Introduction
When building and developing a business plan, paying attention to several aspects is critical. One is the company’s mission, possible risks, and implementation timelines. This indicator is also necessary for the company’s audience since essential indicators such as market position, reputation, and demand depend on it. Individuals need to clearly understand the future business’s purpose and what needs it will strive to cover. Thus, before fully adopting a business plan, it is necessary to consider the business’s goals, risks, and fundamentals to achieve the greatest market and consumer success.
Major Sections
Purpose
A critical component of any business’s creation is determining its necessity and demand in the market. In this context, external legitimacy is “the extent to which a small business is taken for granted, accepted, or treated as viable by organizations or people outside the small business” (Katz and Green 214). First, this characteristic is valuable for investors who want to invest in the business initiative. However, before doing this, they must provide them with a plan to fully justify their future financial investments.
Vision
The following steps must necessarily affect such important concepts of creating and presenting a business: vision and mission statements, elevator pitches, executive summaries, and direct business plans. A vision statement implies a short representation of the main idea that the company’s leaders adhere to. Examples of this statement may be Google – “to provide access to the world’s information in one click” or LinkedIn – “create economic opportunity for every member of the global workforce” (Ray para 19). In these cases, it is easy to understand the company’s primary goal and its services to society.
Mission
A mission statement is closely related to the vision statement, but has a separate value for the company’s business plan. It is a more detailed description of what the company wants to achieve with its activities and what measures it will take to do this. An elevator pitch is also a description of the vision statement. The main feature of this component of the business plan presentation is that it presents a description of specific actions that will be taken by the company. It is important to note that this aspect is aimed at attracting the attention of investors and showing what a competitive advantage a business can have in the market.
Executive Summary
The executive summary is one of the most critical and time-consuming parts of developing a business. It is an “overview of the business, its model, market, expectations, and immediate goals” (Katz and Green 218). Thus, for managers and heads of the company, this aspect should be of leading importance since it implies consideration of many different components. After considering all these indicators, it is possible to create a business plan to present to investors and continue to create a new product or service on the market.
Potential Risks
Property Risk
An essential part of developing a business and its strategy is paying attention to potential problems that may arise along the way. Risks for small businesses are usually divided into those related to property, personnel, and consumers. The first type defines events related to damage to the company’s property, which determines its value. So, it can be inventory, reputation, land, or skills. To prevent this threat, creating a strategic plan that will consider possible risks in this context is necessary.
Human Risk
Of particular value is the consideration of risks associated with human resources. Research stated that “lack of an adaptive, comprehensive and effective personnel risk management system can cause multiple adverse consequences, including low economic and personnel security, motivational imbalances, reduced profitability of organizations” (Tselyutina et al. 1030).
In other words, the main problems that small businesses may face are employee dissatisfaction, loss of motivation, lack of training and skills, and dismissal. The latter is an exceptionally high threat to a young company, as it requires additional financial and time resources to find and train new personnel. Thus, it is necessary to include these components in the risk assessment process and develop approaches for training employees and creating the most favorable workplace.
Consumer Risk
The next possible risk concerns the company’s consumers. First, it concerns the dissatisfaction of small business customers. It can be caused by insufficient staff competence, a low level of service, or poor quality of goods or services. In addition, the risk may be caused by insufficient flow and consumer engagement.
Due to this factor, the company’s financial profit, on which many different business operations depend, can significantly decrease. It can also cause problems with the company’s competitiveness in the chosen market. To maintain the business’s position, it is important to consider strategies that ensure maximum consumer involvement and interest.
Technological Risk
One risk is the introduction of new technologies into the company’s activities. First, this is because substantial knowledge about innovations that will be introduced into the business is necessary. In the absence of full-fledged training of employees and inadequate training of the company, a business can suffer severe financial losses that are highly undesirable for it (Temel and Durst 666). Thus, a detailed strategic plan is necessary to limit the possible consequences of the introduction of new technologies and outline the actions that need to be taken when they occur.
Audience
Assessing Market Demand
The target audience is also one of the most essential components of a business plan for young companies. It is determined by the fact that profitability, demand, competitiveness, and reputation depend on consumers’ choices for the future product or service. In other words, how a young business will grow and develop directly depends on the target audience.
Therefore, when developing a plan, it is necessary to consider such aspects as needs and demand in the selected market. To do this, it is necessary to study the availability of the offered product or service and how much the audience needs it. It is vital that the business plan takes into account product characteristics, such as its uniqueness and fit for the financial capabilities of a specific population.
Selecting Marketing Strategies
Another aspect that allows you to determine the choice of the target audience is the selection of marketing and promotion strategies. Hence, with the help of this component, the company can determine the channels and methods of advertising to capture as many customers as possible. For example, social networks used by a large population are becoming the most productive in this context. This outlet “enables firms and customers to connect through various platforms, such as social networking sites, microblogging sites, and content communities, that allow social networks to build from shared interests and values” (Li 54). Thus, investing in social networks can give small businesses a significant advantage in attracting a target audience, which determines the need to consider it when creating a future development plan.
Conclusion
In conclusion, carefully developing a business plan with several components is paramount for small businesses. First, heads and managers must define the goals of their activities, which in turn define the vision and mission statement. These aspects, in turn, determine the formation of the elevator pitch and executive summary, which will be presented to investors and stakeholders of small businesses. To achieve success, companies must provide a unique offer that will interest these sides of the business.
Another essential part of writing a business plan for a young company is considering potential risks related to personnel, property, and consumers. Last but not least, it becomes crucial to determine the target audience on which the profitability and demand for small businesses and the course of their further development depend. Therefore, if these indicators are met, managers can succeed when opening a small business.
Works Cited
Katz, Jerome, and Richard Green. Entrepreneurial Small Business. 7th ed., McGraw-Hill, 2023.
Li, Fangfang, Jorma Larimo, and Leonidas C. Leonidou. “Social Media Marketing Strategy: Definition, Conceptualization, Taxonomy, Validation, and Future Agenda.” Journal of the Academy of Marketing Science, vol. 49, 2021, pp. 51-70.
Ray, Stephanie. “What Is a Vision Statement? 25 Vision Statement Examples to Inspire You,” Project Manager. 2023. Web.
Temel, Serdal, and Susanne Durst. “Knowledge Risk Prevention Strategies for Handling New Technological Innovations in Small Businesses.” VINE Journal of Information and Knowledge Management Systems, vol. 51, no. 4, 2020, pp. 655-673.
Tselyutina, Tatyana V., et al. “Development of the Personnel Risks Assessment and Supply Chain Strategy as a Basis of the Risk Management System of Modern Organizations.” International Journal of Supply Chain Management, vol. 8, no. 5, 2019, pp. 1030-1038.