Strategic Planning in the Small Business

Unit 2

HO 2-5 (continued)

to advertising efforts

have been gathered. Therefore,

judg­

mental approaches

are often utilized. Of course,

steps can be

taken to build

confidence and objectivity

into these judgments.

As mentioned

in the section on environmental

brainstorming,

one

way to gain insights and to

balance biases may be to have

a number

of key people in the business

involved in the rating

process.

ANALYSIS OF THE FOUR

KEY INTERNAL RESOURCE

CATEGORIES

Many variables

may need to be analyzed, depending

on the

firm and industry.

For example,' Pearce and

Robinson list over

fifty variables. The following

discussion suggests four

cate­

gories

of variables, but owners may

wish to devise their own.

Evaluating

FinancialResources

The internal factor that

most visibly affects the smaller

firm's

efforts is the adequacy

of its financial resources.

Excellent en­

vironmental

opportunities may be

identified and reasonable

strategies for attaining these

may be noted. Yet, without

ade­

quate financial

resources, these plans may lay

dormant for years

or never be

implemented at all. Even more

disturbing, a busi­

ness may be forced

to halt a viable project

or program in mid­

stream because its

financial capacity is exhausted.

Analy:is of

financial resources can help

identify the problems and prevent

such disappointing

occurrences.

As one begins to examine and

rate the relative strength of

the firm's

financia, resources, certain

caveats should be rec­

ognized.

First, existing financial

statements are used as tools

in

1. John A. Pearce II and Richard
   B. Robinson, Jr., Strategic Manage­

ment: Strategy Formulation

and Implementation, 2nd ed.

(Homewood, Ill.:

Richard D.

Irwin, Inc., 1985).

60 PartOne The Analysis Phase

203