BUSINESS PLAN
The most important lesson that I have learnt while developing a business plan is I must understand the industry, market, competitors, and consumers well that as an entrepreneur. This forms the market analysis section of the business plan. If this section is not satisfactory, then the rest of the business plan will not achieve a good flow. For example, the sales and marketing strategies as well as the implementation plan recommended in the business plan largely depend on the degree of competence in articulating the market analysis (Abrams, 2003). Every business start-up, restructuring, or expansion requires a solid foundation. It is of great essence to understand the market to be served, and the customer needs that a business fulfils or will fulfil. This is the stage that leads to failure of most business plans in achieving their goals.
First, the size of the market refers to the potential level of annual sales in the market. During the formulation of my business plan, the total sales I projected for my target geographical area came in handy in the financial section that involves forecasting monthly sales and the expected market share.
Second, it enables an entrepreneur to segment the market, according to the various feasible criteria supported by the market. This helps the reader to understand the specific markets that a product will fit. The most common types of segmentation used in business plans are customer and geographic segmentation. Geographic and location segmentation involves describing the characteristics and size of the market in geographical terms (Abrams, 2003).
Under customer segmentation, it is good to begin with a thorough description of the target customer, including the psychographic and demographic features that are unique to them. All the customers that purchase a given commodity from the potential market for the product (Abrams, 2003). However, not all these customers hold the same reasons for purchasing the product. There are various ways of profiling consumers, including using their incomes, cultural values, educational achievement, and rate of change in their tastes and preferences among others. A good business plan depends on how good the consumer characteristics have been detailed so that the appropriate marketing strategies can be designed for particular groups.
Another component of the market analysis is the review of the market needs and trends. An entrepreneur cannot just provide any product in the market that does not address a certain need that has been identified among consumers. Closely associated with the need are the prevailing trends, existing and expected growth. The business plan should show that there is a need that is not fulfilled or is undeserved and that it can be perfectly solved by the enterprise’s offering (Pinson, 2008). The need should promise success for the company in the long term to ensure sustainability given the prevailing trends and growth rates in the market.
The industry analysis is the third crucial component of the market analysis. I learnt that it is vital to address in detail the competition, industry participants, and distribution patterns. Of great significance to me was the competition. Any entrepreneur knows that they can only survive in the business landscape if they recognize, acknowledge, and appropriately respond to competitors. The analysis includes identifying their strengths and weaknesses, strategic direction, technological advancement, financial strength, the level of expertise in their workforce, and the market perception of their products by the customers (Pinson, 2008). This is the opportunity to display to the reader that the entrepreneurial venture is worth a try and that it provides a unique offering that can survive competition, gain market share, and reap economic benefits.
In conclusion, market analysis gave me a sound foundation for the rest of my business plan. It broadened my thinking and approach to my proposal. It is that stage that requires adequate attention so that the rest of the sections acquire a natural, logical flow (Abrams, 2003). A market analysis is not only necessary for a business plan, but also for an existing venture since it should be reviewed from time to time to keep it relevant to the prevailing market conditions.
How do you think the entrepreneurial theories learned from this module, particularly in term 2, are important in enhancing your understanding of being a successful entrepreneur? Please use examples to illustrate.
The entrepreneurial field has been seen for a long time as an applied trade rather than something that can form an academic study area (Brockhaus 2001). However, with the recognition of how economies rely on this discipline, the scholarly field has developed several theories, perspectives, and processes aimed at developing entrepreneurial skills (Alvarez 2005). This is especially with the realization that entrepreneurship is not necessarily a natural trait, but a skill that can be installed in people.
First, learning the entrepreneurial process has enabled me to appreciate the importance of following the necessary steps from generating an idea until a new business venture is actualized (Sijde 2008). An idea passes through several vital stages such as the development of a business plan to appraise the validity of the idea. This process gives an entrepreneur enough time to evaluate and select a venture among other alternatives based on a well-defined mechanism for screening information (Katz and Shepherd 2004).
Entrepreneurship theories promote creativity and innovation. These are essential especially in today’s business landscape where market conditions change rapidly (Alvarez 2005). As an entrepreneur, I can extend my thinking to create new processes for existing business projects, new products and services. The majority of the most successful ventures in the 21st Century were born out of creativity and innovation creating new sets of needs in the market and influencing demand. An example is mobile banking services that are slowly eliminating the need to access a banking hall to get financial services. Another example is the Uber taxi business that introduced an entirely different way of operating taxi companies across the world (Shepherd and Katz 2005).
Entrepreneurial skills do not strictly bind me to have a business venture. Entrepreneurship is a universal discipline that applies to any field, meaning that it will be an essential component in my career path growth and development (Katz and Shepherd 2004). With the subject gaining interest both in academic and corporate circles, it is becoming an extremely marketable competence. Multinational corporations recruit their top leaders using entrepreneurial capabilities as one of the crucial qualities. My long term target is to be a prominent leader in a big organization, and thus, knowledge of entrepreneurship will be vital in advancing my career aspirations.
Entrepreneurship teaches about creating and maintaining healthy relationships with business partners, suppliers, and customers. In the business world, no company stands alone. The market is an interdependent system of many participants where each needs the other for existence. For example, a company has to maintain a good working relationship with authorities by obeying the set regulations (Katz and Shepherd 2004). Also, companies engage in corporate social responsibility as a way of respecting the community and giving back. Businesses are distributing products to customers and maintain a good relationship with them to maximize customer lifetime value as well as favorable reputations.
