Business Planning And Development

BUSINESS PLANNING AND DEVELOPMENTSTRATEGIC PERSPECTIVE AMANI DAVID DEP: M&E/CBSL 11th April, 2018/Wednesday (Lecture 1) Strategic – describes something which is extraordinary. It is used to mean systematic or well organized decisions or actions which have been made or taken to offer significant results or outcomes. In modern world, the term is considered as a new way or a postmodern approach of looking or seeing issues. General meaning of the term strategic It is a situation of being focused, predetermined, motivated, authoritative and aggressive in striving to achieve something. From a strategic lens successful business are not born but are made. In other words business success is on the hands of an individual who owns or manages a given business. This further implies that success and failure of any business firm are attributed by owners or managers themselves. Thus, success or failure is always considered as planned events and not accidental events. Thus the term strategic from business planning perspectives may refer to;         

Ability of a person to think strategically It is all about resources mobilization It is all about strategic allocation of resources by linking them with business environment It is how resources are linked into (linkage), and how linkages are avoided. It is defining of dreams and priorities into vision It is how to design mission that drives your vision It is about looking opportunities and linking them with appropriate business ideas It is all about priorities setting It is all about an individual dreams

These are characteristics that distinguish a person who is planning for his or her business and another who is planning for the same but strategically. In traditional business planning approaches, the decision might be, “the business should be competitive so as to survive.” However in strategic perspective on starts to think on why, how, what, when, who, etc. strategic business planning is very specific and focused it requires specific actions and decisions rather than generalization. Strategic business planning – fundamental business concept which integrates the two fundamentals of strategy which are deciding where you want to go and how to implement operational initiates to take you there, coherently in one process.(setting of a direction to be respected by everyone within the business) BENEFITS OF STRATEGIC BUSINESS PLANNING   

Stimulates or stretch thinking at the highest levels which are not ordinary levels It promotes or motivates a person to be very specific determined and focused It ensures resources mobilization, linkage and minimizing linkages.

Credits: Ngalla, Samson and Mwaipopo Moses

Added benefits of strategic business planning (Goggled) (ref: Sam and Moses 19/04/2018- Thursday11:02pm)   

New opportunities for the business. Reviewing and working on your business strategy involves a lot of creative thinking which is likely to generate new ideas and opportunities for your business which you may not have identified under traditional planning. It can make a business more durable Strategic business planning enables your business to cope with changing business environment. Due to the dynamic business environment, without strategic business planning a booming business may become in debt after a short while Allows planners to be proactive rather than reactive It allows planners to foresee the future and plan accordingly. Through strategic business planning planners can anticipate certain unfavorable scenarios before they happen and take necessary precautions to avoid them.

FUNDAMENTALS OF STRATEGIC BUSINESS PLANNING      

Setting or establishing mission and vision Determining strategic direction Setting strategic goals and objectives Goal- a broad business result that a business is absolutely committed to attain Objective- a specific step, a milestone which enables you to accomplish a goal Identifying key strategic issues and challenges Defining business environments Strategic allocation of resources Resources are said to be invested strategically if they have been able to cover the following questions. a) Are you confident that allocation has been done in proper projects, place, on proper time and to proper people? b) Do you see any possibility to get maximum outcomes due to the allocation? c) Does allocation match with your dreams, inspiration, vision, mission etc.? d) Do you have any feeling that there is other alternatives which may give you more chance of success? e) What do you say regarding input output ratio? Do you see the balance between the two? f) How about risks? Remember strategic business planning offers the best mechanisms to minimize risks.

Credits: Ngalla, Samson and Mwaipopo Moses

18th April, 2018/Wednesday (Lecture 2) STRATEGIC ISSUES IN BUSINESS PLANNING A strategic issue is a forthcoming development either inside or outside of the organization, which is likely to have an important impact on the ability of the business firm to meet its objective. OR Strategic issues are events, developments or trends that are perceived by decision makers as having the potential to affect the organization performance. (Ansoff 1965) It can take a form of a welcome issue, an opportunity to be grasped in the environment or an internal strength which can be exploited to advantage. Furthermore it can be an unwelcomed external threat or an internal weakness which imperils continuing success, even the survival of a business firm.

