Critique Of Business Plan For Smes Commerce Essay Example

next three years. It is the company's goal to develop new business units and expand their client base in order to become a well-known photography business in York. The proposed plan by the three team members highlights suitable opportunities for Galuska to focus on developing a photography brand in the coming years. Different business tools have been utilized in an effort to achieve this goal. This study is based on the experiences gained through this business planning process.

3.Formal and Informal Business Planning

According to Mintzberg (1987), a company's approach can be seen as a program, which includes its position in the market, vision for future opportunities, and actions taken in the decision-making process.The rigid strategic management literature suggests a strong connection between strategic planning and company performance (Greenley, 1995). A well-developed business plan aids organizations in achieving their business goals, saving time and money by focusing on core operations and improving control over cash flows, marketing, and operations. It also enhances the capital requirements of the business (Rhonda and Kleiner, 2003). Business planning involves top management analyzing both the internal and external environments to conduct a Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis and evaluate the extent of the company's mission (Wheelen and Hunger, 1991). However, Georgellis et al. (2000) found in their study on PEST and SWOT analysis that over 90% of the sampled companies had not utilized or even heard of a PEST analysis, while 80% had not used a SWOT analysis. Despite this, 82% of the companies had conducted competitive analysis during their planning process. In our consultancy project, we observed that clients do not place much focus on SWOT analysis. The main

aspects of business planning include extensive time periods, formality, the use of planning tools, and regular management of plans.This type of planning can enhance performance by generating relevant information, gaining a better understanding of the important environment, and reducing uncertainty (Hodgetts and Kuratko, 2001). For instance, MAS Holdings in Sri Lanka, which has over 44,000 employees, is the largest intimate apparel industry in South Asia. It has won various international awards, including Vendor of the Year by Victoria's Secret in 2006 and Excellence in Social Responsibility Award for women's issues by American Apparel and Footwear Association in 2005 (www.ifc.org). According to the manager of corporate branding and strategies, the key to their success lies in a comprehensive planning approach that includes women empowerment (Anon 2008). Delmar and Shane (2003) argue that adopting a systematic planned approach produces better outcomes for organizational performance compared to those who follow informal and ambiguous methods. In the case of Toyota, Fujio Cho, the president, asserts that their Total Production Systems practices are based on well-planned core principles that shape their values, beliefs, and business planning methods. He further claims that these practices have provided them with a competitive edge over the years. Therefore, for Toyota, culture holds greater significance and they capitalize on their strong homogenous planned culture for organizational benefits (Liker, 2004).Another viewpoint is that strategic planning is more effective when used as a reflection of past decisions rather than a plan for future endeavors. It can be utilized as a part of an organization's efforts to develop new stable foundations for itself, incorporating recent initiatives into a broad range of planned objectives (Mintzberg 2000). However, relying too

heavily on systematic strategic planning can hinder the need for management autonomy and organizational learning in an era where adaptability and flexibility are crucial for coping with rapid environmental changes (Anderson 2000). Many observers believe that cultural differences at Daimler and Chrysler made their merger more challenging without a long-term plan. But in August 2000, Daimler's CEO of automobiles, Jurgen Hubbert, stated: "we have a clear understanding: one company one vision, one president, two cultures." Ultimately, with the acknowledged presence of two cultures, DaimlerChrysler truly became one company with one vision and is now operating as Chrysler. Emergent strategy and flexibility may provide the best opportunity yet to merge the cultures (Sculler & Jackson 2001, pp.248). It is evident that even without formal long-term plans, some strategies can still lead to success.

4. SME Vs Business plans

Entrepreneurs play a vital role in the economy. and their contents are not clear in the text provided. Please provide the text again with specific that need to be maintained.SMEs also have a distinct focus on operational rather than strategic procedures. They are skilled at using implicit knowledge for planning. Research shows that during the initial stages of a business, entrepreneurs take on multiple roles such as being a leader, marketer, salesperson, public relations officer, and financial accountant (Cope, 2001; Fuller-Love, 2006). It is crucial for entrepreneurs to have some skills and training in the field before developing a business plan. Entrepreneurs launch new ventures with the goal of achieving success and viability of their plans (Barringer, 2009). Through a consultancy project, it was evident that the client was involved in art workshops and commissioned wedding photography as a

hobby. It is worth mentioning that she also facilitated eight stop motion animation workshops for the British Library's Inside Story exhibition at Hillcrest Primary School in Leeds. This experience provided the foundation for her future aspiration of starting her own photography venture.Shane and Venkataraman (2000) argue that entrepreneurs do not come up with future plans in isolation or solely based on technological, political, or socio-demographic changes in the environment. Instead, these opportunities arise through various interactions and creative activities. Opportunities are generated through the creativity of individuals who engage in different activities while understanding each other's perspectives and actions, as well as considering the material environment.

In consulting projects, it has been observed that there is no proper system in place to acquire competitor information due to budget and time constraints. For example, in competitor analysis, conducting mystery shopping can be a valuable marketing research technique to obtain qualitative information. In a complex business environment, having access to quality and reliable information is crucial. This allows small businesses to keep up with larger companies when formulating their strategies for implementing a business plan (Franke, 1999).