Entrepreneurial theories present some methodologies for venture evaluation to help in assessing and evaluating new investments. Not every idea is worth pursuing. These methodologies provide precise mechanisms of ensuring that entrepreneurs take calculated risks when investing their efforts and resources to satisfy customer needs (Alvarez 2005). They may either be non-numerical or numerical. Examples include the net present value, internal rate of return, operative necessity model, and competitive necessity model (Congregado 2008). With many business ideas streaming in, I possess the knowledge and capabilities to evaluate and select the best alternatives that will maximize revenues.
I believe that I can generate highly innovative ideas that feature invented processes. To avoid competitors taking advantage to launch similar products and services like mine, I have learnt about intellectual property rights and their importance to business (Alvarez 2005). I have knowledge on patents and copyrights among other forms of property rights that will enable me to maintain a competitive edge over my competition.
How do you evaluate yourself, a potential entrepreneur or not, why?
I believe that I am a potential entrepreneur. I am a natural problem solver with excellent ability to spot market gaps. Recognition of business ideas by observing market gaps is an important source that is responsible for the majority of new ventures (Karataş-Özkan, 2011). Apart from growing my professional career, I aspire to own businesses that will be mainly born out of innovative ideas.
I possess excellent managerial skills. I have amassed a wide range of skills from my few formal employment opportunities. I have learnt how to run both small and large organizations to drive an efficient system of production that generates impressive performance (Karataş-Özkan, 2011). Also, I have acquired significant competencies in business applications through my academic qualifications including fields like basic accounting, managing human resources, marketing, quantitative techniques, and management information systems among others.
I am a great leader. As a leader, I possess unique traits that help me to stand out from the rest in a team. I am a natural problem solver with strict attention to detail and results. I can maintain the strategic direction of an enterprise as well as guide the workforce towards achieving a common goal. I am also a good communicator with exceptional negotiation skills to strike deals and contracts with other people and businesses.
I am an independent thinker and risk taker. I have an excellent level of intuition that supports my decision making even in moments when faced with extreme pressure. Before taking a risk, I do a thorough situational analysis to understand the alternative courses of action available, their benefits, and consequences. This way, I can take calculated risks without just entering a venture blindly for the sake of entrepreneurial spirit (Buchholz and Rosenthal 2005).
I am competitive in nature. I am quite aggressive and unwilling to lose in an endeavor. I do not believe in defeat. I believe that I can succeed in any field that I decide to venture in provided I have the right information. The success ventures today were started by competitive individuals who believed that they can conquer the existing players (Buchholz and Rosenthal 2005). For example, Google was started by young IT professionals who saw a gap and need to invest in a search engine despite the presence of a much established Yahoo. They conquered the search engine market and are the providers of the biggest search engine today (Medina-Garrido, Martinez-Fierro and Ruiz-Navarro 2007).
I am a self-starter who takes the initiative to handle tasks as they come without the need for any supervision (Keister 2005). For entrepreneurs, initiative drives their ambitions. I am self-motivated to achieve my goals in my everyday activities including academics and career life. These are qualities that I believe make me a potential entrepreneur.
I possess a strong passion for business, entrepreneurship, and excellence. I have not engaged in something just for the sake, but because I have a passion for it. This means that I will not get tired when pursuing my goals as the passion keeps me motivated and interested in forging forward (Karataş-Özkan, 2011). To excel in a certain field, one has to exemplify a passion that drives them to accomplish their goals.
I am innovative and creative. I believe in constant betterment and improvement of ideas and processes to attain greater results every time. I can think on my feet when faced with problems. Also, I always aim at personal development to keep myself informed and in the know. Learning never stops, and to be a reputable entrepreneur, I must keep learning.
Bibliography
Abrams, R. (2003). The successful business plan. Palto Alto, Calif.: Planning Shop.
Alvarez, S. (2005). Theories of entrepreneurship. Boston, Mass.: Now Publishers.
Brockhaus, R. (2001). Entrepreneurship education. Aldershot: Ashgate.
Buchholz, R. and Rosenthal, S. (2005). The Spirit of Entrepreneurship and the Qualities of Moral Decision Making: Toward A Unifying Framework. J Bus Ethics, 60(3), pp.307- 315.
Congregado, E. (2008). Measuring entrepreneurship. New York: Springer.
Karataş-Özkan, M. (2011). Understanding relational qualities of entrepreneurial learning: Towards a multi-layered approach. Entrepreneurship & Regional Development, 23(9- 10), pp.877-906.
Katz, J. and Shepherd, D. (2004). Corporate entrepreneurship. Amsterdam: Elsevier.
Keister, L. (2005). Entrepreneurship. Amsterdam: Elsevier JAI.
Medina-Garrido, J., Martinez-Fierro, S. and Ruiz-Navarro, J. (2007). Cases on Information Technology Entrepreneurship. Hershey, PA: Idea Group.
Pinson, L. (2008). Anatomy of a business plan. Tustin, CA: Out of Your Mind and Into the Marketplace.
Shepherd, D. and Katz, J. (2005). International entrepreneurship. Amsterdam: Elsevier JAI.
Sijde, P. (2008). Teaching entrepreneurship. Heidelberg: Physica-Verlag.
