Discuss about the Business Plan for Sustainable World.
Business planning is essential for its entire existence. All successful business, reviews its business plan regularly (Chambers & Humble, 2017). It helps to ensure the process to meet its objectives. It is also necessary to review the present performance in a regular basis to adopt most appropriate strategies to ensure growth. For this study, the researcher has selected a business plan on Pty Ltd. The company is small company and a business planning adviser in Sydney. The author will compare this plan with Growth Management Strategies (GMS) is a small firm in an aim to serve the small business clients through logistical, business strategies and technical services. A comparative analysis will help to determine how much the adopted strategies are helpful to meet the business objectives in future.
The main role of a business plan is to set its objectives. With the setting of the objectives of the business plan, the organisation will try to prepare its road map. Hence, the setting of an appropriate strategy is necessary (McKenzie, 2017). In the current business plan Pty Ltd, the author has set few objectives which are its main target and which needs to be fulfilled. The objective of Pty Ltd. is to provide best business planning to its clients. On the other hand, GMS has set few objectives like :
Help to access the SBA (Small Business Administration) loan on Startup.
Enhance client base up to 450% in next three years.
Hence, from both the objectives it has been identified that Pty Ltd. objectives are not stated clearly whereas GMS objectives are clearly stated. Pty Ltd. business goal is not specific. It is very hard to identify which parameters they have set for their future development.
Operations of the business plan denote the location of the business and who are the suppliers and customers. It is necessary to be clear about operation process of each and every business plan (Finch, 2016). This will help to help to run the business in a strategic way. For Pty Ltd., it has been identified that the business will operate with one business employee (managing director) and the business will be operated through the home. All necessary equipment are obtained already. For GMS, the employees will be altogether two and business will be run through a small office (Bplans, 2018). Hence, it has been identified that Pty Ltd. has a clear operation plan compared to GMS. Operation plan needs to be clearly stated in terms of the success of the business.
Marketing strategy helps to determine the success of the business. Market strategies enable the entrepreneurs to be familiar with the marketing aspects. It will help in defining the target market. Also, it generates profit for the entrepreneurs within the competitive environment through pricing, distribution, strategies for promotion. Marketing strategy indicates the industry growth potential for the proposed company and allows in developing estimates for the future endeavour (Gabler et al. 2017). Marketing strategies are identified that Pty Ltd. has done a survey before preparing the business plan. The survey is conducted on :
- Australian Statistics Bureau
- Interviews with several business entities personally
- A brief survey on SME (Small Medium Enterprise) who already used consultants
- Online literature and statistical site
Market analysis and marketing plan of Pty Ltd. and GMS
Through the market analysis, it is necessary to identify the industry area and its market potentials. It is really important for every business (Armstrong et al. 2015). There is a demand for the business consulting services in the SME in Australia. Business growth declines in December to January due to Christmas and summer holiday.There are several competitors of this business, though they provide different types of services also. The business plan of Pty Ltd. also shows the internal environment to determine the potentiality of the business. Through the SWOT analysis the business strengths, weakness, Opportunities and Threats are identified. In the marketing plan, the products and target market are identified. The promotional strategies are also identified which will help to promote the business among the market. Pricing strategy also identified trough a proper market research. Pty Ltd. has set $120 per hour a standard rate and this rate must enable advantage for this organisation. For every start-up it is necessary to analyse marketing strategy after 6 months.
In GMS marketing plan it has been identified that market growth is present at the very beginning. It shows the market growth area will be the Boston/Cambridge Metro area and which will be able to generate 3% growth and which will be ideal for lending SBA programs. This signifies that apart from the market growth, the customer base of the company depends upon the solid reputation and service needs. Through the analysis of the market segmentation, it has been identified performance issue and management discord etc. help to differentiate the market. With the calculation the market analysis is presented year on year basis. GMS also presents the target market segmentation strategy. The strategy is divided into tier basis. In the first tier, the company will be able to maintain consistent cash flow and second tier the company expected revenue will be $501-$3 million. In the third tier, the company will be able to generate a good customer base.
Pty Ltd. has presented its marketing plan and strategy through a organised way. It is essential to present marketing strategy in a proper way which will help to determine the organisation plan to meet its objectives. This also determines the future obligations and help to plan accordingly. GMS market analysis and strategy show the process is presented in a calculative way. The marketing strategy helps to identify the future market of the organisation. At present, through the GMS marketing strategy, it has been identified that they are focused on their target market and customer service. Suitable customer service and on-time payment to the employees can help to generate good entrepreneurship strategy. The setting of the marketing strategy of both the companies are justified, internal analysis of industry is missing in GMS marketing strategy though. Moreover, these strategies will surely help them to reach their business goals.
Financial strategies adopted by Pty Ltd. and GMS:
Pty Ltd. has presented the financial analysis with the calculation of basic income and expenses. The gross cost of the goods has been identified as 60% and forecast has for only one year as it is difficult to forecast for the long time period. Business financing also evaluates the potentiality of the business for the industry. Business profit distribution also analysed to generate the idea about the market growth of the business. In financial forecasts, net profit margin, break-even point and market based earning for the start-up are analysed. At the end projected profit and loss statement analysed through calculation using Microsoft Excel.