WHY STRATEGIC ISSUES?    

Efficiency and effective utilization of resources Priorities setting which is very crucial in business management It enables a very quick and real reaction or response to any development It defines a well proper business structure and systems given the situation

In order to explore strategic issues the following questions should be addressed.       

What is the issue? Why is it an issue? Who says it is an issue? How do we know it is an issue? What factors make it a strategic issue? +Can we do something about it? What are the consequences of failing to address this issue?

FEATURES WHICH DEFINE STRATEGIC ISSUES.     

It has to link with your dreams as well business mission and vision. It always demand strategic actions e.g. continuous monitoring and evaluation. They cut across the entire industry or market. An issue is always the concern of individual firms. They are not static but rather dynamic. They are reflective of trends, changes, growth, development of either a business firm, industry or market. They demand proactive measures as opposed to reactive measures. They tend to rely on projections and predictions.

Credits: Ngalla, Samson and Mwaipopo Moses

Things that make strategic issues to differ from one business to another business.       

Nature and size of the business firm Forms of ownership and management Industry and market which a business firm operates and serves respectively Level and intensity of competition Business growth cycle. Strategic issues are dynamic and not static. Individual dreams, interest as well as a business firm mission and vision. Government actions or decisions that relate to tax, policies, regulations etc.

General and typical examples of strategic issues.        

Business opportunity and ideas Business name and branding Business location Resources mobilization Business networking Government policy, tax, procedures, regulations Business policies and strategies Business current and prospective customers.

FEASIBILITY STUDY OR ANSLYSIS DESCRIBED The term feasible is defined as capable of being done or carried out. Therefore the term feasibility study or analysis may then refer to an investigation into something which is capable (or not) of being successful. Such as the initiation and continuation of a new business venture based on a creative or novel idea (Lee Ross and Lashley 2009). It is a process of determining or establishing if a given business idea is viable. A feasibility study is a detailed analysis of a company and its operations that is conducted in order to predict the results of a specific future course of action. For example; a good feasibility study or analysis would review a company’s strengths and weaknesses, its position in the marketplace and its financial situation. It would also include information in a company’s major competitors, primary customers and any relevant industry trends, changes or development. However it is necessary to note that a feasibility study or analysis dos not guarantee a business idea success rather conducting a study reduces the likelihood that a business planner will waste time pursuing fruitless business ventures. A feasibility study is not the same as a business plan, it answers the questions like should we proceed with this business idea? Its role is to serve as a filter, screening out ideas that lack the potential for building a successful business before a business planner commits the necessary resources to building a business plan. Therefore it is an investigative tool designed to give a businessman a picture of the market, sales and profit potential of a particular business. A business plan is a planning tool that transforms an idea into reality.

Credits: Ngalla, Samson and Mwaipopo Moses

Feasibility study concentrates on the following business critical factors.     

Estimation of market size for the proposed business firm Estimation market demand for the proposed business firm Establish sales forecast based on the market demand Estimation of expenditures, cost of investment and whether business offerings can be sold at a reasonable price Determine return on investment and if the benefits outweigh the risks.

Feasibility study is all about:   

Assessing the market attractiveness i.e. market consist of buyers Assessing industry attractiveness i.e. industry consist of sellers Possibility of getting sustainable advantages

Why feasibility study or analysis?    

It assist investors to make prudent investment decisions. It is an opportunity to get answers on the questions such as, is it worth doing? It is very helpful in ensuring sustainability of a business firm. For how long the business will go on giving you benefits. It is of importance in establishing and planning for a business which is relevant given the time, place, demand etc. In some stances, feasibility study is very helpful in meeting requirements of some government laws and regulations or local areas bylaws.

