Enterprise and Entrepreneurial Management: The Setting of Strategic Objectives in a Business - Term Paper Example

Task Enterprise and Entrepreneurial Management: Critic of Business Plan Introduction The paper critics the contents of the business plan while giving a definition of each stage along with a description of what they entail. The paper also critics the contributions made by each of these elements towards ensuring success for the business. It first of all describes the stages of idea generation and the setting of strategic objectives in a business. It additionally describes how businesses conduct their market analysis and research activities. Issues such as their competition, finances, competitive strategies and the business scenarios have also been analyzed in the paper. The effect of an entrepreneur understanding and applying them correctly in business has also been discussed, and this is done to understand how successful businesses are created. Idea Generation It is the process of providing solutions to the problems we are experiencing while performing our daily business activities (Goble, 2004). It involves scanning the environment for solutions that will be the most cost effective in helping us find satisfaction (Thomas, 2008). This section of the business plan describes the cognitive and psychological processes that an entrepreneur goes through in order to come up with the idea. It also describes the form of business ownership along with the business background information (Chell and Haworth, 2001). This is in order to come up with solutions which satisfy the customer’s needs in the most profitable way. He or she first selects the industry they want to join, their clients’ requirements, supply and demand of their raw materials and products (Chell and Haworth, 2001). It also considers the alternative sources of raw materials that the business expects to have at their disposal (parker, 2004). The location of a business along with the availability of labor is also included in this section. The idea generated by an entrepreneur should be profitable in the short and long term periods (Goble, 2004). They should also be able to raise the funds required in pursuing the venture. This is because they bring efficiency to their operations once they have begun. At this stage, the entrepreneur acquires business insights that will enable him to achieve success. Strategic Objectives These are the short and long term goals that a business expects to attain in the long and short run periods (parker, 2004). These goals are set by the strategic management in a business. They are implemented for the purpose of attaining the goals of the business in the most efficient way. The business plan considers the communal, financial along with political forces affecting the environment of the business (Goble, 2004). The business proprietor is able to come up with realistic and achievable objectives after carrying out an in depth analysis of his surroundings. The business plan gives a list of the objectives that an entrepreneur hopes to achieve in the course of running his business. This plan also indicates the means through which the business will attain their objectives. According to the business plan, the methods chosen by the management should be the most cost effective in achieving their goals. This will ensure the business reduces any unnecessary costs they might incur. Such moves will help in augmenting their profitability levels during business (Landoli and Landstorm, 2007). Market Analysis and Research The process of analyzing and researching into a market is done for the purpose of determining the factors that impact a business environment (Still, Cundiff and Govoni, 2006). Research involves the use of scientific and purposeful methods to develop new ways of doing things or improving products (Fischer, 2007). The business plan includes information concerning the share of the market a business intends to have along with a scrutiny of their target customers. It also describes the prices that will be charged for the business products in comparison to their competitor’s prices. The document expounds on the methods that the business will be using to perform the analysis and research into their market. The business plan also includes information on the provision, promotion and sales methods the business will use in the future (Chell and Haworth, 2001). These processes can lead to great improvements in the performances of a business if well implemented. The development of more cost effective ways of production and operating a business will lead to an increase in the productivity of the business. Understanding the Competition This is the ability that a businessman or woman requires for the purpose of comprehending the style and strategies used by their competitors in fighting their products (Fischer, 2007). This activity involves comprehending the competitors’ behavior and cognitive styles. All this activities are performed for the purpose of creating competitive advantages over their competitors (Landoli and Landstorm, 2004). The business plan describes the competition present for a business, their respective market shares and the strategies an entrepreneur will use to counter this competition. It also describes the pricing strategies that their competitors use and the ones the business will opt to use in its activities. The availability of this information will enable an entrepreneur to remain relevant and profitable when carrying out his business ventures (Fischer, 2007). Cash Flow These are records of the expenditures and incomes that a business intends to generate once they have begun operations. These financial statements help an entrepreneur in determining the level of liquidity for his business once he is in operation (Parker, 2004). These financial books additionally display all the variable and non variable costs that a business will incur. A business plan displays the cash flows the business intends to make after purchasing and selling various products and services. This information is displayed through the