PERSONAL REFLECTION ON BUSINESS PLAN DEVELOPMENT
Personal Reflection on Business Plan Development
Reflection on Business Plan
The significance of innovation and flexibility for the contemporary organizations is essential following the latest changes occurring in the business sector. Nowadays, the companies have to deal with the technological progress, alteration of the traditional business strategies, and globalization. In the conditions of fierce competition the organizations today have to invent new ways of surviving in the business world. With the present-day conditions in mind, it is possible to imply that entrepreneurship can be a productive solution. During the period of start-up, a lot of novice entrepreneurs encounter with a wide range of problems, from financial issues to technical barriers. In this case, new business initiatives have to take into account the specificity of drafting a business plan that will have to include the marketing strategy, environmental analysis, human resources strategy, financial specificity, legal issues, and the evaluation of risks of entry and exit of the business.
It was admitted that each year the number of start-ups is increasing, so as the interest of new entrepreneurs in each segment (Josien, 2012). It becomes more difficult to innovate and remain creative in the modern times, which implies that the start-ups both in small and medium enterprises (SMEs) have to take into account the most important aspects of preparing the business plan. First of all, before starting a venture, it is important to craft an idea that may be valuable for the market. At the same time, it is important to provide maximum information and address the demand-supply chain. One of the crucial things is to find a niche, where new company can propose its unique solution for the existing problem.
Once, the idea is crafted, the main step is the implementation that would follow particular steps. Each step has to be meticulously calculated, as, for example, incorrect market segmentation can lead to the inability to meet the consumers’ demands and an eventual failure. Another example of a possible loss is lack of investments into the marketing campaign that will lead to the lack of clients as well as their interest in the product or service. One of the most important lessons I had during the development of the business plan is that all aspects of business are closely interrelated. Inadequate financial calculations can cause not only economic losses, but hinder the company from innovations. Wrong advertisement may scare off the potential buyers and mistakes in market research can lead to underestimation of the competitors.
An effective business plan has to include every aspect a company has, from the financial management to the HR. Therefore, despite becoming innovating and planning to grow, a start-up has tom make sure that all analyses are performed, including marketing mix evaluation (4Ps), PESTLE, and SWOT assessment in order to evaluate each aspect of market and its impact on the start-up (Kuratko & Audretsch, 2009). By calculating the strength, weaknesses, opportunities, and threats to business, the entrepreneur has to focus on the real-life patterns existing in the market by adding statistics and evidence for each point. By evaluating product, prices, promotion, and place, it is essential to be sure what kind of product/service the company has to sell in order to meet the demands from the public.
As it was mentioned, it seems to be hard to create something new in the environment overwhelmed with innovations and technical gadgets. However, there are still companies that manage to enter the market with novice ideas that eventually bring millions to the entrepreneurs. For example, Local Motors is the company that managed to enter automobile industry, which is one of the most difficult markets for the new companies due to the need for vast investments and severe competition. It was created by john Rogers, who used crowdsourcing as the innovative method for designing the vehicles and the option to develop cars by involving the community (Norton & Dann, 2010). Overall, the entrepreneur managed to create a virtual presence for LM and attract a lot of automobile designers creating a contest for the best project (Norton & Dann, 2010). Another example is the recently developed company Carbon3D that decided to create adjustable and customizable parts made of resin that can be used in almost all business segments (Schrage, 2016).
There are tons of such companies that usually started being small or medium businesses that grew to multinational giants. Nowadays, in the age of accessible information, it is particularly easy to create a business plan. At the same time, it is crucial to evaluate the market, prices, and consumers objectively taking into account such variables as culture, modern trends in a particular segment, and demand for a specific product (Barba-Sanchez & Martinez-Ruiz 2010). There are a lot of ways to create a viable start-up by using incubators, corporate entrepreneurship, or attracting the investors (McDougall-Covin, Jones, & Serapio, 2014). Also, it is possible to create a business that does not require substantial investments, like a small cleaning company or web design firm. Such businesses require a thorough assessment of the competition in the region and demand for a specific service. Within such markets, the companies can enjoy easy enter and exit with the minimum financial risks involved.
However, innovative ideas require the monitoring of legal issues, contingencies, and the issues connected to authorship. Each of these aspects has to be evaluated by analyzing the local and national legislation and risks involved in a particular segment of business. It has to be noted that because of the technological progress, it is possible for the novice businesses to use the services of outsourcing or crowdsourcing in order to achieve the plans regarding the HR management (Bogenhold, Heinonen, & Akola, 2014). For example, if a firm requires legal support, it is possible to fill the gap in the respective department by delegating these responsibilities to the third parties. It is expected to hire specialists in legal advice at the beginning of the company’s operation and in the time when it will be required. In such a way, the company can save the finances and implement sustainable strategy for business management, which is one of the latest trends in business that is usually pursued by both SMEs and multinationals.