BUSINESS FEASIBILITY TEST. INDIVIDUAL CRITERIA FEASIBILITY TEST    

Individual inspirations, dreams, visions etc. Psychological aspects Mental capabilities and technical skills Family and social background

INDUSTRY AND MARKET LEVEL CRITERIA FEASIBILITY TEST         

Have you considered all the advantages or benefits of the idea? Is there a real need for it? Have you pin pointed the exact problems or difficulties your idea is expected to solve? Is your idea an original new concept or is it a new combination or adaptation? What immediate or short range gains or results can be anticipated? Are the projected returns adequate? Are the risk factors acceptable? What long range benefits can be anticipated? Have you checked the idea for faults or limitations? Are there any problems the idea might create? What are the changes involved? How simple or complex will the ideas execution or implementation be? Could you work out several variations of the idea? Could you offer alternative ideas?

Credits: Ngalla, Samson and Mwaipopo Moses

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Does your idea have a natural sales appeal? Is the market ready for it? Can customers afford it? Will they buy it? Is there a timing factor? What, if anything, is your competition doing in this area? Can your company be competitive? Have you considered the possibility of user resistance or difficulties? Does your idea fill a real need, or does the need have to be created through promotional and advertising efforts? How soon could the idea be put into operation?

BUSINESS VIABILITY A business is said to be viable if there is clear possibilities of being successful. In other words, a viable business is strongly linked with opportunities (Encarta dictionary 2009). Viability is about able to grow, survive or able to be done or worth doing. A viable business must be both feasible and profit making. MARKET PARAMETERS USED TO DESCRIBE BUSINESS VIABILITY 

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Market viability From a market viability point of view, a viable business must be strongly related with its current and potential customers. Thus, a business is said to be viable if it is capable to meet current needs and wants of its potential customers. Therefore, market viability defines the business strengths or capabilities to meet customer expectations. Technical viability Business viability can be defined by looking to what extent a business is technically well structured and arranged. Technical viability includes all institutional arrangements and systematic issues which influence business performance. It sometimes include even human behavior that are necessary for operationalizing various activities. Financial viability Financial aspect is used to define the viability of a business by looking input-output ratio or analysis. Thus, the business is said to be viable if there is a great chance for making profits given a certain level of investment Economic viability From economics perspective a business must be economically viable. A viable business is the one which economizes resources by utilizing them carefully. It is connected to effective utilization of resources as well as its ability to accommodate various economic situation or pressures.

Credits: Ngalla, Samson and Mwaipopo Moses

25th April, 2018, Wednesday (lecture 3) PUTTING YOUR PLANS INTO ACTIONS: PREPARING AND COMPILIG A BUSINESS PLAN A business plan consists of many components that is why we say that we are compiling. A business plan determines success since success does not come as accident. It is then considered as a manual which provides guidelines for managing various routine business operations. Business plans and strategic plans support each other and overlap to some degree but are used for different purposes. Business plan is often prepared to test feasibility, mobilize resources, and coordinate activities (product, management, ownership) Some people argue that a business plan may not be important, that some. the point is that what is in your mind is what matters. A business plan is just a physical document. However empirical studies in entrepreneurship have unveil that most of entrepreneurs are not successful because they have nothing in mind about business planning. Conclusively, a business plan is a necessary document but it doesn’t guarantee success. Only those who walk in their plans are able to step forward. Even though some businesses were established without a business plan none was established without planning. BUSINESS PLAN DEFINED The best perspective is to start looking the process of preparing a business plan into individuals or people perspective. I this perspective - it is something that demonstrates different business activities or operations that flow from a person’s inspirations and dreams. It is a document that presents a person’s mental picture into something which is feasible or able to be seen and possible to be shared and communicated to others. It translates visions, dreams and inspirations into practical and financial terms. It helps managers to think through their strategies, balance their enthusiasm, passions, interests, dreams, or inspirations with facts and recognize their limitations. (Covello and hazelgren 2006) A written plan can help us find omissions and flaws I our ideas by following other people to critically review and analyze them. A business plan does not only highlight key planning issues but provides specific course of action to be adopted so as to realize success. A business good plan should be a flexible (over-evolving) resource that grows and changes with the business.

