#Information sheet#

Improve Business Practice

Learning objectives
 Diagnose the business
 Benchmark the business
 Develop plans to improve business performance
 Develop marketing and promotional plans.
 Develop business growth plans.
 Implement and monitor plans.,
Lo 1:- Diagnose the business
Diagnosis is associating unsatisfactory performance of business processes with poor managerial
decisions. It is also a process that helps enterprises to improve their capacity by assessing and
changing inefficient patterns of enterprise behavior as a basis for greater effectiveness. Business
diagnosis is an effective ways of looking at an enterprise to determine gaps between current and
desired performance and how it can achieve its goals.
Effective diagnosis provides the systematic understanding of the enterprise necessary for designing
appropriate change interventions intended to resolve problems and improve enterprise functioning.
Within the diagnosis and assessment phase, one is trying to uncover essential information about the
future in which the enterprise must operate and to understand the capacity of the enterprise to manage
its parts in the future.
Diagnosis is a cyclical process that involves data gathering, interpretation and identification of the
problem areas and possible action programs. During the diagnosis process, it is important to look at
both the environment and enterprise.
Source and required data for diagnosis
The process of data diagnosis, which combines information about one enterprise from multiple sources,
increases the richness of information available in a study. The data source must be chosen carefully to
ensure that it can address the study purpose so that sufficient data could be acquired as a basis for
diagnosis. There are two sources of data these are primary and secondary. The primary sources are
collecting information from the enterprise or from the enterprise customers though direct observation
and interview. And the secondary data could be from enterprise documentation and from different
institution or agency. For the diagnosis purpose, they have to also make critical observation about the
internal and external environments, as well as plant down time and capacity utilization.

To conduct the business diagnosis, the consultant/industry extension providers collects data

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Data required for diagnosis is determined and acquired
 organization capability
 appropriate business structure
 level of client service which can be provided
 internal policies, procedures and practices
 staff levels, capabilities and structure
 market, market definition
 market changes/market segmentation
 market consolidation/fragmentation
 revenue
 level of commercial activity
 expected revenue levels, short and long term
 revenue growth rate
 break even data
 pricing policy
 revenue assumptions
 business environment
 economic conditions
 social factors
 demographic factors
 technological impacts
 political/legislative/regulative impacts
 competitors, competitor pricing and response to pricing
 competitor marketing/branding
 competitor products
Competitive advantage
An in-depth investigation and analysis of your competition allows you to assess your competitor’s
strengths and weaknesses in your marketplace and helps you to choose and implement effective
strategies that will improve your competitive advantage
Competitive advantage of the business is determined from the data
 services/products
 fees
 location
 timeframe

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SWOT analysis of the data is undertaken
 internal strengths such as staff capability, recognized
 quality
 internal weaknesses such as poor morale,
 under-capitalization, poor technology
 external opportunities such as changing market and
 economic conditions
 external threats such as industry fee structures, strategic
 alliances, competitor marketing
SWOT Analysis for Enterprise
Strengths
The "S" in SWOT stands for strengths, internal factors that are favorable to achieving the desired
outcome. Strengths may include product patents, trade secrets, exclusive access to resources and
company reputation.
Weaknesses
The "W" in SWOT stands for weaknesses, internal factors that may interfere with achieving the desired
result, including high overhead, lack of supplier relationships and poor reputation.
Opportunities
The "O" in SWOT stands for Opportunities; these are external factors that may help in reaching
the desired outcome, including new technologies, increased customer demand and loosened
regulations.
Threats
The "T" in SWOT stands for threats, external factors that may hinder the achievement of the desired
goal; these include changes in customer preferences, intense competition in a particular market and
governmental regulations.
Lo 2:-Benchmark the business
Use benchmarking to improve your business benchmarking shows you whether your performance is
stronger or weaker than your competitors. It will give you a clear picture of where improvements are
needed and how to increase profits.
For example, financial benchmarking data will help you to see how much you earn and how much you
spend on advertising, rent, staff, training and other expenses compared to your competitors.

You may discover that:-

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  you are spending too much on rent and need to consider negotiating lower rental rates
 your inventory costs are higher than your competitors, so you may need to reduce waste
or negotiate better rates from your suppliers
 your income per employee is lower than the industry average, meaning you may need to
examine productivity and training.
When benchmarking, you should analyze in detail how your business compares to others. Once you
understand where you can make improvements, you are ready to develop a plan to put changes in place.

