Planning is one of the most important factors to be considered in putting up a business. However, starting a business enterprise will have ...
Planning is one of the most important factors to be considered in putting up a business. However, starting a business enterprise will have to undergo several stages, perform different activities, and encounter many problems in the process.
Stage in planning and managing an enterprise
1. Project identification- This is the time when an individual thinks of the business idea wherein he could invest money in order to grow. He has to undertake the process of environmental scanning and think about the significant problems and needs of the community. The prospective entrepreneur should identify the needs of the community. He should assess the strengths, weaknesses, opportunities and threats of the business ideas he is going to consider for investment.
2. Project formulation- This is the time when the entrepreneur decides to go on with the business plan he prepared. He prepares here a more detailed project plan to determine its feasibility in all aspects of value and marketing.
3. Project appraisal and financing- When the business plan has been made, the next stage is raising the capital to finance all the needed equipment, materials, salaries, and miscellaneous expenses. Lack of capital may not be a problem because he can borrow a money from relatives, friends or banks. If the entrepreneur intends to borrow money from the bank, he has to comply with requirement. The submission of a business plan or project study plus a collateral will be required to back up the loan. A personnel from the bank will make an appraisal or assessment to determine the viability of the project. When everything is alright, an approval will be given for the release of the loan being requested.
4. Project implementation- When the needed capital has been raised, the implementation of the business plan begins. The entrepreneur is now ready to put up the business in the planned location or rent a space, install the needed facilities and equipment that will be used in the production. A trial run should be conducted before the formal opening of the business. At this point, the business should be ready for the selling and marketing of the products with quality to the customers.
5. Project management- While the business is in full operation, the process of managing the business will now takes an important role. Management includes production planning and sales, organization of the resources, assigning and directing the staff and workers regarding their responsibilities, coordinating the business activities, monitoring the inputs and outputs, and controlling the business activities in its day to day operation. In the monitoring of the business operations, problems may occur on the following aspects:
a. Marketing problems- The problems that may be encountered are poor sales, fluctuation in the market demand, customer buying and paying habits and product disapproval.
The entrepreneur should form a committee among his staff that will be responsible for studying the causes of the problems and recommend constructive suggestions for the solution of each problem.
b. Production and operation problems- These problems are about the failure of the production process to produce the required volume, quality and price; increase in the cost of production materials, labor, and utilities; a big number of products rejects; out of order equipment; low workers output; shortage of materials and power failure.
Again, the entrepreneur should form a committee with the entrepreneur presiding and entertaining suggestions from the members. Laying out of policies and many recommendations should be discussed for the good of everybody. It should be the concerned of all in order to survive and have a good and continuous employment in all their lives.
c. Personnel management problems- These problems involve the satisfaction of the workers, motivated and productive all the time; habitual tardiness and absenteeism; and sagging morale.
These are minor problems that need solutions. One remedy that may be effective is the pro-God, pro-human and pro-justice treatment of all the personnel wherein the superiors may gain the respect of the company workers. Second, is the granting of incentives to qualified personnel who have exerted efforts that benefit the company. Third, the conducting of seminars for their professional growth and finally, the organization of some social functions that will improve the camaraderie or relations of superior to personnel relationship, personnel to workers relationship and worker to worker relationship.
d. Financial management problems- These problems include the shortage of money to finance the business operations; protecting the cash from bad elements and big volume of inventories and receivables.
The most important solution to the problems is discipline of all the people involved in the financial management of the business. The judicious spending of the business financial obligations will contribute a lot. Another, is the systematic flow of materials in the production process. An excellent way of money collection to reduce receivables will give the business a good cash flow.
6. Project evaluation- At this point, it is important for entrepreneur to evaluate the status of the business. Assessing the operation, he has to look at the books of the business by analyzing the profit and loss statement and the balance sheets. The entrepreneur should determine if has gained profit from this kind of business. If he is successful, an expansion of the business plan may be an option or to diversify by investing in other fields in order to gain more.
