How to Write a Business Plan: Your Step-by-Step Guide

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So, you’ve got an idea and you want to start a business —great! Before you do anything else, like seek funding or build out a team, you'll need to know how to write a business plan. This plan will serve as the foundation of your company while also giving investors and future employees a clear idea of your purpose.

Below, Lauren Cobello, Founder and CEO of Leverage with Media PR , gives her best advice on how to make a business plan for your company.

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What is a business plan, and when do you need one?

According to Cobello, a business plan is a document that contains the mission of the business and a brief overview of it, as well as the objectives, strategies, and financial plans of the founder. A business plan comes into play very early on in the process of starting a company—more or less before you do anything else.

“You should start a company with a business plan in mind—especially if you plan to get funding for the company,” Cobello says. “You’re going to need it.”

Whether that funding comes from a loan, an investor, or crowdsourcing, a business plan is imperative to secure the capital, says the U.S. Small Business Administration . Anyone who’s considering giving you money is going to want to review your business plan before doing so. That means before you head into any meeting, make sure you have physical copies of your business plan to share.

Different types of business plans

The four main types of business plans are:

Startup Business Plans

Internal business plans, strategic business plans, one-page business plans.

Let's break down each one:

If you're wondering how to write a business plan for a startup, Cobello has advice for you. Startup business plans are the most common type, she says, and they are a critical tool for new business ventures that want funding. A startup is defined as a company that’s in its first stages of operations, founded by an entrepreneur who has a product or service idea.

Most startups begin with very little money, so they need a strong business plan to convince family, friends, banks, and/or venture capitalists to invest in the new company.

Internal business plans “are for internal use only,” says Cobello. This kind of document is not public-facing, only company-facing, and it contains an outline of the company’s business strategy, financial goals and budgets, and performance data.

Internal business plans aren’t used to secure funding, but rather to set goals and get everyone working there tracking towards them.

As the name implies, strategic business plans are geared more towards strategy and they include an assessment of the current business landscape, notes Jérôme Côté, a Business Advisor at BDC Advisory Services .

Unlike a traditional business plan, Cobello adds, strategic plans include a SWOT analysis (which stands for strengths, weaknesses, opportunities, and threats) and an in-depth action plan for the next six to 12 months. Strategic plans are action-based and take into account the state of the company and the industry in which it exists.

Although a typical business plan falls between 15 to 30 pages, some companies opt for the much shorter One-Page Business Plan. A one-page business plan is a simplified version of the larger business plan, and it focuses on the problem your product or service is solving, the solution (your product), and your business model (how you’ll make money).

A one-page plan is hyper-direct and easy to read, making it an effective tool for businesses of all sizes, at any stage.

How to create a business plan in 7 steps

Every business plan is different, and the steps you take to complete yours will depend on what type and format you choose. That said, if you need a place to start and appreciate a roadmap, here’s what Cobello recommends:

1. Conduct your research

Before writing your business plan, you’ll want to do a thorough investigation of what’s out there. Who will be the competitors for your product or service? Who is included in the target market? What industry trends are you capitalizing on, or rebuking? You want to figure out where you sit in the market and what your company’s value propositions are. What makes you different—and better?

2. Define your purpose for the business plan

The purpose of your business plan will determine which kind of plan you choose to create. Are you trying to drum up funding, or get the company employees focused on specific goals? (For the former, you’d want a startup business plan, while an internal plan would satisfy the latter.) Also, consider your audience. An investment firm that sees hundreds of potential business plans a day may prefer to see a one-pager upfront and, if they’re interested, a longer plan later.

3. Write your company description

Every business plan needs a company description—aka a summary of the company’s purpose, what they do/offer, and what makes it unique. Company descriptions should be clear and concise, avoiding the use of jargon, Cobello says. Ideally, descriptions should be a few paragraphs at most.

4. Explain and show how the company will make money

A business plan should be centered around the company’s goals, and it should clearly explain how the company will generate revenue. To do this, Cobello recommends using actual numbers and details, as opposed to just projections.

For instance, if the company is already making money, show how much and at what cost (e.g. what was the net profit). If it hasn’t generated revenue yet, outline the plan for how it will—including what the product/service will cost to produce and how much it will cost the consumer.

5. Outline your marketing strategy

How will you promote the business? Through what channels will you be promoting it? How are you going to reach and appeal to your target market? The more specific and thorough you can be with your plans here, the better, Cobello says.

6. Explain how you’ll spend your funding

What will you do with the money you raise? What are the first steps you plan to take? As a founder, you want to instill confidence in your investors and show them that the instant you receive their money, you’ll be taking smart actions that grow the company.

7. Include supporting documents

Creating a business plan is in some ways akin to building a legal case, but for your business. “You want to tell a story, and to be as thorough as possible, while keeping your plan succinct, clear, interesting, and visually appealing,” Cobello says. “Supporting documents could include financial projects, a competitive analysis of the market you’re entering into, and even any licenses, patents, or permits you’ve secured.”

A business plan is an individualized document—it’s ultimately up to you what information to include and what story you tell. But above all, Cobello says, your business plan should have a clear focus and goal in mind, because everything else will build off this cornerstone.

“Many people don’t realize how important business plans are for the health of their company,” she says. “Set aside time to make this a priority for your business, and make sure to keep it updated as you grow.”

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How to Write a Business Plan Learn the essential elements of writing a business plan, including advice and resources for how to write and conduct each section of your business plan.

No business can be successful without a solid business plan. In fact, a business plan could be the thing that makes or breaks your entrepreneurial enterprise, especially if you haven't started a successful business in the past.

Let's break down what a business plan is, why it's important, and a step-by-step guide on how to write one in detail.

What Is a Business Plan?

Put simply, a business plan is a detailed outline explaining what a business will be, how it will work, and how it will bring in money. Business plans can range heavily in terms of length and complexity, but they all include an explanation of what the business will do and how it will turn a profit, dealing with everything from financial statements and pricing to potential customer segments and business development.

Think of business plans as the guiding documents for for-profit organizations. A business plan guides business owners and employees or other executives at existing businesses and helps inspire investor confidence when seeking financing in the earliest days of a business's life. There are a few types of business plans, but they all do the same things.

Related: An Introduction to Business Plans

Why Is a Business Plan Important?

A small business plan is important for any new enterprise, regardless of industry or niche. Why?

By far, the most crucial thing a good business plan does is improve investor confidence. When an entrepreneur or startup executive needs to secure funding and business loans, they have to convince investors that their business is worth investing in. It's impossible to do that without a solid business plan explaining:

  • What the business will provide or make
  • How the business will make money (i.e., financial projections for a new business)
  • Who the business will advertise to
  • And similar forecasts or discussions lenders need to see

By looking through a business plan, investors (both individuals and large firms) can tell whether a business owner (or would-be entrepreneur) has a good idea or is merely flailing in the wind.

In addition, a business plan is important since it will help guide your actions as a business owner and executive. With a business plan to keep your head on straight, you'll know what to do, how to scale your business, and what objectives you need to meet in order to achieve the goals outlined in your business plan.

Elements of a Traditional Business Plan

Business plans are usually comprised of several key elements. These include:

  • A title page , which breaks down a rough overview of the startup business and its name
  • An executive summary, which essentially describes what you want the business to achieve as its owner
  • The business description, which describes the business, its structure, what it sells or produces, and related information. It should also include the value proposition and any intellectual property you have for your business idea
  • Market research and strategies, which will help convince potential investors that you know how you will market and sell your products to your target audience
  • Management and personnel, which should outline your projections for the employees or labor force you'll need to achieve your business goals. If you plan to hire team members, don't worry about stating too much about them here
  • Financial documents, including any capital you have already raised, the funding you need to get your business off the ground, and so on. This can include a balance sheet or cash flow statements if you already have a financial plan or have operated your business for some time
  • A competitive analysis page , breaking down the status of your competitors in the same industry. This can include company descriptions or business models based on what you know
  • A design and development plan, exploring how you will design and develop your business for ultimate success. Think of this as a roadmap or mission statement for how your brand will hit milestones and gain a competitive advantage over other brands
  • An operations and management plan , which should explore and explain how you will run and operate your business as its owner or chief executive

With each section of your business plan, an investor or venture capitalist can determine the viability of your sole proprietorship, LLC, or other business.

Related: How to Write a Business Plan

Now that you understand why you need a business plan and you've spent some time doing your homework gathering the information you need to create one, it's time to roll up your sleeves and get everything down on paper. The following pages will describe in detail the seven essential sections of a business plan: what you should include, what you shouldn't include, how to work the numbers and additional resources you can turn to for help. With that in mind, jump right in.

Executive Summary

Within the overall outline of the business plan, the executive summary will follow the title page. The summary should tell the reader what you want. This is very important. All too often, what the business owner desires is buried on page eight. Clearly state what you're asking for in the summary.

Related: How to Start a Business With (Almost) No Money

Business Description

The business description usually begins with a short description of the industry. When describing the industry, discuss the present outlook as well as future possibilities. You should also provide information on all the various markets within the industry, including any new products or developments that will benefit or adversely affect your business.

Business Plan Guide "

Before writing your plan.

  • How Long Should Your Plan Be?
  • When Should You Write It?
  • Who Needs A Business Plan?
  • Why Should You Write A Business Plan?
  • Determine Your Goals and Objectives
  • Outline Your Financing Needs
  • Plan What You'll Do With Your Plan
  • Don't Forget About Marketing

Writing Your Business Plan

  • How To Write A Business Plan
  • The Ingredients of a Marketing Plan
  • Updating Your Business Plan
  • Enhancing Your Business Plan

Business Plan Tools

  • Business Plan Software
  • Books and How-to Manuals

Business Plan Templates

  • Sample Business Plans

Market Strategies

Market strategies are the result of a meticulous market analysis. A market analysis forces the entrepreneur to become familiar with all aspects of the market so that the target market can be defined and the company can be positioned in order to garner its share of sales.

Competitive Analysis

The purpose of the competitive analysis is to determine the strengths and weaknesses of the competitors within your market, strategies that will provide you with a distinct advantage, the barriers that can be developed in order to prevent competition from entering your market, and any weaknesses that can be exploited within the product development cycle.

Design & Development Plan

The purpose of the design and development plan section is to provide investors with a description of the product's design, chart its development within the context of production, marketing and the company itself, and create a development budget that will enable the company to reach its goals.

Operations & Management Plan

The operations and management plan is designed to describe just how the business functions on a continuing basis. The operations plan will highlight the logistics of the organization such as the various responsibilities of the management team, the tasks assigned to each division within the company, and capital and expense requirements related to the operations of the business.

Financial Factors

Financial data is always at the back of the business plan, but that doesn't mean it's any less important than up-front material such as the business concept and the management team.

Want to see some of these principles in action? You can check out business plan templates in this detailed guide . Feel free to use some of these templates when drawing up business plans for your organization in the future!

As you can see, business plans aren't as complex as you may have initially thought. Furthermore, they are important parts of any business enterprise. Don't forget to write a business plan for your upcoming endeavor before seeking funding!

For more guides, resources, and information, check out Entrepreneur !

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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What Is a Business Plan?

Understanding business plans, how to write a business plan, common elements of a business plan, the bottom line, business plan: what it is, what's included, and how to write one.

Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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A business plan is a document that outlines a company's goals and the strategies to achieve them. It's valuable for both startups and established companies. For startups, a well-crafted business plan is crucial for attracting potential lenders and investors. Established businesses use business plans to stay on track and aligned with their growth objectives. This article will explain the key components of an effective business plan and guidance on how to write one.

Key Takeaways

  • A business plan is a document detailing a company's business activities and strategies for achieving its goals.
  • Startup companies use business plans to launch their venture and to attract outside investors.
  • For established companies, a business plan helps keep the executive team focused on short- and long-term objectives.
  • There's no single required format for a business plan, but certain key elements are essential for most companies.

Investopedia / Ryan Oakley

Any new business should have a business plan in place before beginning operations. Banks and venture capital firms often want to see a business plan before considering making a loan or providing capital to new businesses.

Even if a company doesn't need additional funding, having a business plan helps it stay focused on its goals. Research from the University of Oregon shows that businesses with a plan are significantly more likely to secure funding than those without one. Moreover, companies with a business plan grow 30% faster than those that don't plan. According to a Harvard Business Review article, entrepreneurs who write formal plans are 16% more likely to achieve viability than those who don't.

A business plan should ideally be reviewed and updated periodically to reflect achieved goals or changes in direction. An established business moving in a new direction might even create an entirely new plan.

There are numerous benefits to creating (and sticking to) a well-conceived business plan. It allows for careful consideration of ideas before significant investment, highlights potential obstacles to success, and provides a tool for seeking objective feedback from trusted outsiders. A business plan may also help ensure that a company’s executive team remains aligned on strategic action items and priorities.

While business plans vary widely, even among competitors in the same industry, they often share basic elements detailed below.

A well-crafted business plan is essential for attracting investors and guiding a company's strategic growth. It should address market needs and investor requirements and provide clear financial projections.

While there are any number of templates that you can use to write a business plan, it's best to try to avoid producing a generic-looking one. Let your plan reflect the unique personality of your business.

Many business plans use some combination of the sections below, with varying levels of detail, depending on the company.

