Formulating a practicable and actionable business plan in a challenging business environment is a key to success. A successful strategy implementation helps a company gain a competitive edge, define the business of the organisation and achieve right direction.
However, Fortune magazine states that 70 per cent of all strategies fail largely because of the inability to execute. In fact, in 26,000 start-up business failures, 67pc had no written plan. Having no detailed plan behind the big idea is one of the top reasons why strategic plans fail.
Many companies find this challenging as this task is intertwined with the budgeting process.
Ideally, business plans should be based on strategic direction, providing budgetary guidance.
A good plan will reduce risk, improve control over costs and operational performance while giving a shared sense of purpose. Although it is not a substitute it will certainly compensate at least in the short run for a strategic plan. In certain situations development of business plans are even more challenging as they should be equipped with corrective operational strategies focusing on medium term while being in line with broader strategic direction.
Central method used by MTI to develop business plans is dependent on MTI’s 8S strategic planning model. Although, it is a strategic planning tool, a variation of the same model with adjustments provides the ideal base for developing business plans. The model covers a wide range of vital aspects such as scope, scan, sights, strategy, systems, structure, staff and social responsibility.
In some circumstances, certain elements pertaining to strategic direction may not apply in the case of developing a business plan. The uniqueness of this strategic planning tool is that if an appreciation is needed with regard to the firm’s strategic direction, then such a demand can be accommodated within the same methodology.
Investment decisions can be taken in the present with one eye on the future via a well-developed business plan. It will certainly serve as a framework and provide benchmarks to see if business goals are achieved.