The emergence of the business plan - Free Essay Example

Sample details Pages: 10 Words: 3135 Downloads: 2 Date added: 2017/06/26 Category Business Essay Type Narrative essay Did you like this example? In todays environment, the business plan is the entrepreneurs most important document when setting up a new business. No company can express its business goals or secure financing without the help of a well-conceived and well-presented business plan. Without a business plan, it is almost impossible for someone to take your business idea seriously or even consider investing in it. Don’t waste time! Our writers will create an original "The emergence of the business plan" essay for you Create order Because this thesis is about setting up a business plan for the start-up of a new kind of social network, we will first start with an overview about the concept business plan throughout the literature. In this literature study the term business plan is defined as well as the main functions of the business plan followed by an overview of the typical structure of the business plan. Furthermore, a problem discussion on the topic business plan in the literature is displayed. In the next part the main focus will lay on the composition of the financial plan. Subsequently, in the section Location Based Social Network a brief explanation is given about LBSN to give the reader an idea about what the business idea is all about. An entrepreneur willing to start his own enterprise stands before a lot of obstacles. Building up a company does not happen over one night. Theoretical framework Introduction There was a time that entrepreneurs only had to write a letter to propose the ir business idea and send it to some investors to secure funding. Nowadays, investors are far more demanding and expect a far higher level of expertise and preparation from the entrepreneurs they choose to fund. Eugene Kleiner, a legendary venture capitalist states that when examining a proposal, investors want to see much more than just a good idea and a bright young man or woman: they want to see a business plan showing that the concept has been thoroughly assessed and that the entrepreneur has carefully thought through the issues for taking the necessary steps of taking the idea and transform it into a successful company. The term business plan is a word that found its origin during the Second World War period. Back then it was mostly used to define the long term strategies of big firms. The Business Plan was a highly confidential document and was only exposed to a very limited audience. During the 80s the term business plan became more popular and it was then that the first a rticles appeared discussing the issues behind the business plan. From that decade on, the term business plan was mainly used to indicate the start-up of new and emerging companies. (Karlsson, 2005). This may be the reason that when the term business plan is mentioned the first image that crosses peoples minds is the start-up business, which has not to be especially so because The Ernst and Young Business Guide (1987) points out that even established firms can have formal written business plans to determine or evaluate the accomplishment of business goals. . Definition of a Business Plan The literature on the topic business plans is awash with information. Essentially these definitions have all the same meanings. Abrams Barrow (2005) define the business plan as a roadmap to the companys targeted destination. Ideally, it enables the entrepreneur to get from the basic business concepts to a healthy, successful business. Barringer (2009) describe it as a written document that carefully explains every internal and external aspects of a new venture (Barringer, 2009, p. 1) The format of the business plan The format of the business plan depends mainly on the purpose for which the BP is elaborated. (Barringer,2008) For instance, a BP for a start-up business wanting to raise funds may somewhat differ from that of a business in expansion or from one designed to establish the feasibility of a venture. Mason and Stark (2004) argue that whether the entrepreneur is pursuing capital from a bank, a business angel or even a venture capi talist, the format of the business plan should be adapted accordingly. So we can conclude that depending on what purpose the business plan serves, i.e. to raise capital or for internal purposes, the emphasis on the topics will be different. The format will also depend on the firms level of development. For example, a start-up firm will not be able to dwell much about the companys history or past successes. Uses of the BP Abrams and Barrow (2005) argue that they see creating a business plan more as an opportunity rather than a chore. While developing the business plan, it gives the entrepreneur the chance to: 1) Learn about the industry and the market. When setting up the business plan the entrepreneur will have go through the process of writing a marketing plan. No matter how good the business idea is, without effective marketing the venture will not succeed. The marketing planning process is an opportunity for the entrepreneur to get hold of some facts of the market. After doing the market research the entrepreneur should have some valuable insights in who are the most important competitors, who will be the main customer. The main topics that will have to be investigated are facts about the industry, for instance what is the market size, restrictions entering the market. Who will be your main customer, who is the main competition, and so onÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ 2) Getting control over the business. While developing the business plan, one will increase the understanding of the many forces that have an impact on your businesss success, which in turn will give a stronger sense of control. For example in the Financial Plan: By realistically projecting Sales Forecast and a Profit and Loss Forecast you will get a better understanding in what drives the main streams of revenue. 