2MBA and JetFan Business Plans Conducting - Coursework Example

Report On Business Plans Student’s name Course title Instructor’s name Date of submission Table of Contents Table of Contents 2 Introduction 3 Descriptions 4 Business plan one: Manufacturing Beverages Appliances, Inc. (2MBA, Inc.) 4 Business plan two: JetFan Technology Limited (JetFan Ltd) 5 Strengths of the business plans 6 Strengths of 2MBA, Inc.’s business plan 7 Strengths of JetFan’s business plan 8 Weaknesses 9 Weaknesses of 2MBA, Inc.’s business plan 10 Weaknesses of JetFan’s business plan 10 Suggestions on improving the business plans 11 Challenges faced and way around 12 Lessons learnt 13 Competencies demonstrated 13 Conclusion 14 References 14 Introduction A business plan, like any other plan, acts as a guideline that is necessary for the implementation of various strategies towards achieving specific goals of an individual or an organisation. The goals of the organisation may revolve around a particular project or a collection of projects. A project refers to a given set of activities aimed at meeting the specified goals with precise outcomes along with auxiliary benefits. The achievement of the given projects and accomplishment of vision such as the dreams on an entrepreneur requires clear and well-spelt procedures or methodologies. Burggraaf and Flören (2008) observe that business plans serve three main functions: communication, management and planning. For instance, a business plan serves critical communicative functions such as acting as tools for attracting capital from various sources. The business plans act as mechanism for highlighting the dreams of an entrepreneur to potential investors with the aim of convincing the investors to provide the required initial funds. The plan communicates the potential of a business idea and propagates the expected return from the business project that enthused in the plan. A business plan allows the entrepreneur to exhibit the careful and thoughtful consideration of various factors that relate to the well-being of the business (Sellars, 2009). The opportunities and threats to the business are considered in equal dimensions. A business plan helps managers in their efforts to steer the development of business idea while maintaining a close supervisory role (Sellars, 2009). The managers may make changes as they deem fit in order to ensure that operations remain on course to fruition. As result, the business plan is a flexible management tool for achieving success. In addition, a business plan serves as a planning tool that guides entrepreneurs and the management teams to wade through various phases of business cycles. The business plan includes specific dates that allows for constant review and provides a way forward for business based on the gradual progress. This paper aims at dissecting two business plans in order to highlight specific important aspects. The strengths, weaknesses and suggestions for improvement will be highlighted. Furthermore, challenges and lessons that have been learnt will also be presented. Descriptions Business plan one: Manufacturing Beverages Appliances, Inc. (2MBA, Inc.) This business plans aims to help 2MBA, Inc. to raise $1.5 million dollars from a potential investor as the initial source of capital funds for the roll-out of operations in the market (Businessplans.org, 2015). The company asserts its dedicated efforts to develop and produce top-class beverage equipment for major companies producing food products. The company comprises of four main managers holding a stake of 60% in the company, with two of them serving on the company’s board (Businessplans.org, 2015). The management oversees the production of a number of products. Among its main products in La Barista, an expresso style machine that boasts of technical capabilities and the company holds patents over it. The company promises that this product is bound to revolutionize the coffee-tasting industry and it has banked its hopes as one of the breakthrough products that will allow it to break-even in the market in a very short time. In addition, the company also seeks to introduce a Mobile Vending Unit (MVU) of its own kind in the market. The MVU will ease the efforts of entrepreneurs in the retailing business using carts. Moreover, the MVU is designed to provide a great platform that allows it to work hand-in-hand with the La Barista. The MVU delivers both user-convenience, increased security and ensures cost-efficiency for the users. 2MBA, Inc. also has the advantage of a business agreement that it signed with Nestle to supply about 2300 La Baristas and MVUs gradually over a five-year timeframe (Businessplans.org, 2015). The business agreement promises to put the company in pole position to ensure that it receives a steady stream of income that is vital for its successful launch in the market. Business plan two: JetFan Technology Limited (JetFan Ltd) JetFan Ltd refers to a company that seeks to commercialize innovative fan impeller (“fan blade”) using the latest technology in the world (Businessplans.org, 2015). The business plan by the company’s elite team identifies various applications of its product. For instance, the team enthuses that the product could be applied in the market for compact electronic equipment cooling and domestic usages in home appliances among other vital usages. The business plan seeks to commercial the fan impellers globally by building strategic business