Business Studies Grade 11

Business ventures and Business roles Term 2 Business ventures and Business roles

Transformation of a business plan into an action plan

TRANSFORMING A BUSINESS PLAN INTO AN ACTION PLAN THE BUSINESS PLAN: A business plan is a written document giving details of the goals of the business and how these goals will be reached. It outlines strategies (management, marketing, production and financial) to help achieve those goals. Business plans usually have some background information about the owner(s) or management team to prove their commitment in reaching the goals of the business. The business plan can be used o check the performance of the business against set goals. The business plan can be adjusted as changes take place in the business. TRANSFORMING A BUSINESS PLAN INTO AN ACTION PLAN

TRANSFORMING A BUSINESS PLAN INTO AN ACTION PLAN THE BUSINESS PLAN: A business plan is also a tool you can use to sell or market your business. There are many acceptable formats or templates for a business plan. Different types of businesses require different types of business plans. Most business plans will contain at least the following: cover page – includes business details and contact numbers of the owner(s) table of contents an executive summary description of the business, including form of ownership and description of product or service a production or operational plan management plan market analysis and marketing plan financial plan legal requirements SWOT analysis support documents, e.g. copies of contracts, plans and diagrams.

TRANSFORMING A BUSINESS PLAN INTO AN ACTION PLAN PROJECT PLANNING AND MANAGEMENT: The business manager or entrepreneur needs to have project management skills to turn the business plan into an action plan. Project management skills are the use of knowledge, skills and tools to plan and implement activities to meet the goals for that project. An example of a project could be: A non-governmental organisation donates R10 million to provide homes to 75 families living in an informal settlement. The houses must meet government regulations and specifications. The project must be completed within three years. From the example we can see that there is: an activity to be carried out – homes must be built for 75 families a timeframe – within three years; and a budget – R10 million.

TRANSFORMING A BUSINESS PLAN INTO AN ACTION PLAN PROJECT PLANNING AND MANAGEMENT: A good project manager will do the following: Identify the resources that will be needed, such as the people, budget and time. This information is taken from the business plan. Allow plenty of time for consultations and approvals and getting financial assistance such as bank loans. Prepare a schedule that identifies the main activities of each plan. Use these main activities to work backwards to prepare timeframes. Analyse each main activity by breaking it down into smaller activities. Say who will make each activity happen and by when. Allocate money to each part of the action plan that needs to be budgeted for. The projected income statement from the business plan will provide most of the information. An income statement is a statement that shows income earned from sales after the expenses are deducted. Develop control methods that will warn the person in charge of any difficulties. Identify risks and plan for unforeseen events. Check the plan from time to time.

TRANSFORMING A BUSINESS PLAN INTO AN ACTION PLAN PROJECT PLANNING AND MANAGEMENT: If the manager finds that the timeframes are unrealistic, the plan will have to be changed. If new information becomes available, the manager also may need to adapt the plan.

TRANSFORMING A BUSINESS PLAN INTO AN ACTION PLAN You need an action plan to implement the business plan. An action plan is a record of activities showing how those activities will be organized to achieve the goals set out in the business plan. Preparing an action plan Preparing an action plan will help in making the business a successful venture. The action plan is based on a number of questions: What must happen? Who is responsible? When will activity start? When will activity end? Did the activity take place or what went wrong? Record any problems experienced during the project. It is important to check and evaluate every stage of the project, so that corrective action can be taken if necessary.

TRANSFORMING A BUSINESS PLAN INTO AN ACTION PLAN Advantages of having an action plan It enables projects to be achieved within the specified time. It helps the person responsible for achieving certain goals to be organized. It is a control measure against which standards and performance can be measured. It prioritises activities according to importance. The main techniques to develop an action plan The main techniques to develop an action plan can be illustrated in four steps: Agree on objectives Set timeframes Allocate responsibilities Establish communication channels

PLANNING TOOLS Different tools such as timelines, task analysis, Gantt charts and critical path analysis can be used to develop, check and control the timeframes of a project. These tools are used as a means of communication between management and staff. Although most businesses use computers and special software applications to create these tools, they can be drawn up by hand. TIMELINES: You can use a timeline to plot your action plan. A timeline is a simple tool that lists all the activities that need to be done and the date order in which they will be completed. It is a line on which time and activities are marked. Businesses also use timelines to get a visual picture of what is happening. Timelines help to determine the order in which tasks must be completed.

