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Use Strategic Planning to lay the Foundation for your Business

Entrepreneurs and business managers are often so preoccupied with immediate issues ...
Tips for better business planning plus template & sample for business plan and software for fina

Use Strategic Planning to lay the Foundation for your Business

Entrepreneurs and business managers are often so preoccupied with immediate issues that they lose sight of their ultimate objectives. That's why a preparation of a strategic plan is a virtual necessity. This may not be a recipe for success, but without it a business is much more likely to fail. A strategic plan is not the same thing as an operational plan. The former should be visionary, conceptual and directional in contrast to an operational plan which is likely to be shorter term, tactical, focused, implementable and measurable. As an example, compare the process of planning a vacation (where, when, duration, budget, who goes, how travel are all strategic issues) with the final preparations (tasks, deadlines, funding, weather, packing, transport and so on are all operational matters). A strategic plan should not be confused with a business plan. The former is likely to be a (very) short document whereas a business plan is usually a much more substantial and detailed document. A strategic plan can provide the foundation and frame work for a business plan.

. A satisfactory strategic plan must be realistic and attainable so as to allow managers and entrepreneurs to think strategically and act operationally - Decide the type of business plan you need: Basic plans are short (often under 10 pages plus appendices etc.); relatively quick to prepare (under one or two months); use limited external assistance; need few drafts; and require much more researching than writing. They are somewhat more difficult to prepare than anticipated - all parts equally difficult. They are frequently used to assess the viability of a business or for internal/personal use and they are rated as important/useful for the business. Comprehensive plans are longer than basic plans; require some months to prepare; make slightly greater use of external help; and require somewhat more time researching than writing. They are more difficult to prepare than anticipated, especially the financial projections and market analysis parts. They are often used to help raise venture capital/equity or bank loans, and they are viewed as being critically important/useful to the business. Based on a survey of over 400 business plan writers, the following table characterizes "typical" plans written for different purposes: Purpose of Plan Type of Plan Approx Pages * Elapsed Months ** External Help ? Number of Drafts Parts of Greatest Difficulty Internal/ personal use Basic 10 <2 No 1-3 Market analysis Raise bank loans Comprehensive 15 1 Probably 2-4 Financial projections Seek venture capital/ equity Comprehensive 20+ 2-5 Probably 2-5 Market analysis Assess viability of business Basic 10 2 Possibly 2-4 Market analysis Secure approval from shareholders/ directors Comprehensive 15 2-3 Possibly 2-6 All parts equal * Main sections only - excludes appendices, attachments etc. ** Covering research, writing & redrafting. For more information on the survey results, see Insights into Business Planning and for the latest survey results see Views on Preparing a Business Plan. For detailed guidance on compiling a plan, review the white paper on Writing a Business Plan, Free-Plan (free 150-page Business Plan Guide and Word-based Template) and the Checklist for Preparing a Business Plan.

any detailed work commences on writing a comprehensive business plan, you should: Clearly define the target audience Determine its requirements in relation to the contents and levels of detail Map out the plan's structure (contents page) Decide on the likely length of the plan Identify all the main issues to be addressed. Shortcomings in the concept and gaps in supporting evidence and proposals need to be clearly identified. This will facilitate an assessment of research to be undertaken before any drafting commences. Bear in mind that a business plan should be the end result of a careful and extensive research and development project which must be completed before any serious writing of a plan should be started. Under no circumstances should you start writing a plan before all the key issues have been crystallized and addressed.
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