3) Obtain a competitive edge. Evaluating the competition and your businesss strengths and weaknesses provides you with a better sense of how to position your b usiness in relation to competitors. Developing a business plan enables the entrepreneur to: Make the crucial business decisions that focus the entrepreneurs activities and maximize his resources. Understand the financial aspects of the business, including cash flow and break-even requirements. Gather crucial industry and marketing information. Anticipate and avoid obstacles the business is likely to encounter. Set specific goals and measurements to assess progress over time. Expand in new and increasingly profitable directions. Be more persuasive to funding sources. To write or not to write a business plan. The relationship between Pre-start-up Formal Business Plans and Post-start-up Performance The opinions on the topic whether a business plan is a useful document or whether it is more a waste of time are not unanimous throughout the literature. Despite a lot of researches that have been conducted within this field, the efficiency of the BP still has n ot been proved empirically. The word efficiency in this particular circumstance means that it has not been proved that the Business Plan will help a new venture in succeeding. According to Abrams and Barrow (2005) a good business plan for a sound business concept helps achieving the business goals. Furthermore, it saves you time and money by focusing your business activities, giving you more control over your finances, marketing, and daily operations, and helps you raise the capital you need. Or as Eugene Kleiner states: Even if you have all the money you need, you still need a business plan. A plan shows how youll run a business. Without a plan, you dont know where youre going, and you cant measure your progress. It typically takes several weeks to complete a good plan. Most of that time is spent in research and re-thinking ideas and assumptions. But the real value of creating a business plan is not in having the finished product in hand; rather, the value lies in the process of researching and thinking about your business in a systematic way. The act of planning helps you to think through things thoroughly, study and research if you are not sure of the facts, and look at your ideas critically. It takes time now, but avoids costly, perhaps disastrous, mistakes later. The adversary: Although it has not yet been proved that the Business Plan effectively helps a new venture in succeeding, it has been proved that there is no relationship between the BP and performance. A study conducted by Lange et al. examined whether writing a business plan before launching a new venture affects the subsequent performance of the venture. The dataset comprised 116 new ventures started by Babson College alums who graduated between 1985 and 2003. The analysis revealed that there was no difference between the performance of new businesses launched with or without written business plans. The authors suggest that unless a would-be entrepreneur needs to raise substantial s tart-up capital from institutional investors or business angels, there is no compelling reason to write a detailed business plan before opening a new business. Instead, Lange et al. (2007) suggest that entrepreneurs should make financial projections, especially cash flow. It means that they should look at expected sales revenue and operating costs including material, labour and capital assets and open their business. That advice implies that they should do business planning but not write formal plans before starting their businesses. Then, if their business grows and needs external funding, they will be able to write a business plan that is more persuasive. . Many business people or entrepreneurs defend that the time that is needed to produce a formal written BP, would be better spent on pushing the new venture forward instead of writing a plan that no one will read. (Allen 2006) This might be true if we take into consideration that the venture capitalist or the firms that provide finance to businesses receive piles and piles of business plans and have no time to read them all. Furthermore, it is a fact that if you want your BP to be noticed by investors, the chance is greater if you get a personal introduction, instead of approaching them on your own (Barringer, 2008). This is definitely the case for all businesses in China. If you want to look for capital, or even if you just want to do business, you will need Guanxi. Guanxi literally means relationships, and is the basis for conducting succesfull business in China. If you have the right connections and build a network they can indirectly link you to new acquaintances and informati on resources, thus helping you to develop other right Guanxi you need. Since Guanxi and relationship could function as an information network, companies with wide Guanxi and relationship networks often have much higher performance than companies with little or no relationship with the Chinese. We can state that is not about having a good or a bad business plan per sà © to secure finance but more about knowing the right people. This is