Business plan critique
Business plans may be great for bankers and investors, but if companies really followed them, you might never have heard of compaq, lotus, or ben & jerry's. The article takes some of america's best small businesses and examines their business plans and how useful they have been. Most of the people say they haven't looked at the business plans in a long time and that the plans did not accurately forecast what really happened with the business! One may easily conclude that it's a waste of time to put together a business jumping to that conclusion, you should be aware of a study done at the university of texas. The study looked at companies that had a formal business planning process, compared actual performance with planned performance, and also measured whether or not they operated according to plan. Article, found that companies that had formal organizational plans did not perform according to those plans! However, the companies that did go through formal planning processes performed better than the companies that did not go through a formal planning process!
If the proper methodology is used, the business planning process builds the knowledge of the industry into the management team and board, so that they have a solid information base when faced with changes in the company's environment, in other words, the business planning product is not as important as the business planning ss plan componentsa typical business plan for a food cooperative usually has:a description of the business, including its purpose and strategyan analysis of food industry trendsan analysis of the market and the competitionan analysis of other key internal and external factors affecting the business, including a historical financial analysisa description of how the cooperative will address the major strengths, weaknesses, threats, and opportunities outlined in the analysisa description of the market niche the cooperative is after and the products and services the co-op will offer to serve that nichea capital, cash, and operating budget, with assumptionsthis article's purpose is to provide food cooperative board members a framework for critiquing the co-op's business plan, including the business planning process. To put together this framework, i interviewed 15 cooperative business leaders and board members; reviewed several artides and books on business plans, and drew on personal experience. The framework based on this information has the following categories:directionassumptionscapacitytechniquevantage pointmanagementthe people interviewed were asked this question: if you were a board member of a cooperative, what questions would you ask to help you critique the cooperative's business plan? Almost everyone interviewed suggested asking a question like: "is this plan consistent with what we are trying to do? The business plan advocates a significant change from the co-op's past direction, a board member should ask why the cooperative is pursuing the new cooperative's strategic those who have not set strategy, top management strategy, by tregoe and zimmerman may be useful. This test may be a part of a board's critique of the business top management determined the nature and direction of the business over the next few years? Board members must find and examine the key business plan assumptions in order to properly critique a business plan.
For a few hundred dollars, this person could review the business plan and generate a list of questions and comments for the board. The board should insist that the business plan, especially the financial portion, have a clear list of interviewees came up with several questions that fall into the category of questioning basic assumptions:how successful has management been at predicting results in previous plans? Article, sales forecasts are the weakest feature of most business plans, so board members should spend considerable time examining the market and sales assumptions. Does the plan address the total market potential and have an analysis of present and future market share? A board member can use this list of questions to ensure that key aspects of the business have been thought through. Does the plan have a realistic assessment of the financial and organizational capacity to carry off these plans? Many times cooperatives have accomplished a wellplanned expansion or move that everyone agreed to, only to find that no one really knew how to operate the store with its new volume.
The entire board may not be looking at the assumption of each line in the financial projections, but the financial committee or the planning committee 's the database that the figures were drawn from? Management is involved with the pieces; the board can look at the condit mentioned that directors usually do not know as much about the business as management does. The directors should ask lots of questions about the areas they do know something about to determine whether the people that put together the plan know what they are talking about. Condit notes that this is a good reason to have a diverse board: someone with knowledge of marketing, another person with a background in finance, ment: marsha krassner, vice-president at the national cooperative bank development corporation and former food cooperative manager, looks at business plans for a living. She mentioned that no matter how skilled the board of directors is, with poor management the plan probably will not l people mentioned that if management is not willing to stay through the time period of the plan, then the board is in a poor position to assume that the plan can be carried rosen, quoted in the inc. Article, says that the details and presentation of the plan are not that important in terms of making an investment. Instead, the business plan is reviewed to get a sense of how realistic the managers are about the problems they face, how savvy they are about business, and whether the management team is any good.
The board may want to review the material and put together the planning process most appropriate for their situation. For example, some cooperatives may want to establish a strategy planning process such as the one outlined in top management putting together the first draft of a business plan, management and staff may want to review the questions and reference materials included in this article. The formal planning process should commence about six months before the board is expected to vote on its acceptance, and the finance committee presented with a rough draft of the plan several months before the adoption date for the plan. The staff would then conduct the additional research required and redraft the plan, which would be presented to the entire board for perusal. At a future board meeting the final plan would be presented to the board for formal ceslisted below are publications, books, and articles that would be useful for management and the board to review and use as resources when building and critiquing a business plan. Brown publishers, dubuque, iowa; ss planning guide; upstart publishing, dover, new hampshire; in to post in to post sponsorsthank you sponsors! Registration for each session is limited to ensure that each participant can apply this valuable information to their own business.
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