competencies in entrepreneurial development and small business management. It also provides you the desired knowledge, skills, and competencies that. Small Business Management Entrepreneurship and Beyond FIFTH EDITION TIMOTHY S. HATTEN Mesa State College Australia • Brazil • Japan • Korea. Entrepreneurship and Small Business Management Business Ethics. [Pdf] Available at: pdf>.
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This article reviews the case for business schools becoming more seriously involved in teaching and research in the field of entrepreneurship. Title: Entrepreneurship and small business: start-up, growth and maturity /. Paul Burns. Small business—Case studies. Managing change and uncertainty. 5. Experiences in Entrepreneurship ancl small Business fulanagement is . entrepreneurship and small business management are the next best thing to being.
Values represent the deepest level of culture. There is assumed to be a two-way underlying factors, by shifting to a less causation between changes in the level of centralized industry structure than has been the entrepreneurship and those in the level of case in other countries Audretsch et al. Linda L. I prefer to use these terms interchangeably. Often we are unaware that we are learning cultural lessons as we observe our parents, friends and family. Everyone is creative to some degree however; as is the case with many abilities and talents e.
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Related Papers. Entrepreneurship and economic performance: By Lorraine Uhlaner. By Akhilesh Yadav. The Impact of Entrepreneurship on Economic Growth. By omer A sayed. Entrepreneurship and its conditions: Download pdf. Remember me on this computer.
Enter the email address you signed up with and we'll email you a reset link. Such innovations often require the longest time period between initiation and market implementation because of the need for testing and modification. Major Innovation Myths Presented next is a list of the commonly accepted innovation myths, along with reasons why these are myths and not facts.
Myth 1: In truth, innovation is unpredictable and may be introduced by any one. Myth 2: Thorough preparation often takes too long. Myth 3: Accomplished innovators are very practical people and create from the opportunities left by reality--not daydreams. Myth 4: This myth has been proven false time after time again.
Larger firms are now encouraging their people to work in smaller groups, where it often is easier to generate creative ideas. Myth 5: Technology is certainly one source for innovation, but it is not the only one. Moreover, the customer or market is the driving force behind any innovation. Market-driven or customer-based innovations have the highest probability of success. A good example is found in Polaroid's polar vision, a television camera that allowed for instant playback of the film.
Polaroid hit the market with this technological advance at the same time videocassette recorders arrived. This result: Polaroid's product was rejected, and the company lost millions of dollars.
These principles can be learned and, when combined with opportunity, can enable individuals to innovative. The major motivation principles follow: Innovators always must be active and searching for new ideas, opportunities, or sources of innovation. People must readily understand how the innovation works. Innovators always must keep the customer in mind.
The more an innovator has the end user in mind, the greater the chance the concept will be accepted and used. Innovators should not attempt a project or development on a grandiose scale. They should begin small and then build and develop, allowing for planned growth and proper expansion in the right manner and at the right time.
Innovators should aim high for success by seeking a niche in the marketplace. Innovators always should follow the rule of try, test, and revise. This helps work out any flaws in the product, process, or service. Innovation does not guarantee success. More important, failures often give rise to innovations. Every innovator should follow a schedule that indicates milestone accomplishments.
Although the project may run ahead or behind schedule, it still is important to have the schedule in order to plan and evaluate the project. This principle applies more to those involved in seeking and motivating others to innovative. Innovative activity should be rewarded and given the proper amount of respect. This also means tolerating and, to a limited degree, accepting failures as a means of accomplishing innovation.
Innovative work must be seen as heroic activity that will reveal new horizon for the enterprise. This is a simple but accurate exhortation with which to conclude the innovation principles. It takes work, not genius or mystery, to innovate successfully. Since there is no definitive measurement developed that makes an entrepreneur successful, each individual need to carefully evaluate his or her situation though several methods of self-assessment models and develop the method or steps when he or she to start a new venture.
Although a variety of backgrounds are very important for the success of entrepreneurs, only a few backgrounds have differentiated the entrepreneur from the general populace or managers. These backgrounds include childhood family environment, education, personal values, age and work history. Generalized Research Results. Birth Order -Most female executives tend to be the firstborn. Because the first child receiving special attention and thereby developing more self-confidence.
