Question

1. Explain how the business planning process is one of revision. Explain two clear examples of your own (not those in the textbook) showing how your calculations in the financial section of the business plan, may force you to go back and change elements in previous sections of the plan.

Answer 1

Absolutely. Business planning is a revision because the competitive market is constantly changing and and it is important that business planning is revised to be make strategic decisions. Business plan should be updated quarterly, half-yearly and annually. It needs to be revised every day if it is a necessary requirement.

Examples are:

- Tesla’s motor company’s initiative to manufacture electric vehicles were merely a business plan before it attracted investors. Later, the business plan changed once the business started to scale up. When the business improved, there were more changes in its financial calculations. This led them to change the business plan in terms of expenses, business loans, equipment purchase, resources procurement, etc.

- In my family owned business, we produce organically grown oyster mushrooms. The business plan was to produce the oyster mushrooms in the suburbs of our city. Once the start-up was started, we understood that the operational cost of growing mushrooms in straw filled bags were costlier than expected. Hence, our further research led us to change plans to grow mushrooms in saw dust filled bags. Thus, the operational cost made us to change the business plan itself.