BUSINESS PLAN 1

  • Category:
    Business
  • Document type:
    Assignment
  • Level:
    Undergraduate
  • Page:
    4
  • Words:
    2712

BUSINESS PLAN

Table of Contents

EXECUTIVE SUMMARY 4

INTRODUCTION 5

Supple Software Company 5

Liquid Commerce 5

STRONGEST COMPONENTS OF THE BUSINESS PLAN 6

Supple Software Company 6

Executive summary 6 i)

Product 7 ii)

Financial Plan 7 iii)

Liquid Commerce 7

Company Description 7 i)

Market Analysis 8 ii)

Strategy and Implementation 8 iii)

WEAK COMPONENTS OF THE BUSINESS PLANS 8

Supple Software Company 8

Company Description 8 i)

Revenue Projection 9 ii)

Market Analysis 9 iii)

Liquid culture 9

Product Description 9 i)

Executive Summary 10 ii)

Objectives 10 iii)

HOW THE BUSINESSES COULD HAVE BEEN IMPROVED 10

CHALLENGES 11

Revenue and financial projections 11

Concealing weaknesses 11

Distribution channels 11

Risk Assessment 12

LESSONS ABOUT BUSINESS PLANNING 12

Reference 15

EXECUTIVE SUMMARY

A business plan is basically a road map for any business that is aimed at achieving the business goals and objectives. It outlines the business goals to be achieved and how these goals are going to be achieved. The success of any business is mainly dependent on how the business plan is developed right from the identification of goals and objectives of the business and how they will be met.

Any individual intending to run a business should have a business plan that will assist in managing milestones, metrics, focus strategy, assign responsibilities and track responsibilities. Additionally, a business plan is useful for the management of funds by projecting sales, costs, cash and expenses.

A business plan is intended to serve different purposes in a business. In addition to defining objectives and description of programs aimed at achieving these objectives. Business plans are also developed for purposes of rising equity funding, supporting loan applications, evaluating new product lines, expansion or promotion. Other businesses use the business plan to create review and correction processes, defining partner agreements and setting value to a business for legal purposes or disposal[ CITATION Tim12 l 2057 ].

To effectively achieve its purpose, a plan must be well written and must contain all the sections or chapters. This paper provides an analysis of two business plans written for different businesses; a software publisher company and a clothing e-commerce site. The paper will criticize these two plans and identify the strengths and weaknesses and how the plans could be improved.

INTRODUCTION

Supple Software Company

The Supple Software Company is a company founded in 1993 and wholly owned by Ralph and Mable Smith[ CITATION bpl13 l 2057 ]. The Company sells three different software products that are widely used in the market. The company is a major player in the market and intend to significantly increase its sales by adhering to the key values of market power, right management team and customer satisfaction. Despite the fact that the company has set high goals and objectives, they can still be achieved.

The major objectives in the company’s business plan include;

  1. Increase and double the sales in the next financial year

  2. Increase the net profit and gross profit margins correspondingly

  3. To maintain a market share of at least 30%

To achieve this, the company has set out key strategies to success that include identifying the right management team, increasing the market power, enhancing product quality and customer satisfaction and maintaining long term customer satisfaction. These key steps are essential for the company’s survival in the market.

Liquid Commerce

The company will be owned by Larry Wilson and Maggie Granger. The company is intended to offer online women’s outdoor clothing. The services are to be provided online through their website. It acts as an intermediary between the client and the manufacturer[ CITATION For07 l 1033 ]. The company cuts costs of shipping and manufacturing and leaves the task to Magic clothing.

The company’s mission is to provide its clients with clothing for any outdoor activity at reasonable prices.

The key strategies to achieving its mission include establishment of an accessible website that is exciting to surf and provides a feel of normal shopping in a mall, provide intensive advertising campaign through the available channels such as magazines, engaging excellent design staff and establishing strong relationships with vendors and manufacturers of these products[ CITATION bpl131 l 2057 ].

STRONGEST COMPONENTS OF THE BUSINESS PLAN

The two business plans have almost a similar structure and entails all the components that is needed in a business plan. However, the contents of some sections of the plans vary from one another and thus create different strengths in the different components.

Supple Software Company

  1. Executive summary

The Supple Software Company business plan has a strong executive summary. This is because the executive summary clearly indicates a background of the company including a summary of the market analysis, products analysis and the strategy to ensure success. Additionally, the executive summary provides a summary of the management team that will be in charge of the company.