Relationship with Parents-from parents that are supportive and encourage independence, achievement, and responsibility. It also can be used to differentiate entrepreneurs from managers, unsuccessful entrepreneurs, or even from the general public. Important to differentiate between entrepreneurial age the age of the entrepreneur reflected in the experience and chronological age. But, it is generally easier to start a second, third, or fourth venture than it is to start the first one.
The process of starting a new venture is embodied in the entrepreneurial process which involves more than just problem solving in a typical management position. Once the entrepreneur has been appraised his or situation, he or she will find, evaluate, and develop an opportunity by overcoming the forces that resist the creation of something new. The process has five distinct phases: Before any strategic decision can be out lined, an individual must establish realistic and specific goals.
These goals must respond to the question; where do I want to go? What and When I want to accomplish? Goals are the targets or ends that one wants to reach. A goal is broad statement of the ultimate results of the change being undertaken. These goals must be written. Goals that are not written down are not much better than wishes. There is no common understanding regarding the difference between goals and objectives. There are three views regarding the similarities and difference of the two terms.
The first view argues that goals are more specific than objectives. Rather goals are operational specific objectives. Griffin, The other category discussed that goals are broader than objectives. On the other hand, Objectives by definition are. Objectives must:. The third category noted that objectives and goals are one and the same, so we can use them interchangeably. I prefer to use these terms interchangeably.
Individual or organizational goal can be arranged in hierarchy: In chapter one, we have covered analysis of personal strength and weakness. With this understanding as a foundation, the individual must then establish his own vision and mission. A vision is a mental image of a possible and desirable future state of the individual. The best visions are ideal and unique. If a vision conveys an ideal, it communicates standard of excellence and a clear choice of positive values.
If the vision is also unique, it communicates and inspires pride in being different from other individuals. Mission statement- Are based on vision that outlines the individual's purpose, premises, values and directions in a relatively specific manner. Operational objective. Their concern is with short-term issues associated with the tactical goals.
These goals more detail and are based on tactical goals.
Individuals may set different kind of goals at one time and sometimes can experience conflict or contradiction among goals. Goals can be:. Individuals must have the concept of prioritizing goals. Prioritizing goals optimizing involves balancing and reconciling possible conflicts between or among goals.
Goals conflict with one another since there is limitation of resources time, finance, and other recourses. Hence, the individual must look for inconsistencies and decide whether to pursue one goal to the exclusion of another or to find a midrange target between the extremes. Neglecting one of these guidelines minimizes the probability of achieving the goals.
Specific- With specific goals you can clearly see what it is you want to achieve and have specific standard for that achievement. In making your goals specific it is important that you actually write them is crucial in all goal-setting guidelines. For example, when you set a goal regarding scoring a mark on a subject, don't say just to score good mark, rather make specific what good mark mean to you.
Measurable- For a goal to be measurable you need a way to measure the progress and some specific criteria that will tell you when you can stop and when the goal is achieved. Feeling the progress is important for you to stay motivated and enjoy the process of achieving the goals. Attainable- An attainable is a goal for which you see a realistic path to achievement and reason that you get there.
This does not mean that the lower you aim the more likely you reach success. It is well known that goals that work best have a challenge in them. They are chosen as ambitious as possible, but still attainable.
Rewarding - a goal is rewarding when you have clear reason why you want to reach the goal.
It is advisable to have your specific reason and expected rewards in writing. Imagine how you are going to feel when the goal is finally achieved. This will ensure that the goal is really worth achieving. Then, when every time you get stuck and do not feel motivated enough, read your reasons. This is a known and very powerful practical technique of how to get through difficult moments and not quit.
Time bound- The final requirement of goal setting guidelines is that your goal should have a specific time limit. Time is the price you pay for the reward form achieving a goal.
Setting the deadline will protect you from paying higher price than the goal is worth. This is also your protection from procrastination. They provide guidance and a unified direction for people. Goals can help everyone understand where the individual is going and why getting there is important. Goal setting practice strongly affects other aspects of planning. Effective goal setting promotes good planning and good planning facilities future goal setting.
The strong growth goal encourages individuals to plan for development by looking for opportunities. Similarly, they must also be alert for competitive threats and new ideas that will help facilitate future development.
