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Writing a business plan for a new venture
A selection of talks on Management, Leadership & Organisation
Psychological barriers to negotiation
- Prof. Andrea K. Schneider
- Marquette University School of Law, USA
EVAN DOUGLAS: Hello, my name's Evan Douglas. I've been advising entrepreneurs on their business plans for many years now. This includes teams of MBA students entering and winning global business plan competitions, as well as advising other entrepreneurs who've been seeking venture capital or a place in a business incubator or a strategic alliance of some kind. The business plan should be designed for a specific purpose with a specific target reader in mind. In the following, you will learn the fundamentals of a good business plan and it's design. So let's get on with it.
We'll first sort out what we mean by a business plan, and go through the arguments for and against writing a business plan. There's been a debate about whether a business plan is a worthwhile expenditure of an entrepreneur's time because it takes a lot of time and money to write a business plan. And we really need to settle the issue up front, whether it's worth doing. We'll note that the business plan is part of a larger communication process. And then spend the rest of the session on the structure of the business plan, looking specifically at the contents of a business plan, what should be in it, what should not, what should be in the body of the business plan, what should be in the appendices, and so on. We'll emphasize the need for a business plan being short, clear, and looking good, brevity, clarity, and aesthetics. And also emphasize that a business plan must be continually improved and updated.
There's widespread difference of opinion about the benefits of business planning. Some business plans are simply descriptive accounts of what the managers plan to do, and are more like a simple roadmap of how the new venture will travel from point A to point B. But a business plan should be more than that. It should explore the territory and determine the best way from A to B. It starts with the process of opportunity recognition. A technology can be used to produce different new products or services, which one should we choose? Who is our target audience and why? Issues like this need to be derived rather than simply stated. A business plan is also an effective viability screening process, identifying all of the major risks, and assuring the target reader that the new venture is worthwhile taking forward. Since there is more than one way to take the new venture forward, the business plan should briefly consider the variety of different business models that could be used and justify the choice of the business model that is selected. And finally, the business model must identify the rewards to the entrepreneur and the investors, the rewards of engaging in the new venture.