Business Plan Essentials: Key Concepts and Strategies
Business Plan Essentials
Executive Summary
A concise summary of the business plan, highlighting the main results on a single sheet.
Problem Definition and Alternatives
This section identifies the problem and its underlying reasons, while also explaining the weaknesses of existing alternatives.
New Business Idea Presentation
Market context, strengths, new components, etc. This section outlines major trends that suggest the new idea has potential.
Sector Analysis
Analysis of the industry structure, including rivalry, new entrants, substitutes, suppliers, and customers.
Strategic Management Tasks
Tasks include defining the company’s direction, administrative control, setting goals, creating strategy, implementation, evaluation, and improvement.
Management Activities
Managers engage in four key activities:
- Planning: Define goals, objectives, and various types of plans.
- Organization: Define tasks, assign responsibilities, coordinate efforts, and establish reporting structures.
- Directing: Motivate employees, communicate effectively, and resolve conflicts.
- Control: Ensure progress aligns with the plan and take corrective actions as needed.
Managers achieve goals through others by making decisions, allocating resources, and directing activities. Key skills include:
- Technical: Ability to apply experience and expertise.
- Human: Ability to understand, motivate, and work with others individually or in groups.
- Conceptual: Mental ability to analyze and diagnose complex situations.
Individual Level Factors
Factors influencing individuals:
- Receptor Factors: Actions, reasons, interests, experience, expectations.
- Situational Factors: Time, working environment, social framework.
- Objective Factors: Novelty, movement, sounds, size, environment, proximity.
Perception Biases
- Halo Effect: Forming an overall opinion based on a single feature.
- Projection: Attributing characteristics to others.
- Selective Perception: Interpreting information based on interests, past experiences, and attitudes.
Motivation and Maslow’s Hierarchy of Needs
Maslow’s five basic needs:
- Physiological needs
- Security needs
- Social needs
- Esteem needs
- Self-actualization needs
Applications of Motivation Theories
- Management by Objectives (MBO)
- Participatory Management
- Performance-Based Compensation
- Alternative Work Schedules
- Behavior Modification
- Quality Circles
- Flexible Benefits
Mission, Vision, and Feasibility
Mission: Who we are, what we do.
Vision (Dream): Where we are going, how we will get there.
- Economic Feasibility: Ensuring the business is profitable.
- Financial Feasibility: Securing project financing.
- Operational Feasibility: Putting the plan into practice.
Strategic Approaches
- Cost Leadership: Low production costs to offer lower prices.
- Differentiation: Offering something unique from the competition.
- Lowest Cost Provider
- Niche: Targeting a segment with similar characteristics.
- Niche Differentiation: Differentiation focused on a specific group.
Levels of Strategy
- Corporate Strategy: Applied to a diversified firm.
- Business Strategy: Focused on a product line.
- Functional Strategy: Oriented to a specific department.
Communication Process
Source -> Encoder -> Channel -> Decoder -> Receiver (Feedback)
Noise: Default, overload, bias, distortion
Types of Power: Coercive, legitimate, expert, reward
Individual Level Factors (Revisited)
- Receptor Factors: Actions, motives, interests, expectations, experiences
- Situational Factors: Time, social work environment
- Objective Factors: Novelty, sound, motion, environment, size, proximity
Perception Bias (Revisited)
- Halo Effect: Forming a general opinion based solely on one attribute.
- Projection: Attributing characteristics to others.