The length of a business plan can vary greatly from business to business. Regardless, gathering the basic information into a 15- to 25-page document is best. Any additional crucial elements, such as patent applications, can be referenced in the main document and included as appendices.

Common elements in many business plans include:

  • Executive summary : This section introduces the company and includes its mission statement along with relevant information about the company's leadership, employees, operations, and locations.
  • Products and services : Describe the products and services the company offers or plans to introduce. Include details on pricing, product lifespan, and unique consumer benefits. Mention production and manufacturing processes, relevant patents , proprietary technology , and research and development (R&D) information.
  • Market analysis : Explain the current state of the industry and the competition. Detail where the company fits in, the types of customers it plans to target, and how it plans to capture market share from competitors.
  • Marketing strategy : Outline the company's plans to attract and retain customers, including anticipated advertising and marketing campaigns. Describe the distribution channels that will be used to deliver products or services to consumers.
  • Financial plans and projections : Established businesses should include financial statements, balance sheets, and other relevant financial information. New businesses should provide financial targets and estimates for the first few years. This section may also include any funding requests.

Investors want to see a clear exit strategy, expected returns, and a timeline for cashing out. It's likely a good idea to provide five-year profitability forecasts and realistic financial estimates.

2 Types of Business Plans

Business plans can vary in format, often categorized into traditional and lean startup plans. According to the U.S. Small Business Administration (SBA) , the traditional business plan is the more common of the two.

  • Traditional business plans : These are detailed and lengthy, requiring more effort to create but offering comprehensive information that can be persuasive to potential investors.
  • Lean startup business plans : These are concise, sometimes just one page, and focus on key elements. While they save time, companies should be ready to provide additional details if requested by investors or lenders.

Why Do Business Plans Fail?

A business plan isn't a surefire recipe for success. The plan may have been unrealistic in its assumptions and projections. Markets and the economy might change in ways that couldn't have been foreseen. A competitor might introduce a revolutionary new product or service. All this calls for building flexibility into your plan, so you can pivot to a new course if needed.

How Often Should a Business Plan Be Updated?

How frequently a business plan needs to be revised will depend on its nature. Updating your business plan is crucial due to changes in external factors (market trends, competition, and regulations) and internal developments (like employee growth and new products). While a well-established business might want to review its plan once a year and make changes if necessary, a new or fast-growing business in a fiercely competitive market might want to revise it more often, such as quarterly.

What Does a Lean Startup Business Plan Include?

The lean startup business plan is ideal for quickly explaining a business, especially for new companies that don't have much information yet. Key sections may include a value proposition , major activities and advantages, resources (staff, intellectual property, and capital), partnerships, customer segments, and revenue sources.

A well-crafted business plan is crucial for any company, whether it's a startup looking for investment or an established business wanting to stay on course. It outlines goals and strategies, boosting a company's chances of securing funding and achieving growth.

As your business and the market change, update your business plan regularly. This keeps it relevant and aligned with your current goals and conditions. Think of your business plan as a living document that evolves with your company, not something carved in stone.

University of Oregon Department of Economics. " Evaluation of the Effectiveness of Business Planning Using Palo Alto's Business Plan Pro ." Eason Ding & Tim Hursey.

Bplans. " Do You Need a Business Plan? Scientific Research Says Yes ."

Harvard Business Review. " Research: Writing a Business Plan Makes Your Startup More Likely to Succeed ."

Harvard Business Review. " How to Write a Winning Business Plan ."

U.S. Small Business Administration. " Write Your Business Plan ."

SCORE. " When and Why Should You Review Your Business Plan? "

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Business Plan: What It Is + How to Write One

Discover what a business plan includes and how writing one can foster your business’s development.

[Featured image] Woman showing a business plan to a man at a desk

What is a business plan? 

A business plan is a written document that defines your business goals and the tactics to achieve those goals. A business plan typically explores the competitive landscape of an industry, analyzes a market and different customer segments within it, describes the products and services, lists business strategies for success, and outlines financial planning.  

In your research into business plans, you may come across different formats, and you might be wondering which kind will work best for your purposes. 

Let’s define two main types of business plans , the traditional business pla n and the lean start-up business plan . Both types can serve as the basis for developing a thriving business, as well as exploring a competitive market analysis, brand strategy , and content strategy in more depth. There are some significant differences to keep in mind [ 1 ]: 

The traditional business plan is a long document that explores each component in depth. You can build a traditional business plan to secure funding from lenders or investors. 

The lean start-up business plan focuses on the key elements of a business’s development and is shorter than the traditional format. If you don’t plan to seek funding, the lean start-up plan can serve mainly as a document for making business decisions and carrying out tasks. 

Now that you have a clear business plan definition , continue reading to begin writing a detailed plan that will guide your journey as an entrepreneur.  

How to write a business plan 

In the sections below, you’ll build the following components of your business plan:

Executive summary

Business description 

Products and services 

Competitor analysis 

Marketing plan and sales strategies 

Brand strategy

Financial planning

Explore each section to bring fresh inspiration to the surface and reveal new possibilities for developing your business. You may choose to adapt the sections, skip over some, or go deeper into others, depending on which format you’re using. Consider your first draft a foundation for your efforts and one that you can revise, as needed, to account for changes in any area of your business.  

Read more: What Is a Marketing Plan? And How to Create One

1. Executive summary 

This is a short section that introduces the business plan as a whole to the people who will be reading it, including investors, lenders, or other members of your team. Start with a sentence or two about your business, your goals for developing it, and why it will be successful. If you are seeking funding, summarize the basics of the financial plan. 

2. Business description 

Use this section to provide detailed information about your company and how it will operate in the marketplace. 

Mission statement: What drives your desire to start a business? What purpose are you serving? What do you hope to achieve for your business, the team, your customers? 

Revenue streams: From what sources will your business generate revenue? Examples include product sales, service fees, subscriptions, rental fees, license fees, and more. 

Leadership: Describe the leaders in your business, their roles and responsibilities, and your vision for building teams to perform various functions, such as graphic design, product development, or sales.  

Legal structure: If you’ve incorporated your business or registered it with your state as a legal entity such as an S-corp or LLC, include the legal structure here and the rationale behind this choice. 

3. Competitor analysis 

This section will include an assessment of potential competitors, their offers, and marketing and sales efforts. For each competitor, explore the following: 

Value proposition: What outcome or experience does this brand promise?

Products and services: How does each one solve customer pain points and fulfill desires? What are the price points? 

Marketing: Which channels do competitors use to promote? What kind of content does this brand publish on these channels? What messaging does this brand use to communicate value to customers?  

Sales: What sales process or buyer’s journey does this brand lead customers through?

Read more: What Is Competitor Analysis? And How to Conduct One

4. Products and services

Use this section to describe everything your business offers to its target market . For every product and service, list the following: 

The value proposition or promise to customers, in terms of how they will experience it

How the product serves customers, addresses their pain points, satisfies their desires, and improves their lives

The features or outcomes that make the product better than those of competitors

Your price points and how these compare to competitors

5. Marketing plan and sales strategies 

In this section, you’ll draw from thorough market research to describe your target market and how you will reach them. 

Who are your ideal customers?   

How can you describe this segment according to their demographics (age, ethnicity, income, location, etc.) and psychographics (beliefs, values, aspirations, lifestyle, etc.)? 

What are their daily lives like? 

What problems and challenges do they experience? 

What words, phrases, ideas, and concepts do consumers in your target market use to describe these problems when posting on social media or engaging with your competitors?  

What messaging will present your products as the best on the market? How will you differentiate messaging from competitors? 

On what marketing channels will you position your products and services?

How will you design a customer journey that delivers a positive experience at every touchpoint and leads customers to a purchase decision?

Read more: Market Analysis: What It Is and How to Conduct One   

6. Brand strategy 

In this section, you will describe your business’s design, personality, values, voice, and other details that go into delivering a consistent brand experience. 

What are the values that define your brand?

What visual elements give your brand a distinctive look and feel?

How will your marketing messaging reflect a distinctive brand voice, including the tone, diction, and sentence-level stylistic choices? 

How will your brand look and sound throughout the customer journey? 

Define your brand positioning statement. What will inspire your audience to choose your brand over others? What experiences and outcomes will your audience associate with your brand? 

Read more: What Is a Brand Strategy? And How to Create One

7. Financial planning  

In this section, you will explore your business’s financial future. If you are writing a traditional business plan to seek funding, this section is critical for demonstrating to lenders or investors that you have a strategy for turning your business ideas into profit. For a lean start-up business plan, this section can provide a useful exercise for planning how you will invest resources and generate revenue [ 2 ].  

Use any past financials and other sections of this business plan, such as your price points or sales strategies, to begin your financial planning. 

How many individual products or service packages do you plan to sell over a specific time period?

List your business expenses, such as subscribing to software or other services, hiring contractors or employees, purchasing physical supplies or equipment, etc.

What is your break-even point, or the amount you have to sell to cover all expenses?

Create a sales forecast for the next three to five years: (No. of units to sell X price for each unit) – (cost per unit X No. of units) = sales forecast

Quantify how much capital you have on hand.

When writing a traditional business plan to secure funding, you may choose to append supporting documents, such as licenses, permits, patents, letters of reference, resumes, product blueprints, brand guidelines, the industry awards you’ve received, and media mentions and appearances.

Business plan key takeaways and best practices

Remember: Creating a business plan is crucial when starting a business. You can use this document to guide your decisions and actions and even seek funding from lenders and investors. 

Keep these best practices in mind:

Your business plan should evolve as your business grows. Return to it periodically, such as every quarter or year, to update individual sections or explore new directions your business can take.

Make sure everyone on your team has a copy of the business plan and welcome their input as they perform their roles. 

Ask fellow entrepreneurs for feedback on your business plan and look for opportunities to strengthen it, from conducting more market and competitor research to implementing new strategies for success. 

Start your business with Coursera 

Ready to start your business? Watch this video on the lean approach from the Entrepreneurship Specialization : 

Article sources

1. US Small Business Administration. “ Write Your Business Plan , https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan." Accessed April 19, 2022.

2. Inc. " How to Write the Financial Section of a Business Plan ,   https://www.inc.com/guides/business-plan-financial-section.html." Accessed April 14, 2022.

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When Should Entrepreneurs Write Their Business Plans?

  • Francis J. Greene
  • Christian Hopp

a full business plan should be written at the beginning of the entrepreneurial process

Don’t write a plan before you understand your customer.

It pays to plan. Entrepreneurs who write business plans are more likely to succeed, according to research. But while this might tempt some entrepreneurs to make writing a plan their very first task, a subsequent study shows that writing a plan first is a really bad idea. It is much better to wait, not to devote too much time to writing the plan, and, crucially, to synchronize the plan with other key startup activities.

It pays to plan. Entrepreneurs who write business plans are more likely to succeed, according to our research, described in an earlier piece for Harvard Business Review . But while this might tempt some entrepreneurs to make writing a plan their very first task, our subsequent study shows that writing a plan first is a really bad idea. It is much better to wait, not to devote too much time to writing the plan, and, crucially, to synchronize the plan with other key startup activities.

a full business plan should be written at the beginning of the entrepreneurial process

  • FG Francis J. Greene is Chair in Entrepreneurship in the University of Edinburgh Business School.
  • CH Christian Hopp is Chair in Technology Entrepreneurship in the TIME Research Area, the Faculty of Business and Economics, RWTH Aachen University.

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How to Write the Perfect Business Plan: A Comprehensive Guide

Thinking of starting a business here's the best step-by-step template for writing the perfect business plan when creating your startup..

How to Write the Perfect Business Plan: A Comprehensive Guide

Maybe you think you don't need a step-by-step guide to writing a great business plan . Maybe you think you don't need a template for writing a business plan. After all, some entrepreneurs succeed without writing a business plan. With great timing, solid business skills, entrepreneurial drive, and a little luck , some founders build thriving businesses without creating even an  informal business plan . 

But the odds are greater that those entrepreneurs will fail.

Does a business plan make startup success inevitable? Absolutely not. But great planning often means the difference between success and failure. Where your entrepreneurial dreams are concerned, you should do everything possible to set the stage for success.

And that's why a great business plan is one that helps you  succeed .

The following is a comprehensive guide to creating a great business plan. We'll start with an overview of key concepts. Then we'll look at each section of a typical business plan:

Executive Summary

Overview and objectives, products and services, market opportunities, sales and marketing.

  • Competitive Analysis

Management Team

Financial analysis.

So first let's gain a little perspective on why you need a business plan.

Key Concepts

Many business plans are fantasies. That's because many aspiring entrepreneurs see a business plan as simply a tool--filled with strategies and projections and hyperbole--that will convince lenders or investors the business makes sense.

That's a huge mistake.

First and foremost, your business plan should convince  you  that your idea makes sense--because your time, your money, and your effort are on the line.

So a solid business plan should be a blueprint for a successful business . It should flesh out strategic plans, develop marketing and sales plans, create the foundation for smooth operations, and maybe--just maybe--persuade a lender or investor to jump on board.

For many entrepreneurs, developing a business plan is the first step in the process of deciding whether to actually start a business. Determining if an idea fails on paper can help a prospective founder avoid wasting time and money on a business with no realistic hope of success.

