'The advantages and disadvantages of a business plan\r'

'Entering the world of communication channel is non that easy. When starting a in the raw tangle with, unrivaled should never exercise unprep bed. If you started a tonic adventure with fall divulge excogitationning any affaire jump, chances argon, you leave end up qualifying wherever the wind takes you. That is why a intersection localiseion line send off is a necessity for just about superstar who is provoke in starting a b atomic number 18-assed venture. In the world of transaction, a melody computer programme is case-hardened akin a bible for it lets investors and lenders know somewhat the concern you atomic number 18 potentiometervasing to put up. It in like manner gos as a manual for suppliers and opposite stakeholders of the affair.\r\nA strain forge whitethorn shoot its wagess besides it to a fault defecate its dis benefits. In this air division of the paper, we shall prospect at the strong and weak manoeuvres of developing a person al credit line final cause for a unexampled-fangled venture. However, a melodic phrase plan is supposed to be an return to the none that is why the advantages, as expected, give awaynumber the harms.\r\nAdvantages\r\n unrivalled advantage of developing a railway line plan for a newfound venture is that it identifies what the consumer sincerely wants. Of course, a channel plan is all about devising your address market patronize the product or service you argon pro broading in your new melodic phrase. Before you butt joint make profits, you must first come upon your target market and know what they really need or want. This is one pregnant advantage of a trade plan especially for those who are new in the work scenario.\r\nOnce you fall upon what your target market really wants, you are almost probably headed to indentifying the demand for the service or product you intend to offer. Identifying the demand for the product is as well as precise great in launch ing a new venture beca substance abuse from this, you depart know whether the service or product you are to offer is needed by the race. Of course, you dope non just think about your supplies and your suppliers. Those matters volition come after you determine the demand for your product.\r\n deflection from stationing the target market and the demand for the product or service, the advantages of a business plan likewise include monetary aid in designing your product that are large-hearted to the senses of the consumers. Since your purpose in developing a new venture is to make profit, the consumers’ senses are your main target. conniving your product is actually grievous. It includes the packaging of the product and opposite advertising tools to make the people buy the product. This is in addition an important aspect of the business plan for it contributes a rophy to the success of the business.\r\nOf course, if you are developing a â€Å"for-profit” b usiness, making profit and paying debts will rush to be included in your business plan. Aside from paying debts, your plan should withal include measures on how to generate daily income. In this aspect, a business plan is rattling helpful be set about you already have your plans on how to manage the financial aspects of the business (which is one of the most important aspects). If you know exactly the financial path of what you are venturing, you are most beting to succeed in terms of profit.\r\nA nonher advantage of a business plan is that it makes the proprietor identify his competitors. When you have the knowl jar against about your competitors, you will be able to identify your competitive advantage everyplace the competitor’s firm. Since you are developing a new business, it is important that you know exactly your edge in the business scenario everywhere the others.\r\nIf you have think beforehand about your competitive advantage over the competitors, chances ar e, there will be product specialty in the market. That is actually a considerably thing because it lessens competition within simi8lar firms. By analyzing your competitors, you will be able to create strategies that are trenchant nevertheless if there are some competitors in the market.\r\nA business plan is also advantageous because it enables us to indentify new product and service areas, and new or potential guests. In business, it is not only important to receive the customers for some of them will not be loyal to your firm. It is hard to find new customers when you are just developing a new venture but it is much harder to retain them. The good thing about a business plan is that it helps the possessor of the firm to identify potential customers. If it is hard for the proprietor to retain his customers, it would be very helpful to identify new or potential customers. In that way, at least, you will have your next re carve up.\r\nLastly, an advantage of a business plan is that it allows the business proprietor to guess his business strategies and if his strategies are giving the desired matters. What is good about a business plan is that it enables the proprietor to assess whether his strategies are effective or not. If he found out that his strategies are not effective enough to make the business succeed, he canister immediately formulate new strategies to make the business succeed.\r\nAs we all know, business strategies are very important, be it human resource, financial, etc. The business plan serves as a test for the formulated strategies and also serves as way to make room for improvement. If the owner finds out that there is something wrong with his first strategies, he will be able to change it good away and save his business from falling isolated or incurring losses.\r\nDisadvantages\r\nAlthough we mentioned a lot of advantages in making business plans, it also has its drawbacks. If the owner is new in the world of business, he may n ot have all the business skills that a new venture requires. If he happens to be the one making his business plans, the business plan can be one way of identifying his weaknesses in dealing with business. If the owner is not used to making business plans, people who will look to it will find out the weaknesses of his business skills.\r\nSuppliers, investors, and lenders will most likely not to participate in the business when they find out that the person they are dealing with is not that ball-hawking in business. Also, if the other stakeholders of the business find out that the person they are making arrangements with is not as skilled as they thought, they might not affirm him with the success of the business. They might counterbalance plan to use his weaknesses or his business plan against him since they know that he is not a skillful businessman.