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MGT602 - Entrepreneurship - Lecture Handout 24

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CREATING AND STARTING THE VENTURE (Continued….)

LEARNING OBJECTIVES

  1. To present helpful questions for the entrepreneur at each stage of the planning process
  2. To understand how to monitor the business plan
  3. To understand the differences between business planning, strategy plans, and market planning
  4. To describe the role of marketing research in determining market strategy for the marketing plan

USING AND IMPLEMENTING THE BUSINESS PLAN

The business plan is designed to guide the entrepreneur through the first year of operations. It should contain control points to ascertain progress. Planning should be a part of any business operation. Without good planning the employees will not understand the company’s goals and how they are expected to perform their jobs. Bankers say that most businesses fail because of the entrepreneur’s inability to plan effectively. The entrepreneur can enhance efficient implementation of the plan by developing a schedule to measure programs and to institute contingency plans.

Measuring Plan Progress

Plan projections will typically be made on a 12-month schedule, but the entrepreneur should check key areas more frequently. Inventory control by controlling inventory, the firm can ensure maximum service to the customer. Production control Compare the cost figures against day-to- day operating costs.
Quality control Quality control depends on the type of production system used. Sales control Information on units, dollars, and specific products sold should be collected. Disbursements. The new venture should control the amount of money paid out

Updating the Plan

Environmental factors and internal factors can change the direction of the plan. It is important to be sensitive to changes in the company, industry, and market.

WHY SOME BUSINESS PLANS FAIL

A poorly prepared business plan can be blamed on:

  • Goals set by the entrepreneurs that are unreasonable.
  • Goals those are not measurable.

To be successful

  • Goals should be specific.
  • They should also be measurable and should be monitored over time.

The entrepreneur who has not made a total commitment to the business will not be able to meet the venture’s demands of the venture. Investors will not be positive about a venture that does not have full-time commitment. Investors will typically expect the entrepreneur to make significant financial commitment to the business. Lack of experience will result in failure
unless the entrepreneur can gain knowledge or team up with someone. The entrepreneur should also document customer needs before preparing the plan

MARKETING PLAN Purpose and Timing of the Marketing Plan

The marketing plan establishes how the entrepreneur will effectively compete and operate in the marketplace. Marketing planning should be an annual activity focusing on decisions related to the marketing mix variables. The marketing plan section should focus on strategies for the first three years of the venture. For the first year, goals and strategies should be projected monthly. For years two and three, market results should be projected based on longer-term goals. Preparing an annual marketing plan becomes the basis for planning other aspects of the business.

Understanding the marketing plan

The marketing plan should answer three basic questions:

Where have we been? -

The history of the marketplace, marketing strengths and weaknesses, and market opportunities.

Where do we want to go (short term)? -

Marketing objectives and goals in the next twelve months.

How do we get there?

-Specific marketing strategy that will be implemented. The marketing plan should be a guide for implementing marketing decision-making and not a superficial document. The mere organization of the thinking process involved in preparing a marketing plan can be helpful in understanding and recognizing critical issues.

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