If the business is losing money, he may reuse the business plan and introduce or use other strategies in order to recover the losses.
Stage in planning and managing an enterprise
1. Project identification- This is the time when an individual thinks of the business idea wherein he could invest money in order to grow. He has to undertake the process of environmental scanning and think about the significant problems and needs of the community. The prospective entrepreneur should identify the needs of the community. He should assess the strengths, weaknesses, opportunities and threats of the business ideas he is going to consider for investment.
2. Project formulation- This is the time when the entrepreneur decides to go on with the business plan he prepared. He prepares here a more detailed project plan to determine its feasibility in all aspects of value and marketing.
3. Project appraisal and financing- When the business plan has been made, the next stage is raising the capital to finance all the needed equipment, materials, salaries, and miscellaneous expenses. Lack of capital may not be a problem because he can borrow a money from relatives, friends or banks. If the entrepreneur intends to borrow money from the bank, he has to comply with requirement. The submission of a business plan or project study plus a collateral will be required to back up the loan. A personnel from the bank will make an appraisal or assessment to determine the viability of the project. When everything is alright, an approval will be given for the release of the loan being requested.
4. Project implementation- When the needed capital has been raised, the implementation of the business plan begins. The entrepreneur is now ready to put up the business in the planned location or rent a space, install the needed facilities and equipment that will be used in the production. A trial run should be conducted before the formal opening of the business. At this point, the business should be ready for the selling and marketing of the products with quality to the customers.
5. Project management- While the business is in full operation, the process of managing the business will now takes an important role. Management includes production planning and sales, organization of the resources, assigning and directing the staff and workers regarding their responsibilities, coordinating the business activities, monitoring the inputs and outputs, and controlling the business activities in its day to day operation. In the monitoring of the business operations, problems may occur on the following aspects:
a. Marketing problems- The problems that may be encountered are poor sales, fluctuation in the market demand, customer buying and paying habits and product disapproval.
The entrepreneur should form a committee among his staff that will be responsible for studying the causes of the problems and recommend constructive suggestions for the solution of each problem.
b. Production and operation problems- These problems are about the failure of the production process to produce the required volume, quality and price; increase in the cost of production materials, labor, and utilities; a big number of products rejects; out of order equipment; low workers output; shortage of materials and power failure.
Again, the entrepreneur should form a committee with the entrepreneur presiding and entertaining suggestions from the members. Laying out of policies and many recommendations should be discussed for the good of everybody. It should be the concerned of all in order to survive and have a good and continuous employment in all their lives.
c. Personnel management problems- These problems involve the satisfaction of the workers, motivated and productive all the time; habitual tardiness and absenteeism; and sagging morale.
These are minor problems that need solutions. One remedy that may be effective is the pro-God, pro-human and pro-justice treatment of all the personnel wherein the superiors may gain the respect of the company workers. Second, is the granting of incentives to qualified personnel who have exerted efforts that benefit the company. Third, the conducting of seminars for their professional growth and finally, the organization of some social functions that will improve the camaraderie or relations of superior to personnel relationship, personnel to workers relationship and worker to worker relationship.
d. Financial management problems- These problems include the shortage of money to finance the business operations; protecting the cash from bad elements and big volume of inventories and receivables.
The most important solution to the problems is discipline of all the people involved in the financial management of the business. The judicious spending of the business financial obligations will contribute a lot. Another, is the systematic flow of materials in the production process. An excellent way of money collection to reduce receivables will give the business a good cash flow.
6. Project evaluation- At this point, it is important for entrepreneur to evaluate the status of the business. Assessing the operation, he has to look at the books of the business by analyzing the profit and loss statement and the balance sheets. The entrepreneur should determine if has gained profit from this kind of business. If he is successful, an expansion of the business plan may be an option or to diversify by investing in other fields in order to gain more.
If the business is losing money, he may reuse the business plan and introduce or use other strategies in order to recover the losses.