Introduction
A business plan is a document that indicates a plan on how an investment is to be conducted. It includes among other elements; generation of ideas, financial and market analysis, strategic objectives, cash flows and profits and loss forecasts. Other elements that may be included in the business plan are a balance sheet projections, competitive strategies and scenario analysis.
The aim of venturing into a business according to Ashton (2007, p.120) is to make profits. In this case, all elements of a business plan should be aimed at creating a successful entrepreneurial venture. This paper provides a critical analysis of the elements of a business plan with respect to creating a successful business venture.
Generation of ideas
Generation of ideas in a business plan refers to the initial stage of defining the type of business the entrepreneur wishes to invest his or her funds in. It is an overview of the general operation of the business venture. The type of goods or services to be offered, the target market and the managerial organization of the business is indicated by this element. In most business plans, this element is referred to as the executive summary.
Generation of ideas is a crucial element of a business plan in the sense that it differentiates the business from other operators in the market. This element helps the business operator to secure operational permits from the authorities and help him to generally plan the entire business.
For this element to be of any significant importance in creating a successful business venture, the limits of operations of the business should be clearly defined. Defining the extent to which the business wishes to operate helps in planning not only for the infrastructure but also for the finances involved in starting and running the business.
Financial analysis
Financial analysis of a business plan aims at giving an understanding on the amount of funds required to start and run a business venture. It should include such things as the operational costs, management costs and any other type of cost that the investor may incur when starting and running the business venture.
Financial analysis in this respect helps the business operators to plan on the extent of their operations, based on the fact that all business operations require finances either directly or indirectly. For a business venture to succeed, the entrepreneur should include in the financial analysis the current financial position of the business and the anticipated incomes and expenditures of the business (Wickham 2006, p. 125).
The worthiness of a business venture is measured in terms of its ability to make profits. Financial analysis on the other hand determines the amount of money to be invested in the business. A research contacted by Boyle (2004, p. 9) indicates a relationship between the amount of investment and the amount of anticipated profits.
For him, a heavy investment in terms of finances is expected to yield higher profits compared to lower financial investments, with all other factors held constant. Financial analysis also gives a rationale of investing in a given business venture. A good financial analysis will therefore lead to a good planning of the business organization and result to the success of the business venture (Deakins, 2007, p.112).
Market analysis
A good market analysis should be a faithful representation of the actual current situation of the market. It should include both the advantages and disadvantages of investing in the present time, and give a forecast of any anticipated changes of the market forces. With this knowledge, the entrepreneur will be in a position to indentify and plan on how to solve any barriers in advance.
Market analysis should include among other things the current demand and supply trends, the current price for the products and that of other complementary products and the accessibility to the market in terms of infrastructure and other limitations (Boyle 2004, p. 11).
In the market analysis, the entrepreneur should analyze the target population. In this case, the he or she should look at the potential of the target population in terms of their purchasing power. This should be done by analyzing their disposable income. It is worth noting that a change in the market may affect the operations of the business significantly.
A good market analysis not only gives a rational for the entrepreneur to invest in the make but also helps in planning for the production of goods and services. Competitive strategies aimed at cutting operational costs can be designed if only the entrepreneur has a clear picture of the actual situation in the market. This therefore gives market analysis the potential of creating a successful business venture.
Strategic objectives
A strategic objective of a business plan refers to the specific targets that an entrepreneur aims at achieving within a specified period of time. In most business plans, strategic objectives are contained in the mission statement of the business. Strategic objectives should clearly define the goals of the business and the time limits in which the entrepreneur wishes to achieve these goals.
The goals contained in a strategic plan should be specific, challenging but achievable. This is based on the fact that strategic objectives measure the achievements of a business. Setting higher goals and working towards achieving these goals will in turn result into higher success of the business (Boyle 2004, p. 10).
Strategic objectives give direction to a business venture. In this respect, the success of a business venture will be measured in terms of the degree of achievement of the strategic objectives. Setting challenging strategic objectives ensures progress of the business venture. The strategic objectives should also be designed in a way that the achievement of a lower objective leads into the achievement of a higher one.
In this case, the entrepreneur should ensures an upwards and downwards communication in the business. Strategic objectives control the operations of business activities. As noted by Brenner (2007, p. 100), all activities of a business should be aimed at achieving the strategic objectives.
Cash flows
Cash flows in a business plan refer to the rate at which money is to be generated and used when starting and running a business organization. It includes both the anticipated expenditures and incomes of the business organization.