Remember to keep your employees and clients informed as you make changes to your business. If any
problems arise, act on them immediately. Learn more about managing people through change.

Benchmarking is a process of continual improvement. Once you have implemented changes, you should
benchmark your business again to see the results. This will tell you what is working, and where you can
still improve.

Benchmarking tips:-

 Think creatively about ways to improve your business

 Ask staff for their input
 Study other, similar, businesses and how their processes work
 Implement changes based on observations and research
 Evaluate the results of the changes you have implemented
 Review whether you have the business skills to improve your business
 Benchmarking before you buy
If you are considering buying a business, benchmarking is an essential resource. Benchmarking can help
you to measure the past performance of a business to see how it performed against industry averages. The
information you gain from benchmarking makes it easier for you to decide if:

- the business is a good buy

- the purchase price is reasonable.
- Find out more about buying a business.

Sources of relevant benchmarking data are identified

Key indicators for benchmarking are selected in consultation with key stakeholders
 salary cost and staffing
 personnel productivity (particularly of principals)
 profitability

By abebe k .(msc)
  fee structure
 client base
 size staff/principal
 overhead/overhead control

Like indicators of own practice are compared with benchmark indicators

Areas for improvement are identified
Lo3:-Develop plans to improve business performance.
For a business to be successful, every business owner or manager needs to ensure that their business is
operating as efficiently and effectively as possible. Improving the efficiency and effectiveness of the
business requires an understanding of the key drivers within the business and a practical approach to
implementing processes that will optimize these key drivers.

For improved business performance, all relevant key drivers should be identified and regularly evaluated
against key performance indicators such as business targets and benchmark data. Implementing a
continual improvement program will ensure that all key business resources are being utilized efficiently
and effectively at all times. In this guide, the key drivers within each of these areas aredetailed to help a
business ascertain which activities will be relevant to their business.

Successful businesses are those that have a clear purpose, set goals aimed at achieving that purpose and
established procedures designed to meet those goals consistently. Good practice business planning will
formalize these activities through regular review of both strategic and financial planning processes in the
business.

Strategic planning

Strategic planning provides direction for the future of the business by establishing priorities and
allocating resources to achieve the objectives outlined in the plan. When a business implements a
formal process of strategic planning on a regular basis, business performance is measured and
assessed. The process allows for business owners and managers to allocate resources and
implement changed business practices for improved business performance. Having a strategy in
place that focuses on continual improvement will ensure that the business thrives, but it also
means that many crisis situations that can be the undoing of a business may be identified and
addressed before they have a negative effect on the business.

Tips to improve strategic planning

Good practice in strategic planning should incorporate a regular formal review that:-

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 • addresses critical performance issues by assessing actual performance against objectives and
criteria established during the business evaluation
• identifies long-term objectives
• recognizes capabilities and resources needed to achieve these objectives (or identifies gaps)
• Documents activities required to achieve the objectives within a specific time frame
Objectives need to be:-
• clear, concise and achievable
• focusing on the key drivers in business
• monitored and measured
Effective strategic planning will determine what business success looks like and what needs to be
done to achieve it.
Financial planning
Financial planning is a continuous process of directing and allocating financial resources of the
business to meet strategic goals and objectives. Undertaking a regular review of the potential
future financial position of the business will provide clarity on the ability of the business to meet
its strategic direction. Budgets and forecasts are critical tools that can be used to predict the future
financial position of any business. The difference between a budget and a forecast is that the
budget sets out the financial goals of the business in line with the strategic plan and a forecast
tracks the financial outcomes in line with budget predictions, providing a valuable tool to assess
the likelihood of the achievement of the budget.

Tips to improve financial planning

Good practice in financial planning in a business requires:-

• Development of realistic targets that align with both the strategic plan and historical trading
activities
• A review of industry trends and other information available that will assist in preparing credible
assumptions and targets
• documented assumptions, including source of information
• budgeted timelines that align to both the strategic plans and the reparation of financial
statements
• regular comparison of budgets against actual financial results
Productivity
One of the simplest ways to improve business performance is to increase productivity. The two
key areas where businesses can source additional resources is maximizing staff potential and
leveraging (and enhancing) the use of technology.

