Business Planning, Production aspect, Financial aspect, Organizational and management aspects, Make a business proposal
Business Planning
Planning is a management function that deals with the selection of vision, mission and objectives, strategies, policies, procedures, rules, programs and budgets. From the two understandings above, the meaning of business planning can now be defined, namely as the process of determining the vision, mission and objectives, strategies, policies, procedures, rules, programs and budgets needed to run a particular business or business. So in business planning there is contained the existence of:
# Vision, which is the future ideal of the company that will do the business.
# Mission is a distinctive or unique and fundamental intention that distinguishes the company from other companies and identifies the scope of business activities / companies concerned.
# Objectives are the results to be achieved from the business / company.
# Strategy is a way taken to achieve business goals by involving all resources or production factors owned.
In the business world, several strategies are commonly applied by companies as follows:
1. Defender, a business strategy geared towards reaching and maintaining the market in a narrow segment of all existing potential markets.
2. Prospector, a business strategy that is aggressively directed to reach the widest possible market through new product innovations.
3. Analyzer, a business strategy that is carried out through imitation, that is, imitating what the prospector does. Business strategies like this aim to make a profit by minimizing risks.
4. Cost-leadership strategy, a business strategy geared towards reaching the widest possible market through cheap product prices
5. Differentiation (differentiation strategy), a business strategy directed at reaching the widest possible market through the uniqueness of the products produced. This uniqueness can be characterized by high quality, excellent service, and innovative product design.
6. Focus strategy, a business strategy directed in a narrow market segment that is carried out through a focus on cost focus or a differentiation focus.
Policies are general guidelines for decision-making. Policies are the limit for decisions, that is, they determine what can be made and what cannot be made.
Programs are activities that will be carried out in order to run the business.
A budget is a report of financial resources that is prepared to finance certain activities in a certain period of time. The budget is mainly used as a supervisory tool in managing a business.
Procedures are guidelines for the implementation of more detailed policies. A procedure gives a number of detailed instructions for the implementation of a set of activities that occur regularly.
A rule is a stipulation that a certain action must or should not be performed in a given situation. Rules used to implement those activities.
Nature and Benefits of Business Planning
A good business planning in general has the following properties:
1. Focus, meaning business planning based on a specific vision, mission and clear goals.
2. Rational and factual, meaning that business planning is based on reasonable, realistic, future-oriented thinking and is supported by existing facts.
3. Sustainability and estimation, meaning that business planning is made and prepared for sustainable actions and forecasts about future conclitions.
4. Preparation and flexibility, meaning that business planning is made as a preparation, namely guidelines for actions to be implemented that are in accordance with the business environment faced.
5. Operational, meaning that business planning is made as simple as possible, detailed and can be implemented.
If a business planning has the following characteristics, then by making a business plan will be obtained several benefits as follows:
1. Work or activity can be carried out regularly and with clear goals.
2. Avoid unproductive activities and use of more efficient power supply.
3. Provide evaluation tools to determine business success.
4. Provide a foundation for oversight and improvement efforts.
That is, business planning is used to ensure that the goals that have been set are achieved.
Business Planning Process
It has been explained that, business planning is a process. As a process, making a business plan is carried out with relatively high market opportunities. Market opportunities are indicated by the excesses of the competition. Excess demand occurs if the amount of demand exceeds its supply amount. The higher the excess demand, the higher the market opportunity, and therefore the more feasible the type of business is to be implemented.
Production aspect
Business feasibility is seen from the aspect of products.i including with regard to the planned business location, production facilities and equipment, supply of raw materials, and availability of labor. A project is said to be worthy of being seen from the aspect of production characterized by a strategic business location, the availability of adequate production facilities and equipment, the availability of a continuous supply of raw materials, the availability of the required manpower.
Financial aspect
Business feasibility is seen from the financial aspect with regard to the benefits that may be obtained by investors or entrepreneurs. This benefit is referred to as business profit or business profit, which is the income obtained after deducting all costs incurred in running a business. Viewed from the financial aspect, a type of business is feasible if the type of business is able to provide adequate operating profits to investors and / or to entrepreneurs who run the business.
Organizational and management aspects
Business feasibility is seen from the organizational and management aspects regarding the business ownership structure, organizational structure, and management team that manages the type of business planned.
Make a business proposal
The last step in the business planning process is to make a business proposal. A business proposal is a written document of business planning.
