{"iconType":"icon","icon":"plus","color":"#31683c","hotspots":[{"position":{"x":50,"y":8.972690802490689},"alwaysFullscreen":false,"content":[{"params":{"text":"

A business plan writer should analyze the environment in which they anticipate operating at each of the levels of analysis: Societal, Industry, Market, and Firm. This stage of planning is called the Essential Initial Research stage, and it is a necessary first step to better understand the trends that will affect their business and the decisions they must make to lay the groundwork for, which will improve their potential for success.<\/p>\n\n

In some cases, much of this research should be included in the developing business plan as its own separate section to help show readers that there is a market need for the business being considered and that it stands a good chance of being successful.<\/p>\n\n

In other cases, a business plan will be stronger when the components of the research are distributed throughout the business plan to provide support for the outlined plans and strategies outlined. For example, the industry- or market-level research might outline the pricing strategies used by identified competitors, which might be best placed in the Pricing Strategy part of the business plan to support the decision made to employ a particular pricing strategy.<\/p>\n"},"library":"H5P.Text 1.1","metadata":{"contentType":"Text","license":"U","title":"Untitled Text"},"subContentId":"0772da5b-624d-4986-a6ba-9abfb3329a52"}],"header":"Essential Initial Research"},{"position":{"x":49.54233409610984,"y":25.679707910470256},"alwaysFullscreen":false,"content":[{"params":{"text":"

Inherent in any business plan is a description of the Business Model chosen by the entrepreneur as the one that they feel will best ensure success. Based upon their analysis from the Essential Initial Research stage, an entrepreneur should determine how each element of their business model\u2014including their revenue streams, cost structure, customer segments, value propositions, key activities, key partners, and so on\u2014might fit together to improve the potential success of their business venture.<\/p>\n\n

For some types of ventures, at this stage an entrepreneur might launch a lean start-up and grow their business by continually pivoting, or constantly adjusting their business model in response to the real-time signals they get from the markets\u2019 reactions to their business operations. In many cases, however, an entrepreneur will require a business plan. In those cases, their initial business model will provide the basis for that plan.<\/p>\n\n

Of course, throughout this and all of the stages in this process, the entrepreneur should seek to continually gather information and adjust the plans in response to the new knowledge they gather. As shown in Figure 1 by its enclosure in the Progressive Research box, the business plan developer might need to conduct further research before finishing the business model and moving on to the initial business plan draft.<\/p>\n"},"library":"H5P.Text 1.1","metadata":{"contentType":"Text","license":"U","title":"Untitled Text"},"subContentId":"6c649003-cceb-4007-8e19-22a8e9dbbdc9"}],"header":"Business Model"},{"position":{"x":49.65675057208238,"y":43.52536707445739},"alwaysFullscreen":false,"content":[{"params":{"text":"

The Initial Business Plan Draft stage involves taking the knowledge and ideas developed during the first two stages and organizing them into a business plan format. Many entrepreneurs prefer to create a full draft of the business plan with all of the sections, including the front part with the business description, vision, mission, values, value proposition statement, preliminary set of goals, and possibly even a table of contents and lists of tables and figures all set up using the software features enabling their automatic generation. Writing all of the operations, human resources, marketing, and financial plans as part of the first draft ensures that all of these parts can be appropriately and necessarily integrated. The business plan will tell the story of a planned business startup in two ways: 1) by using primarily words along with some charts and graphs in the operations, human resources, and marketing plans and 2) through the financial plan. Both must tell the same story.<\/p>\n\n

The feedback loop shown in the diagram demonstrates that the business developer may need to review the business model. Additionally, as shown by its enclosure in the Progressive Research box, the business plan developer might need to conduct further research before finishing the Initial Business Plan Draft stage and moving on to the Making Business Plan Realistic stage.<\/p>\n"},"library":"H5P.Text 1.1","metadata":{"contentType":"Text","license":"U","title":"Untitled Text"},"subContentId":"23f4d69f-aafe-4597-9468-3841dec04b4e"}],"header":"Initial Business Plan Draft"},{"position":{"x":49.77116704805492,"y":61.103073398144424},"alwaysFullscreen":false,"content":[{"params":{"text":"

The first draft of a business plan will almost never be realistic. As the entrepreneur writes the plan, it will necessarily change as new information is gathered. Another factor that usually renders the first draft unrealistic is the difficulty in making certain that the written part\u2014in the front part of the plan along with the operations, human resources, and marketing plans\u2014tells the exact same story as the financial part does. This stage of work involves making the necessary adjustments to the plan to make it as realistic as possible.<\/p>\n\n

