Business Plan: Business Plan to an Organization

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Business Plan to an Organization

Looking before you leap: The value of an effective business plan for an organization

Writing an effective business plan is not simply beneficial in terms of generating start-up capital. Ideally, it should focus the mind of the organizer of the enterprise and enable him or her to envision where the business is 'going' in the near and far future. First and foremost, it is essential to clarify the purpose of a business, as well as to stimulate the interest and confidence of angel investors or banks offering loans. "Without it, you are likely to come unstuck and lost along the way, as you will forget what you have learnt from people through research, training and networking -- all essential activities when starting out" (the value of a business plan, 2010, Starting Out). "The real value of creating a business plan is not in having the finished product in hand; rather, the value lies in the process of researching and thinking about your business in a systematic way. The act of planning helps you to think things through thoroughly, study and research if you are not sure of the facts, and look at your ideas critically. It takes time now, but avoids costly, perhaps disastrous, mistakes later" (Business plan for starting out, 2010, Score).

As well as generating quantitative data, hard numbers about potential consumer demand and the ability to generate revenue while estimating costs of production, the business plan can be an important psychological reality check for the potential business owner. Having a good idea is not enough. The idea must be profitable enough relative to output costs and sustainable in the long-term as well as the short-term. Of course, in terms of getting 'in the black,' supply and demand in the short run is critical. An organization that is able to capitalize upon a recent trend can generate investor confidence and create an impression that it is an organization worthy of interest.

However, a dramatic upsurge in initial consumer demand in the target market is not enough -- an organization must build a long-standing base. For example, recently there was a 'cupcake craze' in New York City, spawned by the popularity of the Magnolia Bakery popularized in the series Sex in the City. However, quickly the trend began to wane, although beginning a bakery is an extremely expensive and costly endeavour. Many enterprises fail because a fad does not become a long-term trend, as was manifest in the dot.com boom and bust. Exterior macro factors, such as a recession, can also impact a business. The downswing in the housing industry decimated the fortunes of many construction companies and the subsequent credit crisis caused many luxury businesses that sold products that were not strict necessities to fail (including boutique bakeries). All restaurants require trained staff and expensive outlays of equipment and legal costs to be declared sanitary enough to serve the public. A bakery might not be able to open until after the craze has long abated, in other words. So a… [END OF PREVIEW]

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Business Plan to an Organization.  (2010, September 4).  Retrieved November 21, 2019, from https://www.essaytown.com/subjects/paper/business-plan-organization/46834

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"Business Plan to an Organization."  Essaytown.com.  September 4, 2010.  Accessed November 21, 2019.
https://www.essaytown.com/subjects/paper/business-plan-organization/46834.