Business Plan Overview and Focus

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is a primary purpose of a business plan?

  • To record daily transactions
  • To assess employee performance
  • To manage customer relationships
  • To outline business goals and strategies (correct)

Business plans are only used to obtain bank loans.

False (B)

What type of business plan focuses on goals important to outside stakeholders?

Externally-focused plan

A business plan serves as a __________ for a business, providing direction for its operations.

<p>road-map</p> Signup and view all the answers

Match the following types of business plans with their descriptions:

<p>Externally-focused plan = Targets goals for external stakeholders Internally-focused plan = Aims at intermediate internal goals Strategic plan = General guidance on internal goals Operational plan = Describes goals of a specific department or group</p> Signup and view all the answers

Which of the following is not typically included in a business plan?

<p>Community outreach programs (D)</p> Signup and view all the answers

Operational plans are created solely for the purpose of gaining external funding.

<p>False (B)</p> Signup and view all the answers

What is a common tool used to measure the success of an internally-focused business plan?

<p>Balanced scorecard</p> Signup and view all the answers

What is a primary concern of venture capitalists when reviewing a business plan?

<p>Initial investment and exit valuation (D)</p> Signup and view all the answers

A non-profit business plan focuses primarily on financial goals like maximizing profit.

<p>False (B)</p> Signup and view all the answers

What is the purpose of an elevator pitch?

<p>To quickly summarize a business plan and generate interest.</p> Signup and view all the answers

A business plan for a bank loan will build a convincing case for the organization's ability to _______.

<p>repay the loan</p> Signup and view all the answers

Match the following types of business plans with their primary audience:

<p>Bank loan business plan = Banks and lenders Venture capital plan = Venture capitalists Internal operational plan = Management External presentation plan = External stakeholders</p> Signup and view all the answers

Which element is important to include in an externally targeted business plan?

<p>Legal concerns and financial liabilities (C)</p> Signup and view all the answers

Writing a good business plan guarantees business success.

<p>False (B)</p> Signup and view all the answers

What are common problems during the estimation of costs and revenues in a business plan?

<p>Underestimating costs and overestimating revenues.</p> Signup and view all the answers

An internal operational plan has a higher degree of _______ than externally targeted plans.

<p>candor and informality</p> Signup and view all the answers

Match the following business plans with their characteristics:

<p>Elevator pitch = 30 to 60 seconds summary Pitch deck = Visual presentation to spark interest Written presentation = Detailed and well-formatted for stakeholders Stripped-down plan = Basic content for initial relationship building</p> Signup and view all the answers

What is the primary purpose of many business plans?

<p>To secure fundraising (D)</p> Signup and view all the answers

Reference class forecasting aims to increase the risk of cost overruns in business planning.

<p>False (B)</p> Signup and view all the answers

What can complicate the sharing of a business plan with venture capitalists?

<p>Venture capitalists often refuse to sign NDAs before reviewing the plan.</p> Signup and view all the answers

For-profit organizations focus on maximizing _______ while non-profit organizations aim for generating societal benefits.

<p>wealth</p> Signup and view all the answers

What is a common risk for technology start-ups during the dot-com bubble?

<p>Cost overruns and revenue shortfalls (A)</p> Signup and view all the answers

Flashcards

What is a business plan?

A formal written document outlining a business's goals, methods for achieving them, and timeframes for accomplishment.

What are external stakeholders?

These stakeholders are primarily external to the business, such as investors, customers, or donors.

What are internal stakeholders?

These stakeholders are internal to the business and include those responsible for achieving the organization's goals.

What is an externally-focused business plan?

A business plan focusing on goals important to external stakeholders, often including detailed information about the organization or the team.

Signup and view all the flashcards

What is an internally-focused business plan?

A business plan focusing on intermediate goals needed to achieve the external goals, often covering specific projects or initiatives.

Signup and view all the flashcards

What is a strategic plan?

A type of business plan that outlines the organization's strategic goals without necessarily detailing the specific methods for achieving them.

Signup and view all the flashcards

What is a project plan?

A plan that outlines the goals of a specific project, its place within the organization's strategic goals, and the methods for achieving those goals.

Signup and view all the flashcards

What is an operational plan?

A plan that describes the goals of an internal organization unit, working group, or department.

Signup and view all the flashcards

Elevator Pitch

A short summary of the business plan's key points, often used to pique the interest of potential investors or partners. It's called an "elevator pitch" because it should be concise enough to be delivered in the time it takes to ride an elevator.

Signup and view all the flashcards

Pitch Deck

A visual presentation that uses slides and oral commentary to capture the attention of investors and encourage them to review a written business plan. It often includes key financial data and trends.

