Training course (PT)

 

Introduction

In fact, entrepreneurship goes beyond just setting a company and launching the business. The bedrock of successful entrepreneurship is the ability to come up with a great product or service. And to do that, the business person must become an expert at something, whether it’s complicated or simple.

Hence, entrepreneurship goes beyond starting companies. The entrepreneur has a vision for a new product/service, comes out with a business the solution to a problem, and is ready to take a risk to make his/her idea real.

According to Kraus and Schwarz (2007), a business plan is a “written form of the firm’s overall strategic plan, which aims to put in place tools, methods, and processes that identify and achieve the long-term goals of the business”.

The business plan is the most important management tool an entrepreneur has. It defines strategy, tactics, and specific activities for execution, including dates and deadlines, and budgets, and cash flow.  The business plan, when and where it is required, is like the calling card of the entrepreneur.  A good business plan guides an entrepreneur through each stage of starting and managing his business. The entrepreneur will use the business plan as a roadmap for how to structure, run, and grow your new business. It’s a way to think through the key elements of an entrepreneur's business.

Not planning the business would be like taking off from an airport without a destination in mind, a planned route, or knowledge of how much fuel an entrepreneur might need to get where he wants to go.

Planning enables the entrepreneur to figure out his focus and priorities—in other words, the entrepreneur’s business strategy. It helps to determine what entrepreneurs are going to do, and more importantly, what entrepreneurs are not going to do. It creates a roadmap and helps actually get things done.

Traditional and Lean planning

Most business plans fall into one of two common categories: traditional or lean startup.

The goal of the Lean Startup is to understand the right product to develop. The product to produce is what the customer wants to pay. The faster entrepreneurs are in this process the better their company will go.

Traditional business plans are more common, use a standard structure, and encourage entrepreneurs to go into detail in each section. Traditional plans tend to require more work upfront.

A business plan need

Starting a business without a business plan is just as risky.  So, one of the first pieces of advice given to entrepreneurs starting a business is: You need a business plan. Why?

• To have a clear statement of business mission and vision;
• It will help you to reach business milestones. A well-thought-out business plan helps to step back and think objectively about the key elements of your business and informs your decision-making as you move forward. It is essential whether you need to secure a business loan or not;
• Planning helps to steer the business. It guides through each stage of starting and managing the business. It’s a way to think through and detail all the key elements of how the business will run.
• Business Planning is important because it establishes the direction of the organization. When people plan before launching a business, they avoid many pitfalls that others do not anticipate. With many businesses failing within their first few years, a sound plan is like a compass to navigate through the obstacles;
• Business planning is proven to help you grow 30 percent faster. Writing your plan and reviewing it regularly gives you a better window into what you need to do to achieve your goals and be successful. Studies have shown that businesses that set goals and track their progress grow 30 percent faster than those who “just wing it.”
• To better understand customers. Why do they buy when they buy? Why don’t they when they don’t? An in-depth customer analysis is essential to an effective business plan and to a successful business;
• To Attract Investors. Investors will need a well-written document they can take away and study before they'll be prepared to make any investment commitment;
• Having a business plan to minimize risk. Creating and reviewing your business plan regularly is a great way to uncover your weak spots—the flaws, gaps, and assumptions you’ve made;
• The business plan helps to decide what steps must be taken first and what steps are most important. The steps down this road must be in a logical order;
• To avoid bankruptcy. The entrepreneur has a rational business model or a plan for how he plans to make money and stay in business;
• Business plans can help to bring on new business partners. It is the tool that will be used to persuade others that working with you is a smart decision.

References

1.   Haag, A. B. (2013). Writing a Successful Business Plan: An Overview. Workplace Health & Safety, 61(1), 19-29

2.   Kraus, S., & Schwarz, E. (2007). The Role of Pre-Start-Up Planning in New Small Business. International Journal of Management and Enterprise Development, 4(1), 1-15.

3.   Introducing Lean Planning: How to Plan Less and Grow Faster, By:  Noah Parsons. https://articles.bplans.com/introducing-lean-planning-how-to-plan-less-and-grow-faster/

4.   8 Reasons Having a Business Plan Is Important for Small Businesses, https://articles.bplans.com/reasons-business-plans-are-important/

5.   Why Is Planning Important? https://www.reference.com/business-finance/planning-important-f154fb21919ca9b1

6.   5 reasons you need a business plan. By Allen Gutierrez on December 10, 2018. https://www.sba.gov/blog/5-reasons-you-need-business-plan.

7.   Why You Should Write a Business Plan, BY SUSAN WARD. Updated November 20, 2019 https://www.thebalancesmb.com/why-write-a-business-plan-2948013