What is business planning and analysis?

Since we open a business, we have acquired a responsibility that forces us to consider aspects that go beyond the activity to which we want to dedicate ourselves. Not only must we be good in our area of interest, but we also have to dabble in administrative, planning, analysis and management issues that perhaps we have never seen before, all with the aim of keeping our project afloat.

INEGI, in its second set of results from the 2020 business demography study, estimates that in 2019 there were 4.9 million minicomputer, small and medium businesses, of which 12.8% (619,443 businesses) were new openings, but 20.8 % (1,010,857 businesses) closed their doors.

Likewise, INEGI comments that the average life of an SME is 7.7 years, but according to the Center for Business Competitiveness Development, only 25% of companies survive the first two years of operation. The causes? There are different responses, from insecurity, high financing costs, the legal difficulty to establish a company and the lack of planning and analysis to sustain the venture in the long term.

Of all these reasons, the one that draws the most attention -because it falls completely under the control of the business owner- is the lack of business planning and analysis, which is why today we want to investigate this issue to help you better understand this essential aspect. .

What is business planning and analysis?

As well as life itself, businesses are governed and work daily under three times: the past (which is responsible for accounting), the present (workers and actions focused on generating income) and the future that depends on the establishment of commercial strategies that ensure the financial health of a company.

We are talking about crucial decisions that will set the course for our business, but how do we make better decisions for the future? The answer lies in forecasting, analysis, budget management and the accumulation of data that allow aligning efforts to meet financial objectives through strategic planning that must be evaluated regularly.

Entrepreneurs must be able to save, collate and analyze all the internal variables of their operation, the current demographic and economic trends and objectively and subjectively evaluate their processes and finances to determine a business plan, as well as its financial impact.

Not only do you have to learn to manage payments and collections in your SME, but you also have to be intelligent to analyze all those financial movements to map a path that leads to maintaining the financial health of the company in the long term and, although this aspect is not so easy to achieve, there are always ways to do it.

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