So, at a minimum, your plan should:

  • Be as objective and logical as possible. What may have seemed like a good idea for a business can, after some thought and analysis, prove not viable because of heavy competition, insufficient funding, or a nonexistent market. (Sometimes even the best ideas are simply ahead of their time.)
  • Serve as a guide to the business's operations for the first months and sometimes years, creating a blueprint for company leaders to follow.
  • Communicate the company's purpose and vision, describe management responsibilities, detail personnel requirements, provide an overview of marketing plans, and evaluate current and future competition in the marketplace.
  • Create the foundation of a financing proposal for investors and lenders to use to evaluate the company.

A good business plan delves into each of the above categories, but it should also accomplish other objectives. Most of all, a good business plan is  convincing . It proves a case. It provides concrete, factual evidence showing your idea for a business is in fact sound and reasonable and has every chance of success.

Who  must  your business plan convince?

First and foremost, your business plan should convince  you  that your idea for a business is not just a dream but can be a viable reality. Entrepreneurs are by nature confident, positive, can-do people. After you objectively evaluate your capital needs, products or services, competition, marketing plans, and potential to make a profit, you'll have a much better grasp on your chances for success.

And if you're not convinced, fine: Take a step back and refine your ideas and your plans.

Who  can  your business plan convince?

1. Potential sources of financing.   If you need seed money from a bank or friends and relatives, your business plan can help you make a great case. Financial statements can show where you have been. Financial projections describe where you plan to go.

Your business plan shows how you will get there. Lending naturally involves risk, and a great business plan can help lenders understand and quantity that risk, increasing your chances for approval.

2. Potential partners and investors. Where friends and family are concerned, sharing your business plan may not be necessary (although it certainly could help).

Other investors--including angel investors or venture capitalists--generally require a business plan in order to evaluate your business.

3. Skilled employees . When you need to attract talent, you need  something  to show prospective employees since you're still in the startup phase. Early on, your business is more of an idea than a reality, so your business plan can help prospective employees understand your goals--and, more important, their place in helping you achieve those goals.

4. Potential joint ventures. Joint ventures are like partnerships between two companies. A joint venture is a formal agreement to share the work--and share the revenue and profit. As a new company, you will likely be an unknown quantity in your market. Setting up a joint venture with an established partner could make all the difference in getting your business off the ground.

But above all, your business plan should convince  you  that it makes sense to move forward.

As you map out your plan, you may discover issues or challenges you had not anticipated.

Maybe the market isn't as large as you thought. Maybe, after evaluating the competition, you realize your plan to be the low-cost provider isn't feasible since the profit margins will be too low to cover your costs.

Or you might realize the fundamental idea for your business is sound, but how you implement that idea should change. Maybe establishing a storefront for your operation isn't as cost-effective as taking your products directly to customers--not only will your operating costs be lower, but you can charge a premium since you provide additional customer convenience.

Think of it this way. Successful businesses do not remain static. They learn from mistakes, and adapt and react to changes: changes in the economy, the marketplace, their customers, their products and services, etc. Successful businesses identify opportunities and challenges and react accordingly.

Creating a business plan lets you spot opportunities and challenges without risk. Use your plan to dip your toe in the business water. It's the perfect way to review and revise your ideas and concepts before you ever spend a penny.

Many people see writing a business plan as a "necessary evil" required to attract financing or investors. Instead, see your plan as a no-cost way to explore the viability of your potential business and avoid costly mistakes.

Now let's look at the first section of your business plan: The Executive Summary.

The Executive Summary is a brief outline of the company's purpose and goals. While it can be tough to fit on one or two pages, a good Summary includes:

  • A brief description of products and services
  • A summary of objectives
  • A solid description of the market
  • A high-level justification for viability (including a quick look at your competition and your competitive advantage)
  • A snapshot of growth potential
  • An overview of funding requirements

I know that seems like a lot, and that's why it's so important you get it right. The Executive Summary is often the make-or-break section of your business plan.

A great business solves customer problems. If your Summary cannot clearly describe, in one or two pages, how your business will solve a particular problem and make a profit, then it's very possible the opportunity does not exist--or your plan to take advantage of a genuine opportunity is not well developed.

So think of it as a snapshot of your business plan. Don't try to "hype" your business--focus on helping a busy reader get a great feel for what you plan to do, how you plan to do it, and how you will succeed.

Since a business plan should above all help you start and grow your business, your Executive Summary should first and foremost help you do the following.

1. Refine and tighten your concept.

Think of it as a written elevator pitch  (with more detail, of course). Your Summary describes the highlights of your plan, includes only the most critical points, and leaves out less important issues and factors.

As you develop your Summary, you will naturally focus on the issues that contribute most to potential success. If your concept is too fuzzy, too broad, or too complicated, go back and start again. Most great businesses can be described in several sentences, not several pages.

2. Determine your priorities.

Your business plan walks the reader through your plan. What ranks high in terms of importance? Product development? Research? Acquiring the right location? Creating strategic partnerships?

Your Summary can serve as a guide to writing the rest of your plan.

3. Make the rest of the process easy.

Once your Summary is complete, you can use it as an outline for the rest of your plan. Simply flesh out the highlights with more detail.

Then work to accomplish your secondary objective by focusing on your readers. Even though you may be creating a business plan solely for your own purposes, at some point you may decide to seek financing or to bring on other investors, so make sure your Summary meets their needs as well. Work hard to set the stage for the rest of the plan. Let your excitement for your idea and your business shine through.

In short, make readers want to turn the page and keep reading. Just make sure your sizzle meets your steak by providing clear, factual descriptions.

How? The following is how an Executive Summary for a bicycle rental store might read.

Introduction

Blue Mountain Cycle Rentals will offer road and mountain bike rentals in a strategic location directly adjacent to an entrance to the George Washington National Forest. Our primary strategy is to develop Blue Mountain Cycle Rentals as the most convenient and cost-effective rental alternative for the thousands of visitors who flock to the area each year.

Once underway, we will expand our scope and take advantage of high-margin new equipment sales and leverage our existing labor force to sell and service those products. Within three years we intend to create the area's premier destination for cycling enthusiasts.

Company and Management

Blue Mountain Cycle Rentals will be located at 321 Mountain Drive, a location providing extremely high visibility as well as direct entry and exit from a primary national park access road. The owner of the company, Marty Cycle, has over 20 years experience in the bicycle business, having served as a product manager for Acme Cycles as well as the general manager of Epic Cycling.

Because of his extensive industry contacts, initial equipment inventory will be purchased at significant discounts from OEM suppliers as well by sourcing excess inventory from shops around the country.

Because of the somewhat seasonal nature of the business, part-time employees will be hired to handle spikes in demand. Those employees will be attracted through competitive wages as well as discounts products and services.

460,000 people visited the George Washington National Forest during the last 12 months. While the outdoor tourism industry as a whole is flat, the park expects its number of visitors to grow over the next few years.

  • The economic outlook indicates fewer VA, WV, NC, and MD cycling enthusiasts will travel outside the region
  • The park has added a camping and lodging facilities that should attract an increased number of visitors
  • The park has opened up additional areas for trail exploration and construction, ensuring a greater number of single-track options and therefore a greater number of visitors

The market potential inherent in those visitors is substantial. According to third-party research data, approximately 30 percent of all cyclists would rather rent than transport their own bicycles, especially those who are visiting the area for reasons other than cycling.

Competitive Advantages

The cycling shops located in Harrisonburg, VA, are direct and established competitors. Our two primary competitive advantages will be location and lower costs.

Our location is also a key disadvantage where non-park rentals are concerned. We will overcome that issue by establishing a satellite location in Harrisonburg for enthusiasts who wish to rent bicycles to use in town or on other local trails.

We will also use online tools to better engage customers, allowing them to reserve and pay online as well as create individual profiles regarding sizes, preferences, and special needs.

Financial Projections

Blue Mountain Cycle Rentals expects to earn a modest profit by year two based on projected sales. Our projections are based on the following key assumptions:

  • Initial growth will be moderate as we establish awareness in the market
  • Initial equipment purchases will stay in service for an average of three to four years; after two years we will begin investing in "new" equipment to replace damaged or obsolete equipment
  • Marketing costs will not exceed 14 percent of sales
  • Residual profits will be reinvested in expanding the product and service line

We project first-year revenue of $720,000 and a 10 percent growth rate for the next two years. Direct cost of sales is projected to average 60 percent of gross sales, including 50 percent for the purchase of equipment and 10 percent for the purchase of ancillary items. Net income is projected to reach $105,000 in year three as sales increase and operations become more efficient.

And so on ...

Keep in mind this is just a made-up example of how your Summary might read. Also keep in mind this example focused on the rental business, so a description of products was not included. (They'll show up later.) If your business will manufacture or sell products, or provide a variety of services, then be sure to include a Products and Services section in your Summary. (In this case the products and services are obvious, so including a specific section would be redundant.)

Bottom line:  Provide some sizzle in your Executive Summary, but make sure you show a reasonable look at the steak, too.

Providing an overview of your business can be tricky, especially when you're still in the planning stages. If you already own an existing business, summarizing your current operation should be relatively easy; it can be a lot harder to explain what you plan to  become .

So start by taking a step back.

Think about what products and services you will provide, how you will provide those items, what you need to have in order to provide those items, exactly who will provide those items, and most important, whom you will provide those items to.

Consider our bicycle rental business example. It's serves retail customers. It has an online component, but the core of the business is based on face-to-face transactions for bike rentals and support.

So you'll need a physical location, bikes, racks and tools and supporting equipment, and other brick-and-mortar related items. You'll need employees  with a very particular set of skills  to serve those customers, and you'll need an operating plan to guide your everyday activities.

Sound like a lot? It boils down to:

  • What you will provide
  • What you need to run your business
  • Who will service your customers, and
  • Who your customers are.

In our example, defining the above is fairly simple. You know what you will provide to meet your customer's needs. You will of course need a certain quantity of bikes to service demand, but you will not need a number of different types of bikes. You need a retail location, furnished to meet the demands of your business. You need semi-skilled employees capable of sizing, customizing, and repairing bikes.

And you know your customers: cycling enthusiasts.

In other businesses and industries, answering the above questions can be more difficult. If you open a restaurant, what you plan to serve will in some ways determine your labor needs, the location you choose, the equipment you need to purchase. And, most important, it will help define your customer. Changing any one element may change other elements; if you cannot afford to purchase expensive kitchen equipment, you may need to adapt your menu accordingly. If you hope to attract an upscale clientele, you may need to invest more in purchasing a prime location and creating an appealing ambience.

So where do you start? Focus on the basics first:

  • Identify your industry. Retail, wholesale, service, manufacturing, etc. Clearly define your type of business.
  • Identify your customer. You cannot market and sell to customers until you know who they are.
  • Explain the problem you solve. Successful businesses create customer value by solving problems. In our rental example, one problem is cycling enthusiasts who don't--or can't--travel with bikes. Another problem is casual cyclists who can't--or choose not to--spend significant sums on their own bikes. The rental shop will solve that problem by offering a lower-cost and convenient alternative.
  • Show how you will solve that problem. Our rental shop will offer better prices and enhanced services like remote deliveries, off-hours equipment returns, and online reservations.

If you are still stuck, try answering these questions. Some may pertain to you; others may not.

  • Who is my average customer? Who am I targeting? (Unless you plan to open a grocery store, you should be unlikely to answer, "Everyone!")
  • What pain point do I solve for my customers?
  • How will I overcome that paint point?
  • Where will I fail to solve a customer problem, and what can I do to overcome that issue? (In our rental example, one problem is a potential lack of convenience; we will overcome that issue by offering online reservations, on-resort deliveries, and drive-up equipment returns.)
  • Where will I locate my business?
  • What products, services, and equipment do I need to run my business?
  • What skills do my employees need, and how many do I need?
  • How will I beat my competition?
  • How can I differentiate myself from my competition in the eyes of my customers? (You can have a great plan to beat your competition, but you also must win the perception battle among your customers. If customers don't feel you are different, then you aren't truly different. Perception is critical.)

Once you work through this list you will probably end up with a lot more detail than is necessary for your business plan. That is not a problem: Start summarizing the main points. For example, your Business Overview and Objectives section could start something like this:

History and Vision

Blue Mountain Cycle Rentals is a new retail venture that will be located at 321 Mountain Drive, directly adjacent to an extremely popular cycling destination. Our initial goal is to become the premier provider for bicycle rentals. We will then leverage our customer base and position in the market to offer new equipment sales as well as comprehensive maintenance and service, custom equipment fittings, and expert trail advice.

  • Achieve the largest market share bicycle rentals in the area
  • Generate a net income of $235,000 at the end of the second year of operation
  • Minimize rental inventory replacement costs by maintaining a 7 percent attrition rate on existing equipment (industry average is 12 percent)

Keys to Success

  • Provide high-quality equipment, sourcing that equipment as inexpensively as possible through existing relationships with equipment manufacturers and other cycling shops
  • Use signage to attract visitors traveling to the national forest, highlighting our cost and service advantage
  • Create additional customer convenience factors to overcome a perceived lack of convenience for customers planning to ride roads and trails some distance away from our shop
  • Develop customer incentive and loyalty programs to leverage customer relationships and create positive word of mouth

You could certainly include more detail in each section; this is simply a quick guide. And if you plan to develop a product or service, you should thoroughly describe the development process as well as the end result.

