The 4 Business Plan Threats
There are four critical areas causing business plans to change. All are changing trends in the business environment. The four areas we will examine are: 1) government trends, 2) economic trends. 3) technological trends and 4) cultural trends. Each one causes a specific impact on our decisions and requires us to make adjustments. Some changes are dramatic and require dramatic reactions to minimize their effect on our business.
First are government trends. There are several different sources caused by changes in regulations, tax policies and new legal precedence. Most of these are not a direct result of what we are doing in our business, but are the result of political and social shifts. On the legal side, changes result from court cases. It is absolutely necessary to address these changes because of both the financial and legal jeopardy. The result will be changes to not only our business plans but also our business conduct.
Second are economic trends. These changes occur because the local, national and international environment changes. Typical of these trends are changes in inflation rates, interest rates and the comparative value of currency (foreign exchange rates). Notice that all of these changes are directly and indirectly effects of government actions. These trends require us to adapt our business plan to the new conditions.
Next are technological trends. The amount of effect that these trends have on our business depends on how directly the changes impact our present operations. For instance, if we are making vacuum tubes when integrated circuits arrive, we will have to make some major changes. Note that the changes in our business plan may mean acquiring or learning new technologies, retraining our people, or seeking new customers and products. Inventors, with changes in product lifecycles or adopting new ideas, normally trigger these trends. We can prepare for these changes by keeping up-to-date with trends, new advances and what our competitors are doing. It may mean new sources of raw materials, different marketing techniques, or perhaps the loss or emergence of a new market.
Finally, cultural trends have a direct impact on our business plan and the business environment. The demographics of our customers may change, new social concerns can arise and new lifestyles evolve. If our customers move from the cities to the country, our business will be affected not only in what we sell, but also, in how we deliver it. Too, as social consciences change, acceptable business practices will change. These could include environmental and social programs. For example, government might require a business to provide a certain level of retirement benefit. These trends often burden businesses with new and unplanned costs but must be assimilated into the business plan to remain a viable enterprise.
Notice, these trend types have definite impacts on our business plan. They are all threats to present business operations and also present new opportunities. If we make changes in our business operations to become environment friendly, employee friendly, or technologically modern our business accrues new public interest leading to new sales. Too, we receive free publicity that positively impacts our business credibility and stature. Regardless of the fringe benefits to our business, we must continually be aware and open to new directions so that our business plan and operation doesn’t stagnate or become less functional in the changing environment.
Author: Michael Russell
How to Write a Good Business Plan
Mail this post