WHY A BUSINESS PLAN   

It is a document which sets business direction. It sets objectives and goals and drives a business person to achieve them. It reduces the risk of failure. This is possible when you walk on your plan. It is a motivational factor (tool)it raises spirit of commitment

Credits: Ngalla, Samson and Mwaipopo Moses

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It is a document which provides a business framework. Where to get, put resources, hoe w to allocate resources and gives u the best way to monitor performance It is important and a must presented when a person is looking for finance (when a person is needy for getting financial assistance for starting up and expansion) It is an important document when you want to decide correctly and at a correct time.

FEATURES OF A GOOD BUSINESS PLAN      

It must be a self-explanatory document. Able to provide a wide picture of the business so as to assist the reader in understanding the business it must be persuasive in nature (important when you want to attract financers) It must be realistic. Do not understate or overstate data. I.e. financially and economically realistic etc. It should seek to seize a certain specific business opportunity. It should possess elementary features as a tool for performance measurement. It is considered as a yardstick against which all performances are measured. A business plan must be flexible. It should be able to adopt changes.

PRE-REQUISITES FOR PREPARING AN EFFECTIVE BUSINESS PLAN      

Business opportunity creation or discovery. Shows how a person is ready to seize opportunities. A business idea. Facts finding and suitable information. (sufficient information) Identify necessary skills, Competencies and technical know-how. Some peoples should sometimes be considered e.g. economists Resource mobilization. Financial and human resources might be needed. Try to think how you will mobilize them. Lastly, try to think, to whom the plan is prepared for?

MAIN STAGES IN PREPARING A BUSINESS PLAN 1. A business opportunity identification or creation This stage creates a base towards developing an idea and thereafter a practicable business pan 2. Business idea development Idea should reflect available opportunities 3. Business idea screening process 4. Collect relevant information and facts that connect between the opportunity and an idea 5. Prepare and compile your plan

TECHNICAL GUIDELINES FOR PREPARING A BUSINESS PLAN 1. 2. 3. 4.

Always concentrate on opportunity to be seized and your idea. Try to link the two. Remember, this is a presentation of a mental picture that you have in mind so stick on it. Avoid multiple ideas or presentations. Choose one idea and pursue it consistently. In order to achieve consistency, get to understand a business which you are planning for.

Credits: Ngalla, Samson and Mwaipopo Moses

5. Always do your best to establish logical flow of your presentation. There should be linkages between all sections of your plan. 6. For nice presentation, use chapters or sections to present your information. E.g. CHAPTER ONE: Description of business 7. Start each chapter or section on a fresh page. 8. Consult different experts when you are writing your plan. 9. Do not exaggerate information. (Do not overstate information)

OTHER IMPORTANT GUIDELINES 1. Avoid unnecessary jargons (complicated words) but try not to mislead the reader.( don’t change the meaning) 2. Make sure your plan is simple but detailed. 3. Avoid information overcrowding. Make sure that you use writing skills and styles that can make your plan neat and readable. 4. Choose correct words. Comply with professional writing style (relevant for official documents. E.g. avoid shortening words) 5. Proof reading. This is necessary so as to correct grammatical errors.

Credits: Ngalla, Samson and Mwaipopo Moses

02nd May, 2018/Wednesday (lecture 4)

PREPARING A BUSNESS PLAN TITTLE PAGE AND TABLE OF CONTENTS The first and foremost part to introduce your plan is through a tittle page. Through a table of content one can trace specific information or a specific page which he/she is interested to read. Thus a table of contents facilitates referencing. Thus the role of this two components should not be undermined. E.g. tittle page can give the best first impression which may interest a reader to go inside the document. But it is not always that a good tittle page reflects what is within the document.

1. TITTLE PAGE OR COVER PAGE The cover page should contain:   

Name of the business Business logo Physical and postal address, Phone number etc.

The fundamental purpose of this part is to introduce the plan to the reader. When you prepare this part it is good to consider that it defines your plan in one way or another.

