Downloaded 564 times
Uploaded byNeha Chouhan
importance of Business plan in entrepreneurship
This document discusses the importance of developing a business plan for entrepreneurship. It begins by defining a business and entrepreneurship. It then explains that a business plan is a selling document that conveys the promise of a business to potential backers. The document outlines the key components of a business plan, including an executive summary, company summary, products/services, market analysis, strategy, management, and financials. It emphasizes that a business plan provides insight into a business, can help secure financing, and allows owners to objectively evaluate strengths and weaknesses. Developing an extensive plan takes time but can prevent business failure and guide long-term success.
More Related Content
Similar to importance of Business plan in entrepreneurship
importance of Business plan in entrepreneurship
- 1. Importance of BusinessPlan in Entrepreneurship
- 3. Business : • Abusiness is an organization involved in the trade of goods, services, or both to consumers.Businesses are predominant in capitalist economies, where most of them are privately owned and administered to provide service to its customers. Businesses may also be not-for-profit or state-owned. A business owned by multiple individuals may be referred to as a company, although that term also has a more precise meaning.
- 4. ENTREPRENEURSHIP What is meantby entrepreneurship? The concept of entrepreneurship was first established in the 1700s. The entrepreneur is one who is willing to bear the risk of a new venture if there is a significant chance of profit. Entrepreneurs develop new goods or processes that the market demands and are not currently being supplied.
- 5. Business Plan A“Business Plan” is a “Selling Document” that conveys the excitement and promise of your business to any potential backers and stakeholders
- 6. I. Introduction to BusinessPlans II. Business Plan Components III. Benefits of a Business Plan IV. BizCentral USA’s Business Plan Writing and Process
- 7. For a businessto be successful and profitable, the owners and the managing directors must have a clear understanding of the firm's customers, strengths and competition. Taking time to create an extensive business plan provides a company with insight into your business. This document can serve as a powerful financing proposal. While all business plans follow the same structure, each business will have a unique plan with a different set of information.
- 8. • 1. It forces theperson preparing the plan to look at the business in an objective and critical manner. 2. It helps to focus ideas and serves as a feasibility study of the business's chances for success and growth. 3. The finished report serves as an operational tool to define the company's present status and future possibilities. 4. It can help you manage the business and prepare you for success. 5. It defines your purpose, your competition, your management and personnel. The process of constructing a business plan can be a strong reality check.
- 9. FAST FACTS: • 90%of new businesses fail in the first two years. Failure is often attributed to a lack of planning. • A comprehensive, well constructed business plan can prevent a business from a downward spiral. • A thorough business plan will have the information to serve as a financial proposal and should be accepted by most lenders. • By taking an objective look at your business you can identify areas of weakness and strength.
- 10. While itis understandable that the owner not write the business plan, he or she should be an active participant in the development of the plan. It doesn't matter if a company is using a business plan to seek financial resources, evaluate future growth, define a mission or provide guidance for running the business- A business plan should be a professionally presented compilation that reflects the business in its entirety.
- 11. • • • • • • • Executive Summary Company Summary Productsor Services Market Analysis Strategy and Implementation Summary Management Summary Financial Plan
- 12. • Executive Summary: •A persuasive summary that will entice a reader to take the plan seriously and read on. Includes information on the company’s history, objectives, services, market, strategies, manage ment, and funding. • Company Summary: • Company summaries should discuss in detail the business’s ownership and legal status. • Also includes information on the company’s start-up.
- 13. Products orServices: It is important to discuss the competitive advantage a business’ product or service has over the competition . They should answer why there is a need for the product or service. What makes your product or service unique? Can you price the product or service competitively and still maintain a healthy profit margin? Marketing Analysis Provides an analysis of who your customers are, their purchasing habits, their buying cycle, etc. Investors look for management teams with a thorough knowledge of their target market.
- 14. Strategy and Implementation: Whatresources and processes are necessary to get the product to market? This section should describe the manufacturing, R&D, purchasing, staffing, equipment and facilities required for your business. Management Summary: Investors must feel confident that the management team knows its market, product and has the ability to implement the plan. Therefore, a plan must communicate management's capabilities in obtaining the objectives outlined in the plan.
- 15. Financial Plan: Atthe heart of any business operation is the accounting system. One of the first steps to having a profitable business is to establish a bookkeeping system which provides data in the following four areas: Balance Sheet Break-Even Analysis Profit and Loss Statement Cash Flow If the goal of your business plan is to obtain financing, a company must generate a financial forecast for 3-5 years.
- 16. Include any documentsthat lend support to statements made in the body of your company's business plan. Resumes Credit information Quotes or Estimates Letters of Intent from prospective customers Letters of Support from credible people who know you Leases or Buy/Sell Agreements Legal Documents relevant to the business
- 17. 1. 2. 3. 4. Puts a businessidea to the test; it fine-tunes it up-front. Turns a good idea into a viable business or a working enterprise. Helps you come up with creative ways to make your business work. Shows you what you are up against with competition. 5. Creates a detailed action plan to keep a competitive advantage. 6. Specifies what you need to start the business… saves time and money. 7. No nonsense list of equipment needs.
- 18. 8. Provides a timetablewhen you need to finish the items on your to-do list. 9. Helps you get the funding you need. 10. Tells the world who you are.
- 19. 1. After a clientsigns up for the service, they must sign the order confirmation & terms. 2. Client receives a link to the business plan steps page & questionnaire. 3. The steps page includes tools, resources and samples that will help the client provide the service consultant with useful information for their plan. 4. Client submits the questionnaire and within 48 hrs an interview is set up with the service consultant.
- 20. 5. During thephone interview, the service consultant will discuss business service or product offerings, target market, projected sales, and sales/marketing strategies with the client. 6. After the interview, the service consultant will thoroughly research target market, industry, demographic and other business data in order to provide additional plan content. 7. Work usually is completed within 10-15 business days and a copy of the plan will be provided to the client via email.
- 21. What is ourexperience with business plans? Do you guarantee you work? Our clients receive a draft copy of the plan and we work with them on it until it meets their approval. Do you have references? Because we are a low price leader, we process these in volume so we know how to do it right. Also, we know what our client’s banks and investors are looking for in a business plan. Yes, we can send clients a list of other satisfied clients who they may call. Also, they can view sample plans on our website. What if I get denied a bank loan? No one can guarantee investors or loans, however if a client needed to add additional information or content, we will work with them.
- 22. Once thebusiness plan is completed, it should become an operational tool to measure the success of the business. This plan should be updated as milestones are reached. A business should not shelve the plan once they receive the necessary capital. It should be a valuable tool for the growth and development of the business!