Posted: October 20th, 2022

Strategic and Short-Term Planning Processes and their Importance Essay

Strategic and Short-Term Planning Processes and their Importance
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Strategic and Short-Term Planning Processes and their Importance
Short-term planning Processes
The short-term planning process entails the processes of setting up small, intermediate goals for achievements with close time frames on progressively important overall objectives. Majority of the business operators engage in short-term planning usually on elements that covers periods of not more than a year with the aim of Helping their businesses to move gradually based on its long-term goals. The short-terms planning appear at the present traits of a business and the establishment of strategies for their improvement. For instance, the state of production equipments or the quality of products issues are considered typical short-term considerations. In order to address such issues, one puts short-term solutions towards resolving the problem (Kraus & Schwarz, et al. 2008, p386). For instance, the undertaking of employee training courses, servicing of equipments and fixing quality are generally considered short-term solutions that set stage for the resolution of problems more effectively within the long term projection.
Just like any other processes, the systemic influences must be addressed in the short-term planning. In the creation of strategic plans, this would entail the analysis of external environment as well as projection of the effect of this environment on the organization in short-run. In particular, the regulatory, social, political and technological issues that must be assessed for their perceived opportunities or threats they generate towards the business. Just lie the macro-environment, market environment which entails customers, competitors, incumbent industry and consumers also demands that they be analyzed in order to determine their impacts on the organization upon any change in the variables. In the short-term projections, it therefore involves the perception of potential impacts on how organizations can strategically leverage variables at this level and time (Gibbons & O’Connor, 2015, p168).
Importance of Business Planning
Business planning is very important component of running business regardless of the size of the business unit involved. Starting a project is very easy. However, without careful planning, it seems like setting off for a journey towards unknown destination basically due to absence of a roadmap. In such a scenario, one can manage to reach a destination of choice but chances of losing a touch with the destiny are very high. For small business owners, it is very discouraging to neglect the planning process particularly for sole proprietor business settings. Planning could be time-consuming while small enterprises may account for this time as time spent with no income generation (Brinckmann & Kapsa, et al. 2010, p31). However, the benefit of effective planning process largely outweighs any of the short-term losses on earnings.
One significant aspect of business planning is that it may provide reference points in any case of disorientation during the execution of a business project as it involves well-articulated project steps and initiatives. Focusing on a plan and observing the extent of coverage of the set goals and objectives often acts as a major motivation for the business proprietors. It may also Help in determining the extent of adherence to the initial business vision and objectives thus, allowing an individual to retrace and recover their initial focus. In addition, business plan also Help individuals to think analytically than can be possible under any other circumstances devoid of planning concerning the industry one operates in as well as the role of individual business unit in the industry (Ballou, 2007, p67). Planning also Helps business owners to understand the correlation between different sets of the business such as cost-reduction in particular processes and their effect on the entire business profit margins.

