1. Chapter 6 – The Importance of Business Planning What is Planning? Planning involves working out: - what is to be achieved - how this will be achieved - who will manage the process - the time frame of the process Plans are important in order to: - determine feasibility - determine profitability - reduce chance of failure - anticipate probable trouble areas - improve chances of success - compare anticipated results with actual VCE Business Management Year 11

2. Chapter 6 – The Importance of Business Planning Steps in planning: 1.Forecasting – looking ahead 2.Setting aims/goals 3.Devising strategies 4.Prioritising tasks 5.Developing policies and procedures 6.Developing budgets VCE Business Management Year 11

3. Chapter 6 – The Importance of Business Planning Levels of planning: Strategic Planning (2-5 years) - whole business planning - involves setting long term goals for whole business Tactical Planning (1-2 years) - each tactical goal is a step towards the strategic plan Operational Planning (daily, weekly, monthly) - adds up to the achievement of the tactical and strategic plans VCE Business Management Year 11

4. Chapter 6 – The Importance of Business Planning The Business Plan Components of the Business Plan 1.Cover sheet 2.Executive summary 3.Mission statement 4.Business Profile 5.Products and services 6.Marketing plan 7.Operational Plan 8.Financial Plan 9.Appendices VCE Business Management Year 11

5. Chapter 6 – The Importance of Business Planning The Business Plan Components of the Business Plan 1.Cover sheet - at the front of the business plan - should state: - name of proposed business - names of people who created the plan VCE Business Management Year 11

6. Chapter 6 – The Importance of Business Planning The Business Plan Components of the Business Plan 2. Executive summary - is written last - it is a summary of what is in the business plan - it is written for people to male a quick appraisal of the business plan VCE Business Management Year 11

7. Chapter 6 – The Importance of Business Planning The Business Plan Components of the Business Plan 3. Mission statement - state the business mission statement - a mission statement is - what the business has to offer the market and the overall aspirations of the business - it will usually contain: - intended market, customers - reference to products - reference to location - businesses philosophy VCE Business Management Year 11

8. Chapter 6 – The Importance of Business Planning The Business Plan Components of the Business Plan 4. Business Profile - this area briefly explains: - statement of objectives - rationale for why business is being established - list of principles / directors - business structure - skills, qualifications of key personnel - description of main activity - unique features of the business - date to be established VCE Business Management Year 11

9. Chapter 6 – The Importance of Business Planning The Business Plan Components of the Business Plan 5. Products and services - Contains a description of the product/service being provided - diagrams/plans and explanation - description of competitive advantage - what they will do better than their competitors - description of possible future opportunities or development VCE Business Management Year 11

10. Chapter 6 – The Importance of Business Planning The Business Plan Components of the Business Plan 6. Marketing plan -Description of the market which the business will operate - - customers, size of market, tastes and trends -An industry analysis of evaluation for the particular industry the business will enter, this could include: -- size of industry -- number of businesses in industry -- number of people employed in industry -- avg size of businesses in industry -- avg operating hours -- avg profit -- industry trends VCE Business Management Year 11

11. Chapter 6 – The Importance of Business Planning The Business Plan Components of the Business Plan 6. Marketing plan -Other things to include in marketing plan: -Profile of business customers -SWOT analysis -Pricing structure -Description of promotion methods -Methods of sale and distribution -Intended marketing strategy VCE Business Management Year 11

12. Chapter 6 – The Importance of Business Planning The Business Plan Components of the Business Plan 7. Operational Plan (read) -Regulatory strategy -- location and local government zoning regulations -OH&S -Employee relations laws -Laws relating to environment -Storage and handling dangerous goods - customer protection -Labeling requirements VCE Business Management Year 11

13. Chapter 6 – The Importance of Business Planning The Business Plan Components of the Business Plan 7. Operational Plan (read) -Production Process -Explanation of the process to be undertaken by the business to produce its product or service VCE Business Management Year 11

14. Chapter 6 – The Importance of Business Planning The Business Plan Components of the Business Plan 7. Operational Plan (read) -Quality Assurance systems -Quality control processes -Certification of quality management systems -Needs to be checked by external body -Customer satisfaction -Best practice VCE Business Management Year 11

15. Chapter 6 – The Importance of Business Planning The Business Plan Components of the Business Plan 8. Financial Plan Will include: -An analysis of current financial position -Including assets, money in bank, loans -Income and expenditure projections (for first 5 years) -Estimated Profit or Loss based on above point -Break even analysis VCE Business Management Year 11

16. Chapter 6 – The Importance of Business Planning The Business Plan Components of the Business Plan 9. Appendices This section will include any information that might strengthen the potential business owners case to start up a business, this could include: -Brouchures -Patents, copyrights, trademarks -Resumes of key personnel -Further market research -Other articles press releases or publicity. VCE Business Management Year 11