Issues to consider when writing a tittle/cover page;    

Do not include information here, try to be precise. Avoid unnecessary decorations. If colors and pictures have to be used, be careful on how you arrange them. Avoid information overcrowding. Use reasonable font size and font type Please, use simple borders to cover your page

2. TABLE OF CONTENTS This assists your reader to go through your plan very quickly by pointing out the key issues through the table of contents. Without it, a reader might unnecessarily have to go through the whole document to see the parts he is interested in.

Why table of content?   

It is a tool for referencing or means for tracing information. It provides a broader picture about your plan on how the plan has been arranged. It might be used as a motivational tool to rise interest on the plan.

Credits: Ngalla, Samson and Mwaipopo Moses

Issues to consider in writing/preparing a table of contents.  

It is very important to include only key elements or items (You may use chapters and headings. Otherwise the table may be too long.) It is advisable to use automatic table of contents instead of manual table of contents. The aim is to ensure the best impression.

Cont.………. (Lecture 5) 3. AN EXECUTIVE SUMMARY It is worth noting that not all readers may go through the whole plan. Some readers may not go through the whole plan or may want to prove the quality of your plan before reading the whole plan. Thus an executive summary summarizes the whole plan. It is a part of a business plan which help the reader to go through the plan within a reasonable amount of time.

Definitions: It is a brief yet concise statement which is designed to give your reader an overview about your business by summarizing the key points. (Record, 2007) Or. It is a condensed abstract of a business plan used to spark the reader’s interest in the business and to highlight crucial information. (Hatten, 2010) Or. It is one to two pages document which gives an overview of the whole document. Or. It is the thesis statement of your business plan. It summarizes who are you, what your company does, where your company is going, why is it going where it is going and how it will get there. Or. It is a synopsis of the entire report in two or three pages. Emphasizes the genetic uniqueness of your company ad suggests the nature of the matrix in which you company will operate. It is considered as a standalone document or component, as one can make decision regarding the whole plan based on the information found in this part. It is necessary to note that an executive summary is prepared after all components have been accomplished.

Why an executive summary?  

To assist the reader to understand what is within your document within a short time It assists decision makers to make quick decisions regarding the plan.( as one can make decision regarding the whole plan based on the information found in this part)

Credits: Ngalla, Samson and Mwaipopo Moses

Issues to consider when preparing an executive summary.      

Remember this part must convey a clear and concise picture of the proposed venture. It must create a sense of excitement regarding its prospects. State the main benefits, thus acknowledging your customers’ needs. This will grab their interest. Always prove your statement by giving your customer several references. (e.g. past performance, case studies) Apply your benefits to your customer by unveiling the real value that not only your customer but also the organization can get through your offer. Use presentations and not vague marketing copy(numbers, facts, percentages, referencing, studies) Finally call your reader to action, and give the necessary information for action. (Who, what, when, where, how etc.)

Qualities of an executive summary.    

It should be prepared in a persuasive language as the intention is to build plan credibility and attract your reader to call you for further consideration. It should be presented in a summary form. Specifically, the part should be within 2-3 ages. If possible keep it within 2 pages. Some scholars suggest that for each 20-50 pages, 1 page. It should contain only sensitive information which are so much important in assisting the reader to take a correct judgment. It must be able to grasp reader interest at the level of making decision to call you for further discussion.

Guidelines for preparing an executive summary (principles/rules)         

Read the whole plan thoroughly and between the lines. Try to contemplate what the plan is all about. Identify all key issues and key information. Think about how the information should be organized in order to offer a good flow. Write by using a new look, do not copy and paste what you have wrote in other parts. Remember, this is a standalone document. Don not itemize or number the information. Always arrange information into paragraphs. Avoid the use of too much jargons which may mislead some of your readers. Keep it simple in terms of language and presentations while observing content sufficiency. Always remember that you are preparing this part for many readers, customers, investors etc. let your focus be on these groups’ interests rather than your own. Do not include any irrelevant information, or information which does not appear anywhere in your plan. Avoid unnecessary technicalities. Do not prepare this part in a demonstrative way. Always use strong, enthusiastic and proactive language.

Credits: Ngalla, Samson and Mwaipopo Moses

HOW TO PREPARE AN EXECUTIVE SUMMARY It is not easy because you have to summarize information in 2-3 pages which can compromise quality, And it is used by most readers to take certain direction regarding viability of the plan.