Goals can serve as source of motivation. We need to decide what we want to achieve so that we can plan how to get there. Once we know a desired outcome, we can gain greater concentration, constantly focused on our desired future performance. Goals that are specific and moderately difficult can motivate people to work harder, especially if attaining the goal is likely to result in rewards.
Setting goals help minimize costs. Because objectives should be stated before we begin to exert our resource, time and effort, they provide us the means to organize our efforts toward accomplishing the desired objectives successfully. Goals provide an effective mechanism of evaluation and control.
The major purpose of goal setting is to improve performance. By clearly stating the results we want to accomplish, we can identify if we have gained the appropriate skills and knowledge. This means that performance can be assessed in the future interest of how successful today's goals are accomplished. Goal setting involves certain logical and interrelated tasks. Some of the procedures are noted below. But you can use your own procedures. Outline the action plan including activities, responsibilities and timeframe.
Culture or sub-culture of a given country or region or ethnic group places a greater influence on the emergence and development of entrepreneurs. Culture in its broadest sense definition refers to that part of the total collection of human action and its products which is socially, as opposed to genetically transmit. A very popular definition is that of Edward Burnet Tyler: Culture of civilization is that complex whole which includes knowledge, belief, art, moral, law, custom, and other capabilities and habits acquired by man as a number of societies.
Culture is also defined as a shared set of beliefs, values, and patterns of behavior common to all groups of people. Most cultural lessons are learned by observing and initiating role models as we go about our daily affairs.
Often we are unaware that we are learning cultural lessons as we observe our parents, friends and family. When we enter a work environment, we are usually young adults, with most of our values firmly ingrained. We will become socialized to the practice of our new work environment, but that is only in the context of the culture in which we have grown up and lived. National cultures differ mostly at the level of basic values and affect ways of management in those countries, as well as way of managing individuals from those countries.
Since much of culture operates outside our awareness, frequently we do not even know what we know. We consciously learn what to notice and what to not to notice, how to dived time and space, how to walk and talk and use our bodies, how to behave, as men or women, how to relate to others, how to handle responsibility, where experience is seen as whole or fragmented.
Let us consider the following particular points in our cultural setting regarding entrepreneurship. Values represent the deepest level of culture. They are broad feeling, often unconscious about what is good or bad, beautiful or ugly, normal or abnormal.
Undoubtfully, the culture, which gives greater value for those who create and manage their own business, promotes entrepreneurship. But there could be a culture that leaves entrepreneurship for academic misfits. So evaluate the value given to our businessmen. Compare the values given to an ordinary merchant with that of an externally employed manger of any local firm. Upon informal research conducted on college students, it was found that there are about II-words, which are used to disgrace the value of the businessmen by associating such.
Unfortunately, there were only 4-words used to praise those who create their own business. Really these words are the manifestation of our culture that discourages entrepreneurship.
As frequently stated, creating and managing one's own business require devotion of time. Time is limited and freely given resource to all equally. Japanese are very conscious of time and expect people to be punctual for appointments. Let you think of something about time. How do you value your time? Suppose you lost your ten Birr and missed a half-day in doing nothing. Which event makes you to feel more?
The attitude toward effective usage of time affects venture creation. What do you feel if you find an instructor while using Anbessa City Bus? What nickname do you give to a person who is exacting in saving? Do you think that your social life the role that you have to play in the surrounding affects your future determination?
Do not go far! Just consider greetings! Japanese greet each other with a bow bend over , the lower the bow the more respectful the greeting. They don't shake hands normally, but in business circles, they will live with nations.
Americans normally can combine a bow and a handshake when meeting Japanese, the bow coming first, shaking hands lightly, not firmly. Many Chinese prefer not to even shake hands and would rather give a moderate bow. How does that compare to our tradition of a strong handshake? Our behavior of receiving and forward feedback is extremely influenced by our culture. What do you feel if someone gives feedback on your weak side? What is your response when you see individuals doing wrong regardless of your personal interest you have with the individual?
Men are often motivated by the desire to control their own destinies to make things happen. This drive often stems from disagreements with their bosses or a feeling that they can run things better. In the filed of their ventures, men more often are recognized specialists in their fields or have attained competence in a variety of business skills.
In addition, their experience is often in manufacturing finance or technical areas. Women tend to be more motivated by independence and achievement arising from job frustration in not being.
