Comparison of 2MBA and Fabrica Company Business Plans - Report Example

Business plan (Course Instructor) (University Affiliation) (Student’s Name) Date Executive Summary A business plan is a document that gives the background data concerning an organization or a group of individuals who aim to attain a specific set of objectives. Organizations make investment decisions based on a clear plan that stipulate the capital requirements, the capital structure, and the goods and services the company offers, the organizational structure and most importantly the firm’s objectives and the mission statement. The objective of this report is to compare two business plans of two organizations doing different businesses. Considering the importance of the business plan in investment decisions, the writer of the report will focus on the information about the two organizations under consideration. The information will include their background information, their cash outlay as well as the expected profit margins. The report will also look at the strengths that the business plan outlines as far as the organization is concerned as well as the weaknesses that have been mentioned. This report is important in that it enables the reader to understand the difference in the composition of business plans from one organization to another. This difference could explain the successes of one firm and failures in the case of another. Those organizations that have a clear business plan are more likely to have financial successes as well as improved profit margins. A poorly written business plan on the other hand is likely to lead to losses. The report therefore will highlight the need to have a credible business plan. The report is meant to compare two business plans: that of 2MBA company, a beverage manufacturing and marketing company and Fabric, a company that a fabric milling company. The report will compare their backgrounds, their strengths and weaknesses as well as the general lessons learnt by the writer. The report will later dwell on the conclusion which gives a summary conclusion of the comparisons. Table of Contents Executive Summary 2 Table of Contents 3 Introduction 4 2MBA Business plan 5 The plan’s strongest components 6 The business plan’s weakest components and how to improve 7 Fabrica company business plan 7 The plan’s strongest components 8 The business plan’s weakest components and how to improve 9 Challenges Faced 9 Lessons Learned 9 Demonstrated Competencies 10 Conclusion 10 Reference 13 Introduction Being such an important statement of intent on the part of the organization, the role of a business plan in the attainment of organizational goals is concerned cannot be underscored. There are a number of parties who will be interested in making use of the information provided to them in the business plan in order to make some critical decisions (Cohn & Schwartz, 2002). A business plan could be required in the registration process of the firm. The financiers such as the commercial banks could also ask to have a look at the business plan that you have in place before embarking on a financing plan. This means that those businesses or organizations that have a detailed and credible business plan have a higher chance of being financed. Investors too could be the consumers of such information. Any investor would want to have worthy returns to their business. A good investor will first look at the cash outlay and the cost elements of the business before making an investment decision. All this information is usually obtained from the business plan (Barrow, Barrow, & Brown, 2015). A business plan could be a catalyst for the change in the perception as well as the brand name in as far as the customers, the tax payers and the society are concerned. When a business organization is planning to introduce a major change or intend to carry out a major investment venture, a five year plan is required since as stated before, the investors will usually be very keen to look at the returns on their investments (Cohn & Schwartz, 2002). Financiers are usually conscious of their money and will usually try to minimize the risk of losses. They will therefore analyze the report to see whether the cash outlay in the business plan is worth the risk that they are going to invest their money in. The main objective of this report is comparing the business plans of two organizations. One of the business plans is that of 2MBA, a beverage company and Fabrica a fabric company. The company will look at the individual business plan by comparing the challenges and the weakness of both business plans 2MBA Business plan The 2MBA is a company that makes manufacturing and marketing appliance and intends to raise 1.5 million dollars in cash from an investor. The company intends to develop and innovative equipment for making beverage equipment that they will supply to companies. The company’s business plan is important in that it enables the stakeholders to understand the difference in the composition of their strategies from those of other organizations (Schiraldi & Silva, 2012). This difference could explain the successes of one firm and failures in the case of another as it has been stated before. Those organizations that have a clear business plan are more likely to have financial successes as well as improved profit margins. The management team of the company is led by a very competent team that is highly motivated and highly qualified as well. 2MBA is headed by a management team of four members that is highly committed to making sure that the company meets the course. The team also holds sixty percent of the stake in equity of the company as well