Effective Business Planning

Effective Business Planning

Introduction

All organisations need an accurate definition of what value means to them, to their end-users and to their key value chain partners. They need to agree clear and realistic objectives, supported by sound business processes that underpin the cost-effective operation of their value chain. To realise their objectives, they require an effective and integrated business plan. All business plans should clearly define where net value is to be added across internal and external activities and processes, and how this is to be improved by enhancing utility and benefits, or revenue and profitability. perfonmance and service, while reducing total costs. Each plan must also describe the relevant uncertainties - that is, the opportunities and the risks. Plans must cover the physical/quantitative aspects, the financial measures, the informational/data context and, of course, the human/cultural and organisational factors (Abkowitz, 2008).

The detailed, integrated internal plans to which people are going to work in practice are of much greater importance than any glossy, externally published summary plan, no matter how inspiring the strategyIoo often, the published plans to be laid before parliament or shareholders have inspired prose and photographs, but inadequate substance and incomplete balances between ends and means, Are these read? By whom and, most important, are they actioned?

Business planning is a dynamic process, There can be plans relating to shifts, days, weeks, months and years, with different horizons, An agreed systematic procedure is essential for updating plans and budgets, in relation to past performance and to changing future expectations, In particular business plans should cover:

The particular value and utility that the organisation aims to provide to the end-user or consumer via products and services,

Revenue streams under various market scenarios, how much is going to be sold and at what prices?

Market competition from existing competitors, and also from alternative providers, who could alter the market with new products and services,

for non-profit organisations, turnover/total value of services to clients and numbers of clients supported/throughput/output/benefits/outcomes.

Costs under the various market scenarios: capital and operating costs; average and marginal costs; through life costs, including internal and external dependencies, and including any disposal costs at end of the life of the products,

Profits and cash flows. When will money flow in and out?

Funding - how much, when, from whom, at what costs, Security of funding.

Resources and prerequisites - required facilities and infrastructure to be provided directly and also to be available from other sources (Grantham & Carr, 2002),

People - numbers, capabilities, training and the simple order development needs, environment and culture, where necessary this should include those people who are essential to the business but are employed by other bodies.

Product and technology development and R&D, relating to end products, ingredients/components and also to facilities and systems, R&D should also aim to reduce the key uncertainties and mitigate the risks across the value chain, as well as to exploit the opportunities,

Marketing and sales, including intermediate customer service. These also cover macro-marketing to all key stakeholders and to those who can have a major impact on the business, as ...