why startup businesses have the disadvantage over established firms because they may not have such contacts. Three functions of the Business Plan According to the Ernst Youngs Business Plan Guide (1987) a business plan serves three functions: Determine the Viability of the Future Business First, and foremost, it is a plan which can be used to develop ideas about how the business should be conducted. It is a chance to refine strategies and make mistakes on paper rather than in the real world by examining the company from all perspective s, such as marketing, finance, and operations. Determine/Evaluate the Accomplishment of the Business Goals Second, a business plan is a retrospective tool, against which a businessperson can assess a companys actual performance over time. For example, the financial part of a business plan can be used as the basis for an operating budget, and can be monitored carefully to see how closely the business is sticking to that budget. In this regard, the plan can and should be used as the basis for a new plan. After some time has elapsed, and thereafter on a periodic basis, the business plan should be examined to see where the company strayed, whether that straying was helpful or harmful, and how the business should operate in the future. Raising finance The third reason for writing a business plan is the one most people think of first, that is, to raise money. Most lenders or investors will not put money into a business without seeing a business plan. Since this business pla n is written in order to raise finance, its ultimate test will be how much interest it can generate from reviewers in as little time as possible. Therefore it should convey the companys basic goals and methods in a clear, readable, and light digestible form. Putting the Plan to Work Evaluating the business plan Sources of Finance Business Angels Attracting Human Capital Zetterberg, Christer assigns In How to write a successful business plan a practical guide (2004) another internal function to the business plan: it will also be a tool for attracting human capital. It is not uncommon that a potential employee wants to see the companys business plan before making a decision whether joining or not. The external stakeholders category includes investors, potential business buyers or partners, potential customers, government and potential workers. Because each of the mentioned stakeholders has its own interest in the business, BP should be produced taking into accoun t all of these stakeholders. Business Plan Structure The Executive Summary The most important section of the business plan, the executive summary, is the first part of the plan that is going to be read by a potential investor or lender. Time is money for businessman and businesswomen and although you can have spent three months at preparing the plan, the cold, hard fact is that an investor or lender can dismiss it in less than five minutes. Therefore it is crucial that this part is very clear and gives a compelling distillation of the business so that the reader will be persuaded to wade through the rest of the plan. A typical venture capitalist can expect to read more than 1000 business plans in a year. Andrew Anker, partner of August Capital one of Americas most respected venture capital firms- explains: The first thing I read are the first two paragraph of the executive summary. If I cant be dragged in, there is no way the next five million people can be dragged in. It doesnt take me more than one minute to decide whether a business is interesting or not. The Summary reflects the results of the entire planning and should be crafted after having considerated all the other aspects of the business, so it has to be written last. The topics that have to be included in the executive summary are everything that would be covered in a five-minute interview. The following fundamentals of the proposed business have to be explained and formulated in a positive and confident tone: What will your product be? Who will be your customers? Who are the owners? What do you think the future holds for your business and your industry? If applying for a loan or pursuing investors capital, there has to be clearly stated how much money is needed, how it is going to be used, and how the money will make the business more profitable, thereby ensuring repayment. For example, an investor interested to fund a start-up company will be interested in seeing the potentialit y of the business in terms of return of the capital and how the risk will be minimized. Business Description To be completed Strategic planning is part of the ongoing management job. The plan itself is only a snapshot; planning should be going on all the time. George James Former Sr. CFO Levi Strauss Co. Location Based Social Networks 3.0 The Financial plan: Nobody plans to fail but many fail to plan This expression is to be interpreted in many ways but according to the authors of Corporate Finance it means that the failure is often attributable to a lack of systematic management. The problem with a lot of entrepreneurs is that they are most often does rather than writers. They prefer the action doing business than behind their desk drafting up business and financial plans. Financial reports display the financial status of the company. When will the company be profitable, how much cash will the company be generating, what is the value of the company? The fina ncial plan gives answers to these questions. This information is also valuable the relations outside the company like banks, investors, customers, the government. Parts of the financial