This component of the business plan is strong due to its concise and clear description of the basic details and information of the company. It is easy to get a clear understanding of what the company deals in, the products and services offered by the company and the strategy that the company uses to attain its objective[ CITATION Stu09 l 1033 ]. The section also involves a perfect analysis of the market share and the management portfolio for the company. By looking at the executive summary of business plan, one can clearly understand the company’s purpose.

  1. Product

The second strong component in the Supple Software is section three that describes the company’s products and services. In this section the business plan has adequately provided a description of the products that are to be offered by the company. The component also identifies and elaborates the competing products and services and the market share. This makes it a strong component in the business plan due to the fact that a proper description of the products and services of a company provides a better roadmap to the success of the business.

  1. Financial Plan

The third strong component of the company’s business plan is section seven that elaborates the financial plan for the business[ CITATION Tim12 l 1033 ]. The Plan is clearly articulated and has all the important sections. Additionally, the financial plan provides key financial indicators to be used to determine the performance of the company. The section also includes projected cash flow, projected balance sheet, business ratio analysis and pro forma balance sheet.

Liquid Commerce

The company provides a clear mission for the business and a strategy to achieving the set objectives. The business plan has several strong components but three of the strong components are discussed.

  1. Company Description

First, the business plan has an elaborate company summary, the section include a clear start-up framework. The start-up subsection has clear amount of capital needed to finance start-up Assets and expenses[ CITATION For07 l 1033 ]. It goes further to break down the asset requirements and liabilities. This makes it one of the strong components in the business plan.

  1. Market Analysis

Secondly, section four of the business plan comprises a market analysis that include the market segmentation and market analysis. The market segmentation section in the business plan has an elaboration of the groups that the company focuses. It provides an analysis of two groups of potential clients and what market share these two groups take[ CITATION Tim12 l 1033 ]. The information provided in this section can be effectively used for marketing purposes and effective decision making regarding product development. Market analysis in the business plan provides a five year projection of sales in the identified market segments.

  1. Strategy and Implementation

Thirdly, section five of the business plan provides a strategy and implementation of the entire business plan. This is a strong component that is not inherent in the Supple Software’s business plan. The strategy and implementation component comprise an analysis of the competitive edge of the company. The section also has a sub section that describes the marketing strategies which include pricing strategy. It also includes sales strategies that include sales forecasting.

WEAK COMPONENTS OF THE BUSINESS PLANS

Supple Software Company

The company’s business plan has some of the sections that are not clearly elaborated and provides less information.

  1. Company Description

The first component that appears weak in this plan is the company summary. The section lacks the company history in terms of the financial statement. The company summary section should not only include the company history but also an indication of its start-up information including the amount of money needed for the business plan. The second weakness is the lack of the analysis of the company strengths[ CITATION Stu09 l 1033 ]. This is important in determining whether the company will achieve its goals and objectives more easily. The section should include the analysis of the company strengths that have been in the company in the past or ones that have to be inco-operated in the company to ensure that the objectives are effectively met.

  1. Revenue Projection

Secondly, the plan has a weak revenue projection section that does not include a clear elaboration of the expected revenues from the identified market segments. This makes it difficult to out rightly determine the expected revenue for the company.

  1. Market Analysis

Thirdly, the business plan does not provide a clear elaboration of the possible competitors and indicating their market share. The market share will aide in providing a good strategy for implementation and competing with the competitors.

Liquid culture

Liquid Culture Company has several components that are weak compared to Supple Software Company.

  1. Product Description

The product description component is inadequate and appears lacking some vital information that could be useful in the business plan[ CITATION Tim12 l 1033 ]. The section only provides a list of the software that the company is intending to deal in but does not provide any description. A small description of the products is useful in order to provide a quick understanding of these products and services.

  1. Executive Summary

Secondly, the first component which is the executive summary lacks some important data and information. These include a brief description of the product, the market, the marketing strategy and the management team[ CITATION For07 l 1033 ]. The Supple Software plan provides this information at the executive summary hence making it easy to identify with the plan at an early stage.

  1. Objectives

Finally the business plan has the mission and the key strategies to achieving the goals but lacks a major component of objectives. The plan should clearly articulate the objectives of the business that the plan aims to achieve at the long run. The Supple Software Company’s business plan has a properly articulated mission statement, objectives of the company and the strategies to achieve the objectives.

HOW THE BUSINESSES COULD HAVE BEEN IMPROVED

Despite the shortfalls the business plans have captured the major components that are needed in a business plan. However, there are some components that could have improved the two business plans include;

  1. Use of charts, bar graphs and other analytical presentation tools to present the outcomes of analysis such as revenue projections and market share indications among others.