The key is to describe what you will do for your customers--if you can't, you won't  have  any customers.

In the Products and Services section of your business plan, you will clearly describe--yep--the products and services your business will provide.

Keep in mind that highly detailed or technical descriptions are not necessary and definitely not recommended. Use simple terms and avoid industry buzzwords.

On the other hand, describing how the company's products and services will differ from the competition is critical. So is describing why your products and services are needed if no market currently exists. (For example, before there was Federal Express, overnight delivery was a niche business served by small companies. FedEx had to define the opportunity for a new, large-scale service and justify why customers needed--and would actually  use --that service.)

Patents, copyrights, and trademarks you own or have applied for should also be listed in this section.

Depending on the nature of your business, your Products and Services section could be very long or relatively short. If your business is product-focused, you will want to spend more time describing those products.

If you plan to sell a commodity item and the key to your success lies in, say, competitive pricing, you probably don't need to provide significant product detail. Or if you plan to sell a commodity readily available in a variety of outlets, the key to your business may not be the commodity itself but your ability to market in a more cost-effective way than your competition.

But if you're creating a new product (or service), make sure you thoroughly explain the nature of the product, its uses, and its value, etc.--otherwise your readers will not have enough information to evaluate your business.

Key questions to answer:

  • Are products or services in development or existing (and on the market)?
  • What is the timeline for bringing new products and services to market?
  • What makes your products or services different? Are there competitive advantages compared with offerings from other competitors? Are there competitive disadvantages you will need to overcome? (And if so, how?)
  • Is price an issue? Will your operating costs be low enough to allow a reasonable profit margin?
  • How will you acquire your products? Are you the manufacturer? Do you assemble products using components provided by others? Do you purchase products from suppliers or wholesalers? If your business takes off, is a steady supply of products available?

In the cycling rental business example we've been using, products and services could be a relatively simple section to complete or it could be fairly involved. It depends on the nature of the products the company plans to rent to customers.

If Blue Mountain Cycling Rentals plans to market itself as a provider of high-end bikes, describing those bikes--and the sources for those bikes--is important, since "high-end cycling rentals" is intended to be a market differentiation. If the company plans to be the low-cost provider, then describing specific brands of equipment is probably not necessary.

Also, keep in mind that if a supplier runs out of capacity--or goes out of business altogether--you may not have a sufficient supply to meet your demand. Plan to set up multiple vendor or supplier relationships, and describe those relationships fully. 

Remember, the primary goal of your business plan is to convince  you  that the business is viable--and to create a road map for you to follow.

The Products and Services section for our cycling rental business could start something like this:

Product Description

Blue Mountain Cycle Rentals will provide a comprehensive line of bicycles and cycling equipment for all ages and levels of ability. Since the typical customer seeks medium-quality equipment and excellent services at competitive prices, we will focus on providing brands like Trek bikes, Shimano footwear, and Giro helmets. These manufacturers have a widespread reputation as mid- to high-level quality, unlike equipment typically found in the rental market.

The following is a breakdown of anticipated rental price points, per day and per week:

  • Bicycle $30/$120
  • Helmet $6/$30
  • Customers can extend the rental term online without visiting the store.
  • A grace period of two hours will be applied to all rentals; customers who return equipment within that two-hour period will not be charged an additional fee.

Competition

Blue Mountain Cycle Rentals will have clear advantages over its primary competitors, the bike shops located in Harrisonburg, VA:

  • Newer equipment inventory with higher perceived quality
  • Price points 15 percent below the competition
  • Online renewals offering greater convenience
  • A liberal return grace period that will reinforce our reputation as a customer-friendly rental experience

Future Products

Expansion will allow us to move product offerings into new equipment sales. We will also explore maintenance and fitting services, leveraging our existing maintenance staff to provide value-added services at a premium price.

When you draft your Products and Services section, think of your reader as a person who knows little to nothing about your business. Be clear and to the point.

Think of it this way: The Products and Services section answers the "what" question for your business. Make sure you fully understand the "what" factor; you may run the business, but your products and services are its lifeblood.

Market research is critical to business success. A good business plan analyzes and evaluates customer demographics, purchasing habits, buying cycles, and willingness to adopt new products and services.

The process starts with understanding your market and the opportunities inherent in that market. And that means you'll need to do a little research. Before you start a business you must be sure there is a viable market for what you plan to offer.

That process requires asking, and more importantly answering, a number of questions. The more thoroughly you answer the following questions, the better you will understand your market.

Start by evaluating the market at a relatively high level, answering some high-level questions about your market and your industry:

  • What is the size of the market? Is it growing, stable, or in decline?
  • Is the overall industry growing, stable, or in decline?
  • What segment of the market do I plan to target? What demographics and behaviors make up the market I plan to target?
  • Is demand for my specific products and services rising or falling?
  • Can I differentiate myself from the competition in a way customers will find meaningful? If so, can I differentiate myself in a cost-effective manner?
  • What do customers expect to pay for my products and services? Are they considered to be a commodity or to be custom and individualized?

Fortunately, you've already done some of the legwork. You've already defined and mapped out your products and services. The Market Opportunities section provides a sense-check of that analysis, which is particularly important since choosing the right products and services is such a critical factor in business success.

But your analysis should go further: Great products are great, but there still must be a market for those products. (Ferraris are awesome, but you're unlikely to sell many where I live.)

So let's dig deeper and quantify your market. Your goal is to thoroughly understand the characteristics and purchasing ability of potential customers in your market. A little Googling can yield a tremendous amount of data.

For the market you hope to serve, determine:

  • Your potential customers. In general terms, potential customers are the people in the market segment you plan to target. Say you sell jet skis; anyone under the age of 16 and over the age of 60 or so is unlikely to be a customer. Plus, again in general terms, women make up a relatively small percentage of jet ski purchasers. Determining the total population for the market is not particularly helpful if your product or service does not serve a need for the entire population. Most products and services do not.
  • Total households. In some cases determining the number of total households is important depending on your business. For example, if you sell heating and air conditioning systems, knowing the number of households is more important than simply knowing the total population in your area. While people purchase HVAC systems, "households" consume those systems.
  • Median income. Spending ability is important. Does your market area have sufficient spending power to purchase enough of your products and services to enable you to make a profit? Some areas are more affluent than others. Don't assume every city or locality is the same in terms of spending power. A service that is viable in New York City may not be viable in your town.
  • Income by demographics. You can also determine income levels by age group, by ethnic group, and by gender. (Again, potential spending power is an important number to quantify.) Senior citizens could very well have a lower income level than males or females age 45 to 55 in the prime of their careers. Or say you plan to sell services to local businesses; in that case, try to determine the amount they currently spend on similar services.

The key is to understand the market in general terms and then to dig deeper to understand whether there are specific segments within that market--the segments you plan to target--that can become customers and support the growth of your business.

Also keep in mind that if you plan to sell products online the global marketplace is incredibly crowded and competitive. Any business can sell a product online and ship that product around the world. Don't simply assume that just because "the bicycle industry is a $62 billion business" (a number I just made up) that you can capture a meaningful percentage of that market.

On the other hand, if you live in an area with 50,000 people and there's only one bicycle shop, you may be able to enter that market and attract a major portion of bicycle customers in your area.

Always remember it's much easier to serve a market you can define and quantify.

After you complete your research you may feel a little overwhelmed. While data is good, and more data is great, sifting through and making sense of too much data can be daunting.

For the purposes of your business plan, narrow your focus and focus on answering these main questions:

  • What is your market? Include geographic descriptions, target demographics, and company profiles (if you're B2B). In short: Who are your customers?
  • What segment of your market will you focus on? What niche will you attempt to carve out? What percentage of that market do you hope to penetrate and acquire?
  • What is the size of your intended market? What is the population and spending habits and levels?
  • Why do customers need and why will they be willing to purchase your products and services?
  • How will you price your products and services? Will you be the low cost provider or provide value-added services at higher prices?
  • Is your market likely to grow? How much? Why?
  • How can you increase your market share over time?

The Market Opportunities section for our cycling rental business could start something like this:

Market Summary

Consumer spending on cycling equipment reached $9,250,000 in the states of VA, WV, MD, and NC last year. While we expect sales to rise, for the purposes of performing a conservative analysis we have projected a zero growth rate for the next three years.

In those states 2,500,000 people visited a national forest last year. Our target market includes customers visiting the Shenandoah National Forest; last year 120,000 people visited the area during spring, summer, and fall months.

Over time, however, we do expect equipment rentals and sales to increase as the popularity of cycling continues to rise. In particular we forecast a spike in demand in 2015 since the national road racing championships will be held in Richmond, VA.

Market Trends

Participation and population trends favor our venture:

  • Recreational sports in general and both family-oriented and "extreme" sports continue to gain in exposure and popularity.
  • Western VA and eastern WV have experienced population growth rates nearly double that of the country as a whole.
  • Industry trends show cycling has risen at a more rapid rate than most other recreational activities.

Market Growth

According to the latest studies, recreation spending in our target market has grown by 14 percent per year for the past three years.

In addition, we anticipate greater than industry-norm growth rates for cycling in the area due to the increase in popularity of cycling events like the Alpine Loop Gran Fondo.

Market Needs

Out target market has one basic need: The availability to source bicycle rentals at a competitive price. Our only other competition are the bike shops in Harrisonburg, VA, and our location will give us a competitive advantage over those and other companies who try to serve our market.

You may want to add other categories to this section based on your particular industry.

For example, you might decide to provide information about Market Segments. In our case, the cycling rental business does not require much segmentation. Rentals are typically not broken down into segments like "inexpensive," "midrange," and "high-end." For the most part rental bikes are more of a commodity. (Although you'll notice in our Products and Services section, we decided to provide "high-end" rentals.)

But say you decide to open a clothing store. You could focus on high fashion, or children's clothes, or outdoor wear, or casual--you could segment the market in a number of ways. If that's the case, provide detail on segmentation that supports your plan.

The key is to define your market--and then show how you will serve your market.

Providing great products and services is wonderful, but customers must actually know those products and services exist. That's why marketing plans and strategies are critical to business success. (Duh, right?)

But keep in mind marketing is not just advertising. Marketing--whether advertising, public relations, promotional literature, etc.--is an investment in the growth of your business.

Like any other investment you would make, money spent on marketing must generate a return. (Otherwise why make the investment?) While that return could simply be greater cash flow, good marketing plans result in higher sales and profits.

So don't simply plan to spend money on a variety of advertising efforts. Do your homework and create a smart marketing program .

Here are some of the basic steps involved in creating your marketing plan:

  • Focus on your target market. Who are your customers? Who will you target? Who makes the decisions? Determine how you can best reach potential customers.
  • Evaluate your competition. Your marketing plan must set you apart from your competition, and you can't stand out unless you  know  your competition. (It's hard to stand out from a crowd if you don't know where the crowd stands.) Know your competitors by gathering information about their products, service, quality, pricing, and advertising campaigns. In marketing terms, what does your competition do that works well? What are their weaknesses? How can you create a marketing plan that highlights the advantages you offer to customers?
  • Consider your brand. How customers perceive your business makes a dramatic impact on sales. Your marketing program should consistently reinforce and extend your brand. Before you start to market your business, think about how you want your marketing to reflect on your business and your products and services. Marketing is the face of your to potential customers--make sure you put your best face forward.
  • Focus on benefits. What problems do you solve? What benefits do you deliver? Customers don't think in terms of products--they think in terms of benefits and solutions. Your marketing plan should clearly identify benefits customers will receive. Focus on what customers  get  instead of on what you provide. (Take Dominos; theoretically they're in the pizza business, but really they're a delivery business.)
  • Focus on differentiation. Your products and services have to stand out from the competition in some way. How will you compete in terms of price, product, or service?

Then focus on providing detail and backup for your marketing plan.

  • What is your budget for sales and marketing efforts? 
  • How will you determine if your initial marketing efforts are successful? In what ways will you adapt if your initial efforts do not succeed?
  • Will you need sales representatives (inside or external) to promote your products?
  • Can you set up public relations activities to help market your business?

The Sales and Marketing section for our cycling rental business could start something like this:

Target Market

The target market for Blue Mountain Cycling Rentals is western VA, eastern WV, southwestern MD, and northern NC. While customers in the counties surrounding the George Washington National Forest make up 35 percent of our potential customer base, much of our market travels from outside that geographic area.

Marketing Strategy

Our marketing strategy will focus on three basic initiatives:

  • Road signage. Access to the forest is restricted to a few primary entrances, and visitors reach those entrances after traveling on one of several main roadways. Since customers currently rent bicycles in the local town of Harrisonburg, road signage will communicate our value proposition to all potential customers.
  • Web initiatives. Our website will attract potential visitors to the resort. We will partner with local businesses that serve our target market to provide discounts and incentives.
  • Promotional events. We will hold regular events with professional cyclists, like demonstrations and autograph signings, to bring more customers to the store as well as to extend the athletes' "brand" to our brand.

Pricing Strategy

We will not be the low-cost provider for our target market. Our goal is to provide mid- to high-end equipment. However, we will create web-based loyalty programs to incent customers to set up online profiles and reserve and renew equipment rentals online, and provide discounts for those who do. Over time we will be able to market specifically to those customers.

