Business plan: - a formal written document that explains in detail how a business is going to achieve its objectives.

What should be included:

• What are the business is aiming to achieve/
• Why?
• What will need to be done to achieve this?
• By who?
• When?
• Using what resources?

Advantages:

• Requires a strategic review of the business that will give a deep analysis and evaluation of a business.
• Gives a business a sense of direction
• Forces an evaluation of current strategic and tactical objectives
• Forces an evaluation of current strategic and tactical objectives
• Forces senior managers to consider the constraints faced by a business in reaching its objectives
• Set out the role of each department of the business and the apart it hacs to play
• Encourages communication and coordination within the business

Disadvantages:

• Might spend too much time and money planning
• Plan might be too rigid and not leave room for creativity
• Plan may be disregarded or altered
• Possibility of plan being leaked to competitors

Reasons for stakeholders to want to see a business plan:

Employees - how are future plans going to affect their job

Suppliers - are they still going to have business with the planned changes or is the business changing suppliers

Investors/Bank - are future plans risky and could lead to them losing their money

Shareholders - will the business bounce back bigger making their stake larger is there a big risk it will fail.

Customers - if there will be any changes with the product like prices or quality.

Local Community - are jobs going to be created or lost. Will the new plans damage the community?

The plan-do-review method:

Plan - establish objectives and the course of action, and the resources needed to achieve them.

Do - implement the plan ensuring that lla areas of the business understand their part of it in terms of responsibilities and deadlines

Review - there will need to be a formal ongoing evaluation of progress of objectives and a final review at the end of the process.

Advantages:

• Approach is methodical and it forces a strategic approach on achieving objectives
• If employees are clear about what they have to do then they’ll be more motivated
• Regular reviews of departmental and employee progress means mistakes can be fixed easier
• Encourages ‘Kaizen’ (continuous improvement)

Disadvantages:

• It is a lengthy process that can cost a lot
• Once the cycle has started it has to be completed before changes are made
• If employers are not involved in planning they may lose motivation
• Some employees dislike ongoing reviews