Building a Business and Securing your Company's Future - Example

Business Plan Report Name Institution Abstract A business plan is an important document for the success of any business. The below paper is a report on a business plan. The paper has given a brief description of how a business plan should be developed and the information that should be contained. The report has also offered a detailed discussion on the strong points and weak points in business plan development. Three demonstrated competencies have also been outlined, one of them being identification of target audience before creating a business plan. Additionally, three recommendations have been suggested with regards to creating an improved business plan. One of the recommendations is the need of including full financial information in the business plan for the sake of financial stakeholders. Finally, creating a business plan is not an easy task; hence various challenges and lessons learnt have been outlined in the report. Table of Contents Abstract 2 Brief description 4 Three strong points 6 Three weak points 8 Demonstrated competencies 9 Analysis 10 Recommendations 11 Challenges and lessons learnt 11 Conclusion 12 References 13 Introduction The business plan is a very crucial tool for entrepreneurs; it acts as a roadmap for a business. According to Pinson (2004) a business plan is a format that has set goals for a business and has well laid out strategies that are to guide the business in achieving the set goals. In addition to the strategies that are the basis for a business plan, a business plan has background information about the genesis of the organization and the team behind the business idea. The businesses plans are normally drawn for internal or external purposes. For the internal purposes business plans acts as a guide on how to implement the strategies, thus the focus audience are the staffs (Pinson, 2004). For the internal purposes the business plans describe the operational plans which are based on intermediate goals that are needed to reach external goals. The externally focused business plans are drawn to target goals that are of concern to the investors, donors and stakeholders. A business plan has key components that provide details of the business and the set strategies to achieve the goals. Comprehensive information of the components is very crucial for target audience to understand (Siegel, Ford &Bornstein, 2003). The components should be practical, i.e. the goals set should be achievable based on available resources and the overall business environment. Analysis of competition: The success of any business is determined by the ability of the business to withstand competition in the industry of operation. The business identifies the competitors and categorizes them based on strengths and weaknesses. The business outlines clearly its competitive advantage to overcome the competition. Brief description As earlier indicated, a business plan is an important roadmap for the success of any kind of business. As a living document, a business plan primarily projects 3 to 5 years ahead besides outlining the path a company intends to take for the growth of revenues. The plan generally gives a light on how a company or an individual should move from one point to another in terms of business growth. The business plan must either take an internal focus or an external focus based on the target audience. For instance, an externally focused business plan tends to target the goals that are important to the external stakeholders (Pinson, 2004). Particularly, the external stakeholders are mainly the financial stakeholders including investors and customers among others. For the non-profit organizations, the external stakeholders include clients and donors. On the other hand, an internally focused business plan targets the intermediate goals that are needed to achieve the external goals. Such a business plan tends to take care of the development of a new service, a new product, a new IT system among other within the organization. It is essential to develop an internal business plan together with a list of critical success factors as well as a balanced scorecard. This makes it possible for the success of the business plan to be measured using non-financial measures (Siegel, Ford, & Bornstein, 2003). An effective business plan should have an inclusion of strategic plans, operational plans, as well as project plans. Generally, the strategic plans provide guidance on how the targeted internal goals can be met. On the other hand, the goals of an internal organization, department or working group are well described by the operational plans within the business plan. The project plans are also known as the project frameworks. They tend to describe the targeted goals of a certain project within the business plan (Siegel, Ford, & Bornstein, 2003). A business plan should be effectively created because it is an important tool for decision making. Since it is an essential decision making tool, the content and format of a business plan must be determined by the target audience as well as the strategic goals. For instance, when preparing a business plan, knowledge should be drawn from various disciplines. Such disciplines include the human resource management, finance, supply chain management, marketing, operations management, as well as intellectual property management among other disciplines within the organization. For an effective business plan, the format should cover various elements. They include executive summary, description of the business, market strategies, competitive analysis, design and development plan, operations and management, as well as financial components among others (Pinson, 2004). Three strong points In the development of any kind of business plan, there are a number of strong points that should be taken into account. Although