Importance and Example of Business Planning
So many people want to go into the field of business and be called businessmen and women, but find it difficult to make plans on how their businesses will be like or the structure it will take. Business is a great idea needed to be managed by people that aspire to be great.
What is business plan? Business plan is a path which every prospective business dealer must walk through before he or she will gets to the destination of making it. Business planning assists businessmen and women who want to make gains in their businesses to succeed. It is like a backbone to every business. It is the most basic of all managerial functions. Planning is deciding in advance what to do, how to do it, when to do it and who to do it. Business planning is deciding and organizing how to control the affairs of business. A good business plan can make a business owner to achieve an outstanding success in business and it is setting up goals on the nature of your business and the achievements it will make in the future time. A person who wants to start-up a new business can state that he will have two more branches in the next three years. This will make him to work towards the plan to achieve what he planned, although it does not work-out as planned in few cases but the business planning makes him or her (business owner) to be focused.
Read more on this topic
Importance of Business Planning
The importance of business planning is discussed under the headings below:
Focus: This means to be concerned on a specific activity. Business planning makes merchants or business dealers to be focused and work toward their goals to make remarkable result. This makes merchants to be focused and accomplish their dreams in business pursuit. It articulates overall plans and unifies departmental activities. Managers who are typically put under the surface of immediate problems are forced through planning to consider the future and even the periodic needs to revise and extend plans in the interest of achieving their objectives.
Facilitate control: Business planning makes managers of companies to take full control of their business establishments. It forces managers to monitor the movement of the employees and it makes the former to give no room for laziness among workers. Planning makes managers to correct any worker that does not carry out his or her function effectively. There are some managers that are harsh on the employees and these managers do so because they had already mapped out target which they will like to achieve.
Profit: Business planning makes manager of a company to achieve good gains in his or her businesses. When he plans, he has the zeal to make it and this makes him to work more hard and makes his gains. Some Chief Executive Officers of many companies run daily advertisements through the media, internet and other means because they want to make some profits. They engage in some of these awareness creations because they had already made some plans on where they want to be in the next years, maybe in the next three years. I meant the level they want their business to be operating on in the next three years to come. Business Planning minimizes costs because of the emphasis of efficient operation and consistency.
Offsets uncertainty and change: When the future is highly uncertain, plan is usually necessary because there will be the necessity of selecting the best way in any institution to accomplish an objective. Also, business plan closes any door that change in the environment or the business area may bring in the course of running a business. In business plan, there is always backup money. This money is kept aside to support the business encase of any uncertainty in the business or changes which may tend to affect the business. Some businesses “die prematurely” because the managers do not make good plans. A business with good plan can withstand uncertainty and changes from any angle.
Business improvement: Business plan helps to improve business standard of any company. It makes managers of many businesses to get more customers which will help them to improve the quality of their businesses by selling more of the already manufactured goods. Take for instance, a business man who wants to buy a new vehicle that he will use to supply goods to his buyers in the next ten months needs to take a step further to achieve this plan of his. He may decide to visit top government bodies that make use of the goods he market. This will make him to sell more of his goods and then use the gain from there to improve his business. At that point, he had made the money he needs for buying of the vehicle.
Example of Business Planning
Business Plan of Michael-Smart Steel Construction Company
Location of the business Set-up
The company is to be located in a very good site and it is where many customers can easily locate. The business will be situated in Cairo in Egypt. The site is located along a busy expressway where customers can be easily attracted. Also, people that invest in house building live in this part of the country and the business will make them to demand for metal gates and other related works which are constructed with metals. Due to high movement of pedestrians along the roadside, they will buy more of the goods.
Brief description of the business
It is a market-moving business. The business is based on the construction of many designs of objects using metal made of steel. It will attract buyers from different parts of the country. Steel is the most widely used metal in the world and it shows how the society needs products made from iron or steel.
The devices needed for this business includes high capacity electric generators, electric arc and gas welding machines, welding thongs, drilling machines, cutting and filing machines, electrodes, face-shield and others.
The generators will be used for constant power supply whenever the Power Holding Company (the organization that takes charge of constant power supply) fails to supply power. The gas and the arc welding machines will be used in the welding the metals together. The welding thongs are to be used for holding of the electrodes. Electrodes to be used during the welding process are of gauge 10 and 12. Gauge 12 is for welding metals with less thickness and 10 is for Steel with higher thickness. Drilling machines are for making holes and threads in the steel metals. Hammers are for hitting and face-shield is used for face and eyes protection during welding. Every device has its individual functions.
The start-up of the business requires about $10, 000. Some of this money to buy the instruments needed and others will be kept as backup money. The backup money means money for minor expenses.
Michael-Smart Steel Company will manufacture many designs of products. It involves construction of metal tables, steel gates, gas cylinders, steel skeletons of furniture which are fixable, steel protectors, vehicle parts and so on. The products to be constructed depend on the choice of the costumers.
The business intends to employ about three workers add to the owner to make-up a total of four workers. They will assist the manager (owner) to bring out good output from the construction business. The workers will be men who are capable and can put their efforts to achieve the goals of the business.
The Business Strategies
The Steel construction company is to embark on awareness creation. Adverts are to be created through the media. The company’s products will be displayed on newspapers within the country. Convincing adverts will be shown on the television channels nationwide. The company will hire experts that will always advertise the creation of the company through the internet. Google will be paid to show adverts on the websites of those that applied for Google Adsense within the country. Google Adsense is the program run by Google where website owners apply for adverts to be placed on their websites whenever their sites are visited by web users. The web owners are paid whenever the website user click on any of the adverts or ads as some people call it. Fliers will be distributed by serious agents that will be appoint and sponsor financially.
Showcasing of the already finished products at the front of the steel fabrication company will not be left out. The products will appear attractive and catchy. The people that pass across the business area will be attracted by the finished products and it will make them to make request or demand of the products.
Effective visitation is another strategy. The company will carry-out visitations to many who deal on constructed metallic products. Businessmen who sell furniture products that involve metal frameworks will be visited. The business owner will discuss with sellers of his related products on the price they will pay for the company to manufacture the products for them instead of going far. This will make the company to build strong relationship with them and sell more of the constructed works. Also, the manager will pay some visits to other big business men and contractors that make us of fabricated metal works in the country.
The company workers will be empowered through incentives. They will be given additional “things” that they need to make them put in their best for the growth of the construction company. These incentives will increase on weekly or monthly basis. Their salaries will be increased as the company grows.
The quality of the product is not left behind. Michael-Smart Steel Company will make sure the quality of their products is splendid. Quality constructed works yield quality demand. Also, quality constructed metal works yield quality profits in return. In fact, very good attention will be paid to the quality of fabricated steel. Any goods or services that have no good quality drive customers away. The quality of the metals used for the construction will be sound. There will be no room for inferiority.
Business Planning of Michael-Smart Steel Construction Company
Estimated Cost ($)
Iron and Steel Metals
The principal goals of the steel construction company are summarized below:
To improve profit to more than 75% of the start-up money per month, about $7070.56;
To boost annual profit to $84846.7;
To open about four more branches within two years;
To create employment for the masses;
To meet up with the fabricated metal works demand in the society.
Business planning is an important tool in affairs of businesses. This is what makes some business owners to have upper hands than others. A failure to plan is plan to fail. What I am saying is that anyone who wants to engage in businesses needs to plan. In summary, the importance and example of business planning were discussed.