as two boards of management positions (Cohn & Schwartz, 2002). The products produced by 2MBA include La Brista, which is a technically and patented espresso like machine. The machine according to the business plan guarantees the consumer sweet tasting coffee at all times. In only form seconds, La Barista can produce special coffee from coffee powder that is soluble at the touch of a button. The other product is the mobile venting unit. The main advantage that the machine has is its portability, their durable nature and the ease at which the machine can be operated (Schiraldi & Silva, 2012). The other advantage of the machine is their appealing nature and designs. The machine can be operated by a single operator to provide an up market, mobile and an innovative platform. The company already has partnerships that include Nestle in order to advance their edge in the innovation. Such innovations are good for business since it showcases the potential that the organization has in its attempt to gain a competitive edge over its competitors (Mullins, 2006). The plan’s strongest components The company’s business plan has a number of strong points that they intend to use to gain a competitive edge over their competitors. This includes a number of innovations like La Brasta and the mobile vending unit (Mullins, 2006). The business plan’s other strongest component is the ability to analyze the market forces that affect the market that the company operates in. These forces include the estimated market demand as well as the competition that the company’s products face. The business plan also outlines a very clear objectives that they intend to obtain in the shortest time possible (“The new business road test: What entrepreneurs and executives should do before writing a business plan,” 2008).. The business plan’s weakest components and how to improve The company’s business plan has a number of weak components that could derail its ability to gain a competitive edge over their competition. One of the weak points is that the company does not give the organizational structure that shows the management of the company’s hierarchy as well as the number of employees. This is important in a number of cases since the customers will always want to know the human resource composition for purposes of proper flow of communication. The other weak point is that the business plan does not give the exact cash outlay of the company as far as the cash inflows and cash outflows are concerned (“The new business road test: What entrepreneurs and executives should do before writing a business plan,” 2008). Fabrica company business plan This is a fabrics company whose main aim is to come up with a weaving mill that can make it possible for the customer of any fabric material to have a sample of a new pattern. The idea behind this is that the current machines can only produce a minimum of 120 yards of fabric and 1,000 yards in an economical sense. The company therefore seeks to reduce the minimum yards for purposes of the sample at the least time possible (Cohn & Schwartz, 2002). The report will also look at the organizational background. The company intends to offer a good solution to give a solution to the quandary of the weaving industry. In less than three days and in a sixth of the normal cost, the company has the objective of producing its own loom. Fabrica can also provide a sample to the customer that has been woven from the same design and pattern, similar yarns, same dye as the finished product. The secret to this new venture lies in the many years of research lead by Dr. Sathit Putthachaiyong who is the director of research and development (Cohn & Schwartz, 2002). As international trade fall and fabric production move from nation to nation and from one continent to another taking after the contradicting pulls of cutting edge innovation and modest work, increasingly exchanges are between relative outsiders (Cohn & Schwartz, 2002). Excluding production from the poor nations, yearly woven material production is around 49 billion meters, worth over $200 billion. This means that as trade in fabric materials is gaining significance and so is the need to have in place a mechanism to make it easier for the consumers to make prompt choices amongst the alternatives (Cohn & Schwartz, 2002). There is no immediate competitor to Fabrica coming soon, and the company is persuaded that in light of the fact that the KS loom arrangement is as of now far along the expectation to absorb information, and on account of the ideal blend of specialized, entrepreneurial and administrative abilities epitomized in our administration group - that they can rule the objective business sector for a long time, and that by 2004 they can offer one Fabrica test for each five designed fabric generation keeps running in the real countries of the Americas, Asia, and Western Europe (Cohn & Schwartz, 2002). The plan’s strongest components The business plan’s strongest component is the ability to analyze the market forces that affect the market that the company operates in. These forces include the estimated market demand as well as the competition that the company’s products face. The business plan also outlines very clear objectives that they intend to obtain in the shortest time possible. The business plan’s weakest components and how to improve The report at this section will dwell on the issues that weaken the business plan of the company that could curtail the company’s ability to gain the 1.5 million dollar investment as well as the measures that can be put in place to improve on that. This includes the fact that the company’s business plan does not give