there are close to seven strong points, this section of the report will only describe three strong points. In creating an effective business plan, one of the strong points is the executive summary. This is the overall summary of the entire plan that creates a picture to the reader of what is expected. In the executive summary, one of the important features is the business concept (Siegel, Ford, & Bornstein, 2003). This tends to describe the business, products and services that will be offered, and the market that the business will serve. The second feature in the executive summary is the financial features. These form the highlights of the financial points of the business which include cash flows, profits, sales, as well as return on investments. Another feature is the current position of business at the company. This offers crucial information concerning the operations of the company (Pinson, 2004). Major achievements should also be included in the executive summary. These may include the many developments within the company that would be crucial for the success of the business (Siegel, Ford, & Bornstein, 2003). The second strong point of the business plan is the business description. In describing the business, it is essential to start with a short description of the industry. The present outlook as well as the future possibilities of the industry should be included in the industry description. Business description is an important point in any business plan since it provides required information on the various markets within the industry, which are essential for the success of the business. The information includes the developments and new products and services that will either affect or benefit the business. In addition, this is a strong point because the information offered is helpful to the business owner in seeking funding (Siegel, Ford, & Bornstein, 2003). This is based on the fact that investors would want to be aware of just how reliable the information provided is so that they can not risk their money on assumptions. Besides that, the business description is important because it offers a clear picture of how the structure of the business will be. This includes the type of business operation or whether the business is new or restructuring an already established business (Pinson, 2004). Market strategies form the third strong point of the business plan. The market strategies are always developed after carrying out a thorough market analysis. This is a strong point in a business plan because the survival of the business will greatly depend on the market. Carrying out a market analysis is vital since it helps the business owner familiarize with all the required aspects of the market. This further assists in the identification of the target market. Another importance of this point in a business plan is that it makes it possible for the business owner to establish promotional, pricing, and distribution strategies that will give the company a chance of becoming profitable within an environment that is competitive. Additionally, market strategies tend to provide a signal of the growth potential within the business industry. This allows the business owner come up with their own estimates for the future of their business. Apart from that, market strategies is a strong point in the business plan based on the fact that it helps the business owner define the market in terms of growth prospects, size, structure, sales potential and trends (Siegel, Ford, & Bornstein, 2003). Three weak points One of the weak points is lack of effective financial components. With poor financial components in a business plan, chances of the business being successful in the market become minimal. This is because the financial data form the backbone of any kind of business plan. For instance, with poor financial components in a business plan, the donors, investors, and customers may not find the business owner reliable to partner with in the business. Therefore, it is important to have well described financial components in a business plan so that the business may thrive in the market. Such components include financial statements of the company such as cash flow statements, income statements, as well as the balance sheet (Pinson, 2004). The second weak point is poor development of operations and management plan within the business plan. Studies have it that operations and management plan within a business plan since it gives a description of just how the business functions on a continuing basis. A poorly developed operations and management plan tends to provide inefficient information of the logistics of the company including various duties of the management team. This indicates that at the end the business will not be highly successful due to poor management. In addition, poor development of operations and management plan is a weak point in creating a business plan because it gives forth to poor organizational structure. With a poor organizational structure, it is definite that the company will lack a proper basis from which to project operating expenses for the business (Pinson, 2004). The third weak point is lack of effective design and development plan within the business plan. In any kind of business plan, the design and development plan is essential since it provides a description of the product design to the investors. Additionally, it tends to create a development budget which makes it possible for the company to achieve its goals. Therefore, with lack of a proper design and development plan, the above benefits will not be realized in the business. Apart from that, this is considered a weak point in the development of a business plan based on the fact that market development, product development, as well as organizational development will not be fully covered by the company (Siegel, Ford, & Bornstein, 2003). Demonstrated