Week 10 Business Plan

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Questions and Answers

What is the purpose of a business plan, according to the text?

To skip the process of planning

To guarantee immediate success for the business

To outline a company's business activities (correct)

To attract outside investors

Why do startup companies use business plans?

To keep the executive team focused

To ensure immediate success

To overlook potential obstacles

To get off the ground and attract investors (correct)

What advantage do entrepreneurs who write formal plans have over nonplanning entrepreneurs?

They rely less on trusted outsiders' feedback

They are 16% more likely to achieve viability (correct)

They face fewer obstacles to success

They invest more money in their ideas

Why should a business plan be specific and unique, as mentioned in the text?

To outline strategic goals clearly Signup and view all the answers

What is a key benefit of having a business plan, as per the text?

Thinking through ideas before investing heavily Signup and view all the answers

Why do established companies use business plans, according to the text?

To keep the executive team focused on objectives Signup and view all the answers

What is highlighted as a purpose of a business plan in the text?

Keeping the executive team aligned on strategic goals Signup and view all the answers

Why do entrepreneurs need to think through their ideas before investing heavily, according to the text?

To avoid investing too much money initially Signup and view all the answers

What is emphasized as a key element that most companies would want to include in their business plans?

'Why' and unique selling points (USPs) Signup and view all the answers

Why are detailed specifics about the company important in a business plan, as mentioned in the text?

To showcase strategic goals and timeframes clearly Signup and view all the answers

What refers to the different structures and methods used to deliver a company's product and value proposition to its customers?

Channels Signup and view all the answers

Which company is mentioned as a fast-fashion, cost-driven company in the text?

Forever 21 Signup and view all the answers

What do customer relationships refer to?

Interactions a company has with its customers Signup and view all the answers

How does a value-driven company differ from a cost-driven company?

Value-driven companies focus on creating value for customers whereas cost-driven companies focus on minimizing costs Signup and view all the answers

What does revenue streams refer to in a business context?

Generating money through various sources related to the value proposition Signup and view all the answers

In the context of customer segments, what does targeting a 'small niche community' imply?

Creating value for only a select group of people within the company Signup and view all the answers

What is the main focus of cost-driven companies?

Minimizing costs and prices for customers Signup and view all the answers

What should a company consider about its channels when assessing their effectiveness?

The integration of supply, distribution, and marketing channels Signup and view all the answers

How do customer relationships differ between businesses providing 'dedicated assistance' and those requiring 'self-service'?

Businesses offering self-service expect customers to seek support independently. Signup and view all the answers

What should be evaluated when determining if a company is properly utilizing economies of scale?

The relationship between production levels and unit costs. Signup and view all the answers

What is the purpose of a Business Model Canvas template?

To simplify a business plan into key building blocks Signup and view all the answers

Which section of a Business Plan describes the current state of the company’s industry and existing competition?

Market analysis Signup and view all the answers

What do Key Partners refer to in the Business Model Canvas template?

The companies or people your business works with to create strategic relationships Signup and view all the answers

Which component of a Business Plan introduces the company, includes the mission statement, and provides information about leadership?

Executive summary Signup and view all the answers

What does the Value Proposition in a business model focus on?

The fundamental offering to customers Signup and view all the answers

What aspect of a Business Model Canvas template involves identifying companies or people your business works with to create strategic relationships?

Key Partners Signup and view all the answers

Which section of a Business Plan details how the company plans to attract and keep customers?

Marketing strategy Signup and view all the answers

What is the purpose of Key Resources in a business model?

To deliver the value proposition Signup and view all the answers

What is typically found in the Financial plans and projections section of a Business Plan for established businesses?

Balance sheets and other financial statements Signup and view all the answers

What does Key Activities focus on in a business model?

Specific tasks fundamental to business operations Signup and view all the answers

Study Notes

How to Offer Something Different

Companies can offer something different by satisfying customer demands in various ways, such as price, quality, design, status, etc.
Understanding customer relationships, channels, customer segments, cost structure, and revenue streams is crucial to differentiate a company.

Customer Relationships

Customer relationships refer to the interactions a company has with its customers.
Examples of customer relationships include dedicated assistance, self-service support, and frequent communication.
Companies should consider the type of relationship they have with their customers, how they interact with them, and how much support is provided.

Channels

Channels refer to the structures and methods used to deliver a company's product and value proposition to customers.
Examples of channels include supply, distribution, marketing, and communication channels.
Companies should consider how they deliver their value proposition, reach their customer segments, and integrate their channels.

Customer Segments

Customer segments refer to the different types of customers a company manages.
Examples of customer segments include economy, business, and first-class customers.
Companies should consider who their main focus is, who they are creating value for, and what their different customer segments are like.

Cost Structure

Cost structure refers to how a company spends money on operations.
Companies can be cost-driven or value-driven, focusing on minimizing costs or creating value for customers.
Companies should consider their key costs, major drivers of cost, and how their costs relate to their revenue streams.

Revenue Streams

Revenue streams refer to the different ways a company's value proposition generates money.
Examples of revenue streams include multiple products and services, such as Apple Music.
Companies should consider their pricing strategy, payment channels, and forms of payment.

Business Plans

A business plan is a document describing a company's business activities and how it plans to achieve its goals.
Business plans are important for startup companies to get off the ground and attract investors, and for established companies to stay focused on their objectives.
A business plan should include key elements such as an executive summary, products and services, market analysis, marketing strategy, and financial plans and projections.

Business Model Canvas

The business model canvas is a strategic planning tool used to illustrate and develop a business model.
The canvas template includes nine building blocks: key partners, key activities, key resources, value propositions, customer relationships, channels, customer segments, cost structure, and revenue streams.
The business model canvas template simplifies a business plan into a condensed form.

Key Partners

Key partners are companies or people a business works with to create a strategic relationship.
Examples of key partners include suppliers and distribution partners.
Companies should consider what key resources they receive from these partners, what key activities are performed, and what motivates them to work with these partners.

Key Activities

Key activities are specific activities or tasks fundamental to the operation of a business.
Examples of key activities include the procurement of fresh produce for a restaurant.
Companies should consider what key activities are necessary to deliver their value proposition, how they set themselves apart from others, and how their key activities affect their revenue streams and distribution channels.

Key Resources

Key resources are the assets necessary to operate and deliver a value proposition.
Examples of key resources include mining equipment for a diamond mining company.
Companies should consider what specific assets are necessary to operate their business, what resources are needed to maintain customer relationships, and what resources are required for distribution channels and revenue streams.

Value Propositions

Value propositions determine the fundamental offering a company is trying to give its customers.
Examples of value propositions include Spotify's "Music for everyone".
Companies should consider what problem they are trying to solve, what needs they are satisfying, and what exactly they are trying to give to customers.

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Description

Learn about what a business plan is and why business planning is important for both startup and established companies. Explore the significance of having a structured business strategy.