Women often leave a previous occupation with only a high level of job frustration and enthusiasm for the new venture rather than experience making the transition more difficult. Most women usually have administrative experience which is limited to the middle- management level usually in more service related areas such as education secretarial work, or retail sales. Women are more likely to start a business in a service related area-retail public relations educational services where men are more likely to enter manufacturing construction, or high- tech fields.
The result is often smaller female-owned businesses with lower net earnings. There are certain personality types, which can lead even the brightest entrepreneurs with the best ideas into bankrupting. An entrepreneur with an excess of non-entrepreneurial characteristics may need to modify it in order to have a higher probability in successfully launching a new venture. Eight of these personality types are profiled as follows. Simplicity sues - is an entrepreneurial type who always thinks everything a lot simpler than it is to create a successful business through one or more easy solutions.
This entrepreneur can make even the most impossible deal seem possible. Shotgun some - is an entrepreneurial type who quickly identifies new promising business opportunity but rarely he ever follow through on the opportunity to create a successful new venture.
Prima Donna Paul-is an entrepreneurial type who is so in love with his own idea that feels everyone is out to take his ideas and take advantage of him while the true entrepreneur seeks out feedback from other actively.
Ralph the Rookie - is an entrepreneurial type who is well grounded in theory but lacks real - world business. Yet successful entrepreneurs are opportunity and goal oriented. Meticulous Mary - is perfectionist entrepreneurial type who is used to having things under control that he or she cannot manage during a catastrophe and cannot handle periods of ambiguity and chaos.
Underdog Ed- is an entrepreneurial type who is not comfortable with actually transforming the invention into tangible business success. Hidden Agenda Harry - is one who does not have the right motives and objectives for developing and expediting a new enterprise. Inventor Irving- is one who is more concerned about the invention itself rather than creating and expediting a business.
B All these non - entrepreneurial characteristics can be found in anyone but can be modified into entrepreneurial characteristics, as the entrepreneurial qualities are more of learned or acquired. James A. Lowery Business planning tends to get treated as an academic exercise by many writers and consultants. Entrepreneurs can enhance their chance of success by taking time to write a business plan. The process of thinking about your business venture and then articulating it on paper will assist you in thinking through how you are going to accomplish your goal.
There are many successful entrepreneurs who will tell you their business plan was instrumental in keeping them focused on their objectives. Entrepreneurs are not the only business people who write and use business plans. Many large corporations engage in planning. The anatomy of their plans resembles in many aspects the basic plan. What is a business plan?
As basic as this question may seem, it is the most appropriate place to begin the planning process. Having the right view of the business plan will help you develop the kind of plan that will do you and your business the most good. All kinds of definitions are thrown around about what a business plan is.
The ''road map'' metaphor used by James Lowry is appropriate one. Others take account of tactics and strategy.
In this chapter we see three definitions of a business plan, partly for the sake of contrast. Both are accurate. Definition 1: A business plan is a document that convincingly demonstrates that your business can sell enough of its product or service to make a satisfactory profit and be attractive to potential backers. Definition 3: A business plan is a selling document. It sells your business and its executives to potential backers of your business, from bankers to investors to partners to employees.
A business plan should be a selling document. It should sell the business to stake holders. The business plan describes the direction the company is taking, what its goals are, where it wants to be and how it is going to get there. Be aware that a business is not a document that you sit down and write over a weekend. Invariably, it is the result of many weeks and months of research and evaluation. A business runs without a plan is reactive instead of proactive.
In today's changing world, a businessperson must plan in order to succeed. Without a plan, it is difficult to know when additional employees, materials, or machinery will be required to support growth, and when products or services will be ready for release to the market. In short, the business plan is the entrepreneur's best insurance against launching a business destined to fail or mismanaging a potentially successful company.
Many entrepreneurs agonize about writing a business plan because they find it so difficult to get started. As you go through the start-up process of evaluating ideas, considering prospective employees, and calculating cash flow needs, you should take various points that raised in this section. The business plan allows the entrepreneurs to exploit the opportunities that arise in the life of a business.
A written business plan becomes entrepreneur's business representative, much as a sales person or executive serves as its representative during sales and conference presentations and meeting. Why write a business plan?
Every entrepreneur has a business plan. The problem is, a plan that is in your head is a lot different from one that is written down.