the company’s capital structure and neither does it give the company’s organizational structure. A good business plan needs to have in place the proposed capital structure of the business (Cohn & Schwartz, 2002). The capital structure of the business has a direct impact on the cost of capital and this is what most of the prospective investors look for in making their investment decisions. It is therefore imperative that when formulating a business plan, then include the capital structure (Schiraldi & Silva, 2012). Challenges Faced The major challenges in writing the report include; Lack of adequate skills on financial analysis on the part of the report writer. Lack of clarity on the organizational structure of both companies The inability of the writer to obtain information from both business plans that can warrant a credible comparison between the two business plans. One of the companies does not give its cash outlay Lessons Learned The section entails the important lessons that the reader can gain from reading the report. The lessons learnt include: Company has different formats of making a business plan for the company A good business plan increases the chances of the company attaining its organizational objectives. A writing a good business plan does not necessarily lead to the attainment of objectives but can go a long way in attracting donors as well as the investors. The business plan important in that it enables the reader to understand the difference in the composition of business plan from one organization to another. This explains the level of profitability of one firm and financial failures in the case of another. Those organizations that have a clear business plan are more likely to have financial successes as well as improved profit margins. Demonstrated Competencies The competency in the two plans is the ability to articulate the objectives of the organizations in a clear manner. The business plans have importantly been able to state the objectives that the organizations aim to achieve and have gone ahead to state the timelines that the organizations aim to make the profits. With convincing the investors and other stakeholders in mind, both business plans have clearly demonstrated the amount of capital outlay that the company needs in order to finance their operations (Taylor, 2009). Conclusion The conclusion will entail a summary of all the observations made in the comparison between the two business plans. The conclusions drawn is essential in enabling the writer showcase the key differences identified in the composition of the two business plans. . The objective of this report was to compare two business plans of organizations doing different businesses. Considering the importance of the business plan in investment decisions, the writer of the report focused on the information about the two organizations under consideration. The information includes their background information, their cash outlay as well as the expected profit margins. The first company’s business plan is that of 2MBA, a company that makes manufacturing and marketing appliance and intends to raise 1.5 million dollars in cash from an investor. The organization intends to develop and innovative equipment for making beverage equipment that they will supply to companies. The plan is important in that it enables the stakeholders to understand the difference in the composition of their strategies from those of other organizations (Mullins, 2006). The other business plan belongs to Fabrica, a fabrics company whose main aim is to come up with a weaving mill that can make it possible for the customer of any fabric material to have a sample of a new pattern. The reason for this idea is informed by the fact that the current machines in the weaving industry can only produce a minimum of 120 yards of fabric and 1.000 in economical sense. The company therefore seeks to reduce the least number of yards of the samples at the least time possible. The report will also look at the organizational background. The company intends to offer a good solution to give a solution to the quandary of the weaving industry. In less than three days and in a sixth of the normal cost, the company has an objective of producing its own loom The report is important in that it enables the reader to understand the difference in the composition of business plan from one organization to another. This explains the level of profitability of one firm and financial failures in the case of another. Those organizations that have a clear business plan are more likely to have financial successes as well as improved profit margins. Reference Barrow, C., Barrow, P., & Brown, R. F. (2015). The business plan Workbook: The definitive guide to researching, writing up and presenting a winning plan (7th ed.). Philadelphia, PA: Kogan Page. Cohn, K. H., & Schwartz, R. W. (2002). Business plan writing for physicians. The American Journal of Surgery, 184(2), 114–120. doi:10.1016/s0002-9610(02)00921-2 Mullins, J. W. (2006). The new business road test: What entrepreneurs and executives should do before writing a business plan (2nd ed.). Harlow, England: Financial Times Prentice Hall. Schiraldi, H., & Silva, J. (2012). Writing a business plan: Reference tools to assist budding entrepreneurs. Reference Reviews, 26(8), 7–9. doi:10.1108/09504121211278016 Taylor, G. C. (2009). A student’s writing guide: How to plan and write successful essays. Cambridge, UK: Cambridge University Press. The new business road test: What entrepreneurs and executives should do before writing a business plan (2008). Choice Reviews Online, 46(02), 46–0997–46–0997. doi:10.5860/choice.46-0997 Read More