Components of the Business Plan
“Organizations that want to outperform & generate consistent profits must meet the four essential components of a business plan first. For long-term success, there should be perfect synchronization between these components of the business plan. The business components which influences the performance of the business entity are stakeholders, processes, resources & organization.”
Stakeholders are those business components who directly influence the business plan. Shareholders, employees, suppliers, distributors & customers are examples of stakeholders of the company. A company must identify the needs of these stakeholders in order to remain profitable & develop their strategies accordingly. These stakeholders are like spokes of the organizational wheels. Without their collective efforts, you cannot run your vehicle of business.
For example: If the company rewarded their employee for their good performance, then employee’s motivation level & productivity increases. Due to these, they give quality service to the customers. The satisfied customer gives repeat purchase to the business entity, which leads to an increase in profit. If the profit level increases to a higher level, then shareholders also invest more for high returns. Hence all the business stakeholders are interrelated to each other.
The process is a way in which workflow takes place. It will define, systematic coordination of workflow between different business units.
If there is a conflict between two different business units, then it becomes difficult for an organization to achieve its goal. So an organization should design their workflow in such a way that these conflicts get cut. Companies now days are investing more to build a cross-functional team by encouraging communication between these teams.
A company needs space, electricity, raw material, human resources to carry out its business operations. In a traditional business era, it was believed that the company should own all the resources to carry out business functions effectively. However, today’s the thinking of business managers is change. They believe that only critical resources are enough to carry out the business process. Rest other non-critical resources like payroll, and accounting functions can be outsourced to optimize business returns.
The organization is an important business component wherein each company has its unique set of structures, Policies & Cultures. While organizational structure & policies are specific, but it isn’t very easy to define the culture of the organization. It refers to the value, norms, & assumptions that each individual carries with the common aim. Top management plays a very key role in defining the culture of an organization. A well-defined organizational culture is very much essential to carry out business strategies & achieve an organizational goal.
“In order to outperform & remain competitive in today’s business environment, an organization must take efforts to fulfil the requirements of these four components of the business plan. These 4 Important business plan components when synchronized properly then, organization get the benefit for the long run.”