develop and implement a business plan (report and ppt)
Slide 1 BSBMGT617 Develop and implement a business plan 1 Develop business plan 1.1. Review and evaluate pre-existing strategic, business and operational plan, if available 2 Business plan Contains thorough operational and financial information such as budget projections, which indicate how the organisation will resource its activities and be able to meet its objectives in the future. Often covers a three year period. Continuously modified as conditions change and new opportunities and/or threats emerge. Business plan Writing a business plan will enable you to: Recognise your strengths and weaknesses Acknowledge key areas where you need to develop expertise Understand the financial risk involved in setting up the business It represents the dynamic process of planning and reviewing the business agenda over time. Strategic planning Strategic planning is the process of: Clarifying the role of the organisation Prioritising the use of resources Evaluating the internal and external environment Determining how best to manage the upcoming changes and transitions Setting out a clear direction Setting concrete goals for the future. Review and evaluate pre-existing plans Identify the purpose of your previous strategic, business and operational plans Identify and review the essential components contained in those plans Identify the business goals and objectives as a basis for developing this business plan. Develop business plan 1.2. Analyse and interpret business vision, mission, values and objectives 7 Mission statement A mission statement should: Be short, yet engage with employees and those outside the organisation Define the beliefs or principles of the organisation Give your customers a sense that they're buying into your vision when they purchase your products. Vision statement A vision statement defines what direction you wan the company to move in. Mid-term to long-term future projections. Should be concise and easily remembered. workers daily activities will automatically become directed towards achieving the vision. Goals and objectives Goals: are general statements of what you want to achieve, e.g. to capture a bigger market share should be suitable, acceptable, understandable and flexible. Objectives: are precise, quantifiable, time-sensitive statements of what is going to be achieved and when, e.g. to grow market share by 10% over the next two years. Develop business plan 1.3. Consult with key stakeholders 1.4. Review market requirements for the product or service, profile customer needs and research pricing options 11 Stakeholders Stakeholders include: Shareholders Board members Staff/employees Business partners Technical advisors Customers Government agencies Suppliers Community from which business draws its resources. Involving stakeholders You could utilise stakeholders in the following ways: A series of consultation meetings Completing questionnaires An open day with workshops Creation of budget and project schedule Identification of project risks Planning for data management. Benefits of consulting stakeholders Decision making will be more informed by those who the actions will affect Stakeholders will be more satisfied with the outcome, and may accept there is a need to compromise Stakeholders will feel ownership of the project, and are therefore more likely to want the project to succeed. Internal organisation environment factors Financial resources such as funding, investment opportunities and sources of income Physical resources such as company’s location, equipment, and facilities Human resources such as employees, volunteers and target audiences Access to natural resources, patents, copyrights, and trademarks Current processes such as employee programs, software systems, and department hierarchies. External organisation environmental factors Competition – are there other organisations developing similar products to you in the marketplace? Suppliers – the financial situations of your suppliers Legal – how will changes to employment legislation impact on the running of your business Economic – what impact will taxation, interest rates, demand, government spending etc. have on the business? Technological – how will product innovation and advances in production technology impact on your business plan? Profile customer needs You could improve understanding of customers by: Put yourself in your customers’ shoes - everyone from the front desk to the delivery staff should focus on exceeding customer expectations Use data – make the most of your customer database Ask for customer feedback – make them feel involved in the development of the business. Pricing options You will need to consider pricing and discount policies Set profit targets, pricing strategies and margins. Consider presentation and display of products/services. Is your pricing structure going to maximise your profits (how much are your customers prepared to pay). Expect pricing to be at the forefront of negotiations. What pricing strategies are your competitors are using? Develop business plan 1.5. Develop performance objectives and measures through consultation with key stakeholders 19 Performance objectives Performance objectives provide tangible goals for your employees. Performance objectives should include specific targets that are: Dictated by the current strategy of the organisation Measurable meaning they can be expressed in quantities, percentages, or dollars Weighted in relation to their relative importance to the job. Performance objectives Features of key performance objectives: Measurable – e.g. the employee should attract x number of new customers Within a timeframe – the employee may be expected to achieve the objective within 2 months for example Attainable – setting unrealistic objectives can be damaging to the employee and organisation Clearly worded using action words. Develop business plan 1.6. Identify financial, human and physical resource requirements for the business 22 Resource forecast You should carry out a resource forecast: All planned activities, goals, and objectives, should be assessed for resource requirements If the forecast identifies areas where the available resources do not correlate with the levels required, then