Thursday, May 31, 2007

Rewrite Your Business Plan for China

This is a recent post on the China Solved Blog which describes how Western companies trying to start up in the Chinese market must restructure their business plan if they are to succeed in China.

Whether your China business is an entrepreneurial start-up or a new branch of an existing business entering the China market, you should definitely sit down and write a formal business plan specifically for China. If you have been on the ground in China for more than 1 year, it is probably a good idea to revisit your original plan and revise (or rewrite).

How does a China business plan differ from a traditional business plan? China Business Plans should include a separate Manpower or HR Plan, since that is the functional area you will make you or break you in China.

Business plans have 3 main sections that drive the analysis:
1) Financing
2) Operational
3) Marketing

While this is fine for a standard business plan, you should recognize China’s special management challenges by devoting the time and energy to drawing up a special HR plan. Make sure it includes:

-Organizational Chart
-Manpower plans for 3 years
-Job descriptions & specifications
-Training Plan
-HR Department structure
-Compensation & incentive
-Management development plans
-Feedback & appraisals
-Outsourcing & Consultants
-National network
-International reporting lines

You’ll notice that some of these line entries impact directly on operations, and other on your budget. For instance, by deciding IN ADVANCE what your org chart and job descriptions will look like, you are imposing a structure on your company’s growth. The training plan, compensation plan and HR department structure require you to think about spending and budgets. The national network and international reporting forces you to consider issues related to your China organization’s growth and management. This is not an inconvenience – it’s the real purpose of writing a business plan.

To view the entire article at its original location click on the title of this post.

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