Assess business feasibility and make business proposals
Business Feasibility Assessment
As explained in advance, the main purpose of a business is to obtain profit or financial profit. Therefore, the determination of whether or not a planned business is planned to be carried out is determined by the possible financial benefits that can be obtained. Assessing business feasibility is a way taken to determine whether or not a business is feasible. In general, if the business feasibility assessment is carried out correctly and the results show that the planned business is feasible to be carried out, then the implementation rarely fails, unless the business feasibility assessment is carried out with incorrect data and/or due to factors that cannot be controlled, for example a natural disaster occurs. How do we assess the feasibility of a planned venture? To assess whether a planned business is feasible or not can be carried out in various ways, including through financial benefit analysis. There are several criteria commonly used to determine business feasibility through financial benefit analysis.
Business Proposal Objectives
A business proposal is a written document about business planning that is proposed to investors (capital owners) and banks as a consideration and assessment to obtain the investment funds needed to run the planned business. Note, from the definition it is revealed that:
1. Business proposal is a written document about business planning. As a written document, a business proposal must be written correctly, completely, in detail, accurately and clearly.
2. Business proposals are made with the main objective of obtaining the investment funds needed in order to finance the implementation of the planned business.
3. Business proposals are submitted to funders, namely investors and/or banks.
Parties in Need of Business Proposals
As revealed from the definition of a business proposal above, there are several parties who need a business proposal as follows:
Businessman
For entrepreneurs, a business proposal is a complete and detailed written document about the business plan that will be carried out and used as a tool to evaluate the implementation of the planned business.
Investor.
For investors, a business proposal is an illustration of business prospects and possible benefits that can be obtained. Therefore, a business proposal for investors will be discussed as a consideration in determining the possibility of investing in the business planned in the business proposal.
Banking/Financial Institutions
Through business proposals, banks can assess the prospects for sustainability and the ability of the planned business to pay all its financial obligations. Therefore, for banks, business proposals are used as a basis for assessment to determine credit distribution for business funding.
The government, through business proposals, the government can assess the contribution of business to be carried out on economic activities and the social impacts caused to society as a whole.
Contents and Systematics of Business Proposals
As a written document of business planning that will be used to obtain investment funds, the business proposal must be made objectively, completely, detailed, accurate, clear, communicative and certainly interesting to read. The content of the business proposal will in essence reveal about the description of the company, market and marketing aspects, production aspects, financial aspects, as well as organizational and management aspects.
How is the systematics of preparing a business proposal?
There is no standard systematics. But importantly, a business proposal must be able to attract investors to invest, or banks to be willing to provide credit to finance the investments needed to realize the planned business. Although there is no standard form or systematics of proposal preparation, in general a proposal will be prepared with the following systematics:
Summary
The purpose of the summary is to provide brief information about the overall content of the business proposal. By reading the summary, in a relatively short period of time interested parties such as investors or banks can already get a comprehensive picture of the overall content of the proposal. Therefore, the content of the summary should be written briefly, concisely but clearly touching on the overall content of the proposal.
Company Description
In this section, everything related to the company that will carry out the business is stated. The name, vision, mission, and goals of the company. Not to forget, it is also stated that the company's history is completed with company documents, the type of managed and the type of business that is planned to be carried out. If necessary complete this description with images or photographs deemed important.
Market and Marketing Aspects
This section states three things, namely an overview of the industrial structure and business environment, market conditions and marketing plans that will be carried out for the products to be produced.
Production Aspects
In this section are put forward matters related to the technical aspects of production. It concerns the location of the business, the necessary production facilities and equipment, the supply of raw materials, labor needs, as well as production costs.
Financial Aspects
Others use the term "financial rations" for balance sheet ratios, "operating ratios" for loss & profit statement ratios and "financial operating ratios" for ratios between reports. There are also those who group as follows:
Liquidity ratio
Is a ratio intended to measure the company's liquidity (current ratio, acid test ratio).
Ratio Leverage
Is a ratio intended to measure how far a company's assets are financed with debt (Debt to total assets ratio. Net worth to debt ratio and so on).
Activity Ratios
Namely ratios that are intended to measure how effective the company is in working on its sources of funds (inventory turnover, average collection period and Jain so on).
Profitability ratios
Namely ratios that show the final result of a number of policies and decisions (Profit margin on sales, Return on total assets, return on net worth and so on).