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Business or organization profile.

Business name, vision, mission, goals and objectives, nature and size. 

Business ownership and management structure.

Includes type of ownership structure which the business has adopted 

Nature of products and services offered

Emphasize on peculiarities so as to show differences. (Uniqueness, quality, ingredients) 

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Market and industry analysis. The following issues should be presented a) Market growth and size b) Available business opportunity emerged c) At what rate the market and industry are growing and opportunities produced. i.e significant or not. You can use percentages, facts… d) Does the industry or market grow, decline, become dormant... and its implication to your business. e) State how you will be able to raise and maintain competitive advantage over other producers. f) Speak in a nutshell about the fundamental or key success factors.(KSFs) Marketing plan and tactics It is good to dwell on the 4p’s or marketing mix variables. Organization and management plan Functions and responsibilities of different officials of your business. Remember this information should originate from ownership structure. They should reflect each other. Financing requirement and financial plan a) The main sources of funds. I.e. start up and expansion capital. b) State the main or key activities of the business and how the collected funds will be allocated to facilitate those activities. c) State the amount of Sales revenue, profits which the business expects in a specified period of time. d) State the payback period. How many years you will wait until you start gaining returns.(capital budgeting techniques will be applied here)

Credits: Ngalla, Samson and Mwaipopo Moses

09th May, 2018/Wednesday (Lecture 6) 4. BUSINESS DESCRIPTION It intends to offer information to your prospective readers that describe the business comprehensively and perfectly. In summary this section should speak about who you are, where you have been, where you plan on going and how your company fits into your industry and marketplace (Covello and Hazelgren, 2006). Generally it is like you are asked to tell us about yourself. In responding to the question tell us about yourself, one has to concentrate on what he/she has relative to others. Similarly, a business description tries to respond to the question of why the proposed business should be considered as doable when compared to the other businesses. It is the question of, what is so special to the extent of calling our attention.

In a special way, in profiling a business emphasis should be on the following areas:     

A name of a business if any. However, if the business is not there try to say which element that look the same as a name can be used to describe the business. The historical background of your business. Basically, the origin of every business differ in terms of issues like ideas. The business owner inspirations or motives. In fact here, is all about what motivates the existence of the business. A business objectives and goals to be achieved. Both personal objectives and goals as well as customers or society objectives and goals. Description of functional benefits (What do you offer) and emotional benefits (how do you offer)

Business description as a part of a business plan can be described as an avenue to describe the business in a big picture on the eyes of your readers. It has to consist any information deemed necessary to make your business known and be differentiated against other businesses. This part can be considered as the heart of the plan, because other parts must reflect what is within this part. According to Miller and Arkebauer (1999) the business description is the first section of your plan after the executive summary. They went on saying, in two or three pages you should briefly describe why the company exists, its structure, where it has been, where it is going, who owns it and what makes it special. According to Longenecker et al., (2008) business description gives a brief picture of the firm. The business description informs the reader of the type of business being proposed, the firm’s objectives, where the firm is located and whether it will serve a local or international market. It describes the business’s current situation and overall big picture. The majority literature shows that business description is very important in attracting customer attention towards the business. However, it is true that this section of a business plan can sometimes be used to attract attention of special groups such as business partners, investors, etc. therefore, the section requires similar weight that could be invested in preparing other sections of a business plan.

Credits: Ngalla, Samson and Mwaipopo Moses

Under normal circumstances, description of business should answer the following questions.          

What is then name of the business? What kind of legal form of business ownership the business has adopted? What is then vision, mission, goals and objectives of the business? How the business will be managed? It has to reflect the adopted form of business ownership. How much is required to manage the business? How are you going to raise fund to manage the business? What is the current business status? For instance, financial status. For a new business, the question will be, what are the business projections? What are the strategies that have been designed to meet the underlined goals and objectives? What are the products and services that the business intends to offer? Where the business is located or will be located?