plan: Profit and loss account The profit and loss account is one of the four basic statements that a company has to make. It keeps track of the financial result for a certain period in time. It answers the basic questions about the financial performances of a company such as: How much money did the company make? The profit and loss account comprises, as the name suggests two categorys in the profit and loss account, namely revenues and expenses. There are a lot of terms for revenue: sales, turnover, return, income,ÃÆ' ¢Ãƒ ¢Ã¢â‚¬Å¡Ã‚ ¬Ãƒâ€šÃ‚ ¦ Costs arise from using the production resources. Costs can be booked referring to the costs they rely with, like the costs of goods sold. (COGS) Or they can be booked in the period the costs are incurred. And finally costs can be booked so that a at tribution to the period is displayed. According to Cornwall et al. (2005) A written business plan is virtually a universal requirement for entrepreneurs who are seeking formal venture capital. However, very few entrepreneurs ever have formal venture capital in hand at the moment they start their ventures Bygrave and Hunt (2004), for example, estimated that fewer than one in 10 000 new ventures are funded at the outset with formal venture capital. Thus it is puzzling why so many entrepreneurs bother to write business plans if the principal purpose of a plan is to raise venture capital, because in almost every case they come up empty handed. Part of the explanation may be that there are other financing sources, such as angels, bankers and corporate strategic partners that require written business plans from entrepreneurs. It seems unlikely that the pursuit of financing is the sole justification for writing a formal business plan. Timmons et al. (19 85) in successive editions of New Venture Creation: A Guide to Entrepreneurship and in a Harvard Business Review article (Timmons, 1980) argued that a business plan is much more than a fundraising device. It has intrinsic value in articulating what the opportunity conditions are, why the opportunity exists, the entry and growth strategy to seize it, and why you and your team have what it takes to execute the plan. In a study of 65 participants who completed a business plan, Wyckham and Wedley (1990) found that 46 used it as an internal planning document, 32 used it as a marketing plan, 27 to get financing and 12 to attract a partner. Many used it for more than one purpose.

Project Cost Management - 1667 Words

|MBA 513 – Project Cost Management | |Project Manager: Manager or Leader? | |How the collaboration of management and leadership skills makes a great Project Manager. | | Ednaline Concepcion | |12/12/2009 | To Be or Not To Be†¦A Successful Project Manager There is no question that one of (if not) the most important aspect ultimately determining of project success†¦show more content†¦Leadership is multifaceted. There are some individuals that are great visionaries who excel at exciting change in people. Too often though, these same people lack the discipline or patience to deal with the day-to-day grind of managing. Likewise, there are other individuals who are very well organized and methodical but lack the ability to inspire others. The SBA also states that â€Å"managers are very good at maintaining the status quo and adding stability and order to our culture† while â€Å"leaders are very good at stirring people s emotions [and] raising their expectations† (SBA 2009). Having the capability to maintain project stability while empowering those involved toward effective project completion, are invaluable traits to any successful project manager. By reinforcing these abilities effectively overtime, the project m anager can better recognize the need to manage interfaces and sustain social networks throughout the term of production. Don’t Forget About Your Project Stakeholders As stated prior, project success depends on the cooperation of a wide range of individuals, many of whom do not directly report to managers themselves. A significant project will likely involve in one way or another working with a number of different groups of stakeholders. Depending on the nature of the project, there are a number of different groups outside the organization that influence the success of the project. 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Treibacher Industrie Free Essays

Treibacher Industrie, A. G. v Allegheny Technologies, Inc (2006) Facts: The case proceeded to a bench trial, where TDY and Treibacher disputed the meaning of the term â€Å"consignment†-the delivery term contained in both contracts. We will write a custom essay sample on Treibacher Industrie or any similar topic only for you Order Now ? TDY introduced experts in the metal industry who testified that the term â€Å"consignment,† according to its common usage in the trade, meant that no sale occurred unless and until TDY actually used the TaC. Treibacher introduced evidence of the parties’ prior dealings to show that the parties, in their course of dealings (extending over a seven-year period), understood the term â€Å"consignment† to mean that TDY had a binding obligation to pay for all of the TaC specified in each contract but that Treibacher would delay billing TDY for the materials until TDY had actually used them. TDY now appeals. ? TDY contends that, under the CISG, a contract term should be construed according to its customary usage in the industry unless the parties have expressly agreed to another usage. TDY argues, in the alternative, that the district court erred in finding that, in their course of dealings, Treibacher and TDY