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The Stakeholder Perspective on Business Planning
There are as many different perspectives on business planning as there are stakeholders. This is because each stakeholder naturally needs to answer the question "what's in it for me?" so they all bring with them their unique perspective. Take a look at some of the possible different perspectives on business planning below.
The Entrepreneur's Perspective
Naturally the entrepreneur wants the business to get off the ground and turn into a success, but a business owner's perspective on planning might be more focused on processes and operational issues because this is what would occupy their time in actuality. Making a profit and getting strong financial indicators are also important to the entrepreneur at the planning stage, but they may have more faith in their ability to personally drive the business. This means they may not be that worried about lower profit margins or the risk that cash flows might run dry.
The Lender's Perspective
If the business is going to be financed with borrowed money, the lender needs to have access to the business plans to ensure the viability of the business. If the lender is not convinced that the idea will succeed, or if they feel the processes appear to be weak, they may predict trouble ahead. The lender would, therefore, prefer a business plan that is geared more toward ensuring that revenue figures look healthy and the cash flow appears to be buoyant. if this is not the case, they may be hesitant to release funding.
The Investor's Perspective
Investors are similar to lenders in that they want to see that the business plan is focused on generating profit. However, some investors may be more willing to take a risk if they can be convinced that abnormal profits lay ahead. Investors are traditionally less conservative than lenders and so they may pay more attention to the novelty of the idea and the softer issues involved that can make the business a success.
Since the business planning process is not static but rather changes and grows as the business grows, additional stakeholders may be added along the way. Suppliers, customers, and even employees may all eventually have an opinion on what should be included in the business plan for the business in question.
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The Time Perspective on Business Planning
It is also possible to have different perspectives on business planning that are based on time.
Past Perspective on Business Planning
When preparing a business plan, an entrepreneur must consider the industry's history. Market research is undertaken to get an idea of what has been successful and what did not work and why. This information shapes the final outcome of the business plan.
Future Perspective on Business Planning
Forecasting is one of the basic skills needed in preparing any business plan. The entrepreneur must be able to make predictions or calculated estimates of future sales, costs, and other factors to be able to plan ahead. This is yet another factor that affects how a business plan is eventually shaped.
Present Perspective on Business Planning
Finally, the entrepreneur must engage in putting the plans for the future into action. The present is essentially involved with implementation and measuring actual performance against what was predicted, so that improvements can be made and rewards can be shared for good performance.
Therefore, there are a variety of ways to look at business planning. Each one is valid and useful in its own right and none of the perspectives outlined in this article deserves to be underplayed.
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