competencies In the development of a business plan, a number of competencies were demonstrated. One of the demonstrated competencies is the identification of the target audience before creating the business plan. As discussed earlier, it is vital to identify the target audience because a business plan can either be internally focused or externally focused. For instance, an internally focused business plan mainly targets the internal stakeholders of the company which include employees and the management team among others. On the other hand, an externally focused business plan targets external stakeholders such as suppliers, investors, donors, and customers among others (Pinson, 2004). Besides target audience, another demonstrated competency is the identification of market strategies that are helpful in achieving the set goals for the business plan. It is important to have strong strategies within the business plan so that the plan may be a purpose driven plan. One of the benefits of identifying market strategies is that it helps the business owner establish a competitive advantage over other similar businesses within the market (Siegel, Ford, & Bornstein, 2003). Another competency is effective description of the business. For instance, business description is an important element of any business plan because it tends to present the current outlook and future possibilities of the company with regards to business (Siegel, Ford, & Bornstein, 2003). Analysis As a living document for any kind of business, a business plan must demonstrate well stated strategies and goals that the business owner intends to achieve when the plan is implemented. As earlier discussed, besides setting achievable strategies and goals, it is important to identify the target audience before developing a business plan. The target audience can be internally or externally identified, hence they tend to drive the purpose of the business plan. Additionally, given that a business plan is an important decision making tool, following all the required elements in the format is important. As discussed all the elements including executive summary, description of the business, market strategies, competitive analysis, design and development plan, operations and management, as well as financial components are essential for the success of the business. For instance, the manner in which the information in the business plan is presented dictates how the business will be in future after the implementation of the plan (Siegel, Ford, & Bornstein, 2003). Recommendations In developing an effective business plan, there are a number of recommendations that can be helpful. One of the recommendations is that achievable strategies and goals should be put in place before developing a business plan. This is important because it makes the plan be purpose driven (Pinson, 2004). The second recommendation of great essence is that effective financial components should be included in the business plan. Financial components are important because they create a clear picture of the company’s value to the financial stakeholders including investors, donors, and customers. Well described financial components within a business plan tend to draw more business partners and investors on board. The financial components include cash flow statements, income statements and balance sheets. Another recommendation is that the executive summary should be short and precise. This will enable the reader get a preview of what is included in the plan (Siegel, Ford, & Bornstein, 2003). Challenges and lessons learnt In the development of a business plan, various challenges were learnt. One of the challenges was on designing an operations and management plan within the business plan. In this section, the most challenging task was developing an effective organizational structure. Another challenge encountered was carrying out a thorough market analysis so that effective market strategies could be arrived at. This challenge was based on the nature of the market, which was quite broad to tackle. On the other hand, various lessons were learnt. One of the lessons was on the importance of identifying target audience before developing a business plan. Other lessons learnt were on the importance of setting achievable strategies and goals, developing a detailed business description, developing an effective design and development plan within the plan, a well as carrying out a meticulous market analysis so that effective market strategies can be obtained for the plan. Conclusion In conclusion, it is evident that a business plan is a roadmap to any successful business. As discussed in the above report, various aspects must be tackled in order to come up with an effective business plan. One of the aspects is that a business plan should be purpose driven; hence it should have achievable strategies and goals. In addition, a business plan should either target internal stakeholders or external stakeholders. The content of a successful business plan should be inclusive of detailed elements, which are executive summary, description of the business, market strategies, competitive analysis, design and development plan, operations and management, as well as financial components. Various demonstrated competencies in creating a business plan have been discussed. In addition, the paper has discussed various recommendations that are helpful in creating a better business plan. Creating a business plan is not an easy task; therefore the paper has outlined some of the challenges and lessons learnt in the process of developing a business plan. References Pinson, L. (2004). Anatomy of business plan. A step by step guide to building a business and securing your company’s future. Chicago: Dearborn Trade. Siegel, E., Ford, B., & Bornstein, J. (2003). The Ernst and Young Business plan guide. New York: John Wiley and Sons. Read More