Importance of Business Plans for Success
Discover the significance of business planning and how it shapes the direction, financing decisions, and resource mobilization of a business. Explore the contents and format of a business plan, along with the key objectives it aims to achieve.
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Presentation Transcript
Module 2: Session 2 Introduction to the Business Plan Module 2: Session 2 1 3/20/2025
Session Objectives 1) Stress the importance of the planning function as a key success factor 2) Introduce a format and contents of a business plan 3) Setting objectives and targets 4) Formulating strategy 5) Identifying and scheduling planned activity Module 2: Session 2 2 3/20/2025
What is a business plan? A business plan describes; Scope of the business and its philosophy What to do future business objectives How to do it strategy and activities to achieve objectives and When to do it- the timing and sequencing of activities Module 2: Session 2 3 3/20/2025
Importance of a business plan Shows business direction generally Enables rational and informed financing decisions by stakeholders Sets key performance indicators Spots potential pitfalls before they happen, e.g. cash shortfalls, man power and skills gap, capital needs etc. The business plan mobilizes and focuses resources to achieve specified and known results. Module 2: Session 2 4 3/20/2025
Possible target audience Owners of the business Management and staff Potential financiers such as banks Potential partners Potential clients The plan is a means of showing owners, potential investors and lenders why and how the business will succeed. Module 2: Session 2 5 3/20/2025
Business plan format and contents 1. 2. 3. 4. 5. 6. Cover page and table of contents Executive summary General description of the business and its environment Statement of mission, vision and core values Goals , objectives and targets. Strategic and operational plans (organizational, marketing, operations, financial). Business implementation action plans. Financial projections (performance, cash flow and position) Key performance indicators (KPIs). 10. Relevant appendices. 7. 8. 9. Module 2: Session 2 6 3/20/2025
General description of the business Information about the road construction industry and its attractiveness, Evaluation of potential market [gravel roads at National, District and Community] Past business performance Organization capacity- branches, key personnel SWOT Competitive advantage: What makes this business unique, how will the business do things differently to manage competition . Module 2: Session 2 7 3/20/2025
Strategic statements: Example 1 Mission: Deliver road construction services in Uganda Vision statement: Become leading road contractor in the region Goals: Provide highest quality road construction Objectives : To achieve 99% compliance to road sector standards Strategy: Staff training, step up supervision and works inspection. Module 2: Session 2 8 3/20/2025
Strategic Statement: Example 2 Mission: Deliver road construction services in Uganda Vision: Become the leading road contractor in the region Goals: Deliver above average return to our investors Objectives: Increase after tax profit by 30% in five years Strategy: Increase turnover, gear up capital structure. Module 2: Session 2 9 3/20/2025
Operations plan: e.g. Marketing Plan Set target business volume (24kms per year) Strategy to get jobs and beat competition: Target LGs, UNRA, large corporations. Pricing and promotion activities say: Review pricing policy Print diaries/calendars Participation in UNABCEC Brand the premises and trucks Module 2: Session 2 10 3/20/2025
Operations plan: Operations Determine capacity requirement to do set targets Machine hours required Equipment to be owned or hired Fuel Materials Manpower Consumables Module 2: Session 2 11 3/20/2025
Operations plans: Other Departments Human resources Staff attraction and retention Staff training and development Occupational health and safety Finance and accounting Performance, cash flow and position forecasts Capital implications Management Structure and policy Administration Transport Maintenance Office running Module 2: Session 2 12 3/20/2025
Developing activity plans For every goal break it down into objectives and activities Indicate the time for the activity Indicate the person responsible for the activity Indicate the output for that activity Example: Module 2: Session 2 13 3/20/2025
Example of an activity plan Goal one : Deliver above average return to our investors (through gearing and higher revenue) Objectives: Activity Time frame 2014 Performance indicator A job obtained Person responsible Operations manager 1. Increase after tax profit by 30% in five years. 1. Extend operations to district X 2. Apply for a term loan of Shs 500m 3. Double Ops capacity to 2 kms per month 2013 Loan obtained Equipment and skills in place Finance Manager CEO/Ops Manager 2014 2. Adopt new road construction technology Module 2: Session 2 14 3/20/2025
Discussions for all groups 1) Review the work done in the overview to strategic planning 2) Propose a mission and vision statement for Munaku Contractors Ltd. 3) Formulate possible goals and objectives for the following five years and set targets. 4) Formulate strategy for at least one objective. 5) Develop an activity plan for at least one objective. Module 2: Session 2 15 3/20/2025
THE END Q &A Module 2: Session 2 16 3/20/2025
Supporting documents Details of projections Extracts of past performance Location, address and website details Promotional materials e.g. schedule of previous contracts Licenses and other legal documents Key management Pictures of say roads done and other outputs Professional reference (Letters of recommendation) Published information about the firm or industry. Artistic impressions Module 2: Session 2 17 3/20/2025
