Strategic Elements of Business Planning - Essay Example

Strategic elements of business planning s Submitted by s: Introduction Plans are long-term objectives that assist a company to move forward and progress instead of short-term goals that only improve the daily operations of the business. The best way of identifying the most crucial aspects of a strategic plan is to become aware of the goals that increase the prospective of the organization without becoming a strain to the resources or creating a lot of risk. Appreciating some of the essential aspects of strategic planning is important in the creation of the best long-term objectives for a company. Elements of a business plan for a profit start up organization During business planning, profit start up organizations should describe the business along with a short description of the industry associated with it (Abrams, 2003, p. 156). During the description of the industry, the planning should address the attitude along with future possibilities and it should provide data on the markets that exist in the industry such as newer commodities or developments that may have an impact on the business. Business planning for a profit start-up company should also consider the structure of the business to be started where the structure refers to the form of operation such as whether it is wholesale or retail. Details of if the organization is a sole proprietorship or partnership, the people who would be in charge together with the requirements they are supposed to provide the business with should also be included in the planning (Pinson, 2008, p. 38). The customers who will be targeted by the organization should also be considered in the planning as well as the manner in which the products would be circulated and the support structures for the organization. The planning will also need to address how the organization will profit from the venture that it is getting into and the factors that will make it effective and successful like technology that will be employed among other aspects (Blackwell, 2011, p. 12). If the planning of the organization is for financial gain, the manner in which equity or loans are supposed to make the organization gainful should be considered. The business plan should include the ways in which the business will become profitable, as the lenders would wish to be aware of how prosperous the business would become. While developing a business plan for a profit start-up business, a market analysis should be included so that a familiarity can be developed with all the elements of the market in order to develop a definition of the target market and to position the organization in a way that will assist it to gain shares in terms of sales (Girard, OKeefe and Price, 2012, p. 27). The business plan should also project market share through analysing the market in regard to vastly targeted and economical distribution, setting of prices as well as strategies for promotion. The business plan must have a capacity to project market share for the period that is covered by the plan including the growth of the industry that may increase the market share and conversion of consumers from the markets considered feasible. In the process of developing the business plan the organization will also have to consider position as this is affected by the variable that are closely linked to the requirements associated with the targeted customers and the activities that are carried out by the main competitors. How the organization prices its products is also vital, as it will have a considerable impact on how successful the business will become, and even though pricing and computations can be complicated, the fundamental regulations of pricing are direct. In creating a business plan for the organization, distribution will involve the whole process of moving the commodity from the manufacturing plant to the consumer, and the form of distribution network chosen is depend in the industry along with the magnitude of the market(Pandey, 2006, p. 479). After the distribution strategy has been created, the business plan must address the promotional strategy, which will be used to control distribution of the communication that is supposed to sell the commodity that has been developed. An analysis of the competition likely to be met after the business comes into operation must also be done to determine the strong and weak points associated with the competition in the market, approaches that will provide a competitive edge as well as the hurdles that may be instigated to make it harder for the competition to enter the market. Elements of a business plan for a large incumbent organization Businesses that are already established experience various challenges and in the process of growth for a business, various problems and opportunities require different solutions, therefore the solutions that worked in the past might not have the same results in the present or the future. A business plan can assist in identifying and overcoming the commonplace drawbacks linked to growth in order for the organization to continue growing and thriving. Business plans should not be developed only when the business is starting as the conditions of the business as well as the environment progressively change. With more success of the business, competitors start noticing and reacting to the activities of the business. Therefore, a business plan for a large incumbent organization should keep in mind the changing environment of the market to ensure that the business cannot run the risk of making business decisions that are based on information that is out-dated. Information sources are also a significant element of the business plan as published reports have a capacity to provide dependable insights concerning the conditions in the market and the prevailing trends (Covello and Hazelgren, 2005, p. 4). The business plan should thus develop a comprehensive perspective of the customer requirements, their behaviour and the marketing approaches that have been working appropriately. The business plan for an organization that is already operating is supposed to address the changes that will best suit the environment it is operating in such as winning new customers and retaining the existing ones (Merson, 2011). The already existing connections of the business provide more potential for profitability and can therefore be a dependable source of cash flow. The business should address new relationships that may increase turnover while addressing profit margins that may be low in order for the operations of the organization to remain sustainable. The business plan should not assume that the current success of the organization would automatically deal with the advantages, which are currently prevailing, as all the moves need to be planned in the same way they were planned when the business was being launched. The business plan should develop proper cash flow controls as cash constraints are the greatest limiting factors for growing businesses as they restrict the growth of the organization (Reuvid, 2011, p. 91). Therefore, the plan should effectively utilize the finances of the organization together with an assessment of the new opportunities of the organization. The plan should consider the best ways of controlling the working capital in order to maximize free cash flow, as efficient credit management as well as stringent controls on debts that are overdue is crucial (Quiry and Vernimmen, 2011, p. 216). Start-up businesses operate in a continuous crisis mode, daily activities bring newer challenges that are supposed to be dealt with in an urgent manner, and thus the management dedicates more time to identifying problems. In organizations that are already operational, this approach may not work and even though a short term crisis remains urgent, there are chances that it may not be as important as other aspects of the organization. Taking time to sooth a customer may safeguard one relationship but emphasizing on the recruitment of the right people is more important in laying foundations for better sales in the future. Therefore, the business plan for an organization that is already operational should deal with the aspect of maximizing employee resources as well as other resources that will make the business profitable in the future. Bibliography Abrams, R. 2003, The successful business plan, Planning Shop, Palto Alto, Calif. Blackwell, E. 2011, How to prepare a business plan, Kogan Page, London. Covello, J. and Hazelgren, B. 2005, Your first business plan, Sourcebooks, Naperville, Ill. Girard, S., OKeefe, M. and Price, M. 2012, A crash course in starting a business, Expert Business Advice, [S.l.]. Merson, R. 2011, Guide to managing growth, Wiley, Hoboken, N.J. Pandey, I. 2006, Financial management [with CD copy], Vikas Publishing House, New Delhi. Pinson, L. 2008, Anatomy of a business plan, Out of Your Mind & into the Marketplace, Tustin, CA. Quiry, P. and Vernimmen, P. 2011, Corporate finance, Wiley, Chicester, West Sussex, U.K. Reuvid, J. 2011, Start up and run your own business, Kogan Page Ltd, Philadelphia. Read More