Entrepreneurship is a very complex phenomenon that is difficult to interpret with one theoretical framework or simple words. Throughout time, entrepreneurs were perceived from different perspectives. Several decades ago some experts insisted that entrepreneurs must have certain innate skills in order to succeed, the others implied that the right environment molds effective entrepreneurship (Morris, Lewis, & Sexton, 1994). Both approaches were predetermined by the evolution of psychology and perception of individual characteristics of a person. Nowadays, the scholars address this topic with another paradigm that stems from the motivational factors and the desire to innovate (Tapsell & Woods, 2008). Moreover, it is customary today for making entrepreneurship an umbrella term for other phenomena, like self-employment, free-lancers, and independent professionals. Each of these concepts can be different in nature and in characteristics needed for the individuals.
There are also a lot of theories that try to explain the phenomenon of entrepreneurship. Some of them, like innovation theory or the theory of high achievement emphasize the importance of skills for the entrepreneur in order to gain success (Baumol, 2010). Specifically, high achievement theory states that the entrepreneurs create new things either under the pressure or in the environment where it is possible to make things better (Bornstein & Davis, 2010). Innovational theory claims that the entrepreneurs develop the economy of the country with their novice ideas and the comfort they bring to the society (Goldsby & Nelson, 2012; McKenzie & Sud, 2009).
Also, there are frameworks that limited their aspect in entrepreneurship, namely sociological and psychological theories, where the first emphasizes the importance of the environment for the entrepreneurs and the second insists that such individuals are born with the specific psychological characteristics (Jain, 2009; Chatterjee & Das, 2015). However, there is another view towards entrepreneurship that concerns motivation. According to the motivational theory, the individuals tend to become entrepreneurs due to their striving for power, affiliation, and/or achievement (Sautet, 2013).
At the same time, the most important conversation has to concern businessmen who managed to launch a venture, even if it consists of one employee. Small enterprises can also be effective if they employ effective principles of growing and expansion, yet the start-up may be initiated even at the level of working from home. There are certain barriers and factors hindering entrepreneurship from growing, like the loss of stable salary when a person decides to start a new company or sudden economic meltdown in the country (Parker, 2003). At the same time, due to the technological progress and globalization, even newly launched ventures can easily work with the foreign clients, investors, and suppliers as well as expanding business abroad.
There are also positive factors that foster entrepreneurship, like the governmental policies that are designed specifically for the mission of supporting new businesses. For instance, in the UK the government together with the Bank of England launches a program of the Start-Up Loan scheme and the Business Angel Co-Investment Fund for supporting new businesses by investments and effective education (Department for Business Innovation and Skills, 2015). At the same time, it was emphasized that entrepreneurs are not supported by the taxation schemes, especially what concerns the small enterprises. Specifically, the experts agree that the current tax policy in the UK prefers the large corporations that can afford to circumvent the law by hiring effective lawyers, while the smaller companies have to get used to the high taxes (Swinford, 2014). Nevertheless, the new businesses have to make sure that each of the aspects in their venture is well-thought and analyzed before creating a new firm, despite the area where the company will have to operate. Each of the components, from legislation to marketing has to be clearly articulated and, if needed, customized to create innovational idea that will be attractive for the consumers.
Self-Reflection
It is difficult to self-assess oneself in regard to the entrepreneurial skills, as the modern paradigms evaluating this phenomenon are quite ambiguous at one point. After the analysis of this topic and my personal observations of the successful entrepreneurs, I can say that I can be effective in this area if I get to know all aspects connected to entrepreneurship in a specific area. To my point of view, it is necessary to monitor a particular field before claiming to be a good entrepreneur. For instance, a start-up in IT may have the threats of entry due to high competition with large companies, simultaneously, entrepreneurship in the retail sector requires the new firms to propose something unique in order to survive in this area. Therefore, the start-up here will depend on the personal skills and creativity, which will designate the ability to succeed.
I have to conclude that I will be the effective entrepreneur only when I gain certain experience in addressing the financial issues, which I have little expertise in. I consider it to be my weakest point, because during the business plan design it took me quite long to interpret the financial analytics. The implementation of environmental and marketing analyses like SWOT, PESTLE, and 4Ps has become particularly important in terms of understanding the market. It is quite clear at this point that the entrepreneur has to be innovative, creative, resourceful, and practical in terms of development of a start-up. It is possible to conclude that my path of entrepreneurship will begin when I make sure that each of the aspects of business is calculated and measured properly for creating viable and successful venture.
References
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