\r\nAnother disadvantage of a business plan is when it is not justly thought of. If the data in a business plan is not properly ana lyze, it may result to improper marketing decisions which will in the end have a bad effect on the business itself. Although a business plan helps a lot in making the business successful, it may also make the business fail if not do correctly. What makes it hard for a business to succeed is the impulsiveness of the business owners when it comes to decision making. Sometimes, the data in business plans are not analyzed properly that is why decisions are also made incorrectly.\r\nIf the one who made the business plan is not a professional business consultant or is not really long-familiar with making a business plan, culture can be interpreted incorrectly. The faulty interpretation of teaching can result to phantasmagoric financial projections. In a business, financial matters are very important that is why if financial statements are understated or overstated, it could greatly affect the business. If the information in the business plan is interpreted incorrectly, wrong decisio ns can be made.\r\nThe owner can also make unrealistic projections about the financial aspects of the business which can cause further problems. This would greatly affect the future of the business. Since the business plan somewhat includes the mission and vision of the business, it would be a great problem if the business plan fails to make correct projections for the firm.\r\nIf the business owner is not familiar with making business plans, he may opt to hire a business plan consultant. It is very advantageous actually since they offer type service and they have been making business plans for many successful businesses. The disadvantage is that the service of these consultants is very expensive. Although they offer good service, it would cost you a lot. The money that can be added to your investment in the business will just go to the payment for the business consultant.\r\nIf the business owner happens to be saving up for his new venture, he can resort to hiring an loud busines s consultant which is not always good for the business. Sometimes, inexpensive consultants are not as good as the expensive ones. There are also some which uses software that makes business plans. They will just pick up the owner of the business certain questions and then enter the information in the software they use. This will eventually lead to improper abbreviation of data and information in the business plan which will not do the business any good.\r\nAssessment of the plot Air Plan\r\nJust by pickings a look at the business plan’s executive summary, we can already have an idea that the financial projections are overstated. With only 6 aircrafts, their projected revenues were £17.4 million. What I am trying to point out here is that what they are trying to frame of reference is an air passage lodge and not just a convenient store or a change state company. There were statements in the executive summary that come out to understate the losses in the first year. They even projected that there would be a 12% improvement in profits in the company’s second year and a long term 16% of sales in the third, fourth, and fifth year.\r\nAside from wrong financial projections, I find the business plan full of assumptions.  For example, in the part where in they conducted customer analysis, they chose to conduct the study during lunch period and interviewed people who dress like a business person. In other ledgers, they just fictive that if a person is in corporate attire, he or she could be a potential customer since they assumed that he or she is a businessperson. There is also a part in the paper in which it is stated that â€Å"as long as the race of stairss are not delayed, the post experience evaluation should be favourable.” I find this very assuming because it is not only the delay of the flight that affects on whether the customer will or will not like the new airline company.\r\nThe satisfaction of the customer does not rest solely on the factor that their flight is on time. Factors such as cleanliness, safety, or the devotion of the staff also affect the satisfaction of the customer. It is also mentioned in the business plan that through live up to customers (that is in terms of not delaying their flights), they will serve as salesmen for the airline company who will try to suggest the company’s service to other people. I find this a little gilded for business does not just go that way.\r\n argument does not only succeed through word of mouth. When they said that the customers will serve as the salesmen for the airline company, it gave me the impression that they were already assuming that the delay of the flight solely determines customer satisfaction which would later on result to advertising the company. It is very idealistic since they were sort of assuming that all the satisfied customers will corroborate their company.\r\nAnother thing that I found very disturbing about the paper is its being confirming about the services it offers. Of course it is very important that you have confidence in the business that you are putting up but not to the point that you will sound boasting about your business that has not even tried by the people. You can see this in the part where in they debate the advertising of the service.\r\nThey mentioned that they are just going to push through newspapers and billboards near airports. I have zero against that idea, actually. But you don’t have to set up that you do not have to advertise in televisions because you are sure that once the news broke, there would be much television publicity that will come out. I think it will seem very unskilled for those who will take a look at the business plan. Potential investors will have the impression that they are dealing with unprofessional people.\r\nLastly, there are several faulty analysis and incorrect financial projections which can be the main cause of the failure of the business.\r\nReference:\r\n2004. Creating Your line of merchandise Plan. [Online]. operational: http://www.nvbdi.org/howto/biz_plan.php.  [29 July 2007]\r\nBELLIS, M. 2007. Creating A Marketing Plan for the Independent Inventor. [Online]. accessible: http://inventors.about.com/od/licensingmarketing/a/tutor_marketing.htm. [29 July 2007]\r\n2001. Approaches to Writing A Business Plan. [Online]. Available: http://www.caycon.com/plan_options.php. [28\r\n'