It is less precise. It is more fluid. It is unknown to others working with you. If you talk to entrepreneurs who have gone through the process of writing a complete business plan, you invariably learn that it was one of the most difficult tasks they ever accomplished. This is understandable, when you stop to think about it. Few of us really enjoy exerting the discipline required to turn into writing something as demanding and complex as the workings of a business.
A plan is a reflection of its creator. It should demonstrate that the entrepreneur has thought seriously about the venture and what will make it succeed. Preparing a solid plan demonstrates that the entrepreneur has taken the time to commit the idea to paper.
Building a plan also forces the entrepreneur to consider both the positive and the negative aspects of the business. A detailed and thoughtfully developed business plan makes a positive first impression on those who read it. In most cases, potential lenders and investors read a business plan before they ever meet with the entrepreneur behind it. Sophisticated investors will not take the time to meet with an entrepreneur whose business plan fails to reflect a serious investment of time and energy.
They know that an entrepreneur who lacks the discipline to develop a good business plan likely lacks the discipline to run a business.
An entrepreneur cannot allow others to prepare the business plan for him or her because outsiders cannot understand the business nor envisioned the proposed company as well the entrepreneur can.
The entrepreneur is the driving force behind the business idea and is the one who can best convey the vision and the enthusiasm he has for transforming that idea into a successful business. Also, because the entrepreneur will make the presentation to potential lenders and investors, he must understand every detail of the business plan.
Otherwise, an entrepreneur cannot present it convincingly, and in most cases the financial institution or investors will reject it. But it is wise to seek the advice and assistance of outside professionals. There are many extremely important reasons for writing a business plan. Obtaining bank financing: For most banks, it is usually enough that an applicant provides past and current financial statements to get a formal hearing of a loan.
Because more businesses are seeking bank financing than banks have money available, only those businesses that make the best case will receive funds. A business plan helps get you apart from the crowd. Companies that submit plans immeasurably improve their chances of getting the funds they seek. Seeking investment funds: Venture capitalists and others investors require a business plan from any company that wants to be taken seriously for funding.
It is the first thing most ask for, much as a personnel manger asks job applicants for a resume investors use business plans as a screening device, looking to be turned on to a business with a significant growth potential when something catches their eyes, they read more carefully and, not they are still intrigued, they will come back the executives for further discussion.
Arranging strategic alliances. Strategic alliances are arrangements between large and small companies to carryout joint research, marketing, and other activities. They have become more common in the last few years. For small companies, arranging a strategic alliance with a large company can mean gaining access to important financial, distribution and other resources. Obtaining large contracts: Smaller companies seeking to obtain a large chunk of business from a major corporation can encounter a common obstacle.
It comes when the corporate representative says something like: Attracting key employees: When a new or early-stage company goes to hire top managers, it faces a difficulty unlike large companies.
A prospective manager your company wants to hire may be considering leaving a secure job with a larger business and wondering how long your company is going to be around. If he or she gets too insecure, you may not convince that persons to join your company.
In the case of recruiting, it can also save you much valuable time explaining all your plans and answering the many questions a prospective manger is likely to ask. That is, a business plan can save a lot of conversation, besides instilling the necessary confidence to snare that hot shots.
Completing mergers and acquisitions: Whether you want to sell your company or acquire another one, a business plan can go a long way toward helping you stand out from the crowd. When you go to sell your company, potential buyers who are looking at many companies will scrutinize you. Similarly, not you are doing the acquiring; you will be looking at many companies before you decide to plunge ahead. Should you be in competition to acquire a business, your business plan can once again inspire the confidence essential to completing the deal.
Motivating your management team: Other benefits are derived from a business plan for both the entrepreneur and the financial sources that read it and evaluate the venture. Specifically for the entrepreneur, the following benefits are gained: The financial sources that read the plan derive the following benefits from the business plan: Each business plan is unique and must be tailor made because each business is unique.
So the plans are not cast in stone: Entrepreneurs may want to make alterations to suit the specifics of their business. The elements of a business plan may be standard, but how entrepreneurs tell their story should be unique and reflect their personal excitement about the new venture. A business plan typically ranges from 25 to 55 pages in length.