  2. The management team and capacity should include additional information and facts such as Organizational charts, individual resumes, and financial statements including balance sheets, cash flow statements and income statements.

  3. Most importantly, the business plans should always have a risk mitigation plan. The section entails the identification of risks facing the success to the company and the possible measures to mitigate such risks. The section focuses on inconvertibility risks, currency devaluation risk, market risk, operational risk and competitive risks.

  4. The market analysis should not only have the analysis of competitors, products and the distribution process[ CITATION bpl131 l 1033 ]. However, it should also include a four step process that includes a situational analysis, sectorial analysis, competitive analysis and value chain analysis.

CHALLENGES

  1. First, I had a challenge in identifying the business plans to write about. Most of them had similar contents and structure and it would be difficult to identify the difference to provide a better comparison. I overcame this by looking at the two most different business plans that are of different businesses to provide a better comparison.

  2. The second challenge came during analysis of the revenue and financial projections for the two business plans. The major challenge was determining whether these figures were accurate and well represented.

  3. Thirdly, there was a challenge in identifying the weaknesses for the two plans. I found it difficult to determine the weaknesses particularly with the Supple Software business plan. Most of the aspects of a business plan were well covered in the Supple Software business plan hence few weaknesses. I overcame this challenge by critically looking at all aspects of the business plan.

LESSONS ABOUT BUSINESS PLANNING

As seen earlier, a business plan is a road map that is basically aimed at ensuring the success of a business in achieving its goals and objectives[ CITATION Tim12 l 1033 ]. Some of the lessons that I learnt about business planning from this exercise include;

  1. A business plan is a tool that can be used for various purposes but most importantly it defines the objectives and purpose and business and how these objectives can be achieved. Thus it is paramount that the objectives, mission and the strategies are well structures and articulated for an effective business plan.

  2. A business plan has different purposes depending on the business needs. However, for a business plan to be successful for any specific purpose it must be specific to be used for tracking results; it must be realistic; it should fit the business needs and should clearly outline the responsibilities to be executed.

  3. A good business plan should be short, clear and comprehensible. A short business plan is easy to browse through and doesn’t have unnecessary information. It provides effective communication of information that it is intended to provide to the intended audience.

  4. By having an elaborate business plan there is a great sense of responsibility by the different players in the business[ CITATION Stu09 l 1033 ]. This is largely due to the documentation and clear guidelines that also provide a platform for regular planning process and regular review.

  5. A business plan is a tool that forms the basis for management of a business. The business plan comprises the management team and the organization chart that must be well constituted to ensure proper business management in the long run.

COMPETENCIES

I have exemplary communication skills that are likely to have a great impact in the development of business plan. The communication skills are essential for the delivery of quality and standard business plan report.

Additionally, analysis and projection of financial and revenues in the business plan require good analytical skills[ CITATION For07 l 1033 ]. I am competent in analysis of financial information and calculation of revenue projections that can be useful towards an effective business plan.

CONCLUSION

Business plans are meant to provide a framework for achieving business objectives. It is an ideal document for any business to be successful. A business plan should therefore adequately address the crucial components of the business to ensure its success. It is important to note that the most important components of business planning is to identify the goals and objectives of a business and to elaborate the key strategies towards achieving these objectives.

The key strategies will require use of resources including human resource and financial resources. All the resources must be well planned for and the source of these resources must be well indicated. Most importantly, analysis of the various factors such as product distribution channels, competition, implementation strategies and financial analysis. When properly done, the business plan can effectively lead to the success of the business.

References

bplan.com. (2013). Clothing E-commerce Site Business Plan. Retrieved August 21, 2014, from bplans.com: http://www.bplans.com/clothing_e-commerce_site_business_plan/executive_summary_fc.php

bplans.com. (2013). Software Publisher Business Plan. Retrieved August 21, 2014, from bplans.com: http://www.bplans.com/software_publisher_business_plan/executive_summary_fc.php

Ford, B. R. (2007). Erns and Young business plan guide. London: John Wiley and Sons.

School., H. B. (2007). Creating a business plan: Expert solutions to everyday challenges . Boston: Harvard Business School Press.

Stutely, R. (2009). The definitive business plan: The fast-track to intelligent business planning for executives and entrepreneurs. New York: FT Press.

Tim, B. (2012). Bplans. Retrieved August 21, 2014, from articles.bplans.com: http://articles.bplans.com/writing-a-business-plan/what-is-a-business-plan