partnerships with top fan manufacturers in the global market. The company seeks to earn a total market share of about 2.85% over a five-year period of operation. The company will ride on the technological revolution that has helped in changing the global marketplace. Technologically-advanced products are slowly taking over the world and the increased demand creates a ready market for firms such as JetFan Ltd (Sellars, 2009). The company has identified this as an opportunity for its introduction and development in the market as a leading manufacturer of efficient and innovative fan impellers. The company boasts of a strong team of managers with a blend of skills and expertise in the global markets that will allow it to grow beyond the horizons. Strategically, the company seeks to use this business plan to woo investors to make a $2.5 million financial injection, representing a 38% stake in the company (Businessplans.org, 2015). The comparison and contrast of these two business plans will be the basis upon which the majority of this report is founded. Such an analysis will provide sufficient information regarding the strengths and weaknesses of the two business plans. In part, the analysis will provide interesting and enlightening perspectives into critical issues and perspectives concerning the development of effective business plans. Strengths of the business plans A good business plan consists of a number of features or elements that make it a suitable tool for communication, management and planning by entrepreneurs as highlighted in the introductory statements (DeThomas & Derammelaere, 2008). Such features enable a business plan to boast of a number of strengths that give it mileage and convinces potential investors and customers of the company’s mission to create value. In addition, a strong business plan acts as a pathway for developing a small business into a large and profitable venture that fulfills the dreams of every entrepreneur (Sellars, 2009). Strengths of 2MBA, Inc.’s business plan 2MBA, Inc. has a strong financial plan that will help it providing affirmative perspectives to highlight the prospects of the business to investors. Burggraaf and Flören (2008) identify a financial plan as a presentation of financial forecast in the form of pro forma statements for a company in its business plan. The statements provide projections of the firm’s financial statements including income statements, statement of financial position, and statement of cash flows for every year over a period of three to five years. The forecasts may also include cash budgets for the first year of the company’s operation in the market and this will serve as an indicator of the potential viability of the business plan right from the onset. The financial plan presented by 2MBA, Inc. also boasts of assumptions used, accompanying graphs aimed at giving a visual representation and a sensitivity analysis section (Businessplans.org, 2015). The financial plan also gives insights about the underlying risks that have financial implications on the company’s prospects unlike JetFan that fails to integrate risk analysis. Furthermore, 2MBA, Inc. makes use of a strong strategic analysis on both the external and internal external environment analyses. The external environment analysis looks at macro-level factors such as technological advancements that affects the industries in general. The company also gives perspectives on economic trends and identifies the meaning of these trends to the prospective success of the company in the market (Businessplans.org, 2015). The strategic analysis does not stop at the macro-level external environment study, but it goes further to give a market description and further highlights the competitive scenario that the company will face. The company analysis describes the chances of the company to succeed in the highly competitive global marketplace (Sellars, 2009). Lastly, 2MBA, Inc. gives a strong overview of the organization. The overview pertains to details such as its registered name, history, vision, mission, organisational objectives, and gives insights on the company’s management team among other crucial details (Businessplans.org, 2015). The information on the company’s management would be important to potential investors seeking to commit their funds strictly to well-managed companies with clear objectives and strong values for success. The management team serves a critical role as the prospects of a good product range could be ruined under mediocre leadership. However, a good leadership structure motivates investors to believe that they are making the right decisions to invest in the business. In addition, a compatible management team would also fit in with the ideals of the investors and they stand to gain a lot from the wealth of advice and knowledge of the investors (Moore & Longenecker, 2008). Strengths of JetFan’s business plan Good marketing analysis that provides insights about the market that JetFan wishes to penetrate and provides details about the exact market share the company envisions to capture. The company makes a strong case for its market analysis such that it goes further to identify a specific amount of market share that it envisions to capture in a span of five years (Businessplans.org, 2015). The company identifies the specific market segments that it can serve. After identifying the market segments, it chooses the exact market that will serve in order to ensure that