SimVenture Simulation - Business Plan Example

SimVenture Assignment Introduction For any business to be successful, one significant factor to consider is planning. Normally, there exist several business plans’ models and variations. Therefore, during the start up of a business, it is important for an entrepreneur to put much focus on selecting the most appropriate business plan. Having a business and having the knowledge of what to do with the business are two different issues. Therefore, creation of a perfect business plan enhances the possibilities of a business succeeding. There are certain ways through which an entrepreneur can come up with a business plan for their already existing businesses or new business (Jones & Jayawarna, 2013, p.1-2). For instance, an entrepreneur can consider using business simulation method to create a business plan. One of the most common business simulations is the SimVenture, which is a simulation that reflects reality and gives an entrepreneur the opportunity of to startup and run their own virtual business. Experienced entrepreneurs normally develop SimVenture; therefore, it has proven to be very helpful to thousands of other upcoming entrepreneurs (Jones & Jayawarna, 2013, p. 148). In the assignment provided it is evident that the Company mentioned is not successful, therefore it can consider using SimVenture to develop a new and appropriate business plan. What SimVenture Does Just as mentioned earlier, SimVenture is a form of business simulation that assists in the formation of a business plan. It does this by doing the following; It offers entrepreneurs or business organization with the opportunity to startup and run their personal virtual company thereby they can test the knowledge they have concerning all business aspects. It acts as a business game driven through the decisions that the user makes. Therefore, through it a businessperson can acquire good decision-making skills. It acts as an appropriate learning resource for business people. This can be attributed to business simulation’s reality combined with information on the on-screen. Since there is an award winning team, it helps build exercise on decision-making. Development of the Company’s Business Plan Though SimVenture In order to ensure the success of the Company, first consider having the knowledge about the Finance, Marketing, Operations and HRM sectors of the Company. Through getting all the available information concerning these sections of the Company, then using SimVenture becomes much easier since one can now recognize the origin of the problem and where to put much focus. Considering the financial sector of the company, it is possible to note that there are high possibilities that the company is wasting away some of its finances. This is because; the Company has had regular sales income after trading for 8 months. This is evidence that the company is not making any considerable profit. Additionally, the Company has operated for the 8 months yet its sole employee still has no office. Moreover, the Company’s cash that is available in the bank is around £8,500. Considering the HRM factor, it is evident that the Company has only one employee who has the responsibility of managing the Company’s resources and the Company itself. Furthermore, the single employee at their home does the operations of the company. Marketing, on the other hand, is poor since the Company does not make significant profits. These are some of the problems faced by the company; thereby the Company’s ability to be successful is suppressed. The elements of the business game (SimVenture) are grouped into two. These include the Virtual Environment’s core areas and the core areas of the Company. The core areas of the Virtual Environment include the Company’s customers, direct competitors, and Virtual Market Segments, while the core areas of the Company include Finance, Operations, Management and Marketing (Jones & Jayawarna, 2013, p. 147). Decisions Made Using SimVenture Finance The employee of the Company should first consider checking the financial resources that are available. The employee can do this by; Deciding on the most appropriate sources of funds if incase the company requires the funds. Some of the sources of funds for the company can be bank loans, overdrafts, F&F among others. Monitoring the creditors: It is important for the employee to make decisions concerning the Company’s credit policies whereby in this case, four options are always available. Monitoring the Company’s accounts: The employee can do this by monitoring and analyzing the cash flow, P&L accounts as well as the balance sheets for the previous months. Making available other appropriate tools that can be needed. For instance, General Performance Ratios (e.g. Liquidity, ROCE), forecasting and budgeting. Generally, the financial projections should have the greatest focus. Once the employee has outlined the concept of the business, confirmed an authentic need in the marketplace, established how they will implement their ideas, and proven that they can manage the Company, what they now need to depict is the profitability of the idea and the flow of cash. However, the employee should know that if the concept of their business is weak, or their execution is poor, or their competence in management is weak, their financial plans are bound to fail (Jones & Jayawarna, 2013, 83). In other words, the strength of the employee’s concept will determine the finances. Therefore, the Company’s employee should consider having strong and well-constructed financials. Marketing The employee of the Company should also consider having the knowledge about the market. The SimVenture can request the employee to; Establish whatever the customers think of the company and verify the consumers, market and competitors. Choose the target segment. In this case, the employee can consider a selection among the six market segments. They can get the details of