Finance Accounting Methods
The accounting method that a business employs has a significant impact on the overall revenue posted by a business entity and the expenses that are deducted from the revenue to realize the bottom line of the overall operating incomes. There are two main accounting methods that determine the manner in which companies’ business transactions are recorded within the financial books namely: the cash-basis accounting and the accrual accounting. Under cash basis accounting, the revenues and expenditures are recognized distinctively. The recognition of the revenue is based on the cash received while the recognition of the expenses is based on the cash paid out. In cash-basis accounting, companies often records expenditures in their financial accounts while during the cash lay out. Besides, in this case, the method also involves booking revenue when they hold cash often in the bank accounts (Weil & Francis, 2013, p45). For example, if a project developer completed a project on 27th August, 2016 but does not receive payments till the inspection of the project on 10th January, 2017, the project developer should report such earnings on their 2017 tax report. In the case of cash-basis accounting, cash-earnings entails credit card receipts, checks and other forms of revenue generated from clients. Small companies without formal incorporation and majority of sole proprietors also use cash-basis accounting approach since such a system is easy to manipulate on their own and must not hire expert accounting officer.
On the other hand, in case a company uses accrual accounting method, the records of revenue is done when actual transactions are completed. This may entail the completion of specified tasks encompassed within the contract agreement between clients and the company as opposed to when the cash is received. This implies that the business record revenue after earning it whether the customer has paid for it yet or otherwise. For instance, for a contractor using accrual accounting, they record revenue earned when they complete a project prior to actual payment of the bill by the client. Similarly, this approach handles expenses in a similar way. In particular, the business records expenditures as soon as they are incurred even before payment to suppliers has been made (Weil & Francis, 2013, p64). For instance, for a contractor purchasing a bulldozer, they may purchase on account as opposed to actual laying of cash for the bulldozer until the time they receive the actual product when the payment is practically executed.
Examples of Business Plans
 Plastic recycling business plan
Plastic recycling business plan is the typical business plan that entails the recovering and use of plastic waste products into useful products. In many instances, the overall end products may be completely different from the original product. The process may involve the melting down of unused materials and casting them into other new products. The final products in this case may be more expensive than the initial product or otherwise.
Planning Process
During the business planning process for a plastic recycling business, the developer contemplates on the possible investments size and opportunity available. This is mainly anchored on the objectives laid down by the business entity. For instance, they should project the initial costs of the business. For instance, this may be presumed to stand at $1.15 million as the initial fixed cost and an aggregate variable cost of the project. Secondly, the project developer contemplates and draws upon elements of the project process. This involves the product acquisition including the plastic wastes, their sources and sorting process. The criteria may involve sorting out the plastics according to their resin types among other basic procedures.
Another critical consideration of the process is the leadership of the perceived business. The business leadership outlay is very important as it may dictate the level of excellence that the business may subscribe to. For instance, in the plastic recycling business plan, one may be interested leadership that has the background knowledge on plastic waste management or environmental management where recycling is considered elemental to the development process.
Strong Components
One of the strongest components in the planning process of this business case is the availability of plastic wastes in the quarters of individual households as well as companies that prefer to dispose their wastes but increased costs of effective disposal press their inquest down. In this regard, the supply of raw materials (plastic wastes) is not only guaranteed but also virtually free of charge. This aspect acts as one of the strength of the business as it facilitates progressive production cycle.
Secondly, the final products generated from the business are also re-usable after some times which imply that the final product will at one time become the raw material and be re-used back into this business. For instance, the plastic bottles produced from this business will be used by the final consumer and then thrown away as waste products which can be returned back to the recycling process for newer products or similar products to the initial output. This means the entire process is simply a vicious cycle that keeps the business in progress.
Thirdly, this kind of enterprise is likely to gain government support because it is consistent with government’s environmental objective of reducing pollution. This is a key component in the sense that the enterprise may enjoy incentives like tax waivers, rebates and other forms of support from the government.
Weak Components
Despite wide range positive features of the business, some of the weaknesses of the business include negative stereotypes against recycled products among the local consumers. This aspect prescribes to a negative perception that people have compared to new products of similar tastes from imports and local producers. This may ultimately decrease the success of the business within its initial market segments locally while the international market may be considerably challenging to tap due to resource considerations.
Secondly, the business plan also suffers from weak linkage with the local packaging companies as it does not suffice the demand for the market hence proving unreliable to many business entities. This implies that majority of producers seeking plastic packaging will opt for alternative sources altogether. This is a negative aspect that may adversely reduce the potential success of the business.
Thirdly, there are usually huge cost implications in this kind of enterprise. This is in terms of setting up a plant and purchasing other inputs to be used in the recycling process. This in turn means that the profitability could be moderate or low.
Suggestions
• Develop business linkages with local manufacturers that may be the prospective consumers of the final recycled products.
• Develop a unique low pricing strategy that will attract local consumers who are largely price sensitive
• Introduce consumers’ civic education on environmental conservation through both social and print media.

