Business Plans Overview

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Questions and Answers

What is the primary audience for an operational business plan?

Investors and stakeholders

Corporate partners

Operational managers (correct)

Marketing team

How many pages does an operational business plan typically range from?

10–15 pages

25–35 pages

40–100 pages (correct)

50–200 pages

What is the main purpose of an operational business plan?

To provide a blueprint for a company’s operations (correct)

To outline marketing strategies

To attract potential investors

To evaluate employee performance

When do businesses typically write a full business plan?

When a new venture is seeking funding or financing Signup and view all the answers

What sentiment about business plans is expressed by some investors?

They find writing a full business plan essential, regardless of initial requests Signup and view all the answers

What is a characteristic of a summary business plan?

It typically ranges from 10–15 pages Signup and view all the answers

How does the length of a full business plan compare to an operational business plan?

It is typically longer Signup and view all the answers

Which type of business plan is best suited for new ventures testing the market?

Summary business plan Signup and view all the answers

What is an important reason for including contact information in both the cover letter and the business plan?

To facilitate communication in case the documents are separated. Signup and view all the answers

Why is a trademark placed near the center of the cover page important?

It signifies the importance of the business's identity. Signup and view all the answers

What purpose does the executive summary serve in a business plan?

To offer a condensed overview of the business venture. Signup and view all the answers

What key realization did GrubHub founders come to regarding their customers?

Customers only wanted to pay when placing an order. Signup and view all the answers

What common challenge do business owners face after launching based on their business plan?

Determining whether to maintain the original business plan. Signup and view all the answers

What is the likely outcome when founders revise their business plan based on customer insights?

They increase the likelihood of business success. Signup and view all the answers

What must entrepreneurs often adjust to after receiving customer feedback?

Their overall business plan. Signup and view all the answers

What does a table of contents in a business plan help the reader do?

Navigate the sections and appendices of the document. Signup and view all the answers

What was the primary problem that Songkick aimed to solve for music lovers?

Music fans were missing out on concerts happening in their area. Signup and view all the answers

What significant change did Instagram undergo from its initial concept?

It switched from a check-in service to a photo-sharing platform. Signup and view all the answers

What was the dilemma faced by Instagram's co-founders regarding Burbn?

They were concerned about the competitiveness and clutter of the app. Signup and view all the answers

What strategy did GrubHub adopt after changing its pricing model?

They collected a commission for each order placed. Signup and view all the answers

Which of the following best describes the evolution of Instagram?

It shifted from being a location-based service to primarily photo-sharing. Signup and view all the answers

What was the outcome for GrubHub after changing their model?

A drastic increase in restaurant inquiries for listing on their platform. Signup and view all the answers

What was one major concern for Instagram's founders while developing Burbn?

They were worried about lacking unique selling points against rivals. Signup and view all the answers

Which business model did Songkick primarily rely on for its operations?

Subscription-based service for concert information. Signup and view all the answers

What is the appropriate sequence for writing an executive summary?

It should be written last after the full business plan is complete. Signup and view all the answers

What does industry analysis primarily focus on?

Examining characteristics like size, growth rate, and sales projections of the industry. Signup and view all the answers

Why is it important to separate industry analysis from target market analysis?

To ensure a thorough understanding of the industry before defining the target market. Signup and view all the answers

What does the term 'industry structure' refer to?

The concentration or fragmentation of firms within the industry. Signup and view all the answers

What insights should the industry analysis provide about the participants in the industry?

Their innovativeness and responsiveness to environmental changes. Signup and view all the answers

What is a key consideration mentioned in an industry analysis?

The key success factors within the industry. Signup and view all the answers

What type of industry is generally more open to new entrants?

Fragmented industries with many smaller players. Signup and view all the answers

What might be a result of writing an executive summary first?

The business plan may become constrained by the summary. Signup and view all the answers

What is the primary use of an overall schedule in a business plan?

To show the major events required for launching the business Signup and view all the answers

What should be the first item included in the financial projections section of a business plan?

A sources and uses of funds statement Signup and view all the answers

Why are assumptions sheets important in financial projections?

They explain the basis for the financial assumptions and projections Signup and view all the answers

Which of the following best describes what should not be included in the assumptions sheet?

Unsubstantiated beliefs about market conditions Signup and view all the answers

How can an effectively prepared schedule impact potential investors?

It reveals the management team's awareness of critical launching events Signup and view all the answers

What type of event is typically represented in the overall schedule of a business plan?

Completion of prototypes Signup and view all the answers

What is the purpose of the financial projections section in a business plan?

To express the developed plans in financial terms Signup and view all the answers

What should an entrepreneur include when stating assumptions about future economic conditions?

A general consensus view without specific sources Signup and view all the answers

Study Notes

Operational Business Plans

Tailored for established businesses, providing a detailed blueprint for operations.
Typically ranges between 40 and 100 pages, offering extensive guidelines for operational managers.

Types of Business Plans

Full Business Plan:
- Length: 25–35 pages.
- Ideal for ventures needing funding or financing.
- Serves as a comprehensive guide for company operations.
Operational Business Plan:
- Length: 40–100 pages.
- Primarily for internal stakeholders, not for external investors.
- Aims to create an operational blueprint for new ventures.
Short Business Plan:
- Length: 10–15 pages.
- Suitable for early-stage new ventures testing market interest.

Executive Summary

Acts as a concise overview of the entire business plan.
Should be written last to ensure it accurately reflects the comprehensive plan.
Contains critical contact information and confidentiality alerts.

Industry Analysis

Describes the industry where the firm will operate, including size, growth rate, and sales projections.
Understanding the industry is essential before selecting a target market.
Differentiates between fragmented and concentrated industries, influencing new entrants.

Schedule and Milestones

A vital component detailing major events for launching the business.
Highlights critical milestones like incorporation, prototype completion, and securing initial financing.
Provides a roadmap for what needs to be accomplished to demonstrate management's planning capability to investors.

Financial Projections

Positioned at the end of the business plan to reflect comprehensive plans in financial terms.
Includes a sources and uses of funds statement detailing financial needs and allocations.
Assumptions sheets clarify the underlying predictions driving the financial statements.
Assumptions can be general economic forecasts or specific data-backed projections.

Adjusting Business Plans

Businesses often need to adapt their plans based on customer feedback post-launch.
Case studies illustrate the varying degrees of success and necessary adaptations for companies like GrubHub and Songkick.
GrubHub shifted from a subscription model to a commission-based system after understanding customer preferences, resulting in increased restaurant partnerships.
Instagram's founding exemplifies drastic changes, transitioning from a check-in service (Burbn) to a photo-sharing platform.

Key Success Factors

Identifying industry key success factors, understanding participant behavior, and knowing competitive dynamics are crucial for positioning the firm effectively.
A visually presented organizational chart enhances clarity regarding the company's structure.

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Description

Explore the different types of business plans, including operational, full, and short plans. This quiz provides insights into the structure, purpose, and audience for each type, helping you understand their significance in business strategy. Test your knowledge on how to craft an effective business plan and the essential components involved.