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Staff
Every business that employs staff must understand the value staff bring to the overall
performance of the business. Truly engaged staff will play a significant part in the overall success
of the business.
Employing and retaining staff who contribute to increased productivity should be a high priority
for every business.
This is relatively easy where a culture based on trust, teamwork, communication and shared goals
is entwined in the business. To achieve this type of culture, business owners and managers need
to ensure that staff are involved in the decision-making process. Weekly meetings, staff surveys
and feedback and team building events are just some ways to improve communication and
feedback.
Bonuses and commissions that encourage staff to meet and exceed targets will also influence staff
behavior.
Tips for improving staff performance
 Employers can engage staff in the determination of strategic direction by :-
• allowing staff to contribute proposals for the future direction of the business
• ensuring that all staff have the capability and confidence to implement and deliver on
strategy
 Staff should understand:-
• their roles and responsibilities, how their performance will be measured and how this
interacts with others in the business
• the level of authorization they have to do their job
 Business owners and managers should:-
• review all job descriptions to see if they align with the business’s strategic direction to
identify potential gaps and opportunities for reallocation of resources
• implement benchmarks to measure and monitor staff productivity, such as sales targets
where possible, key responsibilities should not be shared between staff members.
Technology
Improving business performance through the better use of technology will require a thorough
understanding of key processes in the business. Business owners and managers can then assess
the areas where technology can enhance these processes.

It is important that staffs are well trained in using the necessary technology and understand the
importance of technology to the business. Staff also need to be well versed in the consequences
to the business where technology is used inappropriately.

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 With a vast array of technological choices, it is important that a business takes a considered
approach to the use of new technology with particular focus on integrating existing technology.

A consolidated list of required improvements is developed

Cost-benefit ratios for required improvements are determined

Work flow changes resulting from proposed improvements are determined

Proposed improvements are ranked according to agreed criteria

An action plan to implement the top ranked improvements is developed and agreed
Organizational structures are checked to ensure they are suitable
 legal structure (partnership, limited liability company, etc.)
 organizational structure/hierarchy
 reward schemes
LO4:- Develop marketing and promotional plans
The enterprises has already conducted the business diagnosis and benchmarking. The business diagnosis
shows what areas of the business should be improved, and what areas should be continued as they are. If
the diagnosis and the benchmarking result shows that the enterprise could not cope up with changes using
the current marketing plans, or could not keep growing or achieve the intended objectives according to
the current competitive performance, the areas of improvement have to be identified for implementation.
One of the areas to fit these requirements is the marketing part of an enterprise in line with its vision and
objectives. Based on the evaluation, the enterprise revises its vision in line with its growth needs and
performance gaps.

Mission, Vision Statement and objective: The revision process

To revise the vision statement based on the result as stated in benchmarking and business
diagnosis, the following steps could be followed even though there is no single universally
accepted way for the process.

i. Review the existing vision statement of the enterprise. Every business owner starts the company for
a reason considering existing opportunity, and personal desire to achieve. During the
development of business plan, an enterprise has to write the vision and mission statement. To
revise the existing vision statement, the enterprise has to go through its achievements up to date;
gaps identified, and consider the growth potential whether to national or international level.
ii. List enterprise’s current objectives. What does the enterprise wants to achieve for its customers? for
employees staff? for the nation?. Then prioritize these objectives, as the most important versus
the list important, to identify the core objective to revise the vision statement.

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3. Renew your mission. If you had to do it all over, how would you define the reason for your business’s
existence? Does your mission meet with your current objectives? What are your objectives for the
future?
Your mission does not have to be limited by what you think you can accomplish. Rather, define yourself
by what you hope to accomplish. For example, in the early 1990’s, Ford Motor Company’s mission
statement was “Ford will democratize the automobile,” a mission statement was “Ford will democratize
the automobile,” a mission that seemed virtually unattainable in the horse-and-buggy days.

4. Recognize changes. The world, or you, may be in a different place from when you started your
business. Recognize that some changes may have an impact on what you hope to achieve. For
example, in 1950, Boeing’s mission statement was to “Become the dominant player in
commercial aircraft and bring the world into the jet age.” With this mission accomplished, over
the years Boeing’s new mission statement has become: “To push the leading edge of aviation,
taking huge challenges doing what others cannot do.”

5. Write your revised statement. Armed with your new vision for the future, write your new statement.
Limit the statement to a sentence or two that encapsulates your mission, product/services and
ethics. Now those are words to live by (at least for the next several years)!