Just as in the Market Opportunity section, you may want to include a few more categories. For example, if your business involves a commission-compensated sales force, describe your Sales Programs and incentives. If you distribute products to other companies or suppliers and those distribution efforts will impact your overall marketing plans, lay out your Distribution Strategy.

The key is to show you understand your market and you understand how you will reach your market. Marketing and promotions must result in customers--your goal is to thoroughly describe how you will acquire and keep your customers.

Also keep in mind you may want to include examples of marketing materials you have already prepared, like website descriptions, print ads, web-based advertising programs, etc. While you don't need to include samples, taking the time to create actual marketing materials might help you better understand and communicate your marketing plans and objectives.

Make sure your Sales and Marketing section answers the "How will I reach my customers?" question.

Competitive Advantage

The Competitive Analysis section of your business plan is devoted to analyzing your competition--both your current competition and potential competitors who might enter your market.

Every business has competition. Understanding the strengths and weaknesses of your competition--or potential competition--is critical to making sure your business survives and grows. While you don't need to hire a private detective, you do need to thoroughly assess your competition on a regular basis even if you plan to run only a small business.

In fact, small businesses can be especially vulnerable to competition, especially when new companies enter a marketplace.

Competitive analysis can be incredibly complicated and time-consuming, but it doesn't have to be. Here is a simple process you can follow to identify, analyze, and determine the strengths and weaknesses of your competition.

Profile  Current  Competitors

First, develop a basic profile of each of your current competition. For example, if you plan to open an office supply store, you may have three competing stores in your market.

Online retailers will also provide competition, but thoroughly analyzing those companies will be less valuable unless you also decide you want to sell office supplies online. (Although it's also possible that they--or, say, Amazon--are your  real  competition. Only you can determine that.)

To make the process easier, stick to analyzing companies you will directly compete with. If you plan to set up an accounting firm, you will compete with other accounting firms in your area. If you plan to open a clothing store, you will compete with other clothing retailers in your area.

Again, if you run a clothing store, you also compete with online retailers, but there is relatively little you can do about that type of competition other than to work hard to distinguish yourself in other ways: great service, friendly salespeople, convenient hours, truly understanding your customers, etc.

Once you identify your main competitors, answer these questions about each one. And be objective. It's easy to identify weaknesses in your competition, but less easy (and a lot less fun) to recognize how they may be able to outperform you:

  • What are their strengths? Price, service, convenience, and extensive inventory are all areas where you may be vulnerable.
  • What are their weaknesses? Weaknesses are opportunities you should plan to take advantage of.
  • What are their basic objectives? Do they seek to gain market share? Do they attempt to capture premium clients? See your industry through their eyes. What are they trying to achieve?
  • What marketing strategies do they use? Look at their advertising, public relations, etc.
  • How can you take market share away from their business?
  • How will they respond when you enter the market?

While these questions may seem like a lot of work to answer, in reality the process should be fairly easy. You should already have a feel for the competition's strengths and weaknesses--if you know your market and your industry.

To gather information, you can also:

  • Check out their websites and marketing materials. Most of the information you need about products, services, prices, and company objectives should be readily available. If that information is not available, you may have identified a weakness.
  • Visit their locations. Take a look around. Check out sales materials and promotional literature. Have friends stop in or call to ask for information.
  • Evaluate their marketing and advertising campaigns. How a company advertises creates a great opportunity to uncover the objectives and strategies of that business. Advertising should help you quickly determine how a company positions itself, who it markets to, and what strategies it employs to reach potential customers.
  • Browse. Search the Internet for news, public relations, and other mentions of your competition. Search blogs and Twitter feeds as well as review and recommendation sites. While most of the information you find will be anecdotal and based on the opinion of just a few people, you may at least get a sense of how some consumers perceive your competition. Plus you may also get advance warning about expansion plans, new markets they intend to enter, or changes in management.

Keep in mind competitive analysis does more than help you understand your competition. Competitive analysis can also help you identify changes you should make to  your  business strategies. Learn from competitor strengths, take advantage of competitor's weaknesses, and apply the same analysis to your own business plan.

You might be surprised by what you can learn about your business by evaluating other businesses.

Identify  Potential  Competitors

It can be tough to predict when and where new competitors may pop up. For starters, regularly search for news on your industry, your products, your services, and your target market.

But there are other ways to predict when competition may follow you into a market. Other people may see the same opportunity you see. Think about your business and your industry, and if the following conditions exist, you may face competition does the road:

  • The industry enjoys relatively high profit margins
  • Entering the market is relatively easy and inexpensive
  • The market is growing--the more rapidly it is growing the greater the risk of competition
  • Supply and demand is off--supply is low and demand is high
  • Very little competition exists, so there is plenty of "room" for others to enter the market

In general terms, if serving your market seems easy you can safely assume competitors will enter your market. A good business plan anticipates and accounts for new competitors.

Now distill what you've learned by answering these questions in your business plan:

  • Who are my current competitors? What is their market share? How successful are they?
  • What market do current competitors target? Do they focus on a specific customer type, on serving the mass market, or on a particular niche?
  • Are competing businesses growing or scaling back their operations? Why? What does that mean for your business?
  • How will your company be different from the competition? What competitor weaknesses can you exploit? What competitor strengths will you need to overcome to be successful?
  • What will you do if competitors drop out of the marketplace? What will you do to take advantage of the opportunity?
  • What will you do if new competitors enter the marketplace? How will you react to and overcome new challenges?

The Competitive Analysis section for our cycling rental business could start something like this:

Primary Competitors

Our nearest and only competition is the bike shops in Harrisonburg, VA. Our next closest competitor is located over 100 miles away.

The in-town bike shops will be strong competitors. They are established businesses with excellent reputations. On the other hand, they offer inferior-quality equipment and their location is significantly less convenient.

Secondary Competitors

We do not plan to sell bicycles for at least the first two years of operation. However, sellers of new equipment do indirectly compete with our business since a customer who buys equipment no longer needs to rent equipment.

Later, when we add new equipment sales to our operation, we will face competition from online retailers. We will compete with new equipment retailers through personalized service and targeted marketing to our existing customer base, especially through online initiatives.

Opportunities

  • By offering mid- to high-end quality equipment, we provide customers the opportunity to "try out" bikes they may wish to purchase at a later date, providing additional incentive (besides cost savings) to use our service.
  • Offering drive-up, express rental return services will be seen as a much more attractive option compared with the hassle of renting bikes in Harrisonburg and transporting them to intended take-off points for rides.
  • Online initiatives like online renewals and online reservations enhances customer convenience and positions us as a cutting-edge supplier in a market largely populated, especially in the cycling segment, by customers who tend to be early technology adapters.
  • Renting bikes and cycling equipment may be perceived by some of our target market as a commodity transaction. If we do not differentiate ourselves in terms of quality, convenience, and service, we could face additional competition from other entrants to the market.
  • One of the bike shops in Harrisonburg is a subsidiary of a larger corporation with significant financial assets. If we, as hoped, carve out a significant market share, the corporation may use those assets to increase service, improve equipment quality, or cut prices.

While your business plan is primarily intended to convince  you  that your business makes sense, keep in mind most investors look closely at your competitive analysis. A common mistake made by entrepreneurs is assuming they will simply "do it better" than any competition.

Experienced businesspeople know you will face stiff competition: showing you understand your competition, understand your strengths and weaknesses relative to that competition, and that you understand you will have to adapt and change based on that competition is critical.

And, even if you do not ever plan to seek financing or bring in investors, you absolutely must know your competition.

The Competitive Analysis section helps you answer the "Against whom?" question.

The next step in creating your business plan is to develop an Operations Plan that will serve your customers, keep your operating costs in line, and ensure profitability . Your ops plan should detail strategies for managing, staffing, manufacturing, fulfillment, inventory--all the stuff involved in operating your business on a day-to-day basis.

Fortunately, most entrepreneurs have a better handle on their operations plan than on any other aspect of their business. After all, while it may not seem natural to analyze your market or your competition, most budding entrepreneurs tend to spend a lot of time thinking about how they will  run  their businesses.

Your goal is to answer the following key questions:

  • What facilities, equipment, and supplies do you need?
  • What is your organizational structure? Who is responsible for which aspects of the business?
  • Is research and development required, either during start up or as an ongoing operation? If so, how will you accomplish this task?
  • What are your initial staffing needs? When and how will you add staff?
  • How will you establish business relationships with vendors and suppliers? How will those relationships impact your day-to-day operations?
  • How will your operations change as the company grows? What steps will you take to cut costs if the company initially does not perform up to expectations?

Operations plans should be highly specific to your industry, your market sector, and your customers. Instead of providing an example like I've done with other sections, use the following to determine the key areas your plan should address:

Location and Facility Management

In terms of location, describe:

  • Zoning requirements
  • The type of building you need
  • The space you need
  • Power and utility requirements
  • Access: Customers, suppliers, shipping, etc.
  • Specialized construction or renovations
  • Interior and exterior remodeling and preparation

Daily Operations

  • Production methods
  • Service methods
  • Inventory control
  • Sales and customer service
  • Receiving and Delivery
  • Maintenance, cleaning, and re-stocking
  • Licenses and permits
  • Environmental or health regulations
  • Patents, trademarks, and copyrights

Personnel Requirements

  • Typical staffing
  • Breakdown of skills required
  • Recruiting and retention
  • Policies and procedures
  • Pay structures
  • Anticipated inventory levels
  • Turnover rate
  • Seasonal fluctuations in demand
  • Major suppliers
  • Back-up suppliers and contingency plans
  • Credit and payment policies

Sound like a lot? It can be, but not all of the above needs to be in your business plan.

You should think through and create a detailed plan for each category, but you won't need to share the results with the people who read your business plan

Working through each issue and developing concrete operations plans helps you in two major ways:

  • If you don't plan to seek financing or outside capital, you can still take advantage of creating a comprehensive plan that addresses all of your operational needs.
  • If you do seek financing or outside capital, you may not include all the detail in your business plan--but you will have answers to any operations questions at your fingertips.

Think of Operations as the "implementation" section of your business plan. What do you need to do? How will you get it done? Then create an overview of that plan to make sure your milestones and timeline make sense.

That way the operations section answers the "How?" question.

Many investors and lenders feel the quality and experience of the management team is one of the most important factors used to evaluate the potential of a new business.

But putting work into the Management Team section will not only benefit people who may read your plan. It will also help  you  evaluate the skills, experiences, and resources your management team will need . Addressing your company's needs during implementation will make a major impact on your chances for success.

  • Who are the key leaders? (If actual people have not been identified, describe the type of people needed.) What are their experiences, educational backgrounds, and skills?
  • Do your key leaders have industry experience? If not, what experience do they bring to the business that is applicable?
  • What duties will each position perform? (Creating an organization chart might be helpful.) What authority is granted to and what responsibilities are expected in each position?
  • What salary levels will be required to attract qualified candidates for each position? What is the salary structure for the company, by position?

The Management Team section for our cycling rental business could start something like this:

Jim Rouleur, Owner and Manager

Joe has over 20 years experience in the cycling business. He served for 10 years as a product manager for Acme Bikes. After that he was the operations manager of Single Track Cycles, a full-service bike shop located in Bend, Oregon. He has an undergraduate degree in marketing from Duke University and an MBA from Virginia Commonwealth University. (A complete resume for Mr. Rouleur can be found in the Appendix.)

Mary Gearset, Assistant Manager

Mary was the 2009 U.S. Mountain Biking National Champion. She worked in product development for High Tec frames, creating custom frames and frame modifications for professional cyclists. She also has extensive customer service and sales experience, having worked for four years as the online manager of Pro Parts Unlimited, an online retailer of high-end cycling equipment and accessories.

In some instances you may also wish to describe your staffing plans.

For example, if you manufacture a product or provide a service and will hire a key skilled employee, describe that employee's credentials. Otherwise, include staffing plans in the Operations section.

One key note: Don't be tempted to add a "name" to your management team in hopes of attracting investors. Celebrity management team members may attract the attention of your readers, but experienced lenders and investors will immediately ask what role that person will actually play in the running of the business--and in most cases those individuals won't play any meaningful role.

If you don't have a lot of experience--but are willing to work hard to overcome that lack of experience--don't be tempted to include people in your plan who will not actually work in the business.

If you can't survive without help, that's okay. In fact, that's expected; no one does anything worthwhile on their own. Just make plans to get help from the  right  people.

Finally, when you create your Management section, focus on credentials but pay extra attention to what each person actually will  do . Experience and reputation are great, but action is everything.

That way your Management section will answer the "Who is in charge?" question.

Numbers tell the story. Bottom line results indicate the success or failure of any business.

Financial projections and estimates help entrepreneurs, lenders, and investors or lenders objectively evaluate a company's potential for success. If a business seeks outside funding, providing comprehensive financial reports and analysis is critical.

But most important, financial projections tell you whether your business has a chance of being viable--and if not let you know you have more work to do.