GMS the financial plan is based on the corresponding cash flow amount and pending of SBA loan. The financial plan is projected on the basis of three years. The break-even analysis has helped to determine the monthly revenue break even, assumptions etc. In this business plan cash flow is also presented along with profit and loss statement. In this plan, the business ratio is also presented through calculation with the help of Microsoft Excel.
Financial projection is necessary for every startup. Financial analysis helps to determine the total cost and expenses of the business. It also generates the profit and loss for future endeavour. Profit and loss are the main point of every business (Kotler, 2015). Every business starts with the assumption of profit through the business. Hence, calculation of profit and statement, break-even analysis and projected net profit margin are integral for a good business plan. In Pty Ltd., it has been identified that the financial projection is stated properly with calculation. The budgeting and cash flow statement Pty Ltd presents the actual business cost and how the applied cost will be mitigated in one year. For GMS, the financial projections also present through calculation. Break-even analysis and expected profit and loss statement of GMS have helped to determine its market potentiality and future expectation.
Plan and effective resource allocation for the success of a business plan:
A business plan helps to play the most important role in resource allocating to meet projected business objectives (Kotler, 2015). Business plan is necessary for start up business because this business plan will help to determine the future obligations and to adopt necessary step to mitigate the critical situation. It is also necessary to review the business plan on a regular basis so that it will generate the expected resource allocation to work properly with the adopted strategy (Muzellec et al. 2015). Resourcing is necessary to meet the target of the business. The resources may be available in existing business plan. Hence recruiting is necessary. Business organisation has to recruit suitable staffs for their business. Recruitment of efficient staffs for the business is essential because business will be able to meet its objectives with their continuous effort. Hence, in recruiting more staff and spending or buying equipment which may require more fund for the business. Generally, it is obviously better funding for future growth by generating revenue. It is essential to budget precisely to determine the resource of a particular department. It is undoubtedly true that resourcing should be prioritised for the success of the business plan (Baker, 2014). Hence, funding and resourcing are an integral part of every business plan. The assured fund will help to collect resource which will enable in generating profit. Pty Ltd. Needs to allocate proper resource for its business.
Use of SMART objectives for the successful business plan:
Use of SMART objectives strategy helps the business to set a proper target which will be able to generate assured revenue. SMART objectives are Specific, Measurable, Achievable, Realistic and Timely.
- Specific: objectives should be specific to the business goal
- Measurable: Business objectives should be measurable so that it could be achieved
- Achievable: Objectives should be achievable
- Realistic: Realistic objective setting will help the business to achieve growth very fast.
- Timely: Objectives should be set for a limited time frame which will drive the business to meet within the timeframe.
Hence the use of SMART objective strategy helps to generate a positive outcome for the business. Specific target helps the business realise the necessity of the target and they achieve it. It is essential to supervise the employee performance, team or product through proper performance indicators. These are profit and sales figure with given period, new product development milestones, statistics of market share. Target setting also helps the employees to visualise where are suitable for the organisation and what is their target. Clear objective setting and proper monitoring help the business to reach its goal.
It is necessary to review the business plan:
For the every successful business plan, it is necessary to review the business plan on a regular basis. After setting the business plan it is necessary to monitor it on a regular basis. Business plan cycle will be effective to review the business plan. In some business, this cycle may be a regular process through regular update and monitor. In some business, the annual plan has been broken into the quarterly operational plan. It has been identified that sales driven business may require monthly operation plan with weekly review and target. It is most important for every successful business, any major events in the targeted business marketplace can indicate to review the business objectives. Monitoring the business plan can help to mitigate any future issues and also helps to take the initiatives for future difficulties. It is essential for the Pty Ltd to review its business plan on a regular basis so that business will run smoothlessly in future.
A successful business plan requires a proper and precise target or objectives. Target is also necessary for the performance appraisal of the employees. Busines plan of Pty Ltd. needs to set its objectives with the SMART objective strategy. For the sophisticated business plan, it is necessary to integrate all the business unit into a single document of strategy. This can be a complex strategy but it is crucial for every business. It is also important to implement stakeholder policy in the plan. It is suitable to set the budgets of each unit and it can be the most important process. Use of Information technology can also help to analyse the projected business proposal on a regular basis. In Pty Ltd., it is necessary to allocate resource and monitor the business plan regular basis. This will help to construct a good business plan and helps to establish a solid startup. Budget and stakeholder are the two integral parts of the business. A business plan is impossible without of budgeting. It is essential to prepare a justified budget to run a business because future profit depends upon the budgeting of the business. For the successful business plan it is necessary to prepare cash flow statement and breakeven analysis. These will help the business to be aware about the critical stage of the business and necessity of future investment if requires. Hence, a successful business requires review in each and every quarter so that the business may avoid any financial downturn in future.
In the conclusion, it can state that Pty Ltd. has surely set for a successful business but it needs some specification and review. This will help to enable them to meet the business objectives. SMART objectives are helpful and necessary for the successful business plan. All the marketing plan and strategy are analysed by Pty Ltd. are justified and appropriate. Those are necessary to reach the organisational goal. If any changes happen in the marketplace then the organisation needs to review its objectives accordingly.
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