WHY BUSINESS DESCRIPTION The following are the reasons to justify why the section is so much crucial in a business plan;     

It defines and describes the business through giving detailed and unique explanations. In the course of defining and describing the business, this part can be used as an opportunity for branding. Note that branding works as a tool for identification and differentiation. It is an important avenue for showing and proving the viability of the business. If you are intending to pursue existing ideas. This can be a place for telling what something new you are going to offer. It builds the basis for writing other sections of a business plan.

GUIDELINES FOR PREPARING DESCRIPTION OF BUSINESS The following guidelines can be helpful in preparing this section.     

Remember your information is for identification and differentiation. So emphasize on these areas. Remember you are defining the business. So try as much as you can to show why the business is distinctive and in which aspects differs from other businesses. Because you are describing the business, observe chronological flow of information. Arrange your details in such a way one can comprehend what you are saying. Remember that most of information which you are going to use here, may be found in other parts of the plan. However here the issue is how those information are enough to exhaustively define your business and to make it unique. For those ideas or businesses which are not new, this section can be used to describe why you want to pursue the idea or the business.

KEY INFORMATION IN BUSINESS DESCRIPTION Different information can be presented as basis for describing a business. It is worth noting that not all businesses are described through the same information or approach. Perhaps, the size, nature, etc. may force a planner to use different approach and even information towards describing his/her business. However, the following are the common information that can be used to describe a business.

Credits: Ngalla, Samson and Mwaipopo Moses

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A business mission, vision, goals and objectives.

As a matter of fact, a vision and mission statement play a significant role in identifying and differentiating a business against others. Furthermore, business goals and objectives as machinery in achieving the vision and mission always create a line of difference between one business and the other. Consider the following vision and mission statements. 

Legal issues. A legal form of business (ownership)

In modern business practices it is advisable to establish and to run a business through specified legal procedures. In other words, the business must comply with different laws, regulations, policies etc. which govern a particular industry, sector, etc. thus, in describing your business, you have to narrate the form of business ownership which the business has adopted or will adopt. 

Management structure and leadership plan.

It is necessary to provide information about management structure and leadership plan. Speak in a nutshell how the business will be managed, what are the key positions and their responsibilities and roles, who will be responsible for making decisions etc. Again, these information can be included while you are describing business ownership. 

Products and services In describing your business, try to put much of your time on highlighting what you are going to offer. This is another avenue to draw a line of demarcation between you and others. It is suggested that, key products or services categories must be mentioned and try to speak about your future plan (products or services which are in pipelines) 

Business location.

It is recommended to offer information about where the business is located or where the business will be located. Basically, physical address is an essential element in describing a business, as it shows the differences between your business and others. This is a strategic issue and can determine success. Thus try to show why the location of your business is potential enough to guarantee success. 

Current position of the business.

If it is an ongoing business, you will be required to say about the business position (status). Try to show whether the business is growing, stagnating, or declining. Again, perhaps you have to say about the reasons for any status. For a new business, try to explain how the business will be moving from one stage to another. 

Financial status. Regardless of the nature of the business e.g. either a new one or old one, financial status is very important. Most of business analysts invest much their time in assessing business credibility through analyzing financial position of a business. For an ongoing business, explain about profit level, cash flow etc. on the other side, for a new business, tell us about………..

Credits: Ngalla, Samson and Mwaipopo Moses

Cont.……. (Lecture 6) 5. INDUSTRY AND MARKET ANALYSIS AN OVERVIEW Before making decision to operate a business in a certain industry or market it is necessary to carry out a thorough analysis. The main purpose of this part of a business plan is to provide scientific justifications concerning your decisions to operate in a given market and industry. This is an opportunity to prove that, your plan is economically viable and there is a ready market for the plan. It is vital in making investment decisions. Furthermore, this part is so much useful in determining challenges or threats as well as opportunities available for investing. It should be noted that, this part must prove without leaving any grain of doubts that your plan is totally viable and can produce positive returns. In practice, market analysis address the market in which the business expect to enter, while industry analysis is a broader term which implies where the business is going to compete.

