plan, Brian has relevant experience because he previously worked with book selling organizations. His wife has a certificate in retail management with 30 years experience (Canada / British Columbia Business Services Society, ND). The initiatives and objectives of the business are also evident in the plan. Objectives of the business include being the chief source of books and magazines in Ladbrokes. Another goal of the business is to uphold the chief position by the time it operates for three years (Pinson, 2008). The plan then explains significant of the business after its introduction. It identifies marketing opportunities and strategies. A summary of financial projections and general risks that the book business is likely to encounter is present. The plan offers an overview of the business including all the products and services it will provide to the community. Finally, the plan provides all the relevant statistics in the book barn business, for example, income statements of the business during the years that it was in operating (Pinson, 2008). Identification of the three strongest components of each plan (and why) Trend Setters Hair Studio Business Plan and Brian's Book Barn Business Plan have individual strong points. Trend Setters Hair Studio Business Plan has the following strong points. First, the plan introduces the salon business in an extremely professional manner. It mentions that the salon will offer full services that will appeal to its clientele because of its prices (B Plan, 2012). The plan can function as an advert in case management is in need of external help from financial institutions. Another strong component of this plan is its presentation of all the necessary facts in a summary form. The summaries ensure that the plan remains relevant because it does have to offer lengthy explanations. Finally, the third strongest component of the plan is its dedication to explaining the finances of the salon business. It is impressive because it ensures the business does not fail to operate because of financial hitches. This component of the plan is presented in a clear manner that most people can understand. The clear presentation of figures facilitates reduced cases of creative accounting from some dishonest human resources. The provision of the balance sheet of the salon business is commendable because it makes the figures in the business plan make sense to anyone who analyses the plan (Pinson, 2008). Brian's Book Barn Business Plan strongest component is its inclusion of exact dates when the business commences and undertakes other operations respectively. This is a substantial component because it allows relevant people in the business to plan for activities in the organization. They have exact dates of operations in their diaries and know when to attend to relevant meetings or issues of the book business. The plan is strong because it is clear in all its explanations of business ideas. The plan uses several subtitles that enable the reader to understand the future operations of the book barn business. Apart from subtitles, the clarity of this plan is evident in its inclusion of possible risks while the book barn is in operation. For example, the plan mentions market risks. It also includes risks that would arise when other industries that the barn depends on become obsolete because of modern innovations. This plan on Brian’s book barn includes significant regulatory issues unlike other contemporary plans. For example, the plan reveals that the business name is a trademark. This makes the business plan strong because it creates confidence in the clientele who confirm that the business is legal (Becherer & Helms, 2009). Identification of the three weakest components of each plan (and why) The plans have weakest components, which compromise the effectiveness of the individual plans. The first plan on the salon business fails to identify the current position of the business. This makes the plan weak because it is difficult for anyone to plan for the salon without knowing its current business position. Strong business plans must include current positions of the respective business. This is a significant reflection because it makes the plan functional to anyone who would wish to assist the business in any manner. Another weakness factor about the salon plan is its presentation of management issues. The plan just mentions that the salon will have three stylists. The three stylists will be a massage technician, someone to do the nails and a barber. They are necessary professional for the salon business, but the plan does not include a practical management team. Finally, the weakest component of this salon business plan lacks a comprehensive exit plan. The omission of exit plans makes business plans to be senseless because they will be incomplete. The salon plan does not explain how the business plans to handle their final profits. It also fails to analyze its potential competitors. This is a significant weakness because it implies that the salon business is not ready for competition, which must exist. Business plans that facilitate growth of any businesses must prepare for competition (Bangs, 2002). The second plan on Brian’s barn is weak as it handles internet issues because it plans to operate in the modern world. It lacks sufficient evidence that the business can operate using recent marketing strategies. The plan fails to include the internet in its marketing that makes it lose modern shoppers who concentrate on the internet for most of their shopping needs. Secondly, Brian’s plan has unrealistic assumptions on its finances. Most of the assumptions, which the plan makes, are senseless because of the nature of the barn. This weakens the plan because the existing figure could fail the business when it begins its operations during the planned time. Finally, the weakest component of this plan on the book barn is its presentation of a business overview that is less comprehensive. The overview in business plans needs to be comprehensive for relevant people to understand without unnecessary explanations (Covello & Hazelgren, 2006). Suggestions on how the business plans could have been improved The plan on Brian’s book barn should include young people on its managerial team. The two managers have experience and relevant training but cannot understand the current market perfectly. For example, there is a proposal that the major market for their books and magazines will be children and parents. The plan should also include services from the book barn. The current ones will not appeal to the modern teenager who is interested in modern phenomena. There should be reductions of books and magazines that have less fascinating topics to the contemporary person. There could be improvements if the plan on the book barn had fewer objectives. Fewer objectives for any business plan make businesses more practical because it proves that management can handle the fulfillment of the same objectives (Pinson, 2008). The plan on the salon business could be effective if it were comprehensive in its mention of the capital of the entire business. The management should make research that is more intensive than the one it made on basics of salon business. The research will facilitate better knowledge of salon trends that is necessary in the preparation of a perfect business plan. The plan should also ensure that there is evident reflection of most of its funding. This will facilitate easy realization of any aspects that would compromise on the success of the entire salon business (Bangs, 2002). Statement of five lessons you have learnt about business planning. i. Business planning requires that the respective planners have sufficient time in the entire preparation. Anyone who hurries with the planning process is likely to forget significant components of the business plan. ii. The planning of any business must be after extensive research from relevant professionals. Lack of expertise could compromise the success of a business, which had potential to grow. iii. Business plans must be made with the caution because they are a true reflection of future business operations. This can be achieved by involving several people who understand logistics of the business. iv. The inclusion of relevant financial issues in business plans makes the respective plans strong. Finances are the most significant aspect of businesses because businesses cannot operate without funds. Business planning needs to be thorough in its inclusion of any financial issues. v. Business plans must include possible risks that the business can experience while in operation. Conclusion Business plans present relevant summaries of their respective businesses. If people wish to establish businesses, they must hire professional to help them. Alternatively, they need to ensure that they are trained in writing functional business plans. Business plans must involve the competition that the business is likely to experience. Weak business plans can fail businesses. People must ensure that they have strong plans that include most relevant aspects of businesses. References Bangs, D. H. (2002). The business planning guide: Creating a winning plan for success. Chicago, IL: Kaplan Becherer, R. C., & Helms, M. M. (2009). The value of business plans for new ventures: Company and entrepreneur outcomes. Journal of Small Business Strategy, 20(2), 80-96. Retrieved from http://search.proquest.com/docview/896268706?accountid=45049 B Plan. (2012). Hair and Beauty Salon Business Plan. Trend Setters Hair Studio. Retrieved from http://www.bplans.com/hair_and_beauty_salon_business_plan/executive_summary_fc.php#.UDvzlyJLRJE Canada / British Columbia Business Services Society. (ND). Brian's Book Barn: Sample Business Plan (Retail) Retrieved from http://www.smallbusinessbc.ca/pdf/sample_retail.pdf Covello, J. A., & Hazelgren, B. J. (2006). The complete book of business plans: Simple steps to writing powerful business plans. Naperville, Ill: Sourcebooks Pub your company's future. Tustin, CA: Out of Your Mind & into the Marketplace Pinson, L. (2008). Anatomy of a business plan: A step-by-step guide to building the business and securing your company's future. Tustin, CA: Out of Your Mind & into the Marketplace. Read More