A good cash flow should include the initial costs of starting up the business, cots of constructing the business premises, managerial costs, operational costs and maintenance costs. There should also be included in the cash flow a reserve for other expenses that may not be foreseeable at the moment. The expected flow of money into the business should also be included in the cash flow.
A good cash flow justifies the investment. According to Brockhouse and Horwitz (2006, p. 123), the success of a business venture depends on the cash flowing in and out of the business. If the amount of cash flowing out of a business exceeds the money generated by the business, such a business is considered a worthless investment.
This is because it does not achieve the aims of an investment, which are to make profits. A good projection of cash flow helps the entrepreneur to secure sponsors for his or her business. It helps in the general planning of the activities of the business and thus contributes in making a successful entrepreneurship (Shane, Kolvereid & Westhead, P. 200, p.123).
Profits and loss forecasts
Profits and loss forecasts refers to the possible returns or losses expected by the entrepreneur after investing his or her money in a given business venture. A good profit and loss projection should be realistic. It should be drawn after analyzing the current market climate and the advantages and challenges of the business.
The entrepreneur should consider any possible change in the production costs and the costs of his or her products in the market. A good profits and loss forecast helps the entrepreneur in planning for the operations of the business and as a result contribute in creating a successful entrepreneurship (Brenner 2007, p. 100).
Competitive strategies and scenario analysis
Competitive strategies refers to the advantages of a given business venture over other businesses in the market, while scenario analysis refers to the inquiry into the current situation of the business. An entrepreneur should bank on the competitive strategies of the business and at the same time use scenario analysis to indentify the shortcomings of the business.
Both competitive analyses a scenario analysis of a business helps the entrepreneur to understand his or her business and set realistic goals for the business. This realization in turn contributes in creating a successful entrepreneurship (Boyle, 2004, p. 10)
In conclusion, all the elements contained in a business plan give an understanding of the current and future expectations of the business. They indentify the business and give a rationale of investing in the said business. In this case, these elements should be comprehensive and a faithful representative of the actual situation of the business venture. If well drawn, the elements of a business plan will contribute in creating a successful business venture.
Attributes, behaviors and skills associated with the entrepreneur
Entrepreneurs have been indentified with specific attributes, skills and behaviors that have enabled them start-up, develop and grow their business ventures. According to (Boyle, 2004, p. 10), entrepreneurship requires one to be creative, be active in all activities he or she involves ion and be open to learning new skills and ideas. Although some scholars argue that entrepreneurial skills are inborn, research has shown that individuals lean and nurture these skills through their daily experiences with life.
According to Carter and Jones-Evans (2006, p. 160) entrepreneurial skills help individuals to come up with new inventions from scratch. This is usually exhibited through their active involvement in initiating and building business organizations. Theirs according to Deakins and Freel (2005, p. 130) is a critical mind that senses opportunities in areas were other people see none.
Through their ability to work as a team, entrepreneurs build teams that eventually complement their individual skills and talents. A research contacted by Norusis (2005, p. 127) indicates that entrepreneurs have the ability to discover, plan and control funds in the most appropriate way. The urge to come up with new inventions leads entrepreneurs to risking their capital by investing in new markets. However, it should be noted that these risks are always calculated and that the entrepreneurs control the situations to their advantage.
Research and analysis in among the skills associated with entrepreneurs. These skills enable them to find markets for their products. Through this skill, entrepreneurs have been able to indentify sponsors for their projects. Research helps them in indentifying and looking for solutions to solve any barrier to their business ventures. By analyzing current situations, entrepreneurs have been in a position to indentify and clarify opportunities for their next course of action.
Through my academic life, I have developed the skills of research and analysis. This has been influenced greatly by the provisions in the curriculum for learners to do research. My experience in the laboratory has developed analytical skills in me. For instance, I have done various researchers for ma term papers and assignments in various subjects. These have in turn developed in me research and analysis skills similar to those of entrepreneurs.
Secondly, entrepreneurs are associated with good communication skills. This includes both written and non-written communication. Through this skill, entrepreneurs have been able to inform, inspire and persuade their audience. This skill is particularly important when it comes to m products marketing.
Through good communication skills, entrepreneurs convince their customers to purchase their gods and services. As noted by Timmons and Spinelli (2008, p. 117) the future of any business venture depends on the level of communication skills with the entrepreneurs of the said venture. In this case, entrepreneurs with good communication skills will not only convince donors to fund for their projects but also market its goods and services effectively.
The requirement by our teachers to research and make presentations during our class has developed in me good communication skills. For example, we have had several group assignments in various subjects. Doing these assignments requires each group member to contribute his or her ideas.