understood the term â€Å"consignment† to require TDY to use and pay for all of the TaC specified in each contract. ? Finally, TDY contends that, if we uphold the district court’s ruling that TDY breached its contracts with Treibacher, we should remand the case for a new trial on damages on the ground that the district court erroneously found that Treibacher reasonably mitigated its damages. SUMMARY AND FINDINGS A) By analysis of the CISG, which governs the formation of and rights and obligations under contracts for the international sale of goods. ? CISG, arts. 1, 4. ?Article 9 of the CISG provides the rules for interpreting the terms of contracts. ? Article 9(1) states that, â€Å"parties are certain by any usage to which they have agreed and by any practices which they have established between themselves. † ? Article 9(2) then states that, â€Å"parties are considered, unless otherwise agreed, to have impliedly made applicable to their contract which under international trade and well known? All parties to contracts of the type involved in the particular trade concerned. † ? Article 8 of the CISG governs the interpretation of the parties’ statements and conduct. ? A party’s statements and conduct are interpreted according to that party’s actual intent â€Å"where the other party knew ? what that intent was,† CISG, art. 8(1), but, if the other part y was unaware of that party’s actual intent, then â€Å"according to the understanding that a reasonable person ? would have had in the same circumstances,† CISG, art. (2). ? To determine a party’s actual intent, or a reasonable interpretation thereof, â€Å"due consideration is to be given to all relevant circumstances of the case including the negotiations, any practices which the parties have established between themselves, usages and any subsequent conduct of the parties. † ? CISG, art. 8(3). Which Treibacher’s materials in consignment store, published usage reports and invoices to support the order made. One of evidence to goods receive parties are known the action made. In arguing that TDY knowing the term’s customary usage takes precedence over the parties’ understanding of that term in their course of dealings, in which states that, â€Å"parties are considered, unless otherwise agreed, to have made applicable to their contract† customary trade usages.? In support of its argument, TDY can points it out anytime when they are question and revise the contract in between themselves. If not, intended the word â€Å"agreed,† in article 9, to mean express agreement, as opposed to silent agreement by course of conduct. ? B)? The district court did not commit clear error in finding that, in their course of dealings, TDY and Treibacher defined the term â€Å"consignment† to require TDY to accept and pay for all of the TaC specified in each contract. ? The parties do not dispute that they executed, between 1993 and 2000, a series of contracts in which Treibacher agreed to sell certain hard metal powders, such as TaC, to TDY. ? Which TDY has number of times to discuss the contract and terms, also whereby how Treibacher agreed to sell a fixed quantity of materials at a fixed price for delivery to â€Å"consignment. In additional, some of material needs to install upon TDY’s request and all the logistic issue follow in between Treibacher and TDY such kept the materials it received from Treibacher in a â€Å"consignment store,† where the materials were labeled as being from Treibacher and segregated from other vendors’ materials with all the usage report and record. ?In each instanc e, TDY ultimately withdrew and paid for the full quantity of materials specified in each contract. Obviously they had been communicated each other for the order. In regards of damages claims, the district court did not commit clear error in finding that Treibacher reasonably mitigated its damages. ? The CISG requires a party claiming breach of contract to â€Å"take such measures as are reasonable in the circumstances to mitigate the loss. †, but it places the burden on the breaching party to â€Å"claim a reduction in the damages in the amount by which the loss should have been mitigated. † ? In sum, the district court properly determined that, under the CISG, the meaning the parties assign to a contractual term in their course of dealings establishes the meaning of that term in the face of a conflicting customary usage of the term. Which in the normal practices for order and the judgment of the district court is affirmed.? The district court was not clearly erroneous in finding that Treibacher and TDY understood their contracts to require TDY to purchase all of the TaC specified in each contract and that Treibacher took reasonable measures to mitigate its losses after TDY breached. ? How to cite Treibacher Industrie, Essay examples

Graduate Labour Market Statistics