use of documents such as income and expenditure statements (Parker, 2004). The business owner benefits from having this information as he is able to know how to use the resources at his disposal to achieve maximum output and increase his profitability (Landoli and Landstorm, 2007). Profit And Loss Forecast This is a forecast of the gross and net profits that a business will make over a certain trading period (Wiklund, 2006). The business plan avails a list of the profits or losses that it expects to make in a trading period. It also shows the expenses the business will incur in the process of performing their activities. These figures help a business in forecasting their likelihood of success when undertaking certain business ventures (Adkisson and Riser, 2006). This information is displayed through the use of documents such the accounts of profit and loss (Parker, 2004). This information is also vital for the decisions that an entrepreneur will take in the course of business since they dictate the direction that a business will take. The forecasts also enable an entrepreneur to determine whether his ventures will be profit or loss making. Balance Sheet Projections The projections that are availed by the balance sheet give the values of the business liabilities, assets and capital after a certain trading period (Mathis and Jacks, 2006). The plan displays a list of the business assets, equity and liabilities and their totals for the trading period. The incorporation of the balance sheet in the business plan enables a business to determine its worth after a certain trading period (Kurakto and Hodgetts, 2008). It in turn enables an entrepreneur to determine the liquidity level of his business. This greatly supports his decision making process in the operation of the business. Competitive Strategy The issue of competitive strategy involves the styles and methods that an entrepreneur will adopt in the course of carrying out his duties (Krueger, 2002). They are adopted for the purpose of fighting off the competition in the market (Weber and Wilheim, 2010). The formulation of these strategies enables an entrepreneur to achieve an advantage over his competitors. The business plan displays the methods that the business man will use in advertising, selling and promoting his products in contrast to his competitors (Krueger, 2002). It also includes the strategies that an entrepreneur will adopt in pricing his products in comparison to his competitors. The availability of this information will enable an entrepreneur to develop an advantage over their competitors. This in terms of achieving more customers while increasing his profitability. Scenario Analysis The scenario analysis provides a vivid description of the environment and activities that a business will indulge in (Parker, 2004). It gives a description of the process a business will go through when producing their commodities and services for their target customers (Whittington, 2007). It additionally provides details on the availability of labor and the costs the business will incur on them in the course of its operations. The business plan contains information about the environment that a business will be operating in (Landstorm, 2008). It provides details of the costs and limitations that a business might encounter in its operations. The business plan also provides details on the availability of labor and the material costs involved. The adequate understanding of the environment a business is operating in enables entrepreneurs to make appropriate decisions (Landstorm, 2008). An entrepreneur will opt for alternative and cheaper methods to aid his production process once the available materials become obsolete. Conclusion The above mentioned steps from the idea generation to the scenario analysis are very vital for an entrepreneur who is beginning his trade. This is because they assist him in sequentially developing a business solution that is viable and achievable. They guide him in ascertaining how effective, different methods of carrying out business will profit him. These steps also give an entrepreneur greater insights on how to start his business and remain profitable in the industry (Fischer, 2007). References Adkisson, J., Riser, C. 2006. Asset Protection, Concepts and Strategies for Protecting Your Wealth, McGraw-Hill Professional, New York. Chell, E., and Haworth, J. 2001. The Entrepreneurship Personality. Concepts, Cases And Categories, Routledge, New York. Fischer, M. 2007. The Impact Of Personal And Environmental Factors On Entrepreneurship, GRIN Verlag, Stuttgart. Goble, F. 2004. The Third Force. The Psychology Of Abraham Maslow, Maurice Basset, New York. Krueger, N. 2002. Entrepreneurship Critical Perspectives On Business And Management, Taylor and Francis, New York. Kurakto, D., and Hodgetts, R. 2008. Entrepreneurship. Theory, Process And Practice, Cengage Learning, London. Landoli, L., and Landstorm, H. 2007. Entrepreneurship, Competitiveness And Local Development. Frontiers In European Entrepreneurship Research, Edward Elgar Publishing, New York. Landstorm, H. 2008. Entrepreneurship, Sustainable Growth and Performance. Frontiers In European Entrepreneurship Research, Edward Elgar Publishing, New York. Mathis, R., and Jacks, J. 2006. Human Resource Management, Cengage Learning, London. Parker, S. 2004. The Economics Of Self-Employment And Entrepreneurship, Cambridge University press, London. Still R., Cundiff, E., and Govoni, N. 2006. Sales Management, Decisions, Policies and Cases, Prentice-Hall, New York. Thomas, W. 2008. The Sales Manager’s Success Manual, AMACOM Div American Mgmt Assn, California. Weber, B., and Wilheim, H. 2010. Infrastructure as an Asset Class, Investment Strategies, Project Finance and Ppp, John Wiley & Sons, New York. Whittington, G. 2007. Profitability, Accounting Theory and Methodology, the Selected Essays of Geoffrey Whittington, Routledge, New York. Wiklund, J. 2006. Entrepreneurship. Frameworks And Empirical Investigation From Forthcoming Leaders Of European Research, Emerald group Publishing, Brussels. Read More