Strategy and Forecasting For a Perfect Business
|Date Added: May 30, 2012 01:39:01 AM|
|Category: Business: Business Services|
Strategic planning is a key element of business. It is simply not enough to handle the day-to-day running of a business. Some objective or vision must drive the entrepreneur or management of a company. If you want your business to grow, then you must understand the nature of business and formulate policies and plans that will take you ahead. However, you cannot just decide what you want and how to get it.
Strategy and forecasting both are very important in developing a business plan. A new businessman can struggle while planning. Therefore, he must follow certain steps to put together a good, effective plan that integrates both Strategy and forecasting.
1. First, you need to know what the things that you are good at are. Identify your area of expertise or competence.
2. Then figure out what keeps you ahead of your competition.
3. Choose the sector or industry where you want to work and compete.
4. Fix the measures, that you will apply in different areas of the business like – production, transport etc.
5. Last but not the least is, to make a sales forecasting for next 3 to 5 years. This give will help you to understand how much customer expectation you can meet.
Making a sales forecast is not a walk in the park. However, you cannot do without it. Forecasting is vital in strategy making. In addition, if you are looking for investors for your business, then you must show them sales forecast. The first step in making forecast is identifying your market and customer base. Then find out about your competitors who compete in the same market. After completing this step, you can follow three methods.
1) First method deals with specific information about the number of your competitors and their locations. Then count the number of houses within a certain area and find out how many of them will buy your product instead of your competitors. Continue this process, by increasing the radius of the area as long as it is realistic.
2) The second method deals with calculation of the total value of every sales category. Business charts should be used in your business plan. Make charts with value based technique to present and analyze projected figures.
3) The third method is measuring the maximum possible revenue the business can achieve in the present circumstances. This is helpful in dealing with future investors. You can show them how the company will perform in production and sales if you only have limited resources.
The above forecasting methods will help you to get a clear picture while preparing your sales forecast. Put it in a format which any investor or moneylender will understand. If you properly demonstrate and analyze your presentation, the investor will be confident. Then you can also share your tactics and strategy with him to achieve your business target. Once the investor can assess your ability as an entrepreneur, he will let you know his decision.