Preparing a business plan and budget

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Outline

Basic reasons of business plan

Giving an assessment of current and future positions of business
Helping in organic growth as well as through external funding
Helping in the securing of financing through several methods by updating it

Benefits of external help in planning

Guiding the planning team
Drawing ideas from the team through brainstorming
Capturing of information
Helping in recording of the plan in a clearly structured way

Objectives of the plan

Communicating the action plan to be used to all the people
Providing a means of assessment and measuring performance
Defining the specified strategic goals and targets as well as objectives

Current financial position analysis
SWOT analysis
PESTEL analysis
Brainstorming
Balanced scorecard

Preparing a business plan and budget

Many companies and businesses must have some goal and objectives they wish to achieve. However, the article, ‘Preparing a business plan and budget’ cites that the key to achieving a set out strategy is to have an annual business plan and a budget. Many companies have business plans, but sometimes they are not well structured, while many people may not know the necessity of having a well-written annual plan, as well as how it should look like. This article addresses the elements of a business plan, what it is supposed to be doing for business, and the process of making the business, which t cites should include all the people in the business. A business plan is important in providing control to the management to have a meticulous review and setting of goals and objectives. On the other hand, it provides a reason for directors and top management to give their support to the budget. In addition, many businesses fail to achieve good business plans since they do not know the real or basic reasons of having a business plan. The article cites three basic reasons of having a business plan, which are proving the owners of the business with an assessment on the business in the current, as well as forecasting the future. It also aids the business in expanding or growing from internal sources as well as through outside sources. Finally, through an updated business plan, the business can be able to acquire financial support through various methods such as overdrafts, loans, and venture capitals. This means that a business plan will help in making the budget of the business, and should be reviewed regularly.

In budget making, when the people involved are not sure that the plan will be successful, outside help can be sought. However, outside help should only be sought to facilitate in the planning of a budget that is realistic and workable. The article sites that outside help ca be of importance in several way, which include, offering guidance to the team involved in the whole process of making a plan, helps in brainstorming or getting strategies from the participants or the team involved, getting of the information and recording the plan in an understandably structured approach. In making of a business, “The words of the business plan are important; they explore issues and make commitments to action,” (brefigroup.co.uk, 2011). Therefore, the facilitator should ensure the right words that make sense are used. The articles further highlights what the objectives of having a business are in order to achieve the desired strategy and goals. The first objectives of a business plan are ensuring that the communicating of the strategy or the action of moving from point A to B done and every person involved is aware of the part they play. Without clear knowledge of what one is supposed to do, the plan may not achieve anything. A plan is supposed to specify the objectives and goals, as well as stipulate how they shall be met. Therefore, by doing so, the plan sets a measure that will allow monitoring of the success of the business, since, at the end of the year, a review of what has been achieved can be made, and the reasons for failing known. Some focus where performance measurement can be done include the revenue, expenditures and costs, and capital. Financial measures are also included such as ratios.

Many people do not know where to start when it comes to making a business plan, and end up having a shady one that is hardly of any help. The planning process is supposed to be done by a team that includes all people from all the departments through their heads of department. The article outlines several tasks that can be done to aid the planning process these are, an analysis of the current financial status, a SWOT analysis, PESTEL analysis, brainstorming sessions, and a balanced scorecard analysis. The scorecard will assess which perspective is more beneficial, whether, “from a financial perspective, a customer perspective and an internal perspective …and identification of critical success factors and performance measures,” (brefigroup.co.uk, 2011). The article has further outlined a business plan, one that can be followed by businesses that intend to have successful plans for their management. The article has critically addressed the needs of having a business plan, provided its objectives, and a process that can be followed to make a plan. The article has holistically addressed the issue of planning in a succinct manner.

References

brefigroup.co.uk. (2011). Preparing a business plan and budget. Retrieved from: http://www.brefigroup.co.uk/consultancy/business_plans.html