Show Chapter 6 Writing a Business Plan 1) According to the textbook, a business plan is best described as a(n) ________. A) narrative description of a new business B) contract C) budget D) agreement E) marketing initiative 2) According to the textbook, a 2010-2012 study of 350 entrepreneurs found that of those that had successful exist, only about ________ started with a business plan A) 10 percent B) 15 percent C) 20 percent D) 30 percent E) 40 percent 3) A business plan is important as it forces the founding team to systematically think through every aspect of their new venture and ________. A) it is a budget B) it is a public relations document that can be used to promote the firm C) it is a contract that is signed by the founders of the firm D) it is a financial analysis E) it communicates the merits of a new venture to outsiders, such as investors and bankers 4) Which of the following statements is incorrect about business plans? A) Writing a business plan forces a firm's founders to systematically think through each aspect of their new venture. B) For most new ventures, the business plan is a dual-purpose document used both inside and outside the firm. C) A business plan is typically 25 to 35 pages long. D) A large percentage of entrepreneurs do not write business plans for their new ventures. E) The business plan should be written while the feasibility analysis is being completed. 5) The document that does the best job of introducing potential investors and other stakeholders with the business opportunity the firm is pursuing and how it plans to pursue it is the ________. A) business plan B) feasibility analysis C) opportunity analysis D) industry analysis E) marketing plan 6) The two primary audiences for a business plan are ________ and ________. A) a firm's employees; officials with the SEC A business plan is a document that defines in detail a company's objectives and how it plans to achieve its goals. A business plan lays out a written road map for the firm from marketing, financial, and operational standpoints. Both startups and established companies use business plans. A business plan is an important document aimed at a company's external and internal audiences. For instance, a business plan is used to attract investment before a company has established a proven track record. It can also help to secure lending from financial institutions. Furthermore, a business plan can serve to keep a company's executive team on the same page about strategic action items and on target for meeting established goals. Although they're especially useful for new businesses, every company should have a business plan. Ideally, the plan is reviewed and updated periodically to reflect goals that have been met or have changed. Sometimes, a new business plan is created for an established business that has decided to move in a new direction.
A business plan is a fundamental document that any new business should have in place prior to beginning operations. Indeed, banks and venture capital firms often require a viable business plan before considering whether they'll provide capital to new businesses. Operating without a business plan usually is not a good idea. In fact, very few companies are able to last very long without one. There are benefits to creating (and sticking to) a good business plan. These include being able to think through ideas before investing too much money in them and working through potential obstacles to success. A good business plan should outline all the projected costs and possible pitfalls of each decision a company makes. Business plans, even among competitors in the same industry, are rarely identical. However, they can have the same basic elements, such as an executive summary of the business and detailed descriptions of its operations, products and services, and financial projections. A plan also states how the business intends to achieve its goals. While it's a good idea to give as much detail as possible, it's also important that a plan be concise to keep a reader's attention to the end. A well-considered and well-written business plan can be of enormous value to a company. While there are templates that you can use to write a business plan, try to avoid producing a generic result. The plan should include an overview and, if possible, details of the industry of which the business will be a part. It should explain how the business will distinguish itself from its competitors. Start with the essential structure: an executive summary, company description, market analysis, product or service description, marketing strategy, financial projections, and appendix (which include documents and data that support the main sections). These sections or elements of a business plan are outlined below. When you write your business plan, you don’t have to strictly follow a particular business plan outline or template. Use only those sections that make the most sense for your particular business and its needs. Traditional business plans use some combination of the sections below. Your plan might also include any funding requests you're making. Regardless, try to keep the main body of your plan to around 15-25 pages. The length of a business plan varies greatly from business to business. Consider fitting the basic information into a 15- to 25-page document. Then, other crucial elements that take up a lot of space—such as applications for patents—can be referenced in the main document and included as appendices. As mentioned above, no two business plans are the same. Nonetheless, they tend to have the same elements. Below are some of the common and key parts of a business plan.
The best business plans aren't generic ones created from easily accessed templates. A company should entice readers with a plan that demonstrates its singularity and potential for success. Business plans help companies identify their objectives and remain on track to meet goals. They can help companies start, manage themselves, and grow once up and running. They also act as a means to attract lenders and investors. Although there is no right or wrong business plan, they can fall into two different categories—traditional or lean startup. According to the Small Business Administration (SBA), the traditional business plan is the most common. It contains a lot of detail in each section. These tend to be longer than the lean startup plan and require more work. Lean startup business plans, on the other hand, use an abbreviated structure that highlights key elements. These business plans aren't as common in the business world because they're short—as short as one page—and lack detail. If a company uses this kind of plan, it should be prepared to provide more detail if an investor or lender requests it. A complete business plan must include a set of financial projections for the business. These forward-looking financial statements are often called pro-forma financial statements or simply the "pro-formas." They include an overall budget, current and projected financing needs, a market analysis, and the company's marketing strategy. A major reason for a business plan is to give owners a clear picture of objectives, goals, resources, potential costs, and drawbacks of certain business decisions. A business plan should help them modify their structures before implementing their ideas. It also allows owners to project the type of financing required to get their businesses up and running. If there are any especially interesting aspects of the business, they should be highlighted and used to attract financing, if needed. For example, Tesla Motors' electric car business essentially began only as a business plan. Importantly, a business plan shouldn't be a static document. As a business grows and changes, so too should the business plan. An annual review of the company and its plan allows an entrepreneur or group of owners to update the plan, based on successes, setbacks, and other new information. It provides an opportunity to size up the plan's ability to help the company grow. Think of the business plan as a living document that evolves with your business. A business plan is a document created by a company that describes the company's goals, operations, industry standing, marketing objectives, and financial projections. The information it contains can be a helpful guide in running the company. What's more, it can be a valuable tool to attract investors and obtain financing from financial institutions. Even if you have a good
business plan, your company can still fail, especially if you do not stick to the plan! Having strong leadership with focus on the plan is always a good strategy. Even when following the plan, if you had poor assumptions going into your projections, you can be caught with cash flow shortages and out of control budgets. Markets and the economy can also change. Without flexibility built in to your business plan, you may be unable to pivot to a new course as needed. The lean startup business plan is an option when a company prefers a quick explanation of its business. The company may feel that it doesn't have a lot of information to provide since it's just getting started. Sections can include: a value proposition, a company's major activities and advantages, resources such as staff, intellectual property, and capital, a list of partnerships, customer segments, and revenue sources. What are the 4 sections of a business plan?The four most important business plan sections for a basic business plan are:. Executive summary.. Marketing plan.. Key management bios.. Financial plan.. What are the 5 sections of a business plan?At their core, business plans have 5 basic pieces of information. They include a description of your business, an analysis of your competitive environment, a marketing plan, a section on HR (people requirements) and key financial information. The following is an explanation of the 5 key elements to a business plan.
What section of the business plan deals with the day to day activities of a company?Production Process Section. While you can think of the stage of the development part of the operations plan as an overview, the production process section lays out the details of your business's day-to-day operations.
What is the title of Chapter 1 in business plan?The executive summary is the first thing someone will read when they start making their way through your business plan, and that makes it vitally important.
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