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Business plan is one of the most vexing aspects of the
venture development to the beginner entrepreneur. The very nature of
the expected functionality of a business plan: Reliably predict the
performance of the venture at some point in time in the future; makes it
all the more anxiety-provoking, -- and is the reason for there still
being a level of
difficulty amongst entrepreneurs on how to
write a Business Plan.
Besides, the fact is that it is never even quite clear as to what it
entails and what exactly is the proper business plan for the venture
that the entrepreneur plans to embark on.
Often, it is not even well known what a Business Plan of an entity
should contain. Even the format of the plan is never really
well-defined. There has not been established a general rule for the
structure of a Business plan.
The situation as has been analyzed persist because of the incomplete
presentation often made about business plans and in the teaching of
writing business plans. There are seemingly as many
recommended content for a business plan as there are writers of
business books.
This lack
of precision in the determination of the appropriate business plan,
in terms of contents,
for a given company accounts for the chaos and trepidation with
which entrepreneurs approach the development of a business plan.
Then, of course, there is the consideration for the two broad
categories of Business Plans: the Plan that is written for a venture
that is yet to exist; and the Plan that is written for a venture
that already exists. The former is often more difficult to write
than the latter. The problem is that the reference point of the
former is all imagination while the reference point for the latter
is real -- the state of the operating business -- granting the
benefit of projective business analysis; hence the The plan for the
former is entirely cerebral.
Needless to note though that there are not many people who are
cerebral enough as to have the capacity to peer into the future with
an imaginative state of mind. As has been determined over the years
through psychological studies only about 25 % of the world
population can actually visualize and hold within the mind with any
level of steadiness of the future. These studies have shown that
about 6.25 percent of the world population than visualize the
future going down 25 years, about 12.5 percent can see into the
future of about twenty years, about 18.75 percent of the world
population can visualize the future up to a maximum of ten to twelve
years, and about 25 percent can visual the future going down five
years,
five years
down the road. |
While demarcations of future
time-snapshots are required in the preparation of a business, as per
the capabilities expressed by the psychological studies the time
frame into the future into which a specific entrepreneur may need to
look into the future is somewhat defined by the entrepreneur, both
consciously and unconsciously. The situation of the unconscious
determination of the future timeframe of visualization is determined
by the psychological capacity of the entrepreneur, which the
entrepreneur must determine through psychological self-analysis.
This self-analysis could be performed by taking some of the
psychological tests available in the public domain. On the contrary the situation of
conscious determination of the future time-frame into which the
entrepreneur must visualize the business depends on the state in
which the entrepreneur intends to position the company/business.
Yet, for brand new
businesses though there has been determined an
empirical time frame for positioning the venture as being
defined by the time-to-turn black. On the other hand, for a venture
that has already started operations, the time-span for which the
Business Plan must be developed depends on the venture development
stage as well as the stage of the Corporate Lifecycle Curve in which the venture
exists then, and the next development stage into which the
entrepreneur plans on developing the venture. However, in general it
is preferred to have the venture evolve into the Prime Stage of the Adizes
Corporate Lifecycle Curve.
In effect then, an entrepreneur not capable of visualizing far into
the future as per these empirically determined venture development
time-span can not develop an efficacious Business Plan - or more
specifically, the Business Plan Appendixes, and would be discovered
as not capable of developing the venture into commercially as well
as financially viable operation.
However an
entrepreneur who is capable psychologically to visualize the future
far into the number of years that his venture needs to turn into black,
the choice of conscious timeframe is, nonetheless, not entirely
under the control of the entrepreneur; rather the time frame is
defined by the closest stage of the corporate lifecycle. The Adizes
defined Corporate Lifecycle Curve ultimately determines to some
extent the state of the entity that will prevail based on the time
frame the entrepreneur consciously chooses to operate at. Clearly
then for the entrepreneur who has the task
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of
developing a business plan, a good point from which to begin the
analysis of the future company would be to determine the Corporate Lifecycle stage of the
venture on the Corporate Lifecycle Curve which is closest to the
length of time into the future for which the entrepreneur can
visualize the future. The organizational structure characteristic of
the Lifecycle stage of the venture should then define
the content and structure of the business plan. Once this assessment
is made, the entrepreneur is ready to put together the business plan.
However, as already observed,
at a minimum then, The Business Plan now consists of the following
- Business Plan :- Growth Tactical Plan
- Appendixes:- Growth Tactics Implementation Plan
However, the commercial and financial
viability of the venture at the end of the development time-span is
attested by the self-supporting state of the venture. As such, the
time-dependent change of the state of the venture must be reflected
by the financial state of the venture: The results of the
Growth Tactics Implementation Plan should, as such, be used to
prepare the
Financial Statements of the corporation, if for no
reason, for attesting the viability of the implementation plan to
effect the manifestation of the entrepreneur's vision.
The Business Plan must, now as
required for funding and business performance assessments, also
include Financial Statements, with the result that the Complete Business Plan
should now consists of the following
- Business Plan :- Growth Tactical Plan
- Financial Statements
- Appendixes:- Growth Tactics Implementation Plan
Preparing the Financial
Statements is actually where the test of the capability of the
entrepreneur to visualize the future is most felt. The fact is the
entrepreneur must necessarily operate the company in the form of a
thought experiment in order to effectively generate the financial
records needed to create the Financial Statements.
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