Most business plans include at least five basic reports or projections:

  • Balance Sheet: Describes the company cash position including assets, liabilities, shareholders, and earnings retained to fund future operations or to serve as funding for expansion and growth. It indicates the financial health of a business.
  • Income Statement: Also called a Profit and Loss statement, this report lists projected revenue and expenses. It shows whether a company will be profitable during a given time period.
  • Cash Flow Statement: A projection of cash receipts and expense payments. It shows how and when cash will flow through the business; without cash, payments (including salaries) cannot be made.
  • Operating Budget: A detailed breakdown of income and expenses; provides a guide for how the company will operate from a "dollars" point of view.
  • Break-Even Analysis: A projection of the revenue required to cover all fixed and variable expenses. Shows when, under specific conditions, a business can expect to become profitable.

It's easy to find examples of all of the above. Even the most basic accounting software packages include templates and samples. You can also find templates in Excel and Google Docs. (A quick search like "google docs profit and loss statement" yields plenty of examples.)

Or you can work with an accountant to create the necessary financial projections and documents. Certainly feel free to do so, but first play around with the reports yourself. While you don't need to be an accountant to run a business, you do need to understand your numbers, and the best way to understand your numbers is usually to actually work with your numbers.

But ultimately the tools you use to develop your numbers are not as important as whether those numbers are as accurate as possible--and whether those numbers help you decide whether to take the next step and put your business plan into action.

Then Financial Analysis can help you answer the most important business question: "Can we make a profit?"

Some business plans include less essential but potentially important information in an Appendix section. You may decide to include, as backup or additional information:

  • Resumes of key leaders
  • Additional descriptions of products and services
  • Legal agreements
  • Organizational charts
  • Examples of marketing and advertising collateral
  • Photographs of potential facilities, products, etc.
  • Backup for market research or competitive analysis
  • Additional financial documents or projections

Keep in mind creating an Appendix is usually only necessary if you're seeking financing or hoping to bring in partners or investors. Initially the people reading your business plan don't wish to plow through reams and reams of charts, numbers, and backup information. If one does want to dig deeper, fine--he or she can check out the documents in the Appendix.

That way your business plan can share your story clearly and concisely.

Otherwise, since you created your business plan, you should already have the backup.

Tying It All Together

While you may use your business plan to attract investors, partners, suppliers, etc., never forget that the goal of your business plan is to convince  you  that your idea makes sense. 

Because ultimately it's your time, your money, and your effort on the line.

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The Business Planning Process: 6 Steps To Creating a New Plan

The Business Planning Process 6 Steps to Create a New Plan

In this article, we will define and explain the basic business planning process to help your business move in the right direction.

What is Business Planning?

Business planning is the process whereby an organization’s leaders figure out the best roadmap for growth and document their plan for success.

The business planning process includes diagnosing the company’s internal strengths and weaknesses, improving its efficiency, working out how it will compete against rival firms in the future, and setting milestones for progress so they can be measured.

The process includes writing a new business plan. What is a business plan? It is a written document that provides an outline and resources needed to achieve success. Whether you are writing your plan from scratch, from a simple business plan template , or working with an experienced business plan consultant or writer, business planning for startups, small businesses, and existing companies is the same.

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The Better Business Planning Process

The business plan process includes 6 steps as follows:

  • Do Your Research
  • Calculate Your Financial Forecast
  • Draft Your Plan
  • Revise & Proofread
  • Nail the Business Plan Presentation

We’ve provided more detail for each of these key business plan steps below.

1. Do Your Research

Conduct detailed research into the industry, target market, existing customer base,  competitors, and costs of the business begins the process. Consider each new step a new project that requires project planning and execution. You may ask yourself the following questions:

  • What are your business goals?
  • What is the current state of your business?
  • What are the current industry trends?
  • What is your competition doing?

There are a variety of resources needed, ranging from databases and articles to direct interviews with other entrepreneurs, potential customers, or industry experts. The information gathered during this process should be documented and organized carefully, including the source as there is a need to cite sources within your business plan.

You may also want to complete a SWOT Analysis for your own business to identify your strengths, weaknesses, opportunities, and potential risks as this will help you develop your strategies to highlight your competitive advantage.

2. Strategize

Now, you will use the research to determine the best strategy for your business. You may choose to develop new strategies or refine existing strategies that have demonstrated success in the industry. Pulling the best practices of the industry provides a foundation, but then you should expand on the different activities that focus on your competitive advantage.

This step of the planning process may include formulating a vision for the company’s future, which can be done by conducting intensive customer interviews and understanding their motivations for purchasing goods and services of interest. Dig deeper into decisions on an appropriate marketing plan, operational processes to execute your plan, and human resources required for the first five years of the company’s life.

3. Calculate Your Financial Forecast

All of the activities you choose for your strategy come at some cost and, hopefully, lead to some revenues. Sketch out the financial situation by looking at whether you can expect revenues to cover all costs and leave room for profit in the long run.

Begin to insert your financial assumptions and startup costs into a financial model which can produce a first-year cash flow statement for you, giving you the best sense of the cash you will need on hand to fund your early operations.

A full set of financial statements provides the details about the company’s operations and performance, including its expenses and profits by accounting period (quarterly or year-to-date). Financial statements also provide a snapshot of the company’s current financial position, including its assets and liabilities.

This is one of the most valued aspects of any business plan as it provides a straightforward summary of what a company does with its money, or how it grows from initial investment to become profitable.

4. Draft Your Plan

With financials more or less settled and a strategy decided, it is time to draft through the narrative of each component of your business plan . With the background work you have completed, the drafting itself should be a relatively painless process.

If you have trouble writing convincing prose, this is a time to seek the help of an experienced business plan writer who can put together the plan from this point.

5. Revise & Proofread

Revisit the entire plan to look for any ideas or wording that may be confusing, redundant, or irrelevant to the points you are making within the plan. You may want to work with other management team members in your business who are familiar with the company’s operations or marketing plan in order to fine-tune the plan.

Finally, proofread thoroughly for spelling, grammar, and formatting, enlisting the help of others to act as additional sets of eyes. You may begin to experience burnout from working on the plan for so long and have a need to set it aside for a bit to look at it again with fresh eyes.

6. Nail the Business Plan Presentation

The presentation of the business plan should succinctly highlight the key points outlined above and include additional material that would be helpful to potential investors such as financial information, resumes of key employees, or samples of marketing materials. It can also be beneficial to provide a report on past sales or financial performance and what the business has done to bring it back into positive territory.

Business Planning Process Conclusion

Every entrepreneur dreams of the day their business becomes wildly successful.

But what does that really mean? How do you know whether your idea is worth pursuing?

And how do you stay motivated when things are not going as planned? The answers to these questions can be found in your business plan. This document helps entrepreneurs make better decisions and avoid common pitfalls along the way. ​

Business plans are dynamic documents that can be revised and presented to different audiences throughout the course of a company’s life. For example, a business may have one plan for its initial investment proposal, another which focuses more on milestones and objectives for the first several years in existence, and yet one more which is used specifically when raising funds.

Business plans are a critical first step for any company looking to attract investors or receive grant money, as they allow a new organization to better convey its potential and business goals to those able to provide financial resources.

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Entrepreneurial Process: Meaning, Overview & Stages – Embarking on the journey of entrepreneurship is like setting sail on uncharted waters. Understanding the entrepreneurial process is akin to having a reliable compass in hand. The intricacies of this venture creation process have become a focal point in the realm of current entrepreneurship. where budding entrepreneurs are on the cusp of turning their ideas into reality. This process is a fascinating terrain to explore, let’s see why it is.

What is the Entrepreneurial Process 

The entrepreneurial process is the sequence of steps and activities involved in starting and managing a new venture. It encompasses the identification of opportunities, gathering resources, creating a business plan, launching the venture, and managing its growth and development.

The entrepreneurial process is a thrilling journey filled with opportunities and challenges. It’s about spotting a chance, seizing it with a solid plan, and then creating value that keeps customers coming back for more. It’s where ideas take flight and become thriving ventures that make a difference in the market.

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Stages of the Entrepreneurial Process  

We label the first level of the technique opportunity recognition. The invention and assessment of opportunities are part of this technique. Inside the possibility reputation system, initial ideas evolve into fully-fledged enterprise opportunities .

Inside the second stage, ‘opportunity exploitation’, important sources are combined to enable exchange with the market. The acknowledged commercial enterprise opportunity is translated into an actual resource.

When the imparting is taken up with the aid of the market inside the third stage. The possibility of exploitation ended with the advent of value. We use the expression value creation in place of wealth creation to stress the feasible non-economic outcomes of the entrepreneurial process. The advent of cost seems because of the final result of the entrepreneurial system. The process seems to be linear and sequential, whereas, in reality, it is dynamic and iterative.

Entrepreneurial Process

Let’s discuss the stages of the entrepreneurial process one by one.

01. Opportunity Recognition in Entrepreneurial Process

The process of opportunity recognition begins with an initial idea, which can come from employment, hobbies, social encounters, or observation. Entrepreneurs often seek opportunities for dissatisfaction and are subconsciously motivated by their talents, environmental context, and societal values. A preliminary idea is crucial for the entrepreneurial process, which involves full-scale development, and social, cultural, and personal elements.

The idea is evaluated and refined until it becomes a complete business opportunity. The process is evolutionary and iterative, involving cognitive sports, data accumulation, and idea introduction. The goal is to overcome expected challenges and maximize potential advantages.

  • Information Scanning
  • Thinking through Talking
  • Information Seeking
  • Assessing Resources

Through these activities, the preliminary concept is evolved and evaluated into a complete-fledged commercial enterprise opportunity. The evaluation of possibilities, in the course of the filtration or screening system, is a vital step inside the system of growing preliminary ideas into commercial enterprise opportunities.

The new breed of entrepreneurship – Click here

The Role of The Entrepreneur in the Opportunity Recognition Process

Entrepreneurship is a crucial factor in recognizing opportunities. Historically, the reason for entrepreneurship was attributed to psychological development. Mental studies can be divided into two groups: identifying entrepreneurial personality traits and examining socio-mental or socio-cultural factors. Socio-cultural attributes, such as ethnicity, gender, and family background, can influence entrepreneurial behavior. Existence-direction changes, such as job loss or cultural influences, can lead to business formation.

However, the effect of personality on entrepreneurial behavior remains inconclusive. Recent research has focused on differences in understanding, statistics, and cognitive behavior, highlighting the importance of prior knowledge and experience in entrepreneurship. Entrepreneurial alertness is also important, as entrepreneurs today interpret statistics differently than executives.

Businessman vs entrepreneur – Click here

The Role of The Environment in the Opportunity Recognition Process

The environment significantly influences the opportunity recognition process, with social contexts playing a crucial role in determining the success of entrepreneurial opportunities. Marketers use their networks to gather information. They gather statistics and access resources and information. To increase their possibilities, entrepreneurs interact with the community. Socioeconomic, cultural, technical, and political issues all have an impact on their success. Technological advancements and favorable political conditions can also stimulate entrepreneurs to start businesses.

Entrepreneurial Process Stages

02. Opportunity Exploitation in Entrepreneurial Process

Opportunity exploitation is a crucial phase in the entrepreneurial process, involving the transition from idea to concrete business concept, the quest for control, commitment to exploitation, modes of exploitation, factors influencing the decision, resource gathering and integration, and the role of networking. Entrepreneurs must identify specific resource requirements and find potential providers, then engage in strategic maneuvers to obtain these resources. Social networking plays a pivotal role in this process, as entrepreneurs act as organizers and coordinators of resources.

Opportunity exploitation is the bridge between ideation and market success, involving resource gathering, strategic networking, and the transformation of ideas into real-world solutions. The choices made during this phase can determine whether a new business is born or an existing one evolves to seize a fresh opportunity. It’s the heart of entrepreneurship, where ideas become action, and innovation meets the marketplace.

The Role of The Entrepreneur in the Opportunity Exploitation Process

Opportunity exploitation in entrepreneurship involves turning potential into tangible products or services. The entrepreneur’s mental attributes, such as risk aversion and prior experience, are crucial in recognizing and exploiting opportunities. Knowledge and experience are key, as they provide insights and expertise needed to make ventures a reality.

Successful entrepreneurs are action-oriented, taking action to turn their ideas into tangible businesses. Information processing styles also play a role in entrepreneurship, with creative individuals better equipped to build a resource base. For example, Alice, a risk-taker with experience in the sustainability industry, sees an opportunity in the growing demand for eco-friendly products. Her creative thinking helps her find unique ways to build her resource base.

The Role of The Environment in the Opportunity Exploitation Process

In the dynamic world of entrepreneurship, the environment in which an entrepreneur operates plays a dual role in the opportunity exploitation process. An entrepreneur’s network is a valuable resource, providing access to financial capital, emotional support, valuable information, and advice. The competitive landscape also plays a crucial role in entrepreneurship, with a favorable environment and high demand enabling entrepreneurs to exploit opportunities. Timing matters also play a role, with the age of technology and the competitive landscape influencing opportunity exploitation.

In industries with infancy, innovation is abundant, and lower competition and opportunity costs can be game-changers. For example, Sarah, an entrepreneur with a passion for sustainable fashion, can leverage her network to access investors and gain valuable insights into the eco-friendly textile market. This combination of resources and timing provides a strong foundation for success in the market.