every market segment in the reports of market research. Decide on the suitable marketing strategy through choosing: The suitable pricing; The suitable selling points; The suitable marketing promotions (e.g. websites, TV, radio, advertising); Generally, by considering marketing, the employee will be able to know the nature of the market and the competitors in existence. Knowing the nature of the market will also help the employee understand and recognize the opportunities, the problems and the dynamics that drive the Company’s marketplace. In addition, from this employee will easily note the target market. The employee will be able to identify the consumer of their product. This distinction is very significant because the consumer is always much different from the business that purchases the product. Moreover, by noticing the target market, it simply means that the employee would have identified any niche that is in the market so that the Company can exploit it (Jones & Jayawarna, 2013, p. 167-170). Operations Here, through the SimVenture, the employee must; Design the most appropriate product or make the existing product appropriate for the Company’s target market and clientele. Link the line of production to the products in a perfect order. Check the buying deals and if possible negotiate the most appropriate ones for the Company Verify and change the elements of quality control as required. In other words, the operations depict how the employee will run the Company and offer value to the Company’s customers. By noting the operations of the Company, the employee can manage to describe the opportunity that the Company has and why the opportunity is attractive. Moreover, to establish the operations, it is only possible through customer surveys, interviews and research (Jones & Jayawarna, 2013, p. 167-170). Management Through the SimVenture, the employee should be able to enhance the management through; Checking the available resources: These may include the managerial and employee skills, location and resources. Choosing the most appropriate location: This should be determined by deciding on whether the location is large enough for the production or not. Considering other legal issues like the supplier contracts Generally, it is important that the employee recognize that management is very vital for a successful business start-up. Therefore, the main purpose of management section is to depict that the employee has great management skills that can complement the business concept (Jones & Jayawarna, 2013, p. 167-170). Additionally, the employee should know that the management section is not the place for self-deprecation or diffidence. They ought to be honest, but must highlight their accomplishments and capabilities while justifying any noticeable weaknesses or shortcomings. Conclusion In summary, participation in the computer games helps in enhancing the overall skills of an individual. This is especially, when playing of the games is done under an environment with controlled training. The computer games such as SimVenture can therefore be helpful to this employee because they can enhance (Jones & Jayawarna, 2013, p. 202-203); Cognitive skills and knowledge acquisition: It can help an individual in comprehending the underlying content of understanding (theory), exercise and come up with significant problem solving competences while tactically conceptualizing their actions. Technical and motor skills: It makes an individual have the ability to familiarize themselves with certain tools and techniques used for the presentation skills and decision-making process. Social skills: Simulations can also help an individual since it helps develop their skills in leadership, communication, negotiation and team working. Reference Jones, O. & Jayawarna, D. (2013) Resourcing the Start-Up Business: Creating Dynamic Entrepreneural Learning Capabilities. Routledge: New York. Appendix From Overview Jan 15 Base Price changed to £380 Discount period changed to 8 months. ---------------- This month you purchased 48 components at a cost of £384 and you produced 1 product. At the end of the month you held 0 products and 0 components in stock. Orders in the previous month generated sales in this month to a total value of £394. Variable costs were £384 and fixed costs were £90, giving total costs of £474 and a net profit of (£64). You had 3 sales enquiries, leading to orders for 3 units to a value of £1,140, which will be satisfied next month. In terms of your bank account, you received £410 and paid out £434. The resulting change in your bank balance (or cashflow as it is known) was (£24), leaving you with a closing balance of £9,976. You can see more detail in the cashflow report. Info Message: You planned to build 1 product in January. Warning Message: A significant proportion of time last month was spent idle. Try to look for ways to occupy your workforce. Advice Message: You should carry out some competitor research before you make any more decisions about your business. ---------------- Feb 15 This month you purchased 144 components at a cost of £1,152 and you produced 3 products. At the end of the month you held 0 products and 0 components in stock. Orders in the previous month generated sales in this month to a total value of £1,140. Variable costs were £1,152 and fixed costs were £90, giving total costs of £1,242 and a net profit of (£88). You had 2 sales enquiries, leading to orders for 2 units to a value of £760, which will be satisfied next month. In terms of your bank account, you received £14 and paid out £1,242. The resulting change in your bank balance (or cashflow as it is known) was (£1,228), leaving you with a closing balance of £8,748. You can see more detail in the cashflow report. Info Message: You planned to build 3 products in February. Advice Message: You should carry out some competitor research before you make any more decisions about your business. ---------------- Read More