it guarantees success by focusing on the segment that it can serve effectively with relative ease. The marketing analysis also identifies competitors such as Dell, Toshiba, Intel and many others depending on alternative product offerings they provide to the market (Businessplans.org, 2015). After a company has developed products and identified potential competition it faces in the market. The company notes that its product’s ability to stand modification to suit various uses in the market. In a nutshell, a marketing plan describes how a company aims at reaching and provide relevant services to customers within a given market. The marketing team aims at seducing customers to try out a new product based on its effectiveness and superiority over other product offerings in the market (DeThomas & Derammelaere, 2008). In addition, the marketing plan aims at encouraging consumers to stick to the particular product. The company’s profile takes a different route in contrast to 2MBA, Inc.’s. The company’s profile highlights the company’s vision, objectives, history, and gives perspectives onto the technology that the company employs (Businessplans.org, 2015). The company further highlights the intellectual property perspectives over its products. The company profile would provide strong points that highlight the company’s desire to succeed in the market given the underlying history, vision, and explains the technical aspects of the technology that would help convince investors. Such explanations allows investors to obtain a better understanding on the business and thus allow them to relate to it easily (Moore & Longenecker, 2008). Weaknesses The weaknesses portrayed in a business plan reflect on either the soundness of the business plan or they indicate the inadequacy of research and poor writing (Sellars, 2009). The weaknesses may influence the decisions on how much capital funds that an investor would be willing to commit towards given prospective business. Weaknesses, therefore, dent the aspirations of an entrepreneur. Weaknesses of 2MBA, Inc.’s business plan Despite the tremendous efforts that 2MBA, Inc.’s team put to put up a great business plan, a few weaknesses could be seen. First, the company fails to give a precise figure on the market share that it seeks to gain as opposed to JetFan that gave specific details. It mainly focuses on the existing agreement that it has with Nestle to supply 2300 La Baristas and MVUs (Businessplans.org, 2015). Other than this agreement, the company does not make a strong case for its products impending success in the competitive market. Second, the assumptions that the company formulates while developing its marketing strategy also rely heavily on the continuation of Nestlé’s contract. The uncertainty of the market conditions requires firms to put in considerations to allow for any negative eventualities that may arise and affect business (Burggraaf & Flören, 2008). Third, the production plan provided by the company is fairly shallow and fails to give specific details on specific mechanisms that the company will employ to meet the ambitious production figures it provides. The actual production of its innovative products will ensure that the company is ready to meet the potential demand in the market. The company relies on its Australian experience in making decisions critical to production such as plant location and layout. However, a deeper research into the American market would be a better alternative and provide significant insights on the best practices and strategies. Weaknesses of JetFan’s business plan JetFan fails to give insights into the possibility of underlying or resultant business risks that may affect the company’s business operations. The market conditions entail some aspects of unpredictability meaning that some risks may arise and derail the steady progress that the management team may achieve over time. Similarly, JetFan only provides figures on financial forecast without accompanying details about the assumptions it made in coming up with the figures (Businessplans.org, 2015). The figures need to be accompanied with accompanying explanation to denote the viability of the figures given and give more details that will allow for a deeper understanding. The financial plan also needs to incorporate sensitivity analysis that would help to make the business plan more credible and informative (Burggraaf & Flören, 2008). The JetFan business plan could borrow from the 2MBA, Inc.’s business plan that has a great financial plan in general. Moreover, JetFan fails to give a specific production plan that it will utilize to avail the products to the market. The management team only gives details about the strategic alliances that it will employ. The company also describes the technology that it will offer to the market yet it does not give the specific details that explore the production possibilities that the firm will undertake over the five year period described in the business plan (Businessplans.org, 2015). Production of high-quality products would allow a company to model its marketing strategy and also assist it in coming up with appropriate pricing models for success. Suggestions on improving the business plans 2MBA, Inc. needed to include specifications of the market share to be gained. Such specification gives a perspective on the viability of the marketing mix that the company employs given the competitive analysis that it has undertaken. The