Additionally, it should be noted that most of the information used in planning is influenced by the uncertainty of the future. Future outcomes cannot always be predicted based on past data alone, as there are multiple and inconsistent drivers of change in social systems (Berkhout and Hertin, 2002).An example of a failure in a business program is the Navan tourer Centre in Northern Ireland. The Centre closed down in 2001 after using up more than ?5m in public support. The failure was attributed to "unrealistic" predictions of visitor numbers, according to the

public history commission. The Navan Centre, which opened in July 1993, is considered a significant archaeological site in Northern Ireland. The projected visitor numbers were 160,000 for the following years, but in reality, annual visitor numbers never exceeded 50,000 and averaged 33,000 over eight years (www.bbc.co.uk).

In the business world, there is a famous anecdote about a shoe salesman who went to a rural Amazon jungle community and discovered that none of the locals wore shoes. This raises the question of whether it is an impossible market with no potential, or actually a major market for growth. Market potential can change over time and is beyond the scope of organizational planning and controls (Brassington and Pettitt, 2006). Therefore, Goodwin and Wright (2001) suggest that in an unpredictable environment, relying on past trends is unlikely to generate consistent forecasts for the medium to long term. They also argue that when such forecasts are presented as single-point predictions, it becomes difficult to assess the level of uncertainty associated with them.Considering the limitations faced by forecasters, the main question is how can businesses cope with the uncertainty of the future external environment through planning? Many SME owners and managers engage in marketing planning through their everyday networking activities, as well as through various communication channels such as socializing and participating in social and business events (Gilmore 2001). For example, the owner of Galuksha Photography develops her networks by attending workshops and incorporates many business planning ideas into her plans based on the knowledge acquired from these events. She has participated in an entrepreneurship workshop at York St John University as an illustration. Similarly, analyzers who are involved in business

planning benefit from both defensive and prospecting qualities. They utilize adaptive strategies to form alliances (Kearns, 2007). In a consultancy project that involved competing with traditional photography markets such as weddings, family portraits, and event photography, consultants suggested tapping into the PET photography market, which is often overlooked by most participants in York. Similarly, integrating marketing into smaller businesses is a natural approach. SMEs heavily rely on traditional practices and past experiences for their marketing activities.Attempts to explain a sales program using traditional marketing constructs are ineffective in newly established businesses. Small business marketing plans rely heavily on the expertise and awareness of owners/managers (Huang and Brown, 1999). Research on Dutch SMEs revealed that a small number of businesses had formal, written business plans, while approximately half reviewed their plans at least once a year (Gibcus and Kemp's, 2003). The underlying concept in entrepreneurial business planning is that opportunities arise and strategies are employed to capitalize on these opportunities without a formal or informal plan. Burns (2007) illustrates that most small businesses use business plans as a tool to secure capital. However, this statement can be seen from two perspectives. Despite the prevailing notion that business plans are crucial for obtaining capital growth for businesses, the alternative view is that investors consider business plans insignificant and therefore disregard them. The overall idea is that business plans will not be useful as a means of support (Bowers, 2009). In a consulting project, it was observed that clients needed to obtain a loan from the bank by utilizing the business plan.According to a survey conducted among 135 winners of the Australian Entrepreneur of the Year in 2004,

awarded by Ernst and Young, it was found that the majority (72 percent) believed that the owner's vision was the main factor contributing to their business success (Mazzarol 2009). Additionally, another survey found that 70 percent of smaller enterprises, within a time span of one to three years, and 92 percent confirmed that they were still operating after more than three years without much planning. It is interesting to note that planning in smaller enterprises is rarely assisted by planning models, as most SMEs stated that they planned based on intuition rather than using planning models (Stonehouse and Pemberton, 2002). Wickham (2001, pp 143) describes an entrepreneur's vision as "a picture of the new world he or she wishes to create. It is a picture into which the entrepreneur fits an understanding of why people will be better off, the source of new value that will be created, and the relationships that will be. Vision exists in the tension between what is and what might be." Overall, in times of uncertainty, the establishment of long-term goals and vision is essential for the continued existence and development of an organization (Stonehouse and Pemberton, 2002). Sarasvathy (2001) sees entrepreneur planning processes as a creativity process. Unified Text (including ):

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The text discusses two types of entrepreneurs: those who actively search for opportunities and those who identify and solve emerging issues. The "Austrian approach" suggests that individuals may not actively seek opportunities but can identify them through specific information that others may not have access to. For example, a consultancy company, initially operated from home, is passionate about art and photography. The company

aims to expand its business and become a renowned photography company in York. The proposed emergent thought plan suggests potential opportunities such as PET photography and online platforms to develop a strong photography brand in the coming years. These creative ideas are often sparked by people's imagination and belief in taking calculated risks based on limited information. This mindset reduces the perceived risks associated with entrepreneurship and encourages individuals to act without a formal plan.

The findings above indicate that there is a paradox when it comes to formal and informal planning in small houses. While formal planning and focus on core schemes are limited in small houses, it cannot be denied that SMEs still engage in planning actions through informal methods, which leads to success. This emphasizes the need for businesses to find ways to deal with the uncertainty of their future external environments within the context of business planning. It is crucial to note that the ability of SME leaders to think and act strategically is more important than just creating a business plan. According to Cummins et al. (2000), elements like readiness for change are also part of the informal planning process inherent to SMEs. Proactive participation, anticipation, and expectation in planning activities are necessary for SMEs to act rather than react. Similarly, Merrilees and Frazer (2006) discovered that highly successful entrepreneurial franchisees demonstrate "hidden" marketing success through their personalities, creativity, and ambition.