The practice vision statement is reviewed

Practice objectives are developed/reviewed

Objectives should be 'SMART' , that

 Specific
 Measurable
 Achievable
 Realistic
 Time defined

Target markets are identified/refined

Market research data is obtained

Market research data includes

 data about existing clients
 data about possible new clients
 data from internal sources
 data from external sources such as:

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  trade associations/journals
 Yellow Pages small business surveys
 libraries
 Internet
 Chamber of Commerce
 client surveys
 industry reports
 secondary market research
 primary market research such as:
 telephone surveys
 personal interviews
 mail surveys

Competitor analysis is obtained

 competitor offerings
 competitor promotion strategies and activities
 competitor profile in the market place

Market position is developed/reviewed

 product
 the good or service provided
 product mix
 the core product - what is bought
 the tangible product - what is perceived
 the augmented product - total package of consumer
 features/benefits
 product differentiation from competitive products
 new/changed products
 Price and pricing strategies (cost plus, supply/demand, ability to pay, etc.)
 Pricing objectives (profit, market penetration, etc.)
 cost components
 market position
 distribution strategies
 marketing channels
 promotion
 promotional strategies
 target audience

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  communication
 promotion budget

Practice brand is developed

 practice image
 practice logo/letter head/signage
 phone answering protocol
 facility decor
 slogans
 templates for communication/invoicing
 style guide
 writing style
 AIDA (attention, interest, desire, action

Benefits of practice/practice products/services are identified

 features as perceived by the client
 benefits as perceived by the client
Promotion tools are selected/developed.
 networking and referrals
 seminars
 advertising
 press releases
 publicity and sponsorship
 brochures
 newsletters (print and/or electronic)
 websites
 direct mail
 telemarketing/cold calling

LO5:-Develop business growth plans.

Plans to increase yield per existing client are developed

 raising charge out rates/fees
 packaging fees
 reduce discounts
 sell more services to existing clients

Plans to add new clients are developed

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Proposed plans are ranked according to agreed criteria

An action plan to implement the top ranked plans is developed and agreed
Practice work practices are reviewed to ensure they support growth plans
Lo6:-Implement and monitor plans

 Implementation plan is developed in consultation with all relevant stakeholders

 Indicators of success of the plan are agreed
 Implementation is monitored against agreed indicators
 Implementation is adjusted as required
Monitoring and evaluation plans should be created after the planning phase and before the design
phase of a programme or intervention. The plan should include information on how the
programme or intervention will be examined and assessed. Generally, the plan should outline:-
 the underlying assumptions on which the achievement of programme goals depend
 the anticipated relationships between activities, outputs, and outcomes (the frame work)
 well-defined conceptual measures and definitions, along with baseline data;
 the monitoring schedule;
 a list of data sources to be used;
 cost estimates for the monitoring and evaluation activities;
 a list of the partnerships and collaborations that will help achieve the desired results; and
 a plan for the dissemination and utilization of the information gained
Monitoring and evaluation plan should include:-
 the stated theory of change
 a monitoring and evaluation framework
 Evaluation questions and tools
 Baseline tools and indicators
 A description of the monitoring activities and key moments
 A timeline
 A budget and explanation of the needed resources-money and personnel, capacity development,
infrastructure,
The important considerations for a monitoring and evaluation plan?
 Resources: how much money and time will be needed to conduct the activities?
 Capacity: does the programme/project have internal capacity to carry out the proposed
monitoring and evaluation activities, including analysis of data collected, or will outside
expertise be needed?
 Feasibility: are the proposed activities realistc? Can they be implemented?

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  Timeline: is the proposed timeline realistic for conducting the proposed activities?
 Ethics: what are the ethical considerations and challenges involved with implementing
the proposed activities, and is there a plan in place for addressing those considerations?
Has a protocol been submitted for review by a research ethics committee?
When should monitoring and evaluation be undertaken?
 Monitoring and evaluation is an integral part of programmatic and strategic planning.
 It should be incorporated into all aspects of planning from the project’s inception.
When should monitoring activities be carried out?
 Monitoring activities should be conducted at key moments during the intervention that will
facilitate an assessment of progress towards the objectives and goal.
 Programmes ideally involve continuous monitoring-or routine collection of data and
information that will allow them to gauge if activities are being implemented according to
expectations, and if barriers or challenges need to be addressed.
 With a series of trainings for example, key monitoring moments should be set after a certain
number of trainings.
 With an awareness-raising campaign, key monitoring moments should be set after each
aspect of planning and implementing the campaign (e.g. determining exposure to information
disseminated through the media after key periods).
Implementation plan is developed in consultation with all relevant stakeholders.
When should evaluations be conducted?
 Evaluations should be conducted at the beginning and end of an intervention process. They
should include collection of baseline data for comparison purposes.
 Evaluations are usually conducted to answer key questions on the programme-such as how to
improve the programme, which activities to continue or discontinue and whether or not to
scale up the programme.
Can monitoring and evaluation plans be amended?
 Yes, monitoring and evaluations plans can always be amended and additional indicators or
information can always be added. However, information that has already been collected
cannot be changed.

