Financial Business Plan
Introduction
The paper intends to develop a business plan for a newly established company, which wants to grow its business in the upcoming years. The plan will provide a guideline for the running of the business and determining its performance in the current years. The plan will also set up the different ways by which the teams can coordinate together to take control of the business. Further, the paper will focus on a reporting package that describes the key performance indicators of the recommended choices. In the last section, the paper will present brief minutes of the monthly meeting for showing evidence of the operating decisions.
Discussion
Business Plan
Problem Summary
The company has been established for one year. The company has already laid down foundations for manufacturing and selling a decent product. For selling its product, the company has developed a sound marketing strategy. This has led to the creation of a moderate financial position for the company (Ferreras-Garcia et al. 2019). However, the turnover of the company has not been exceptionally high until the current year. For this reason, the management has decided to set up a plan for the growth of its business and reach its targeted turnover and profit within a year. Don't use plagiarised sources.Get your custom essay just from $11/page
Solution Summary
The management can make use of the essential management tools for controlling the operations of the business. Through the application of these tools, it would be easier for the management to generate the targeted revenue as well as profit. The management can conduct proper strategic planning through a balanced scorecard approach and Porter’s five forces model for analyzing its competitive position. The performance measurement can be suitably improved through the examination of the key performance indicators and benchmarks of the industry (Mariani et al. 2019). Along with this, the company can also adopt suitable techniques and strategies for minimizing the risks of the business. These techniques can be an enterprise risk management program and risk heat maps.
The other factors that should be taken into account by the management are product delivery and value recognition. The quality of the delivered product can be checked through total quality management, six sigma model, and the cost of the quality of the product (Cant 2016). The value can be recognized through two methods, that is, value chain analysis and customer relationship management program.
The management of the company should look into the existing financial condition of the company and act appropriately for the management of its finances. The monetary base can be improved through gradual growth and usage of profit for funding additional growth. The administration should also look out for additional funds from external sources (DeNoble and Zoller 2017). To improvise these techniques, the company should calculate its current debt to equity ratio. If the company is already debt-laden, it should take appropriate measures for funding its business through additional equities.
Along with this, the company should also try to keep a balance between its operational and financial segments, while going through the process of expansion (Almeida and Santos 2018). In some situations, the marketing segment of the company might extend beyond its financial capabilities. In such cases, the company must keep track of the growth of both the sectors and devise policies accordingly.
Reporting package
To reach the targeted heights of growth, the company should determine its key performance indicators, which would consequently help the company in gaining a suitable market position and supersede its competitors. In preparing its key performance indicators, the company should take into account two segments, that is, customer bases and financials. In the sector of customer base, the company can carry out an analysis of the cost of customer acquisition (Almeida and Santos 2018). This analysis provides the value of the cost spent in marketing for acquiring a new customer.
Another metric can be customer lifetime value analysis. This shows the amount that is spent by a customer at the business for their entire life (Xu 2020). Another metric that can be useful for determining the financial progress of the business can be a revenue growth rate. This determinant is helpful in examining the rate of change in revenue.
The management should take into account all this information to make proactive decisions for the company. The administration can start the procedure through the preparation of a strategic scorecard (Watson and McGowan 2019). The scorecard will elaborate on five critical areas of business. These areas are strategic position, strategic risks or opportunities, business model, strategic implementation, and strategic options. The metrics for development, along with the strategic report, will provide a complete picture of the current business environment and direct the management towards developing suitable strategies of business enhancement (Council 2018). The scorecard will also identify the gaps in the business and suggest proper recovery strategies for the company.
Minutes
| GROUP: | LOCATION: |
| PERSONS PRESENT: CEO, Board of directors, and managers of the operational departments such as marketing, finance, and other key departments.
APOLOGIES | |
| DATE OF MEETING: 12 March 2020 | |
| Action | Person responsible |
| 1) Strategic planning through Porter’s five forces and balanced scorecard approaches | CEO and the management |
| 2) Risk minimization through enterprise risk management programs and risk heat maps | Risk management department |
| 3) Quality management of the delivered product through the TQM and six-sigma model. | Quality check department |
| 4) Value recognition through value chain analysis and customer relationship management program | Marketing department |
| 5) Financial analysis through debt-equity balance and funding through earned profit. | Finance department |
Conclusion
From the business plan, the newly established company is expected to meet its targeted turnover and profit figure within a year. The company should take into account the three critical segments to improvise its action plan. These three segments are the financial segment, operational segment, and customer segment. The different metrics to be used by the management are highlighted along with the action plan in the form of minutes.
References
Almeida, F. and Santos, J., 2018. The Business Plan Reference Manual for IT Businesses. River Publishers.
Cant, M.C., 2016. Entrants and Winners of a Business Plan Competition: Does Marketing Media Play a Role in Success?. Journal of Entrepreneurship Education, 19(2), p.98.
Council, C.C., 2018. Annual Business Plan and Budget.
DeNoble, A.F. and Zoller, T.D., 2017. Is the Business Plan Really Dead and Should it Be?: A Case for the Lean Start-Up Approach’, The Great Debates in Entrepreneurship (Advances in the Study of Entrepreneurship, Innovation and Economic Growth, Volume 27).
Ferreras-Garcia, R., Hernández-Lara, A.B. and Serradell-López, E., 2019. Entrepreneurial competences in a higher education business plan course. Education+ Training.
Mariani, G., Morelli, D. and Bartoloni, L., 2019. Managing uncertainty in the start-up environment. Is a business plan an incentive or a limitation?. Management Control.
Watson, K. and McGowan, P., 2019. Emergent perspectives toward the business plan among nascent entrepreneur start-up competition participants. Journal of Small Business and Enterprise Development.
Xu, X., 2020. Compose the Business Plan. In Introduction to Entrepreneurship (pp. 139-163). Springer, Singapore.