Signup and view all the flashcards

External Presentation

A detailed, well-written, and formatted document that outlines the business plan's key elements for external stakeholders like investors or partners. It aims to impress and provide a comprehensive overview.

Signup and view all the flashcards

Internal Operational Plan

A comprehensive plan outlining the internal operations and details of the business, providing information relevant to management and internal decision-making. It can be less formal than the external presentation.

Signup and view all the flashcards

Reference Class Forecasting

A method used to estimate costs and revenues for a business plan. It helps to reduce the risk of overestimating revenue or underestimating costs by analyzing similar ventures and historical data.

Signup and view all the flashcards

Non-Disclosure Agreement (NDA)

A legal agreement that protects confidential information shared during the business plan review process. It safeguards the business's ideas and prevents potential investors from exploiting them.

Signup and view all the flashcards

Fundraising

The process of raising funds from investors to finance the business. A strong business plan is critical to securing investments and convincing investors of the company's potential.

Signup and view all the flashcards

For-Profit Organizations

Organizations that primarily focus on generating profits and maximizing financial gains. Their business plans typically center around financial goals.

Signup and view all the flashcards

Non-Profit Organizations

Organizations that primarily focus on serving a social cause or mission. Their business plans prioritize achieving their mission and ensuring financial sustainability to support their goals.

Signup and view all the flashcards

Organizational Mission

The guiding principle or purpose that defines the activities of a non-profit organization. It outlines the organization's reason for existence and its intended impact on society.

Signup and view all the flashcards

Margin

The ability of a business to generate revenue and sustain itself financially. In non-profit organizations, it's balancing the mission with financial viability.

Signup and view all the flashcards

Business Plan Satire

A humorous or satirical representation of business plans that is often used to highlight flaws and common mistakes. Can be used to improve the quality of business planning.

Signup and view all the flashcards

Financial Viability

The ability of a business to generate revenue and sustain itself financially. In non-profit organizations, it's balancing the mission with financial viability.

Signup and view all the flashcards

Financial Sustainability

The ability of a business to generate revenue and sustain itself financially. In non-profit organizations, it's balancing the mission with financial viability.

Signup and view all the flashcards

Study Notes

Business Plan Overview

  • A business plan is a formal document outlining business goals, methods to achieve them, and a timeframe.
  • It details the business, background, financial projections, and strategies.
  • It acts as a roadmap for the business.
  • Often required for securing loans or financing.
  • Templates available from organizations like the Small Business Administration (US).
  • May be internally or externally focused.

External Focus

  • Externally focused plans address goals important to external stakeholders, like investors, customers (for-profit), donors, clients (non-profit), taxpayers, higher-level government agencies, and international lending bodies.

Internal Focus

  • Internally focused plans target intermediate goals needed to achieve external goals.
  • May cover new products, services, IT systems, restructuring, or refurbishing.
  • Often developed with tools like balanced scorecards, OGSM, or critical success factors.
  • Measurements use non-financial data.
  • Strategic plans identify internal goals but provide general guidance.
  • Operational plans detail departmental goals.
  • Project plans detail individual project goals and their place within the overall strategy.

Business Plans as Decision-Making Tools

  • The content and format depend on the goals and the audience.
  • Different audiences have different concerns (e.g., banks focus on repayment, venture capitalists on investment & exit).
  • The plan draws on various business disciplines: finance, HR, IP, supply chain, operations, marketing.
  • The plan can be viewed as a collection of interconnected sub-plans.
  • A good plan can make a business more credible and attractive.

Presentation Formats

  • Multiple formats for a single plan (especially startups).
  • "Elevator pitch": A brief summary (30-60 seconds) to pique interest.
  • Pitch deck: A slide show/presentation to generate discussion.
  • Written presentation for external stakeholders: A detailed, well-formatted document.
  • Internal operational plan: detailed for internal use.

Business Plan Viability

  • Cost and revenue estimates are crucial for viability.
  • Cost overruns and revenue shortfalls common, especially in startups.
  • Reference class forecasting can improve accuracy.
  • Legal considerations (e.g., NDAs, non-competes) affect audience and presentation.
  • Two versions of the plan may sometimes be necessary.

Motivation and Goals

  • Funding is often a primary reason to create a plan.
  • Goals vary based on the organization type (for-profit vs. non-profit).
  • For-profit often targets financial goals (profit, wealth creation).
  • Non-profit focuses on mission and providing societal benefit, but may also target revenue optimization.
  • Non-profits balance mission and margin (revenue).

Satire and Education

  • Satires of business plans exist to highlight shortcomings and educate.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

More Like This

Business Plan Writing
10 questions
Business Plan Overview
10 questions

Business Plan Overview

JawDroppingSarod avatar
JawDroppingSarod
Business Plan Importance and Main Elements
16 questions
Use Quizgecko on...
Browser
Browser