We then discuss these ideas before arriving t the final conclusions, which then becomes the answer to our question. In this process, I have developed good communication skills and the ability to work with others, a skill that is similar to that of entrepreneurs.
In addition to research and analysis skills associated with entrepreneurs is the skill of idea generation and creative thinking. This according to Sexton and Bowman-Upton (2001, p. 115) is the ability to evaluate ideas with the aim of finding out the possibilities of tuning such ideas into an investment. Entrepreneurs have been associated with the ability to discover new ways of making money following their ability to think critically. This skill has also been associated with the behavior of entrepreneurs to risk in investing their capital to new markets.
I have developed the skill of generating and analyzing ideas like entrepreneurs through my experience with school life. As indicated earlier in this paper, most of our assignments are done in groups. During our group discussions, different ideas are generated my group members. My role as a group member to discuss these ideas and give my contribution towards the problem has instilled in me the skill o generating and analyzing ideas just like that of an entrepreneurs.
Networking is another common skill associated with entrepreneurs all over the world. The development of this skill is influence the need by entrepreneurs to search for new markets for their products. Through the process of making their products familiar in the market, entrepreneurs have formed working relationships across the world.
Among the people targeted by entrepreneurs to form working networks are influential personalities. This category of people is particularly useful to entrepreneurs in the sense that they provide a connection between the entrepreneurs and the markets.
My academic life has taught me the skills of networking. Through my academic lie, I have had to look for information from learners from other schools in order to complement with the information I get from disusing with my school mates. In this case I have made working networks with students from many schools with the aim of benefiting academically. This networking skill is similar to that of entrepreneurs.
Scholars have ranked financial literacy among the important skills that entrepreneurs possess. From the start, entrepreneurs have to deal with finances. However, finances are usually a rare commodity that needs to be planned for. For any business venture to succeed, the entrepreneur in question must therefore possess financial literacy.
This skill; helps entrepreneurs to budget, forecast and control the cash flow in and out of the business. Drawing of balance sheets, cash flows and profit and loss accounts becomes inevitable for entrepreneurs. They use their financial literacy to understand the consequences of their actions with respect to the success of the business venture.
In school, I have had to budget for the limited pocket money given to me by my parents. For instance I have had to plan on how this limited amount of money will cater for my personal effects without having to put financial pressure to my parents. As a result, I have learned on how to plan for the little amount of money I have at any given point in time and plan on alternative means of generating money. This school experience has made me financially literate just like an entrepreneur.
Research has indicated entrepreneurs as having high levels of commercial awareness. This according to Stikes and Wilson (2006, p. 150) is the developing the ability to venture into the market place, analyzing it and coming up with strategic plans to compete with other operators in the market place. Commercial awareness enables entrepreneurs to balance the interests of their businesses with the actual current situation of the market place.
Limited finances added to many personal effects in school have made me develop a business mind and be commercially aware. For instance, I indentified the need by many students to photocopy their academic materials and the limited photocopying facilities provided y the school.
As a result, I purchased a photocopying machine and began the business. From the money generated by the photocopying business, I have been able to purchase my personal effects and save the remainder for my future business aspirations. Being commercially aware is associated with entrepreneurs and has been instilled in me by my schooling experience. Subjects such as business and economics also teach us on how to look for business opportunities and how to invest wisely.
As indicated earlier, entrepreneurs are associated with team working skills. For a person to coordinate teamwork, he or she must possess leadership characteristics. In this sense, entrepreneurs direct, inspire and provide vision to the people they are working with. They motivate and persuade others into working towards the realization of success of the business venture.
Working with people develops negotiation skills to entrepreneurs. This usually involves discussing issues concerning the business venture with the staff, customers and any other agency with the aim of creating a god operating environment for the business.
Finally, entrepreneurs are associated with management skills. The development of this skill however depends on whether the entrepreneur is working alone or with others. The complexity of the product or services the entrepreneur is engaging him with also determines the level of development of management skills within him or her. According to Schumpeter (2009, p. 120) management is the ability to utilize time, people and material resources for the benefit of the business.
School life requires students to budget for both their pocket money and their time. For instance, we are expected to attend to our classes during ever lesson and be actively engaged in extracurricular activities. This requirement has developed in me management skills just like those of entrepreneurs.
Conclusion
The above discussion gives some of the skills, behaviors and attributes associated with entrepreneurs which they have developed as a result of their experience with entrepreneurial activities. From the above discussion, it is evident that all these characteristics aim at achieving the set goals by the entrepreneur. However, school experience teaches learners skills, attributes and behaviors similar to those of entrepreneurs as discussed above.
References
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