The Making Business Plan Realistic stage has two possible feedback loops. The first means going back to the Initial Business Plan Draft stage if the initial business plan needs to be significantly changed before it is possible to adjust it so that it is realistic. The second feedback loop circles back to the Business Model stage if the business developer needs to rethink the business model. As shown in Figure 1 by its enclosure in the Progressive Research box, the business plan developer might need to conduct further research before finishing the Making Business Plan Realistic stage and moving on to the Making Plan Appeal to Stakeholders stage.<\/p>\n"},"library":"H5P.Text 1.1","metadata":{"contentType":"Text","license":"U","title":"Untitled Text"},"subContentId":"7630c1b0-46e7-420f-9817-91f9ebb9c78c"}],"header":"Making Business Plan Realistic"},{"position":{"x":49.54233409610984,"y":80.18131562751206},"alwaysFullscreen":false,"content":[{"params":{"text":"

A business plan can be realistic without appealing to potential investors and other external stakeholders, like employees, suppliers, and needed business partners. It might also be realistic (and possibly appealing to stakeholders) without being desirable to the entrepreneur. During this stage, the entrepreneur will keep the business plan realistic as they adjust plans to appeal to potential investors, stakeholders, and themselves.<\/p>\n\n

If, for example, investors will be required to finance the business\u2019s start, some adjustments might need to be relatively extensive to appeal to potential investors\u2019 needs for an exit strategy from the business, to accommodate the rate of return they expect from their investments, and to convince them that the entrepreneur can accomplish all that is promised in the plan. In this case, and in others, the entrepreneur will also need to get what they want out of the business to make it worthwhile for them to start and run it. So, this stage of adjustments to the developing business plan might be fairly extensive, and they must be informed by a superior knowledge of what targeted investors need from a business proposal before they will invest. They also need to be informed by a clear set of goals that will make the venture worthwhile for the entrepreneur to pursue.<\/p>\n\n

The caution with this stage is to balance the need to make realistic plans with the desire to meet the entrepreneur\u2019s goals while avoiding becoming discouraged enough to drop the idea of pursuing the business idea. If an entrepreneur is convinced that the proposed venture will satisfy a valid market need, there is often a way to assemble the financing required to start and operate the business while also meeting the entrepreneur\u2019s most important goals. To do so, however, might require significant changes to the business model.<\/p>\n\n

One of the feedback loops shown in Figure 1 indicates that the business plan writer might need to adjust the draft business plan while ensuring that it is still realistic before it can be made appealing to the targeted stakeholders and desirable to the entrepreneur. The second feedback loop indicates that it might be necessary to go all the way back to the Business Model stage to re-establish the framework and plans needed to develop a realistic, appealing, and desirable business plan. Additionally, this stage\u2019s enclosure in the Progressive Research box suggests that the business plan developer might need to conduct further research.<\/p>\n"},"library":"H5P.Text 1.1","metadata":{"contentType":"Text","license":"U","title":"Untitled Text"},"subContentId":"ad8c0eae-300a-49d2-bc39-200cdeb5158c"}],"header":"Making Plan Appeal to Stakeholders and Desirable to the Entrepreneur"},{"position":{"x":50.11441647597255,"y":96.15130490939845},"alwaysFullscreen":false,"content":[{"params":{"text":"

The final stage involves putting the important finishing touches on the business plan so that it will present well to potential investors and others. This involves making sure that the math and links between the written and financial parts are accurate. It involves ensuring that all the needed corrections are made to the spelling, grammar, and formatting. The final set of goals should be written to appeal to the target readers and to reflect what the business plan says. An executive summary should be written and included as a final step.<\/p>\n"},"library":"H5P.Text 1.1","metadata":{"contentType":"Text","license":"U","title":"Untitled Text"},"subContentId":"7c2145a7-70ae-4246-af56-3531eeb5d5fb"}],"header":"Finishing the Business Plan"}],"hotspotNumberLabel":"Hotspot #num","closeButtonLabel":"Close","image":{"path":"images\/image-612c6cfe2272c.jpg","mime":"image\/jpeg","copyright":{"license":"U"},"width":481,"height":1024},"backgroundImageAltText":"Figure 1 \u2013 Business Plan Development Process"}

Business Plan Development Process

Workforce Development Curriculum Team