Critical Appraisal of Business Plan Process Towards the creation of a successful entrepreneurial venture Introduction A business plan is “a detailed definition of a business idea and explains how the business of the potential company will be executed (Piotrowski, 2011, p…
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Because it is contained in a tangible document, it is open to critical examination by important third parties such as possible co-investors, creditors, venture capitalists, or banks which may be considering extending a loan towards the business (BC Ministry of Small Business, 2011, p.2). Elements The business plan is comprised of several elements, which may be described as follows: Idea generation, while not a tangible part of the business plan proper, is a vital phase of the planning process. It is the germination of the business intention, the idea that combines a perceived need in the environment with a recognized capability in the business proponent. Idea generation is the most difficult stage of developing a new product or service, whether it be for a new or existing business (Crane, 2010, p. 104). This is because it involves the creative process and is not defined according to any established procedure, but often occurs as a flash of inspiration or unique insight as to how a particular need may be fulfilled. When an idea is first generated, there is usually no indication as to whether it will be successful or even feasible, thus embarking on a course of action on the bases of new ideas always involves a great deal of conviction and a leap of faith. Strategic objectives are set subsequent to the generation of the idea. Strategic objectives provide the overall mission or purpose of the business (i.e., a “philosophical” purpose, according to Piotrowski, 2011, p. 174), as against the operational objectives. Strategic objectives relate to the definition of four elements of the business profile, namely products, customer groups, market segments, and geographic markets (Robert, 1998, p. 234). As with all statements of intention, however, the statement of strategic objectives is always couched in general terms that may admit of many varied interpretations. As a guide, therefore, the strategic objectives are at best advisory, but cannot be held as definitive as promises or commitments for which the business may be held answerable. Therefore, the effectiveness of strategic objectives will only be as meaningful as the best intentions of the business proponents may hold them to be. Market analysis and research is the process of gathering information about the prospective market of the business and drawing important insights and observations about future prospects. Information about the market’s size, its location, its history, the competitive profile, and likely profitability, as well as its general strength and health, are described and assessed. The information gathered during this stage provides the foundation for forecasting sales volumes and revenues, for determining the capacity of the business, and consequently the amount of financing required (Ehmke & Akridge, 2005, p.3). Market research analysis has its limitations. Ideally, accurate knowledge of markets is very important, but such knowledge does not serve to reduce knowledge of the business into a single solution that solves all possible problems. It is a myth that a business cannot fail if it completely knows its market; this is because the market is just one aspect of the business, the others being the financial, technical operations, accounting control, and human resources aspects (Brown, 2008, p. 464). Furthermore, the market has too many factors that could not be forecast with certainty, that any feeling of possessing complete knowledge of the market is a certain
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“Critical Appraisal of Business Plan Process Towards the Creation of a Essay”, n.d. https://studentshare.org/business/1393041-enterprise-and-entrepreneurial-management.
Any business plan or model may be susceptible to market forces and pressure that need to be dealt with critically in order to guarantee success. The proposed business model is critically appraised in this text as per the various included aspects. The SWOT analysis for the business model delineates that the key strength my business would possess is the market knowhow that I possess.
From this paper, it is clear that one of the prime requisites for formulating a business plan is to generate an idea. Based on the idea, certain guidelines are formulated. Sometimes, the idea generation itself may be flawed. Before we venture to critically evaluate this concept, let us find out the difference between creativity and innovation.
Part 1: The Creation of a Successful Entrepreneurial Venture: Analysis and Critique
The importance of entrepreneurship in modern day society cannot be overstated with Henry, Hill and Leitch (2003, pp. 7-8) arguing that it contributes significantly to total employment and household per capita incomes in the UK.
The entrepreneur will have an overall idea about what he/she intends to do with the business venture. Thus the main component of a business plan is the core business objectives. It guides the business in its day to day activities. “A Business Plan is the foundation, or rather a springboard, towards the establishment and growth of a new business, particularly in the later stages of growth.” (VCgate, 2010) The importance of a business plan also lies in the fact that it is the tool that helps to fetch the required capital for setting up the business.
Thus, important elements of a business plan will be discussed in the first part of the essay and these include the following: idea generation, strategic objectives, market analysis and research, understanding the competition, cash flow, profit and loss forecasts, balance sheet projections, competitive strategy and scenario analysis. .
The tasks vary from opening an enterprise, rewarding, and motivating employees to taking considerable risks all for the business. An entrepreneur can also be referred to as a person who identifies a business opportunity and gets the necessary resources to start the business (Landstro?
The entrepreneurial process that brought about the creation and growth of the business venture, mySmoothie, by the innovative entrepreneur, Domeniqu. The growth and expansion of any business depends largely on the kind of entrepreneurial structures that are put in place by owners of the businesses.
The quality of trust that develops between the customer and the business units guides the overall outcome of the business. (Lynn, 2010) Getting ready for the Business: I was staying in long Island, and was determined to set up a business of my own. Investing a considerable amount of money into the business was a constraint for me.
A business that is going to be able to adequately service customers, maintain profit expectations, mitigate risk, and ensure alignment between strategy and accounting must conduct extensive planning. The business plan provides the initial template by which the organisation will structure its cost systems, management structure and produce activities that contribute to successful competitive rivalry for improved market share in the industry where the business delivers products or services.
the validity and implications feasibility of idea and to analyze that either the thought can be turned into valuable opportunity; in order to attain this objective it is important to realize existing market, financial, competition and personal issues. for the successful
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