Model of the opportunity exploitation process

Overview of Entrepreneurial Process

The “opportunity exploitation process” is a crucial phase in the entrepreneurial journey, involving the transformation of a promising business opportunity into a practical business concept. This process includes translating the idea into a complete package, including resources, organizational structure, products or services, and a marketing plan. The entrepreneur plays a pivotal role in driving this transformation. They shape the business concept and set it on the path to success. The environment also plays a significant role, in providing support, resources, and competition. Entrepreneurs must be flexible and pivoting in times of challenges.

03. Value Creation in Entrepreneurial Process

Value creation is a crucial aspect of the entrepreneurial process, as it drives the journey, motivates everyone involved, and serves as a catalyst for future entrepreneurship. The perceived value created through opportunity exploitation motivates entrepreneurs customers, and even potential investors.

The outcomes of the entrepreneurial process can shape the future, as lessons learned and experiences gained to contribute to the development of human and intellectual capital. Even failures can be valuable lessons, leading to new insights, strategies, and innovative ideas. Therefore, value creation is not just about the present but also a driving force in shaping the future of entrepreneurship.

Did you know the “Difference between Businessman and Entrepreneur” – Click here

Levels and Types of Value Creation

Value creation in the realm of entrepreneurship isn’t a one-dimensional concept; it operates on multiple levels and takes various forms. Entrepreneurship impacts both personal and societal levels, with entrepreneurs seeking to accumulate wealth for personal success. This can stimulate economic growth, create new markets, and generate employment, contributing to society’s betterment. However, not all forms of wealth creation lead to societal benefits, such as organized crime or rent-seeking.

Entrepreneurial activities can also trigger changes within specific industries and regional economies. Different forms of value emerge. Including economic, non-economic, positive, negative, immediate, or long-term. Entrepreneurial opportunities can have a spectrum of outcomes, from success to failure.

The Role of The Entrepreneur in the Value Creation Process

The role of the entrepreneur in the value-creation process is a complex interplay of various factors. Let’s dissect this intricate relationship.

1. Ambiguous Impact of Personality

Studies on the direct influence of an entrepreneur’s personality on value creation have shown contradictory findings. Although personality qualities are undoubtedly important, the relationship is not simple. The entrepreneur’s personality can influence value creation, but this influence is often mediated by user behavior and external factors.

2. The Mediating Factors

An entrepreneur’s abilities and personality traits, such as creativity and strategic thinking, indirectly affect value creation. This influence is channeled through their work approach and focus. High-performing entrepreneurs, those driving successful firms, tend to concentrate on strategic tasks that drive sales growth, rather than getting bogged down in operational details.

3. The Critical Evaluation

At a certain juncture, the entrepreneur must evaluate the progress of opportunity exploitation. This involves weighing the expected payoffs against the results achieved. Based on this evaluation, the entrepreneur may decide to continue, pivot, or even abandon the venture. The decision to exit or continue is deeply linked to the company’s financial performance and a predefined performance threshold.

4. Exit Strategies

In the entrepreneurial world, exits are not uncommon. Even when a venture is performing well, entrepreneurs may decide to exit the stage. They might opt to sell the business. Also, aiming to capitalize on its value, as was seen during the dot-com boom. Different exit strategies, such as Initial Public Offerings or mergers and acquisitions, are often considered.

5. Succession and Organizational Mortality

However, the exit of the founding entrepreneur, especially in a relatively young company, can pose a significant challenge. It may lead to a succession problem, potentially threatening the organization’s survival. This challenge can result in organizational mortality, where the company struggles to find suitable leadership to carry it forward.

Corporate entrepreneurship – Click here

This exploration of the entrepreneurial process delves into its fundamental elements, from idea initiation to thriving venture creation. Successful entrepreneurship is a dynamic interplay between an entrepreneur’s unique characteristics and the environment. It’s an art and science, blending individual ingenuity and environmental dynamics. Understanding this journey helps entrepreneurs navigate challenges, seize opportunities, and shape the future of business and society.

FAQs on Entrepreneurial Process

What is the entrepreneurial process.

The entrepreneurial process is the series of steps and activities involved in starting and managing a new business. It includes opportunity identification and resource acquisition. Also, business plan creation, venture launch, and growth and development management.

Why entrepreneurship is a process?

Entrepreneurship is a process because it is not a single event. It is a journey that requires continuous learning. Also, adaptation, and growth. Entrepreneurs must be able to identify opportunities and develop products or services. Then they can meet those opportunities, and then successfully launch and manage their enterprises. The entrepreneurial process is complicated and challenging. It is also one that can be very rewarding.

What are the four (4) aspects of the entrepreneurial process?

The entrepreneurial process has four aspects. 

  • The capacity to spot market issues or unmet wants that a new good or service may solve is known as opportunity identification.
  • The capacity to create and carry out a strategy to take advantage of a chance that has been recognized is known as opportunity exploitation.
  • Value creation is the process of creating and delivering goods or services that buyers are prepared to pay for.
  • The capacity to get the resources required to launch and run a firm, including cash, personnel, and tools, is known as resource acquisition.

What are the three (3) major parts of the entrepreneurial process?

The three major parts of the entrepreneurial process are:

A. Opportunity Recognition

Entrepreneurial traits and experiences influence identifying untapped market needs, while the entrepreneurial ecosystem provides necessary support, resources, and networks for successful opportunity recognition.

B. Opportunity Exploitation

Opportunity exploitation involves entrepreneurs identifying and utilizing identified opportunities, leveraging resources, and leveraging the environment to access capital, markets, and support. This process involves a step-by-step journey from idea inception to product creation.

C. Value Creation

The value-creation process involves entrepreneurs shaping products and services to cater to customer needs, transforming societal levels from personal wealth to broader economic impact.

What are the six steps in the entrepreneurial process

The six steps in the entrepreneurial process are

  • Idea generation – It is the process of coming up with novel business ideas.
  • Opportunity evaluation – This is the process of considering the viability of business ideas.
  • Business planning – This is the process of developing a roadmap for how the firm will be launched and operated.
  • Resource acquisition – This is the process of collecting the resources required to start and operate the business.
  • Venture launch – This is the process of getting the business to market.
  • Growth management – This is the procedure of growing and extending the business.

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a full business plan should be written at the beginning of the entrepreneurial process

2.1 Overview of the Entrepreneurial Journey

Learning objectives.

By the end of this section, you will be able to:

  • Explain the entrepreneurial journey to explore and discover entrepreneurship as a career choice
  • Identify the steps, decisions, and actions involved in the entrepreneurial journey
  • Recognize the rewards and risks of the steps in the entrepreneurial journey

Self-Employment as an Entrepreneurial Journey

When the economy and the job market are strong, the entrepreneur has a safety net that decreases the risks in creating a new venture , a startup company or organization that conducts business or is created to satisfy a need, and allows for a quick recovery if the venture is not successful. There are more new startups when there are high levels of confidence in both the venture’s success and the entrepreneur’s confidence in finding employment if the venture fails. People over 40 years of age account for most new startup activity, in part because of the continuing trend in which a business may choose not to hire an employee but instead hire an independent contractor , a person who provides work similar to an employee without being part of the payroll for the contracting business, and who is responsible for paying their own taxes and providing their own benefits. With previous knowledge and expertise, this group of entrepreneurs recognizes opportunities created by this move away from hiring full-time employees to more outsourcing to independent contractors. One contributor is the gig economy , which involves using temporary and often transitional positions hired on a case-by-case basis, rather than keeping a full staff of hired employees. Advantages for the employer include a decrease in cost of benefits and loyalties to specific employees. Advantages for the hired worker or independent contractor (sometimes called a freelancer ) include no long-term commitment and flexibility in accepting contracts. From an entrepreneurial perspective, the creation of websites that support the gig economy offers opportunities for independent ventures. Many people today are becoming small entrepreneurs. This process goes by a variety of names, such as the sharing economy , the gig economy, the peer economy , or the collaborative economy . Maybe it means driving for a company such as Lyft , Uber , or GrubHub , or perhaps offering services through TaskRabbit , UpWork , or LivePerson . The projected numbers of independent contractors and on-demand workers are stated as 42 percent for small businesses by the year 2020, a growth of 8 percent from current figures. 1 And a projection of greater than 50 percent of the workforce will be independent contractors by 2027 if this trend continues at the current pace. 2 In the “Freelancing in America: 2019” report, the sixth annual study by UpWork and Freelancers Union, 57 million United States citizens are estimated to freelance, with income approaching 5 percent of US gross domestic product (GDP) at nearly $1 trillion and earning a median rate of $28.00 an hour, representing an hourly income greater than 70 percent of workers in the overall US economy. 3 One report found that 94 percent of net job growth from 2005 to 2015 was in alternative work categories, with 60 percent due to independent contractors and contract company workers. 4

According to the US Bureau of Labor Statistics, the number of self-employed Americans is growing, with 9.6 million self-employed people at the end of 2016. That number is expected to grow to 10.3 million by 2026. 5 A more recent study by FreshBooks’ second annual “Self-Employment” report predicts that 27 million US employees will leave traditional work in favor of self-employment by 2020, tripling the current population of full-time self-employed professionals to 42 million. The main driver for this change in the workforce is a greater desire for control over one’s career with the ability to have greater control over working hours and acceptance of work. 6 , 7 Of course, self-employment is a broad category that includes small-business owners as well as entrepreneurial startups and freelance gig employees. Since 2016, there has been a downward slide in the number of employees working for self-employed businesses, which results from a variety of factors, including difficulties in finding qualified employees, qualified employees having more employment options, such as employment through the gig economy, outsourcing activities, and technology actions that decrease the need for employees, with entrepreneurial activity remaining steady. 8

Entrepreneurship around the World

In a 2017 Business Insider article, “America Needs Immigrant Entrepreneurs,” David Jolley writes that immigrants constitute 15 percent of the US workforce and 25 percent of the country’s workforce of entrepreneurs. 9 Forty percent of startups include at least one immigrant. Jolley’s article cites a study that identified immigrants as twice as likely to start a business as people born in the United States. In 2016, 40.2 percent of Fortune 500 companies were founded by at least one immigrant or a child of immigrant parents. Dinah Brin, writing for Forbes , stated in a 2018 article that immigrants form 25 percent of new US businesses and that new immigrant-owned firms generated 4 to 5 million jobs. 10

These statistics and other findings have prompted countries such as Canada to revise their immigration policies to attract more entrepreneurial-minded immigrants. A World Bank report from May 2018 ranked the United States 53rd out of 190 countries for ease in starting a business, with higher scores representing greater ease. 11 The same report ranks the United States eighth for ease of doing business. The difference in these rankings indicates that once a business is established, factors such as regulations, permits, access to credit, and infrastructure support the business owner’s ability to continue the business, but actually starting the business is more challenging. For any given country, ease in starting a business and the country’s interest in supporting entrepreneurial activity are crucial in both attracting entrepreneurial people and supporting their ability to open a business. Imposing restrictive regulations and processes on new ventures significantly decreases the number of new ventures.

According to a 2018/2019 report, the highest rate of entrepreneurial activity worldwide in 2018 was in Angola at 41 percent. 12 Angola’s low-income economy meant fewer employment opportunities, creating pressures to find other ways to earn an income. Guatemala and Chile reported 28 percent and 25 percent of entrepreneurial activity, respectively, with medium- and high-income economies. These percentages are quite high, considering that these economies offer employment opportunities in existing companies. In terms of innovation, India at 47 percent, and Luxembourg and Chile at 48 percent each, take the lead in offering new products and services not previously available. This entrepreneurial activity reflects the ease of starting a business. The Netherlands, Poland, and Sweden were reported as the easiest countries in which to start a new business, in part because many people in those countries view entrepreneurship as an attractive lifestyle. As you can see, both economic opportunities and a country’s specific support for entrepreneurial behavior contribute to the number of people who enter entrepreneurial activities.

From a gender perspective, there are currently over 11 million woman-owned businesses in the United States. This number includes both small business owners and entrepreneurs. Thirty years ago, there were only 4 million woman-owned businesses. 13 The number of woman-owned businesses has increased 45 percent between 2007 and 2016, five times faster than the national average, with 78 percent of new women-owned businesses started by women of color.

Starting Your Entrepreneurial Journey

How do you fit into this entrepreneurial journey? This chapter will help you to explore and discover your potential for entrepreneurship as a career choice. Think of this exploration and discovery experience as a way to map out a strategy to reach your goals or dreams. Let’s imagine that your dream vacation is a hiking trip to Glacier National Park in the US state of Montana. Just as hikers have different levels of experience, so do entrepreneurs. Just as your plan for a wilderness hike would involve many stages, your entrepreneurial journey involves multiple levels of self-discovery, exploration, experiences, and accomplishments on your way to success. For our purposes, the term entrepreneurial venture means any type of new business, organization, project, or operation of interest that includes a level of risk in acting on an opportunity that has not previously been established. For each story of entrepreneurial success that is shared—such as that of Facebook or Airbnb—there are even more lesser-known entrepreneurial success stories such as Zipline , a company that delivers medical supplies in Rwanda and Ghana by drone. These entrepreneurs faced the same dilemmas in pursuing their passion, or opportunities, which led them to their entrepreneurial destiny. They courageously stepped out of their comfort zones to explore the possibilities that lie ahead. What is the difference between entrepreneurs and you? The main difference is taking that first step. Many people have ideas that fit into the definition of an entrepreneurial idea but never take that first step. Just as the Chinese philosopher Lao Tzu suggests, every journey begins with a single step.