WHY INDUSTRY AND MARKET ANALYSIS The following are the benefits which can be accrued from this part of a business plan.   

Through market and industry analysis business opportunities and challenges can be explored. It offers the basis for creating proper and relevant strategies and tactics for establishing and managing a business. It is an opportunity to prove strategic opportunity of the business as well as proving the existence of profitable business market(s).

GUIDELINES FOR PREPARING AND MARKET ANALYSIS The following are the guidelines which must be observed when preparing this part of a business plan:        

Make sure you know exactly or correctly the market which you want to enter and the industry which you are going to compete. Make sure you invest enough and quality time on studying the structure, nature, trend etc. of the market which you want to enter and the industry which you want to compete. Think strategically on the key issues which distinguish the market to be entered and the industry which you want to compete. Highlight the key issues and information which you will prefer or demand the most. This may be influenced by the proposed business. Think about where, when and how to collect the information. This means, the place, time and techniques to collect the information. Do not attempt to collect any irrelevant information as this will consume your time and resources for no good cause or result. However, the principle is collect as many relevant information as possible. Invest enough time for “facts finding” which describe the market and the industry. If you will be required to visit literatures as sources of information, then read as many literatures as you can.

Credits: Ngalla, Samson and Mwaipopo Moses

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Through this section huge and complex information can be collected, thus try to narrow down the information from complex context to the simplest form or context. The best way is to start with industry analysis to market analysis which offers specific information. STOP!!!!!!!!! Do not prepare this part without sufficient information or facts about the market and industry.

SOURCES OF INFORMATION As we have seen, this part requires sufficient information before preparing it. Thus, the following sources can be used for facts finding, data collection or information searching.         

Business and economics magazines, newspapers etc. Through visiting internet, online libraries etc. Through watching business news, business documentaries etc. Through reading relevant literatures, books, research and academic papers. Etc. Business research and customer survey activities Brainstorming and focus group discussion Formal and informal sources such as customer interviews etc. Institutions dealing with statistics e.g. NBS, BOT etc. Specific institutions operating in various industries or sectors. For instance; TSPF, TCT etc.

INDUSTRY ANALYSIS In industry analysis the primary purpose is to describe the structure of an industry which the business is going to compete. The main focus is to analyze the extent of which the industry is attractive enough to compete and to operate. Likewise, then results of this analysis will be opportunities and threats. Hence, the decision will be how are you going to take advantage of opportunities and how are you going to strategize so as to face the challenges. The analysis will analyze areas like business environment, competition analysis and competitors’ analysis etc.

BUSINESS ENVIRONMENTAL ANALYSIS Through analyzing business environment, different opportunities and challenges can be divulged. For example, environment analysis may bring out untapped business opportunities. Furthermore, through this analysis you may identify different challenges which you must be ready to face them once you make decision to seize a certain opportunity available in the business environment. In practical context, business environmental analysis should focus on addressing issues such as government focus and intention (priorities), policies, strategic plans, etc. in fact, environmental analysis should be looked from the context of “CHANGE”. Any business environmental change which seems to relate with the proposed business can be included as part of your industry and market analysis. However, it is not expected that you will start mentioning information about PESTEL elements. In other words, tell the readers what you have extracted from the model. Your reader will be interested with how these elements provide something relevant to your business and not otherwise. If possible, try as much as you can to avoid the use of PESTEL model as it is. Try to present the extracted information.

Credits: Ngalla, Samson and Mwaipopo Moses

Generally you have to find the answer for the following questions when carrying out business environmental analysis;   

To what extent the business environment provide viable business opportunities? How the opportunities grow? What economic trends support the opportunity? Do business environments provide ready market for the proposed business? Are you capable enough to cope with changes in business environments? Can you build competitive advantage through them?

Conclusively, business environmental analysis should help to analyze various government policies, procedures, interventions, priorities etc. the task of business planners is to link the aforementioned factors, as well as similar factors with the planning process. Again, this is considered as a chance for highlighting key features which vindicate the attractiveness of the industry in terms of growth, share, stability and predictability.

Credits: Ngalla, Samson and Mwaipopo Moses