In Part 2 of this series, we covered the Marketing Plan. Based on that, you already have a mental picture of the resources you need to implement the Marketing Plan. Intuitively you can classify the resources into Labor, Capital and Technology. We now cover this component of our business plan.
Human Resources Plan
We will again continue with what we have been saying about the exercise of writing a business plan being a process of giving structure to your thoughts and the mental picture you have of how to run your business. When you formulated the Small Business Marketing Plan, as outlined in Part 2 of this series of articles, you knew that the first question you need to address while getting into translating this marketing plan into action would be, what kind of people do I need to employ in my business. When we say what kind of, we mean both the skill-set mix and the headcounts that will constitute the labor resources for your business.
Charting out the right Human Resources Plan for your business is a very critical part of the business plan. It will be a good idea to start with the organizational structure and then taking up the workforce requirement for each function as per your proposed organizational structure. Then for each function, you need to prepare a time-bound recruitment plan, in line with the marketing plan, so t
hat the goals you had set for yourself will be met. Given an organizational structure, we can take up each function separately.
- Sales (already covered in Part 2)
- Marketing support
- Production or Operations (depending on whether you are looking at products or services)
- Logistics Support
- Finance and Accounting
- General Administration
Definitely, you will use certain productivity norms to arrive at the headcount, just as we used the target per sales executive to arrive at the sales force requirement. For this you need to get a feel for how others in the industry operate and benchmark your requirements against the industry norms.
This exercise does not stop with deciding on your labor requirements against the three-year plan. There are some critical issues which will dictate your Human Resources Plan. As shown in the diagram, planning properly to attract staff in the first place, and more important, planning to motivate and retain the existing staff are very crucial. Thus the Human Resource Plan must address the Compensation Plan, Performance Appraisal Plan, and the Training Plan. All expenses towards these must be built into your business plan to get a professional and realistic picture of the appropriate labor resources you need for running your business.
Capital and Technology Plan
Once your labor requirements are worked out, and the Human Resources Plan as given above is documented, you are now ready to prepare the Capital and Technology Plan for your business. The very first question you will address here will be relating to the space you need for your business. The space requirement must always keep the long-term requirement in mind. Again, you will generally use standard industry benchmarks to compute your space requirements. A ball-park estimate would be based on a rough-cut figure of 60-80 square feet of space per headcount in any of your offices. This will off course be modified to accommodate requirements for training rooms, laboratories, conference rooms, and so forth.
The space requirement will also be determined by whether you propose to operate from one location or from multiple locations, and multiple branch offices. If you are into products which will be produced by your firm, you will also need to determine the space required for your manufacturing facilities, which will depend upon your manufacturing process and the plant layout.
Writing a Business Plan: Step by Step
This series will walk the reader through the steps involved in writing a detailed business plan. The guides have been written using the natural intuitive thinking approach, so that the entrepreneur realizes the structure behind the written plan, and appreciates its value.