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Business Plan Analysis Essay


The business plan analysis below relates to the areas identified in the business plan with room for improvement. The analysis includes the weakness observed in the plan, the rationale, and suggestions for improvement. Covello & Hazelgren (2005) attest that it is crucial to follow certain rules to make a business plan. Without proper presentation, a plan may fail to provide the direction it promises.

Risk Assessment

The section dealing with the assessment of risk requires some improvements. As it stands, it identifies the risks to the business and in some cases predicts their possible impact on the business. The assessment presents all the risks in prose. The entire presentation fits in two small paragraphs. This is incongruent to the average length per section in the business plan. These weaknesses have a number of ramifications.

First, the assessment does not provide for weighted-criteria for the determination of the “seriousness” of the risks. There is no way of knowing which risks have the highest likelihood of happening, and if they happen, there is no way of determining the kind of consequences that will accrue.

Secondly, having a section of the plan significantly shorter than others gives the impression that the section did not receive much attention during the preparation of the plan. Thirdly, while there is no problem with putting down the risks in prose, the nature of the information is such that presenting it in prose only, reduces the efficacy of communicating. This is because the risks are distinct. A reader of the plan does not have a means of appreciating the gravity of each risk.

There are a number of ways to improve the section. One of them is to use a list containing the risks in a numbered or bulleted fashion. This will make each risk stand out and will make it easy for someone looking at the plan to see the distinctness of each risk. This method will not make it possible to add conveniently weighted-criteria. The second method involves tabulation of the risks and providing columns for putting up the weighted-criteria.

To make the presentation of risks more effective, the following format may be useful. First, a paragraph written in prose will introduce the section. Secondly, a general assessment of the risks will take place. Thirdly, there should be a risk-matrix table to display the risks and their probability of happening, and the consequences of such risks.

This is a strong indicator of a “carefully prepared business plan” (DeThomas & Derammelaere, 2008, p. vi.) Finally, a paragraph explaining the risk management strategy will close the section. A sample risk matrix used in project management follows below.

Risk Probability of occurrence Consequences Mitigation measure
  1. Introduction of government regulation of internet companies
3 3

For probability of occurrnce, using a scale of 1-5, assign a value based on the perceived probability of the risk occurring. “1” means improbable, “5” means very probable. On the consequences, “1” represents “inconsequential while “5” means “catastrophic”. Multiplying the two columns provides the relative seriousness of the risk in question.

Strengths and Weaknesses

In the section covering competitive strengths and weaknesses, a table contains the information and bullets make each of the entries distinct. The table assesses the strengths and weaknesses of traditional travel agencies, online travel agencies, and airlines. It deals with the issues that affect the three forms of airline booking services. By using a table, the information takes on an easily readable format and shows the distinctness of each of the issues.

There are three problems with this section. The first problem is that the section does not have an introduction to help a reader understand its significance. It just appears in the plan. The second weakness with it is that there is no synthesis of the information presented. The laying down of facts does not conclude with a paragraph explaining the significance of the information presented.

This leaves the user to determine what the significant is, and what is not. The third problem with the section is that it fails to provide for a concluding section showing the impact of the information on the proposed business.

To improve the section, there is need to include the three sections proposed. The first bit is the analysis of the data presented, to determine its significance to the business planning process. Another way to deal with the shortcomings is to expand the table to include two more columns. The first column will show the impact of the strengths and weaknesses of the competitive industry sectors while the final column will show how the business proposed will avoid the weaknesses and take advantage of the strengths.

From the issues identified above, the best way to deal with the shortcomings of the section will be by having separate paragraphs to address the issues identified. The paragraphs required include one that addresses the need to introduce it to readers so that they are clear about its significance.

The second paragraph for inclusion should come after the table. It should synthesize the issues addressed by determining in broad terms the impact of the strengths and weaknesses of other members of the sector. Finally, the concluding paragraph will address the strategic direction that the business should take to take advantage of the opportunities that the sector presents.

Management Plan

The management plan attempts to provide information on the skills, qualifications, and responsibilities of the management team members. It provides the details of four people, with Kimberly Peters as president.

The rest of the team members are Christa Bentley who will work as the Finance and Accounting Manager, Jack H. Welch who will work as the Public Relations/Information Technology Manager, and Sandrene Bouchet who will take care of Administration as a Manager. There are some lapses and room for improvement in this section of the business plan too.

The first issue is the use of the shortened version of Kimberly’s name, Kim. While the shortened version of the name is easy to read, it sounds informal, which may cause readers to feel that the plan lacks seriousness. The second issue identified is the mention of Kimberly’s birthplace. Unless there is a straightforward legal requirement or a similar condition, this information is not necessary in the plan.

It makes the plan bulky without adding to the critical information required to make the plan compelling, especially if it will go through an approval process. The third issue identified is the use of prose to present Kimberly’s qualifications. The information is harder to read in this form. The fourth issue in the section is the sentence structures chosen to describe the roles and experience of the team members. Some of them can benefit from modification to give them a stronger punch.

The section will benefit a lot from bulleting of the skills. Compared to the current presentation, which is in prose, bulleted lists will provide an easier way for the readers to see the skills each person possesses.

The section will also get a more serious image if the name of the president remains Kimberly. In addition, it makes sense to omit all information relating to places of birth of the management team unless there is a clear business reason to include it. Another part of the section that needs adjustment is the graphic presentation of the organization structure.

It has some discrepancy with the information presented in prose. Sandrene Bouchet title is “manager” in the prose, but in the organization tree, it is “director”. In addition, Christa Bentley’s title is incomplete in the organizational tree. These errors reduce the professional appeal of the plan. Finally, there is room for improving the sentence structures of the information relating to the background and skills of the management team.

Financial Plan

In the financial section, the plan presents three forms. There is a pro-forma income statement showing a three-year summary, a pro-forma income statement for one year presented month by month, and a pro-forma cash flow statement month by month. The second form does not have the relevant explanation below it. Since the pattern used for the rest of the tables follow this pattern, the section will look better if the explanation related to it appears immediately under it.

These proposals will go a long way in improving the appeal of the business plan because “without a convincing business plan, no one will seriously consider your business idea” (Abrams & Kleiner, 2003, p. xiii).

Reference List

Abrams, R., & Kleiner, E. (2003). The Successful Business Plan: Secrets & Strategies. California: The Planning Shop.

Covello, J. A., & Hazelgren, B. J. (2005). Your First Business Plan: A Simple Question-and Answer Format Designed to Help You Write Your Own Plan. Naperville, Illinois: SOurcebooks, Inc.

DeThomas, A., & Derammelaere, S. A. (2008). Writing a Convincing Business Plan. Hauppauge, New York: Barron’s Education Series.

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1. IvyPanda. "Business Plan Analysis." November 7, 2019. https://ivypanda.com/essays/business-plan-analysis/.


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