Shorter plans typically are too sketchy to be of any value and those much longer than this run the risk of never getting used or read. However, entrepreneurs must recognize that, like every business venture, very. Cover page: The purpose of a cover is to tell the reader bankers, investor, or other stakeholder what the document is about. Fonts used should be easily read, and color contrasts should be pleasant to the eye. The table of content: Be sure to list headings for the major sections as well as for important subsections.
The executive summary: To summarize the presentation to each potential financial institution or investor, the entrepreneur should write an executive summary. This is the single most important section of the business plan.
That is because most readers- especially lenders and investors- turn to it first and decide whether to take the rest of the plan seriously. It should be concise and should summarize all of the relevant points of the proposed deal.
The executive summary presents the essence of the plan in a capsulated form, i. It should explain the purpose of the financial request, the birr amount requested, how the funds will be used, and how and when any loan will be repaid. It should be logical, clear, interesting- and exciting. When readers finish the executive summary, they should have a good sense of what you are trying to do in your business.
Capturing an entire business plan within two pages sounds like a difficult task. It is better entrepreneurs begin the process of putting together their business plans by writing a draft of the executive summary, then putting together the full plan, and finally revising the executive summary when everything else has been completed. Business description: In this section entrepreneurs provide a detailed description of their business. An excellent question to ask yourself is: Remember, however, that as you develop your business plan, you have to modify or revise your initial questions.
The business description section is divided in to three primary sections. Section 1 actually describes your business, section 2 the product or service you will be offering and section 3 the location of your business, and why this location is desirable? The licenses or permits you will need. What are the growth opportunities? Will franchising impact on growth opportunities?
In the description of the business, describe the unique aspects and how they appeal to consumers. Emphasize any special feature that you feel will appeal to customers and explain how and why these features are appealing. The description of your business should clearly identify goals and objectives and it should clarify why you are, or why you want to be, in business. Drawings, diagrams, and illustrations, may be required if the product is highly technical.
It is best to write product and service descriptions so that laypeople can understand them. The entrepreneur should include a summary of any patent, trademarks, or copyrights.
Successful business owners know or at least have an idea of what their customers want or expect from them. This type of anticipation can be helpful in building customer satisfaction and loyalty. And, it certainly is good strategy for beating the competition or retaining your competitiveness. Your location should be built around your customers, it should be accessible and it should provide a sense of security.
Most authorities on small business would quickly agree that failing to do your homework in searching for the best location is a serious mistake. Too many entrepreneurs never look for a location beyond their own home cities or towns.
Consider these questions when addressing this section of your business plan: The building desirable? Is street lighting adequate? The marketing plan Marketing plays a vital role in successful business ventures; hence it should be the crucial concern of entrepreneurs.
Perhaps the worst marketing error an. By identifying these factors, you can develop a marketing strategy that will allow you to arouse and fulfill their needs.
At first, target only those customers who are more likely to purchase your product or service. As your customer base expands, you may need to consider modifying the market plan to include other customers.
Your marketing plan should be included in your business plan and contain answers to the questions outlined below. What needs and wants drive their purchase decisions? Successful entrepreneurs know that a solid understanding of their target markets is the first step in building an effective market strategy. Indeed, every other aspects of marketing depend on having a clear picture of the customers and their unique needs and wants.
The marketing plan comprises the following: We compete for jobs, promotions, scholarships to institutes of higher learning, in sports and in almost every aspect of our life. Trade associations, customers, industry journals, marketing representatives, and sales literature are valuable sources of data.
What does the product or service cost to produce or deliver? What image is the company trying to create in the market? Can it produce a profit? How does the planned price compare to those of similar products or services?
Are customers willing to pay it? What price tiers exist in the market? How sensitive are customers to price changes? Will the business sell to customers on credit? Advertising is any sales presentation that is non personal in nature and is paid for by an identified sponsor. How you advertise and promote your goods and services may make or break your business. Having a good product or service and not advertising and promoting, like not having a business at all. Many business owners operate under the mistaken concept that the business will promote itself, and channel money that should be used for advertising and promotion to other areas of the business.
Advertising and promotions, however, is the lifeline of a business and should be treated as such. Develop short, descriptive copy text material that clearly identifies your goods or services, its location and price. Use catchy phrases to arouse the interest of your readers, listeners or viewers. Questions that might be raised in this section include: It should discuss your supply sources, equipment, capacity, and quality control.
Can the subcontractors deliver on time?