Awareness on business planning and budgeting vital for SMEs

Ramani KANGARAARACHCHI

A strategic vision statement is a roadmap of a company's future. It provides specifics about technology and customer focus and geographic and product markets to be pursued, the capabilities it plans to develop, and the kind of company the management is trying to create. Smart Quest Consultant Hannelore Fernando said.

Addressing a seminar on Business Planning and Budgeting at Galadari Hotel she said awareness on proper business planning and budgeting is vital to small and medium sector (SME) entrepreneurs in Sri Lanka because they are the live-wire of the economy.

"Many of them develop their businesses according to a plan but not knowing what a business plan should include, she said.

A business plan which is a written document of where the business wants to go and how it intends getting there includes a vision statement, setting objectives, strategies and action plans, implementing the chosen strategy and evaluating performance to make corrective action, she said.

Fernando said the Business Plan is very important because it provides better guidance to the company on the crucial point of "What the company is trying to do", make managers more alert to new opportunities and threats in the environment and help to unify the organization.

It also creates a more proactive management posture and promote the development of a constantly evolving business model that will produce sustained bottom line success for the business leaders and not react to defend.

Elaborating on six steps to a good business plan she said that once the basic business concept is done all the important data on the industry should be gathered and carry out a SWOT analysis by an entrepreneur.

"The target market has to be decided as one cannot be everything to every one and then objectives have to be set to develop strategies," she said.