Question: Describe about the Graduate Labour Market Statistics. Answer: Introduction It is said that the development of any country depends on the educated youth of that country. This is very true because a qualified individual acts as a boon in the development and upliftment of the country. In this particular analysis on the graduate labor market of UK, it is analyzed that how can the educated resource be consumed in an organization to produce optimum output (Blundell, 2014). To make the picture clearer the Graduate Labor Market Information (LMI) helps in many ways. Through LMI the present or the current economic position of the employment sector and the employment situation of the graduates can be recorded. It looks at the capabilities of the recent graduates and the factors which are considered by the employers and various economic consultants for the future growth in the employment sector. LMI includes the final destination of the graduate, the average salary to start with, and the latest or current trends which are applicable in employment sectors along with the manner of recruitment (Branine and Avramenko, 2015). All the above information can be supportive to make a correct career decision. Terms of reference To analyze the graduate labor market, the necessity of the Labor Market Information (LMI) plays an important factor (Lim, 2015). It arises a need for Professional development Planning (PDP). PDP is the concept through which the plans can be evaluated. Planning plays a vital role in each and every step of our life, without proper planning the desired result may not be achieved. So to enhance our chances of career success we should plan first (Green and Henseke, 2016). Another important factor about the concept of PDP is that it should be highly individualized, which states that the plans may be inspired by others but they need to work for an individual only. So plans should be made keeping in mind your preferences, priorities and tastes. The theory of PDP works on the concept of exploring various trends which help to grab the available opportunities and to know about the skills and experience required to achieve the desired goal. Planning should be considered as a living document. Pla ns should be kept updated; they should be referred on regular basis. Plans help us in self- assessment which is very critical in the development of our core skills. Methodology The current analysis is related to the educated labor market conditions in the UK. The study describes the factors which affect the educated youth of the country (Lee and Trappmann, 2014). It states whether the manual resource of the country is utilized properly or not. The major topic of concern is to ensure proper employment and wages to the employed people. Proper approach and appropriate strategy were taken into consideration. Many business institutions were referred and bulletins were studied. The main motive behind the research was to develop a proper planning system through which the employers and the employee will be benefitted. During the research mainly two types of data were collected -Primary data which is collected by conducting various surveys and getting information from the human nature. -Secondary data which is obtained from sources like journals, bulletins of various business houses and management institutes. Key findings There is absolutely no scarcity of information from different sources which demands a necessity for graduate labor management. Although it may be sometimes confusing, seeming contradictory and often unreliable. But data should be studied thoroughly and should be applied in a useful and meaningful manner. An overview of Graduate Labor Market Statistics (GLMS) as published by Department for Business Innovation Skill states that in 2015 graduates as well as post- graduates were employed in large numbers, resulting in an increased employment ratio (Klinthall and Urban, 2014).Another statistics shared states that the average salary for young graduates increased in 2015 and there is increase in the employment rate to 4.4% in 2015 as compared to 2.7% in 2008. Similarly remarkable results were published in the statistical report of UK Labor Market by the Office for National Statistics in February 2016 (Kluve, 2014). Therefore through these statistics analysis of UK labor market depicts many strengths and weaknesses which can be elaborated under certain heads. Firstly certain strengths to be discussed are as follows: -A remarkable increase in employment rates, unemployment rates and inactivity rates. -The skilled employment rates and median salaries have risen. -Awareness among the educated youth in the country takes a major place for their professional development planning. Fig 1: Increment in employment rate of graduate labor of UK. Source: (market-statistics-Q2-2015.pdf) Fig 2: Rise in salaries of graduates of UK. Source : (market-statistics-Q2-2015.pdf). Though the level of employment has increased, but certain factors clearly state the weaknesses also such as: -The earnings did not match with the expectations of the graduate employees. -A significant income difference has been created amongst the graduates. -Certain specialized areas of knowledge such as education and public services are usually reserved for females, which result in gender indifferences in an occupation as well as income. -Indifferences can be seen by color also. The black have lower rates of employment and wages as compared to white graduates. -Graduates studying science, engineering, English, math have high employment rates. Conclusion In the above analysis, about the UK graduate labor market, what factors were responsible for ranges in salary, what skills and theories should be employable etc. were highlighted. Finally, as a coin has two faces similarly this analysis has certain strengths and weaknesses. The hard work applied or the urge to chase the desired objective acts as our strength. Whereas the stress felt in case of a failure is the major weakness of this planning policy. Everyone is a performer but things may not become favorable all the times. For facing that situation flexibility is required to handle changes.To conclude the analysis, planning appeared as an effective tool for development of the educated labor and it should be kept close to hand and worked on regular basis. 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