PLANNING TOOLS TIMELINES: Business enterprises make use of different sequencing rules to determine which tasks should be completed first: First-come first-served This is when you complete the first task assigned to you first. Shortest processing time This is when you complete the task that will take up the least time first. Earliest due date This is when you complete the task with the nearest due date first. Most valued customer Tis is when you complete a task for your most valued customer first. Most profitable job This is when you complete the most profitable job first.

PLANNING TOOLS TASK ANALYSIS: Task analysis requires you to evaluate the different tasks. Dependent tasks are when a task cannot begin until certain other tasks have ended. Parallel tasks are those tasks that can be done at the same time as other tasks. You need to know these concepts when you learn about Gantt charts. GANTT CHARTS: Gantt charts are more sophisticated types of timelines. Definition of a Gantt chart A Gantt chart is an instrument that helps project managers do project planning and is represented as a type of bar graph. Gantt charts show project managers: The tasks that must be carried out to complete a particular project. When each activity must take place. The time it will take to complete each task.

PLANNING TOOLS GANTT CHARTS: Functions of Gantt charts Helping project managers to plan projects and to monitor progress of projects. Indicating how long it will take to finish a project. Sequencing the activities that must be carried out. Indicating the tasks that can be carried out simultaneously. Helping project managers instantly see what activities should have been completed at a certain point in time. Helping project managers identify the resources they will need to complete a project.

PLANNING TOOLS GANTT CHARTS: Drawing a Gantt chart: Although Gantt charts have many uses, most Gantt charts have one disadvantage – projects often appear easier and less complicated than they actually are. Project managers make use of the following steps to draw Gantt charts: Write down all the activities that must be carried out to complete a project. 2. Decide how much time you will need for each activity. 3. Determine which activities need to be completed before others can be started and which activities can be carried out simultaneously. 4. We now draw the axes of the graph – draw an x-axis and a y-axis 5. Write each activity of the project in order, down the y-axis. 6. Time appears on the x-axis – draw a horizontal bar that covers the appropriate time on the timeline next to each activity. The left side of the bar must indicate the time the activity should be completed.

PLANNING TOOLS GANTT CHARTS: Advantages of Gantt charts: They are easy to prepare. They are easy to read and understand. Events are shown in chronological order (date order). The time needed for an activity is shown visually. Managers and team members can see which activities run concurrently. Team members can immediately see who is responsible for each activity. They show progress on an activity and enable you to check up on a project. Interrelated tasks can be seen at a glance. More information can be included with the use of colour-coding and key symbols. If adjustments have to be made, you can see the effect on the other activities.

PLANNING TOOLS WORK BREAKDOWN STRUCTURES: A Work Breakdown Structure (WBS) is a diagram that breaks down all tasks that must be performed to complete a project. A WBS is a hierarchical structure. The project is stated at the top of the diagram. All tasks that must be performed to complete this project are then grouped or packaged together. These chunks of work, or “work packages” are then presented as “branches” of the WBS.

PLANNING TOOLS CRITICAL PATH ANALYSIS (CPA): Another technique that is often used in project management, especially for large projects, is critical path analysis. It is useful for calculating the minimum time needed for each task that determines the project finish date. CPA calculates the maximum time for each task to be completed and identifies tasks that can be delayed.

PLANNING TOOLS PROJECT PLANNING: Is a detailed description of all the activities that need to be completed in order to execute a project successfully. People in charge of projects are known as project managers and are held responsible for the success or failure of projects. The following steps will help a project manager execute the task at hand: Determine why the project must be executed. Determine who will need to be involved. Identify and analyse all the activities required to complete the project. Identify the resources you are going to need. Identify risk. Execute the project. Evaluate and reflect on the project

PLANNING TOOLS PROJECT PLANNING: A project manager is responsible for the successful execution of a project. Other responsibilities of project managers include: Assigning the right task to the right person. Keeping the team motivated. Determining specific and clearly defined goals. Not underestimating the project. Following up. Being reasonable.

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