specification also sets the way for the company to acknowledge the amount of efforts required to achieve the desired nomenclature in the market. It is also prudent to come up with a marketing strategy to involve alternative aspects rather than relying heavily on a particular marketing component to drive the success of the marketing strategy. An innovative marketing plan would involve alternative methodologies that guarantee success (DeThomas & Derammelaere, 2008). Furthermore, 2MBA, Inc. needs to develop a production plan that is tailor-made for the American market instead of relying heavily on its Australian experience. JetFan needs to develop production strategy to give details on how it aspires to incorporate its strategies to deliver well-thought and suitable products for the market. A risk analysis would also be a worthy addition to the business plan presented by JetFan. A risk analysis identifies the specific risks that the company may face and experience substantial financial losses (DeThomas & Derammelaere, 2008). Additionally, the financial plans need to be accompanied with the underlying assumptions that informs the investors on the methodologies used in coming up with the financial forecasts thus helps in judging the viability of the plan. Challenges faced and way around i. Numerous formats of business plans. After extensive research, I got to see the similarities in the formats and realized that only the headings differed yet the contents were more or less the same. A detailed business plan provided more incentives as a powerful communication tool to woo investors. ii. Time frame for completing the project. The time frame for completing the project within a specified deadline timeline meant that efficient time management had to prevail. Time management allowed for the completion of the research and writing of this report in good time. iii. Research work online and in the library proved to be more cumbersome than I thought. The amount of information I came across meant that a lot of summarisation had to persist in order to integrate various aspects obtained from research work. iv. Accessing some databases proved challenging as they required prior subscriptions before getting information from them. I accessed some databases and books online using the university’s platform. I also made use of the available resources to draw conclusions relevant to this report. Lessons learnt The various approaches to writing a good business plan. Key elements of a good business plan. These include the overview, management team, marketing plan, strategic analysis, financial plan among others. Uses of a business plan as a communication, management, and planning tool. The entrepreneurial process that also integrates the development of a good business plan. The entrepreneurial process entails the various stages that entrepreneurs passes through on the path to excellence (Sellars, 2009). Methodologies for tailoring business plans to fit various sectors of the economy such as health sector business plans, service industry business plans and manufacturing industry business plans among others. Competencies demonstrated Ability to integrate knowledge gained in the classroom and from general research to come up with a detailed report of this nature. The information gained from extra research served as an auxiliary reference point that supported the classroom knowledge. An integration of the tow aspects allowed for the presentation of an elaborate report on business plans that focused on two business plans. Conduct an analysis of two separate business plans and an in-depth comparisons that highlights key features of a good business plan. The analytical skills demonstrated would be vital in completing future assignments and reports. The report also evaluates the ability to come up with an effective and appropriate business plan that would work for a given business idea. Conclusion Business plans serve important roles in the initial stages of a business and they set a company on its pathway to success. As a result, entrepreneurs need to take maximum care to ensure that they employ the best practices and adhere to the guidelines required for conducting effective writing business plans. The business plans would help managers as both a mechanism for basing managerial and planning decisions in the future of a business (Burggraaf & Flören, 2008). Therefore, a good business plan is very important for the development of a business and as a guide for growth strategies thus assuring the realization of an entrepreneur’s dreams. References Top of Form Top of Form Bottom of Form Top of Form Burggraaf, W., & Flören, R. H. (2008). The entrepreneur & the entrepreneurship cycle. Assen: Koninklijke Van Gorcum. Businessplans.org. (2015). Manufacturing & Marketing Beverage Appliances, Inc. Retrieved 25 August 2015, from http://businessplans.org/2mba/2mba00.html Bottom of Form Businessplans.org. (2015). The Company Profile JetFan. Retrieved 25 August 2015, from http://www.businessplans.org/jetfan/jetfan01.html Bottom of Form DeThomas, A., & Derammelaere, S. A. (2008). Writing a convincing business plan. Hauppauge, N.Y: Barron's Educational Series. Moore, C. W., & Longenecker, J. G. (2008). Managing small business: An entrepreneurial emphasis. Australia: South-Western/Cengage Learning. Sellars, D. (2009). Business plan project: A step-by-step guide to writing a business plan. New York: Business Expert Press.Bottom of Form Read More