Business plan and corporation plans
Corporation plans
Business plans
What it contains
Descriptions of business opportunities: details of entrepreneur, what is going to be sold and to whom
Management team and personnel: the skills & experience of the entrepreneur and the people they intend to recruit
Marketing & sales strategy: why the entrepreneur thinks the customers will buy their products and how the business plans to sell them
Operations: premises to be used, production facilities, IT systems
Financial forecast: the future predictions of sales, profit and cash flows, for at least one year ahead
Importance
Main purpose is for a new business to obtain finance for start-up capital
Increase the chances of success, even if the entrepreneur is entering a new business
Financial and other forecast can be used as targets
What it contains
Strategy or strategies to be used to attempt to meet these objectives
Executive summary: overview of new business and its strategies
Overall objectives within a given time frame, normally three to four years
Advantages
Have a clear focus and sense of purpose due to planning for several years ahead
(Hopefully) they will communicate with this sense of purpose and focus to all managers and staff - important for effective corporate plans
Control & review process: original objectives compare with actual outcomes to assess the business' performance
Consider the organisation's strength and weaknesses in relation to its environment and to think about how all of the different department in the firm interrelate
Disadvantages
Rapid and unexpected internal and external changes means that the plan can be obsolete
The plan can be inflexible to changes. e.g the business refuse to make any changes, hence less flexible to adaptations
Can be time-consuming