Lars this is how you create a business plan. First you have to set the vision, goals, and objectives of your business. The most important driver for almost any business plan is return on investment (ROI). Commonly, when someone starts to write a business plan for the first time you need to determine what is your objective? The essential planning elements are identifying your objectives. What you are going to sell to whom, when and how you are going to sell it, how much contribution the sales will produce, what the marketing and selling cost will be, and what will be the ROI.
Research would be your next step. Your market research should focus on the information you need, to help you to formulate a strategic plan and make business decisions. Market information potentially covers a vast range of data, from global macro-trends and statistics, to very specific and detailed local or technical information, so it’s important to decide what is actually relevant and necessary to know. However there’s no point spending time researching global statistical economic and demographic data if you are developing a strategy for a relatively small or local business.
It would be far more useful to carry out your own primary research about the local target market, buying patterns and preferences, local competitors, their prices and service offerings. First establish or confirm the aims of the business. Then state the objectives of the business unit you are planning to develop. Determine what is the business aiming to do over the next one, three, and five years? Next define your mission statement. All businesses need a mission statement.
It announces clearly to your staff, shareholders and customers what you are in business to do. You can involve staff in defining and refining the business’s mission statement, which helps develop a sense of ownership and responsibility. Producing and announcing the mission statement, is also an excellent process for focusing attention on the business’s priorities, and particularly the emphasis on customer service. After your mission statement you must understand and define clearly what you are providing to your customers.
This description should normally go beyond your products or services, and must include the way you do business, and what business benefits your customers derive from your products and services, and from doing business with you. Develop offerings or propositions for each main area of your business activity. Under normal circumstances competitive advantage is increased the more you can offer things that your competitors cannot. The important process in developing a proposition is translating your view of these services into an offer that means something to your customer.
The definition of your service offer must make sense to your customer in terms that are advantageous and beneficial to the customer, not what is technically good, or scientifically sound to you. Think about what your service, and the manner by which you deliver it, means to your customer. The important thing is to understand your services and proposition in terms that your customer will recognize as being relevant and beneficial to them. Customers value these benefits more than all others by making money, saving money, and saving time.
If your propositions cannot be seen as leading to any of these then customers will not be very interested in you. When you write your business plan ensure that it shows what your business can do. Essentially your plan is a spreadsheet of numbers with supporting narrative, explaining how the numbers are to be achieved. A plan should show all the activities and resources in terms of revenues and costs, which together hopefully produce a profit at the end of the trading year.
Your business plan, which deals with all aspects of the resource and management of the business, will include many variables in from the marketing process. The business plan will state sales and profitability targets by activity. Above all a plan needs to be based on actions. These actions need to lead to cost-effective and profitable causes and effects. Inputs required to achieved required outputs, analyzed, identified and quantified separately wherever necessary to be able to manage and measure the relevant activities and resources.
Your marketing plan is actually a statement, supported by relevant financial data, of how you are going to develop your business. Plans should be based on actions, not masses of historical data. The historical and market information should be sufficient just to explain and justify the opportunities, direction, strategy, and, the marketing actions, methods and measures. There are two kinds of organizational structures. They are a tall organization structure and a flat organization structure. The tall one means there is a tall pyramid of different management levels and the flat one means it has few layers of management.
Since you are going to be in the global market you would be in the tall organization structure to have different levels of management in different parts of the world working for you. Some lower levels would be making and shipping products while other higher levels would be traveling making sure everything was being done right while you have different plants in different countries. Centralized authority is another aspect you should consider when authority occurs with decision-making authority maintained at the top level of management at the company’s headquarters.
Decentralized authority occurs when decision-making authority is delegated to lower-level managers and employees who are more familiar with local conditions than headquarters’ management could be. The advantages of a centralized authority are greater top-management control, more efficiency, simpler distribution systems, and stronger brand/corporate images. The disadvantages of a centralized authority are less responsiveness to customers, less empowerment, interorganizational conflict, and lower morale away from headquarters.
The advantages of decentralized are better adaptation to customer wants, more empowerment of workers, faster decision making, and higher morale. The disadvantages of decentralized authority are less efficiency, complex distribution systems, less top-management controls, and weakened corporate images. Span of control is the optimum number of subordinates a manager supervises or should supervise. Departmentalization is the dividing of organizational functions into separate units. Departments are often being replaced or supplemented by matrix organizations and cross-functional teams.
Use of cross-functional teams sometimes results in decentralization of authority. The span of control becomes larger as employees become self-directed. The problem with tall organizations is that they slow communications. The trend is to eliminate managers and flatten organizations. Job related criteria are all the tools you use in human resources to hire the right people. For example you would want to hire people that have sales skills and a diverse group of people from different countries that speak different languages.
If you were selling in Asia you would want to hire Asian people that speak the language of the area and also have sales skills. Other job related criteria are the hiring process. You would want to make sure you checked their background out and give drug test so you would be able to trust and know you don’t have criminals or drug users working for you. Some of the resources you would use to recruit people outside would be employment agencies, new graduates, competing organizations, college placement offices, newspaper ads, job fairs, and the internet.
Once you have your business running you could hire within the company by transfers, promotions, employee recommendations, retrained employees, and department reorganizations. Some other tools for hiring would be to give employment tests to try to get the best skilled employees you can find. Make sure you have interviews so you can pick the right ones for whatever position then have trial periods for people so if they are not right for the job you can let them go. After you hire a great staff of managers you can have on the job training and internships or apprentice programs to help skill your employees.
You would want to compensate your employees that are qualified so you can keep the best. Give regular raises and incentives for selling the most products or getting contracts with different people. Commission would work well for a sales position. When you hire someone you want to make sure you have a good orientation. Explain to them the different retirement programs, fixed salaries for managers, stock options, health insurance, profit sharing, which will make your business one where people will want to work.
The more people you have interested in working for your company the better pool of people you will have for hiring. Motivation is very important when owning a business. It is important because people are willing to work, and work hard, if they feel that their work makes a difference and is appreciated. One of the theories of motivation is the Hawthorne effect where people will behave differently when they know they are being studied. The Maslow theory is based on the idea that motivation comes from need.
If need is met, it’s no longer a motivator, so a higher-level need becomes the motivator. The Maslows hierarchy of needs is physiological needs, safety needs, social needs, esteem needs, and self-actualization needs. Herzberg’s motivating factors are from the best to the least: sense of achievement, earned recognition, interest in the work itself, opportunity for growth, opportunity for advancement, importance of responsibility, peer and group relationships, pay, supervisor’s fairness, company policies and rules, status, job security, supervisor’s friendliness, and working conditions.
McGregor’s theory X and Y is that x is when you have to assume the average person doesn’t like work and will avoid it if possible. So you have to put fear and money into the person to motivate them and these people need to be closely supervised because they are not trusted. The Y theory is the total opposite of x. It is when most people like work, so people work towards goals and personal achievement and they have responsibility and can be trusted. The Y theory causes a more relaxed managerial atmosphere in which workers are free to set objectives, be creative, be flexible, and go beyond the goals set by management.