Business Plan Challenges - Essay Example

Business Plan Challenges Name Institution Hardest challenge in the development of a business plan A business plan is tool that guides an entrepreneur towards attaining success in his or her business. It provides a live and real roadmap for a business to follow for at least a period of three to four years (Prikladnicki et al., 2007). The process of developing a business plan consists of several steps and each step has its own challenges as far as the attainment of its goals is concerned. For example for one to identify a gap in the market so as to embark on the development of the plan or the roadmap towards filling the gap identified, there are so many difficulties that are involved in that process. In this paper we will discuss some of the challenges that we came across while developing a business plan for our company’s new product; mobile nail care service. The development of this product was faced by numerous hindrances as far as the establishment of the same is concerned. Idea development stage Under this stage challenges related to both internal and external environment in the market were experienced. Internal environment This refers to the challenges that originated from within the company that would discourage the development of the business plan. Among this challenges included disagreements and lack of self-drive from some of the company management team members. A number of the team members began to doubt the workability of the idea once it was tabled before the management so as to give the steering team a go ahead. This move demotivated the idea bearer to an extent of letting it go unattended to. However, the reality and the clarity of the idea in the market stood out so well that no one would shut an eye from the fact that it would help the company rise to greater heights. (Stark, 2011) Moreover, some of the members also complained about the resources required to carry on the plan till its completion. Since the company has been operating an indoor salon service that have only been able to make returns just enough to sustain the company in the market, it was said that introducing another product would make the company operate at a loss. Availability of resources is a very vital aspect as far as business operation is concerned. This is so especially at the initial stages of a company’s new product. The mobile nail care service required an initial capital that would enable its commencement. For example employees were required so as to offer the service to customers as well as vans to ferry the nail technicians to several parts of the country to offer the service. It means therefore that without the resources to provide the starting essentials, it would be difficult for the business plan to be developed. Most difficult challenge External environment This refers to those problems whose sources cannot be controlled by the company’s management. Such challenges include the competition that the product is expected to face from other similar or closely related products. For example in Hillingdon there are many salons that offer both manicure and pedicure to the customers, therefore in order for the company to thrive in the market new strategies ought to be introduced to differentiate the service provision from others. In the process of developing a business plan challenges related to external environment are normally the most difficult to deal with. In our business plan, whose main aim was to come up with the most reliable and preferred choice of service in the nail beauty industry the most difficult challenge that we faced was how to offer a product that would win the consumers’ preference given the existence of other salons in the industry. (Prieto‐Carrón et al., 2006) Reason why it is the hardest The competition problems are quite wide this is because they entail such issues as brand positioning, product differentiation strategies, and marketing strategies among others. For the business plan to undergo a successful development the company has to come up with ways on how to incorporate these strategies so that the product will be able to stand competition from other similar products. . How to overcome the challenge As it was discussed earlier each stage in developing a business plan had its own challenges, however some challenges were easy to overcome as compared to others. For instance those who were against the plan, had to be taken through a thorough elucidation about the idea. This was done so as to make them understand the viability of the project. In addition, to overcome the challenge involving limitation of resources, it was agreed that the development of the plan would engage cost effective activities that would help minimize the initial and the operating costs of developing the business plan. The company will also ensure that the technicians who will be employed to offer the mobile nail beauty service are licenced drivers. This will help cut the cost of employing drivers. However, to overcome the competition challenge several strategies have to be engaged so that the product being introduced in the market will be able to capture a good market share. Brand position One of the major strategies to overcome the competition challenge in developing a business plan is by ensuring that the brand positioning of the new product is well looked at. Brand position refers to those strong features of the product that makes it different from other products in the market. There are also referred to as the product’s unique features. These features are the ones that make the product to be preferred by consumers to others. (Kuratko, 2003). The mobile nail beauty service is the only one of its kind in Hillingdon. This is because almost all other nail beauty service providers offer their services at designated places. The fact that our salon is mobile gives the company a brand positioning. Taking the service to where customers are expands the market share of the company. Moreover the company is able to attend to emerging needs and choices of the consumers since the nail technicians are take the services directly to the consumers. This makes the product more accessible as well as flexible depending on the consumers’ preferences and behaviour. Product differentiation The company has been able to package its product such that it sounds well thought of and differentiated from what has been in the market. The manicures and the pedicures that the company aims to provide are such that; made from natural products, they are also of varied polish from varieties available all over the world. (Kuratko, 2005) Another differentiation is that the product will be offered not only to the adults but also to young kids because it is made of natural products that are harmless to human health. In addition, the company aims at providing a classic and luxurious service that will attract people of different classes. Although the services will be comfy and deluxe the company will charge enticing prices depending on the consumers’ surplus. This will help the company to expand its market segment by making sure that there is no group of people that will not be served by the mobile nail beauty service technicians. Marketing strategies Some of the marketing strategies that the company will engage in will include pricing strategies as well as advertising strategies. This will enable the product to stand the competition that may be created by other existing and arising nail beauty service providers. The pricing strategy will include price discrimination as well as pear pricing. The fact that the service will be taken to the consumers it will make it easy for the company to practice price discrimination. This is because the service providers will be able to weigh the abilities of different consumers and charge them different prices depending on their social, age and economic status. Peak pricing will be carryout depending on the economic series, booms and recessions. During booms when the demand is high the company will also charge high prices but slightly lower than those charged by other firms. During economic recession the prices will be lowered to levels that consumers can afford depending on their incomes. (Gibson, 1997) The company will also be engaged in an effective and efficient advertising strategy that will help in outdoing other firms. Hillingdon is densely populated and has two universities among other institutions where the nail beauty service may be highly demanded. For this reason advertising will highly be concentrated around the two universities as well as high traffic areas so as to capture as many consumers as possible. At the initial stages the company will announce an offer so as to entice consumers and increase the rate of product consumption in the area. The most important lesson learnt Business plan development has equipped us with the real picture of what is expected in the market before introducing the new product. An entrepreneur is forward looking and therefore, a business plan provides a roadmap through which a business would follow so as to realize its goals. Ability to take advantage of future eventualities in the market has been a major lesson learnt in the development of a business plan. This includes such issues as the competitors’ behaviours as well as changes in the economic times. With a well-researched business plan an entrepreneur would be able to deal with such emerging issues in the marketing of a new product. The nail beauty service business plan helped us to gather more information about Hillingdon, for instance we had to find out the viability of the product by first of all checking the market of the existing salons. This gave the company’s management confidence to invest in the nail beauty service provision. In nutshell, the business plan made the idea to appear as real even before it was ventured into. References Kuratko, D. F. 2005: The emergence of entrepreneurship education: Development, trends, and challenges. Entrepreneurship theory and practice, vol. 29(5), pp. 577-598. Prikladnicki, R., Audy, J. L. N., Damian, D., & de Oliveira, T. C. 2000: Distributed Software Development: Practices and challenges in different business strategies of offshoring and onshoring. In Global Software Engineering, 2007. ICGSE 2007. Second IEEE International Conference on (pp. 262-274). IEEE. Kuratko, D. F. 2003: Entrepreneurship education: Emerging trends and challenges for the 21st century. White Paper, US Association of Small Business Education. Stark, J. 2011: Product lifecycle management (pp. 1-16). Springer London. Prieto‐Carrón, M., LUND‐THOMSEN, P. E. T. E. R., Chan, A., Muro, A. N. A., & Bhushan, C. 2006: Critical perspectives on CSR and development: what we know, what we don't know, and what we need to know. International Affairs, 82(5), 977-987. Gibson, A. 1997: Business development services–core principles and future challenges. Small enterprise development, vol. 8(3), pp. 4-14. Read More