Possible Challenges
• Low bargaining power in the local market for the recycled plastic products
• Negative stereotypes against the recycled products in the local market
• Poor marketing strategies owing to poor understanding of the local and international market for recycled plastic products
Competencies
• Professional leadership characterized with passion for environmental conservation and plastic waste management
• Availability of sufficient supplies of plastic wastes in the local precincts.
• Availability of start-up capital for both financial and human resources
• Ability to comply with the government regulations due to availability of resources and local environmental management authority.
 Children’s educational toys business plan
Description of Business Planning Process
In the educational sector, physical facilitation to learning has been an important milestone in the development of successful learning environment. However, the supply of these facilities is often manipulated by demand. Although the demand for the products and services may be high, the research essay supply may be limited by availability of disposable resources on the part of consumers. These comprise some of the important considerations in the planning process. In particular, the size of the business, vision and the anticipated initial capital for the business. One of the unique aspects of this business is the new concept of educational toys for children that have had little penetration in the local market. This informs the initial size of the company that should be relatively small during the start up but allow a significant growth capacity. The planning process in this case will concentrate on four main aspects: the location of the business, the components of work as far as children education toys are concerned, determination of the business vision and determination of the route map to realizing the child education toys business. The determination of the leadership of the business is quite important in developing a long-term business projection in order to analyze prevailing business influences on the local educational market segment.
Strong Components
One of the strong components of this enterprise is the availability of market. In this regard, the demand for education worldwide has been increasing with the increase in population. Actually, demand is the major consideration in establishing any enterprise
Secondly, the market segment is open and less saturated with toys. This means that the market is less restrictive to new entrants. Actually, in this market, it is difficult for one or a few firms to dominate the market because demand is essentially based on a firm’s ability to innovate and provide useful toys to the market.
Another strength of the business is the ability to produce fun and engaging educational tool with special experience relative to existing local suppliers. The three main products are: number toys, letter toys and the Phonic Toy. Although these products are education tools for youngsters, they are also quite engaging and fun to use thus, encouraging users to manipulate them during the learning process and beyond the normal learning schedule. This is one of the special insights developed by the product beyond other ordinary children toys.

Weak Components
Although the business plan seeks to develop very effective children facilitation products, the supply of raw materials and expertise in the production is a major challenge. For instance, the production unit involves individuals driven largely by passion as opposed to general professional skills. The supply of human resource is a major challenge which implies that the human resource turnover could prove very expensive for the business including subsequent recruitments and development of new working profile.
Secondly, the business plan is also challenged with counterfeits which are a major challenge to the local business segment. The latter challenge is particularly attributable to the challenge of product differentiation and branding of the specific product. As a result, this may render product promotion and marketing quite expensive to uphold in the long-run. Beside, the newness of this concept of children education toys in the market segment targeted by this business also implies a significant challenge of developing concrete business expansion in the long-run due to immense set of uncertainties.
Lastly, the developers must be well acquitted with the school curriculum since there is a tendency of the government and other stakeholders in the education sector to influence demand by endorsing or recommending certain toys based on curriculum needs.
Suggestions
• Develop links with local education stakeholders through corporate social responsibility that may facilitate civic education on the importance of education toys
• Establish business profile and pamphlets that demonstrates the use and impact of children education toys both in local and internal business segments.
• Provide an elaborate business marketing initiative through the development of business projection that informs consumers of the anticipated impact of the product in enhancing children education. For instance, make intermittent visits to schools and educational centres forming the main consumption blocs to identify some of the challenges involved in end consumption of the product.
Challenges

• Marketing the new product in a new market (local market) is quite challenging as the initial target market entails a strange concept of learning that is challenging to sell.
• Establishing the new brand amidst potential influx of imports is a major foreseeable challenge
Competencies

• The business plan has a pool of experienced staffs that are responsible for developing and marketing the education toys for children.
Conclusion
Finally, business planning process is very important as it promotes the prospects of success of a business entity. In particular, the development of a business plan involves the weighing of potential opportunities in a business segment as well as possible threats to the business success. In particular, the development of a business plan determines the path through which a project idea is developed into a practical simulation of a business in resolving a problem for the purpose of realizing profits in a given market segment.

References
Ballou, R. H. (2007). Business logistics/supply chain management: planning, organizing, and controlling the supply chain. Pearson Education India.
Brinckmann, J., Grichnik, D., & Kapsa, D. (2010). Should entrepreneurs plan or just storm the castle? A meta-analysis on contextual factors impacting the business planning performance relationship in small firms. Journal of Business Venturing, 25(1).
Gibbons, P. T., & O’Connor, T. (2015). Influences on strategic planning processes among Irish SMEs. Journal of Small Business Management, 43(2).
Kraus, S., Harms, R., & Schwarz, E. (2008). Strategic business planning and success in small firms. International Journal of Entrepreneurship and Innovation Management, 8(4).
Weil, R. L., Schipper, K., & Francis, J. (2013). Financial accounting: an introduction to concepts, methods and uses. Cengage Learning.

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