THE SECRET OF BUSINESS SUCCESS IS BUSINESS PLAN
Read some articles saying the death of business plan probably since simply because the pace of business is faster for technology companies or start up than you can write. The same people claim business plan more appropriate for slower paced industries such as construction or pharmaceuticals that has long iteration times and well established business models which are not likely to change in the near term. This industry has well understood market information leads to greater predictability.
We may need to agree that technological businesses are fast changing but why do someone put their legs into unknowing territory. It is just for sake of getting start up investment or try out only.
We at Qaasoo strongly suggest some kind of planning need to be done prior putting your legs into any swamp. Remember failure to plan is planning to fail.
Business is a swamp whether fast or slow pace,it’s success depends on how well you maneuver.- DrBiz Arikrishnan
What is a Business Plan?
The business plan allows not the setting up or direction of the firm’s activity but the quantification as precise as possible of the predictable effects of the decisions. It is an instrument to make possible the projection of the future of the firm establishing if the financial means allow the unwinding of a successful business.
The business plan may give a first image of the actual perspectives of the business, so that loss/wastage of unviable projects is avoided before it may be actually made. The drafting of a business plan allows:
- the establishment of the necessary resources and the sources from which these can be obtained, in a realistic manner;
- the planning ahead of the stages of business;
- the surveillance and the coordination of the next stages of business and the solving of the possible imperfections.
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The business plan represents, at the same time, a demand of the outside investors, of creditors and of possible shareholders. These have to learn from the content of the business plan:
- the consistence of the business;
- the viability and the benefit of the business;
- the necessary financial resources;
- the bankable profitableness;
The prevision of the profitableness of the business has to be realistically fixed and based on fundamental decisions. The reason is, because the conclusive purpose is, actually, the attainment of a short term advantage but the development of an enduring business.
It is obvious that the use of a long term strategy is not possible without precisely evaluate the probable consequences of the taken decisions and the possible risks. So the preparation or development of a business implies statistics/sectional analyses, market surveys, business plans feasibility and pre-feasibility studies.
Its purpose is to outline as accurate as possible of the work environment and of the market to be approached, the manner in which the business reference to it, the given services or products, the way in which the financial resources may be efficiently allocated or the necessary financial resource, the adaptability at economical and social environmental changes and the increased involvement of the employees in the on-going activities.
A market survey, correctly legitimated, is a key element of the advantage of the competition. The SWOT analysis confirms that the identified issues in assessment of the current situation and presents, at the same time, the opportunities and the strong points which can be exploited to grow the economical competition.
Through this business plan, the enterprisers are “forced” to consider the aspects which could save them from a more shallow approach. Simultaneously, they might discover week points of the business or new ideas that could enhance its profitableness. The previsions of the business plan are not entirely integrated in the effective accomplishments, but, still, in case the plan is well-elaborated, its data can attend to as a control instrument of the achieved results.
The business plan is not the only document taken into account by the possible financers, but a business plan which verifies that there is not a coherent strategy of the management team will distance any potential buyer.
The business plan allows, as well, the accomplishment at every communicational level involved in the designing and unwinding of the business, the communication between business associates which divide the power and the firm’s holding, representing a means of management and organization, reducing the classical conflicts between the management and the share holders.
The business plan also insures the communication regarding accomplishments and also the failures allowing the explanation of the probable corrective measures. The existence of a business plan may be a means through which a managerial competence is proven, the competence to be responsible for the financial, material and human resources.
Ciochina, Iuliana and Iordache, Carmen and Panoiu, Laura and Decuseara, Razvan Nicolae, The Business Plan – Way to Increase Firm’s Competitiveness (May 2008). Available at SSRN: https://ssrn.com/abstract=1083077