Business Plan

Business Planning is most fundamental pre-requisite before an entrepreneurial initiative. Business Planning should involve critical analysis of the strength of the entrepreneur, weakness of the entrepreneur, opportunities prevalent in the socio-economic, socio-political and techno-economic matrix, and the situational threats that can retard the momentum of the enterprise.


Generally an Entrepreneur should consider the following factors while executing business planning:

• Educational Background: While planning a business initiative and Entrepreneur should always deploy his knowledge and skill acquired through theoretical education and practical training. Moreover he should also analyse his educational background and draw a tenable deduction regarding the fact that whether his exiting education level is appropriate for his planned business initiative or he should have to imbibe greater techno-managerial inputs through customized education and training programs.
• Experience: While planning for a business, an Entrepreneur should take into consideration his past experiences pertaining to any of the functional activities that are relevant to his potential business initiative. 
• Economic Background: The Entrepreneur should critically analyze the economic condition of his family before floating a business initiative. His risk level should be tailored in accordance to the economic stability of his family.
• Investment Capacity: An Entrepreneur should analyse his resource base and his capacity to invest in his business venture. Based on such analysis he should have to take decisions recordings his plan for resource mobilization. To be more precise after a critical analysis of his investment capacity he will have to identify sources form where capital can be leveraged either in the form credit or in the form of angel investment.
• Family Background: If the Entrepreneur valid from a business family in that he case he can get advisory inputs from the veteran members of his family who are engaged in business initiative. On the contrary if a person is a first generation entrepreneur then he will have to acquire advisory inputs from external resource person.
• Market Competition with other Producers/Size of Market: After selection of the product, the Entrepreneur should critically analyze the market potential. He should try to determine the size of the existing market as well as the volume of the new market or upcoming market. Secondly the Entrepreneur will have to assess the resource and the deficits of the competing products within the similar price band and having similar target segment.
• Location of the Unit: Before establishing the unit. An Entrepreneur should try to ascertain whether the unit will be strategically located or not. A location is considered to have strategic advantage from two perspectives - Production Perspective and Marketing Perspective.

A unit will be considered to have strategic location advantage from the production perspective if the source of raw materials or the skilled workers are prevalent in close proximity i.e. very near the location of the unit.

On the other hand a unit will be considered to have locational advantage from the marketing perspective if the captive customer base or any bulk institutional buyer is located in close proximity i.e. very near the geographical location of the unit.

• Availability to technology and process know-how: If the business initiative is technology intensive, then the Entrepreneur should identify the technological institutes or research centers who  be the knowledge partner of the initiative. The Entrepreneur should also try to determine the procedural formalities through which technological inputs can be leveraged from the knowledge partner in a seamless pattern.
• Government Policy: The Entrepreneur should critically appraise the existing policies and programs of the Government and try to deduce which of the policies and programs are conducive to his entrepreneurial initiative.

If the Business Planning is executed on the framework of SWOT ANALYSIS, then it becomes easier for the Entrepreneur to map the resources and diagnose the deficits from the internal as well situational perspective.

Let us explain SWOT ANALYSIS.

SWOT is an abbreviation of strength, weakness, opportunity and threat.

Out of these four parameters of analysis, we can affirm that analysis of internal environment paves the path towards identification of organisational strength and organizational weakness of the entrepreneur's owned organisation. On the other hand the analysis of external environment leads towards the identification of situational opportunities and situational threats pertaining to the socio-economic matrix within which an entrepreneur is functioning.

Let us enumerate a practical example for clarifying the intricacies of SWOT Analysis.

Let us consider an Entrepreneur named Shyam. Shyam is running an entrepreneurial initiative named Shyam Food Products Pvt. Ltd. Now let us diagnose the strength, weakness, opportunity and threat of Shyam Food Products Pvt. Ltd.

STRENGTH:

• Shyam's Entrepreneurial Characteristic features
• Availability of hygienic infrastructure for running a food-processing unit
• Skilled labourers 
• Qualified Managers
• Qualified Food Technologists for ensuring quality control
• Corporate Image of the Company
• Brand value of the food produced from the company
• Sumptuous Capital
• Liquidity
• Strategic & Result Oriented Management System

WEAKNESS:

• Low morale of the labourers 
• Lack of motivation in the sales force
• Managers are not commitment-driven
• Prevalence of Conflict among the Line-Managers and Support Staff
• Absence of Behavioral Trainers for indicating Life Skills among the managerial staff as well as the labourers. 

OPPORTUNITY:

• Common people are becoming more attracted towards processed food 
• The consumers are expressing their favorable opinion towards the quality of the products.
• The Distributors and Retailers are ventilating satisfactory opinion.
• A reputed research-institute has expressed its intent to become the Knowledge-Partner of Shyam Food Products Pvt. Ltd. Thus there has been an opportunity of leveraging cutting-edge technological inputs.
• An Angel investor is very much impressed regarding the burgeoning popularity of the food products. He has shown interest in investing on the expansion framework of the company.
• Some institutional buyers (food based malls) are interested to establish a B2B (Business to Business) model with Shyam Food Products. They have delivered a proposal of bulk purchase of some food products.

THREAT:

• Community Based Action Groups are asking for recruitment of local people although there is dearth of skill among them.
• The Local Administration is not cooperative. They are against land acquisition for expansion of unit.
• The suppliers of raw materials are becoming irregular
• A new start up company has floated some organic food products and captured a slice of the market share of Shyam Food Products.
• Government is not taking stringent step to control the price inflation of the raw materials.

In this way the strength, weakness, opportunity and threat factors are to be identified. Subsequently while framing the business plan, all of such diagnosed factors (pertaining to strength, weakness, opportunity and threat) are to be taken into consideration.