Business Planning

A Management Information System

The sources of information listed in Gathering information could lead to significant amounts of data being collected. You need to consider how you will deal with this information. You need a system.

If you use a PC, there are some computer programmes available commercially which will help you organise and analyse the data. Alternatively a paper-based system might suit your business needs. Whichever type of system you adopt, it must:

• be simple to use and follow (otherwise it will fall into disuse)
• provide analysis on which to base decisions at the right time (its no good finding out that a new competitor is opening up once they have successfully taken most of your customers)
• give you the management information you need (too much detail can be as bad as too little - you need to be able to disregard irrelevant information)

Only you can decide what system best suits your business. Time taken at the planning stage in setting up a system will pay for itself many-fold once it operates.

Analysing the Data

The important feature at this stage in your Business Planning activity is not the method you use for analysing data but that you do carry out some form of logical analysis which tells you where the business is and where it is going. You will have wasted your time and probably a great deal of effort if you collect data and do nothing with it.

In preparation for setting out your plan, the information gathered must be analysed. Many existing tools which help businesses successfully plan their future use the 'SWOT Analysis' technique. This is a relatively simple, but very effective, method of stating the Strengths, Weaknesses, Opportunities and Threats which lie before the business, hence the term SWOT Analysis.

The SWOT Analysis is only one of many tools used to analyse the variety of information which you will gather. More complex forms of analysis, including more complex forms of SWOT Analysis, are available to help chief executive and management teams cope with the wide array of information which can be collected.

SWOT Analysis

STRENGTHS

• Identifying your strengths will help you decide on which areas you can reply.
• You are likely to see better returns for your effort in these areas.

WEAKNESSES

• Your weakness will tell you which areas need special attention - thus turning them into strengths.
• Alternatively, you might decide that these are areas which you should avoid.

OPPORTUNITIES

• Opportunities are areas which the business needs to attack; they offer earning potential.
• You will need a strategy that allows you to make the most of the opportunity which exists.

THREATS

• Threats are areas which need to be monitored and action taken if needed.
• The system you have to monitor your business needs to watch out for changing or increasing areas of threat.

You can read more on SWOT analysis here.

Business Planning Guide © Crown Copyright 2011