Essential Tools for Operations Management: Tools, Models and Approaches for Managers and Consultants

CHAPTER 2

BUSINESS PLANNING

INTRODUCTION

Without doubt it is safe to say that the task of business planning is applicable to all businesses whether as a sole trader or a multinational conglomerate. The production of a business plan is needed to describe the business, its objectives, its strategies, the market it is in and its financial forecasts. It is often used as a tool for measuring the performance of the organization against that intended over a short- or medium-term period, typically three to five years. For many new businesses the business plan may be used as a tool to promote an interest in the business and to secure external funding and as such needs to be undertaken as a serious task. At the outset the production of a business plan will help the organization to:

• Describe and explain its business idea or proposition.

• Provide a structure to the short- and longer-term plans.

• Uncover any problem areas that might be lurking.

• Identify unforeseen opportunities.

• Record the financial details.

• Provide an overview of the bigger picture.

• Provide an integrated framework for all of the business ideas.

• Make the business statistically more likely to succeed.

• Identify the risks that the business may face or prevent progress.

Another view is that a business plan is vital to:

• Gaining financial support from internal and external sources.

• Helping the organization to establish ...