Rift Valley University

Nekemte compass TVET Program

Group assignment for pharmacy section A, B, C

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  Choose one types of business and prepare business plan by
using the following contents
Executive Summary
Name of business ______________________________________

Legal form_____________________________________________

Contact address_________________________________________

Tel. _____________________E-mail________________________

Fax.____________________

Type of business

􀂉 Manufacturer 􀂉 Service provider 􀂉 Retailer 􀂉 Wholesaler

Brief description of the business idea

Products or services_____________________________________________-
_____________________________________________________________________________________

Customers / target group

_____________________________________________________________________________________
_____________________________________________________________________________________

Owner(s)

(Name, Address, Qualification, Function in the business, relevant experience)

1.________________________________________________

2.________________________________________________

Business Idea and Market

Description of the business idea

(e.g. identified needs (market gap), who are the customers, type of products or services to satisfy the
needs, how to reach the customers, etc.)

_____________________________________________________________________________________

MARKETING PLAN
Description of the market

(e.g. geographical area, town, type of customers, size of total market,

description of competitors, market share for the new business, etc.)

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_____________________________________________________________________________________
_____________________________________________________________________________________

Marketing Plan Product

Detailed description of the product or product range or service

Product/service type

_____________________________________________________________________________________

What is special about the product/ the unique characteristics of the product?

_____________________________________________________________________________________

Specification of the product (e.g. size, color, quality, Packaging etc)

_____________________________________________________________________________________

After sales service

_____________________________________________________________________________________

Marketing Plan
Price----------------------------------------------------------------------------------------------------

What are the reasons for setting your price?

_____________________________________________________________________________________

Marketing Plan Place

Location of the business

Description of the planned location for the business

_____________________________________________________________________________________

Reason for choosing this location

_____________________________________________________________________________________

Reaching the customers by selling to

􀂉 Individuals 􀂉 Retailers 􀂉 Wholesalers 􀂉 Others

Reason for choosing this way of distribution

_____________________________________________________________________________________

Marketing Plan Promotion

Description of the planned actions to inform customers about the opening of

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the new business (e.g. printed information, brochures, posters, newspaper

articles, radio advertisements, opening ceremony, etc. Also make inquiries

about the costs for the different types of promotion)

_____________________________________________________________________________________
_____________________________________________________________________________________

Legal Form

The legal form of the business will be:-

□ Sole proprietorship □ partnership □ limited company □ Corporation

Reason for choosing this legal form

_____________________________________________________________________________________

Start-Up Capital

Estimation of start-up capital Amount

INVESTMENT
Land

Building

Equipment

Total Investment

WORKING CAPITAL
____ months of staff costs
____ months of operational costs
Total working capital
TOTAL START-UP CAPITAL

List fixed assets needed and their cost

No. Item Quantity Amount

1
2
3
4
List of raw materials needed

No Raw materials DIMENSION QUANTITY UNIT TOTAL COST

needed per month COST
1
2

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Sources of Start-Up Capital

Sources of funding

Type Source Conditions Amount

(duration/interest)
􀂉 Own savings
Equity capital
􀂉 Partner
Loan 1 􀂉 Family
􀂉 Friends
􀂉 Money lender
Loan 2 􀂉 Credit cooperative
􀂉 Government scheme
􀂉 Bank loan
TOTAL FUNDING

Information about funding sources

Loan 1

Name and address of creditor or credit institution

__________________________________________________________________________________

Credit agreement 􀂉 under discussion 􀂉 finalized

 Money available on (date) ________

_____________________________________________________________________________________

Debt Service

Repayment 1 2 3 4 5 6
period Amount Amount Amount Amount Amount Amount
Loan 1
Installment/principal
Interest
Loan 2
Installment/
principal
Interest
Debt service
Sum of Installments

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 Organization and Staff

Staff costs

Position Qualifications Salary Social Total

Per month security staff cost

1. __________ ___________ _________ ________ ______

2. __________ ___________ _________ ________ ______
3. __________ ___________ _________ ________ ____
Organization of business premises

(Sketch of planned shop, office or workshop)

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