this must be corrected or the plan must be changed Once you are satisfied that the required resources will be available, then the plan can be implemented. Financial resources Financial resources concern the ability of the business to fund its chosen strategy. Existing finance funds: Cash Bank overdraft Bank and other loans Shareholders' capital Working capital (e.g. stocks, debtors) already invested in the business Current credit availability. Human resources An audit of human resources should take place and assess the following: Existing staffing levels The expertise and experience of staff Job functions and roles Flexibility Distribution Standards of training Staff turnover. Physical resources Production facilities may include: Machinery Plant Equipment/tools Computers Vehicles/ Delivery agents Sales space. Can current production facilities manage extra output? Develop business plan 1.7. Consider any permits or licences that may be required for new activity 27 Legal requirements ASIC is the regulator for Australia’s corporate, markets and financial services. You need to consult with them about: Company officeholder duties Annual statements Changing company details address name. New activities You may require permits or licenses if your business plan involves new activities, such as: Working at heights Removing asbestos Operating a food business Running a business from your home or a mobile van. Develop business plan 1.8. Write business plan 30 Components of business plan Title page Business summary Management/operations plan Marketing plan Strategy/operational plan Financial plan Management structure. Tips for writing business plan Research - having sufficient evidence at hand through research will make decisions more informed, and your forecasts are likely to be more accurate. Time period – writing a business plan should not be rushed, set time aside and ensure you review it carefully; mistakes will seem unprofessional. Be open - if your business plan is for an upcoming company, you should make it clear that you are estimating your finances. Monitor performance 2.1. Communicate business plan to all relevant parties and ensure understanding of performance requirements and timeframes 33 Communications plan A communications plan provides you with the opportunity to communicate your business plan to all relevant stakeholders. The plan will ensure performance requirements and timeframes are fully understood. Put simply, a communications plan dictates who you should be communicating with, about what, in what form you’re going to do it, and how often. Steps to communicate business plan Set communication objectives What do you want to communicate? Who are your key stakeholders? Developing key messages for each group Developing communication tactics Allocate budgets and responsibilities Develop a communication calendar Assessing your results and adapting the plan. Segment stakeholders Benefits of segmenting stakeholders: Helps to clarify the nature of relationships Provides an understanding of stakeholders Helps to clarify how they are interacted with Allows for enhanced communication between employees and other stakeholders Reducing unnecessary communication will save resources and ensures that your communication effort is more likely to be successful. Monitor performance 2.2. Ensure skilled labour is available to implement plan 2.3. Test performance measurement systems and refine, if necessary 37 Develop a staffing plan Follow these steps to assess your current staffing needs: Assemble statistics on employee productivity How much can the average worker do in each hour? What is your maximum output in your busiest period? Divide the number from step three by the average productivity rate in step two Develop a plan to staff your business in peak period. Produce/deliver products/services Outline your staffing requirements in this section of your business plan, including a description of the specific skills that the staff and management working for you will need to bring to the table Calculate your labour costs Determine how much salary each employee will receive, and total the cost of salary for all your employees. Pre-employment testing Pre-employment testing can help to identify whether applicants have the competencies required for a role This can save time and reduce costs in the enrolment process However, testing has issues with validity – will it measure what it is supposed to Also, will the test be a true reflection of the candidate’s skills? Monitor performance 2.4. Ensure timely reports on all key aspects of the business are available, user-friendly and balanced in terms of financial and non-financial performance 41 Audience You will need to decide the best format for reporting key aspects. This could be a report or business letter. Whoever your audience might be, you need to consider: What do they know already before reading your report? What do you want them to know after they’ve read it? What are their backgrounds and likely biases? Key aspects Financial accounting Customer service Internal business processes Human resources Training, learning and development Support systems Technical or other services Suppliers Specialist knowledge Funding requirements Obtaining of goods or services Environmental issues/reporting WHS Quality Assurance Balanced report You should aim to make the report balanced, in terms of financial and non-financial performance Financial information is important for stakeholders, as it includes profit and loss accounts, balance sheets, cash flow statements etc. However, stakeholders also want to hear about non-financial factors, such as the skills of staff, training and development, and health and safety. Monitor performance 2.5. Report system failures, product failures and variances to the business plan as they occur 45 Reporting system failures A failure reporting, analysis and corrective action system (FRACAS) is a system you could implement to monitor product reliability It delivers a disciplined closed-loop process for solving failures at the design, development, production and deployment stages. FRACAS FRACAS has the following benefits: Provides engineering data for corrective actions and preventive actions Identifies deficiencies as they