Are You Ready?

Taking the first step.

Go to Fire Nation’s website on taking the first step to learn more. Changing your mindset (your perception of yourself and your life situation) and encountering trigger events (significant external situations) can nudge you into taking the first step toward being an entrepreneur.

  • Is there a venture you’ve always thought you should start but never did?
  • Think about what factors are stopping you. Consider your mindset and how you might change your mindset so that your venture could become a reality.
  • What are some possible trigger events that could make the difference between starting your venture and waiting to start your venture?

Opening your future to the possibility of starting your own venture brings new and exciting experiences ( Figure 2.2 ). Every entrepreneur moves through several steps in considering the entrepreneurial journey. Once you understand this journey, the steps will help you define your path toward creating and starting your new venture. Each step of this process offers another level of understanding that prepares you for long-term success. How will you achieve this success? By taking one step at a time, exploring and learning, considering new ideas and expectations, and applying these experiences to achieve your personal outcome. Think of the entrepreneurial journey as a guide to knowing what is in store for you as you start your new venture.

One benefit of outlining a step-by-step process is the opportunity to explore different paths or behaviors that may lead to an entrepreneurial venture. Think again of your dream visit to Glacier National Park. How would you get there? What equipment would you need? What kinds of experiences would you expect to have? Think of the Glacier National Park journey as your entrepreneurial journey, a metaphor intended to help you as you create your career as an entrepreneur.

What makes someone ready or willing to choose entrepreneurship over becoming an employee of an established business or a small business owner? It takes confidence, courage, determination, resilience, and some know-how to select entrepreneurship as a career as well as the recognition of the opportunity. An entrepreneur is defined as someone who not only recognizes an opportunity but who also is willing to act on that opportunity. Both actions are required. We might identify an opportunity, but many people do not act on the idea. Confidence, courage, and willingness are necessary to take that first step, as well as remembering the following:

  • You are unique. Even if two similar people attempted to launch identical ventures, the results would likely not be the same. This is because each one of us has different ideas, approaches, available resources, and comfort levels, all of which influence the venture’s development and eventual success.
  • Although there are no hard and fast rules or theories of the best way to launch into entrepreneurship, we can gain wisdom from the lessons learned by experienced entrepreneurs.
  • Selecting an entrepreneurial career requires honesty, reflection, and a tendency to be action oriented. You will need to recognize your own strengths, limitations, and commitment as part of that honesty. Reflection is required for self-growth—seeking improvements in your own skills, interactions, and decision making—and commitment is required to maintain consistency in your willingness to make the new venture a top priority in your life. You will also need to understand that you cannot accomplish everything by yourself, and you may need to ask for help. It helps to be curious, open, and able to take calculated risks and to be resourceful and resilient when faced with challenges or obstacles.

Entrepreneurial Potential Self-Assessment

Take this quick Entrepreneurial Potential Self-Assessment to assess your potential to become an entrepreneur. After completing this self-assessment, what new information did you learn about yourself? Do you think your answers will change as you acquire more life experiences and education? Why or why not?

Optimizing Interest Areas

What are three areas that interest you? These could be hobbies, work activities, or entertainment activities. How would someone else describe your skills and interests, or what you are known for? Answering these questions provides insights into your strengths and interests. Next, what is one area that you are passionate about? What strengths could you bring to this passion to build your own business?

Keep an open mind in looking for an opportunity that fits your strengths and interests. If you decide to explore entrepreneurship, what would be your first step? What are your initial thoughts about being an entrepreneur? What would you review or search to find more information on your idea or area of interest? With whom would you first question or discuss this idea? Why?

The Entrepreneurial Journey as a Trip

The entrepreneurial journey is your exploration to discover if entrepreneurship is right for you. Every entrepreneurial journey is unique; no two individuals will experience it in the same way. Along the way, you will find opportunities and risks coupled with challenges and rewards. It’s useful to think about the entrepreneurial journey as an exciting trip or other adventure. Most of the preparations and steps involved with planning a trip are like those for starting a venture. Just as you would plan and prepare for a trip—starting with inspiration and leading up to finally traveling on the trip—you might follow similar steps to launch a venture. And just as you would prepare for any challenges that you might encounter on a trip—bad weather, lost luggage, or detours—so you should consider potential obstacles or barriers along your entrepreneurial journey ( Figure 2.3 ). Think of these difficulties as opportunities to learn more about the entrepreneurial process—and about yourself and how you manage challenges.

Developing a venture can be an exciting and active experience. It is also a lot of hard work, which can be equally rewarding and enjoyable. Here we present the entrepreneurial journey as seven specific steps, or experiences, which you will encounter along the road to becoming an entrepreneur. You’ll find more information about the entrepreneurial journey in other chapters in this book.

  • Step 1: Inspiration – What is your motivation for becoming an entrepreneur?
  • Step 2: Preparation – Do you have what it takes to be an entrepreneur?
  • Step 3: Assessment – What is the idea you plan to offer through your venture?
  • Step 4: Exploring Resources – What resources and characteristics do you need to make this venture work?
  • Step 5: Business Plan – What type of business structure and business model will your venture have?
  • Step 6: Navigation – In what direction will you take your venture? Where will you go for guidance?
  • Step 7: Launch – When and how will you launch your venture?

As you work through each step of the entrepreneurial journey you should prepare for significant aspects of this experience. You will meet with rewards and challenges, the consequences that result from the decisions made at various points along your journey. To visualize the steps of the entrepreneurial journey, imagine your possible hiking trip to Glacier National Park ( Table 2.1 ). Just as hikers have different levels of experience, so do entrepreneurs. Compare the following aspects of preparing for a hike with aspects of your entrepreneurial journey.

Type of Hiker Mountain Hiking Skill Level Entrepreneurial Journey Equivalent
Walker
Climber
Mountaineer

Step 1: Inspiration

When you think of being an entrepreneur, what is the inspiration for your venture? Just as you might have an inspiration for a hiking trip to Glacier National Park, you will have an inspiration behind the decision to become an entrepreneur. When you’re planning a trip to a new and exciting place, one thing you might do is to imagine what you will experience along the journey and on arriving at your destination ( Figure 2.4 ). This portion of the entrepreneurial journey includes imagining yourself as an entrepreneur or as part of an entrepreneurial team. For this stage, you need a creative, open, and innovative state of mind, also known as an entrepreneurial mindset , which is discussed in more detail in The Entrepreneurial Mindset and Creativity, Innovation, and Invention . Dream big about your potential future and opportunities ( Figure 2.5 ).

Step 2: Preparation

Just as when you are preparing for a trip, you need a plan ( Figure 2.6 ) to move forward on your entrepreneurial journey. Before your dream hiking trip, you might gather information about Glacier National Park from a trusted source, such as a good friend with travel experience, or you might conduct online research. Your friend’s feedback could be just the motivation you need to try this experience yourself. Or you might use your research to determine if the trip is possible. You will need to look at maps, either online or on paper. Either way, you might also consider travel and accommodation options, such as booking a flight and finding a place to stay. You might want to create benchmarks to align your journey with your available resources, such as the amount of time and the amount of money you have to spend on the trip. Benchmarking is a method of tracking target expectations with actionable results by comparing one’s own company’s performance with an industry average, a leader within the industry, or a market segment. Benchmarking can help design the trip to meet incremental goals and timelines. From both a travel plan and an entrepreneurial perspective, although benchmarking is used as a control mechanism, we know that situations can arise that require an alteration in the plan, causing the benchmarked items to also need adjustments.

Link to Learning

Which type of benchmarking will help you the most in beginning your entrepreneurial journey? Visit the American Society for Quality’s resource page on benchmarking for help.

To plan for an entrepreneurial journey, you should first conduct some preliminary research regarding your venture idea. Your research must be honest and objective if it is to give you a clear picture of the venture. Next, you might organize and prioritize your research and thoughts. For instance, you might see an idea like yours online or on television, and feel disappointed that someone stole your great idea or beat you to the punch. This is a common occurrence in entrepreneurship, but it should not discourage you. Instead, use that knowledge and energy to find an overlooked or different aspect of your original idea. The difference might even be the focus on a different target market , a specific group of consumers for whom you envision developing a product or service. Further, it is critical to maintain a fluid focus upon expanding the scope of a product or service to uniquely differentiate provisions of benefits apart from existing benefits or those offered by competitors. A focus on a different target market is exactly how the Jitterbug smartphone was created, because it targeted senior citizens. The Jitterbug smartphone offers a larger screen, larger buttons, and simpler features that make it easier for older people to make quick calls or send texts.

Preparation also includes opening space in your life to the time and energy commitment needed to support your new venture. Are the important people in your life willing to support the interest and passion you will need to dedicate the time, energy, and other resources to this new venture? Review the questions shown in ( Figure 2.7 ) to consider your answers to these questions. Preparation through research and other activities is discussed in more detail in Identifying Entrepreneurial Opportunity .

Step 3: Assessment

Now that you have decided where to go for your trip and have gathered information to prepare for it, the next action is to create and set your schedule. This action is simple but critical, because it involves connecting and coordinating information and resources that fit your lifestyle and needs. For example, you might schedule an early-morning Uber or Lyft to the airport and electronic delivery of your plane tickets to your smartphone. For the entrepreneurial journey, this phase might also include recognizing appropriate relationships and gathering needed resources. For many entrepreneurs, the opportunity to receive guidance from trusted advisors or mentors may provide valuable insights on how to manage the process. This step allows for reflection on your idea and intentions. After you’ve done your researching and gathering knowledge about your idea through the preparation step, is the idea still viable? Is the idea still interesting to you? With a better understanding of the industry, your idea, and your own interests that you gained in Step 2, is this idea something that you still want to explore? This step is discussed more fully in Problem Solving and Need Recognition Techniques with deeper coverage on the topic of opportunity recognition ( Figure 2.8 ).

Step 4: Exploring Resources

Regardless of where you might travel, you could not complete your trip without adequate resources such as available financing. There are many ways you might fund a hiking trip: savings, loan, pay-as-you-go, sponsorship (family or friends), or any combination of these options, to name a few. No matter how you finance your trip, it might help to have a balance of available credit and cash on hand to support your day-to-day expenses and any extracurricular activities or even unforeseen emergencies. As discussed in Entrepreneurial Finance and Accounting , the US Small Business Administration (SBA) provides funding opportunities.

This scenario is mirrored in the entrepreneurial journey. Just as you wouldn’t begin a trip without adequate resources, including access to cash, you wouldn’t begin your entrepreneurial journey without the necessary resources, including cash. The options between funding a trip and funding a new venture are similar, but they have different names. For example, on a trip, you might use the cash you have on hand, from savings or a personal loan. For an entrepreneurial journey, you might address cash management —management of cash inflows and outflows to support cash needs of the venture—to include bootstrapping , a funding strategy that seeks to optimize use of personal funds and other creative strategies (such as bartering) to minimize cash outflows. (See Entrepreneurial Finance and Accounting for more information on bootstrapping.) Bootstrapping includes ideas like leasing instead of purchasing, borrowing resources, or trading unneeded resources for needed ones. Another example of cash management includes a business model that offers subscriptions rather than a payment received for an item purchased. Subscriptions provide the entrepreneur with cash up front, with the buyer receiving benefits throughout the year. Consider the example of Amazon. Amazon offers Prime with a yearly subscription service, as well as Subscribe & Save , Amazon Instant Video , Amazon Mom , and Amazon Web Services , all based on a subscription business model.

According to Entrepreneur.com, other potential subscription-based models include services or products geared to older consumers, with 8,000 people turning sixty-five every day. A similar idea offers services to college students. Both ideas would offer family members a subscription that sends monthly gifts or products to either the elderly person or college student. We also see this model offered to pet owners who pay a monthly subscription to receive treats and toys for the family dog. Looking back at Amazon, we see the company offering the ease of repeat purchases for frequently used products such as vitamins and air filters.

Entrepreneur In Action

Prospurly is a subscription-based company that uses Cratejoy ’s subscription platform to sell small-batch artisanal products for bath, body, and home, marketing a natural lifestyle focused on the happiness of living a simple and appreciated life. Conduct your own research on Prospurly and other subscription-based businesses. Read the article, “How I Built a Subscription Business That’s Made over 50k in 6 Months,” on Cratejoy for more information about this company and Prospurly’s move from ideation to profitability.

Other ideas for finding funding include applying for grant funding. The importance of cash and cash management requires in-depth coverage, which is presented in Entrepreneurial Finance and Accounting and Business Structure Options: Legal, Tax, and Risk Issues .

The idea of exploring resources includes many other options besides how to fund a new venture. In a trial run , you would offer your product or service for sale within a limited market on a test basis to evaluate what additional resources are needed to support the success of the venture ( Figure 2.9 ). Examples of places where a trial run fits well, depending on your product, include farmers markets, in-home sales, or through friends and family. The idea is to track the feedback you receive about your product or service. How do people react to the price, the quality of the product, the packaging? You can experiment by selecting one variable to adjust—changing the price, the packaging, the sales pitch, the presentation, or the quantity—to track reactions and make improvements based on this feedback. You may then decide to adjust other variables to gather more information, as well as considering what other resources are needed for the success of the new venture. Financing and ideas to preserve your financial stability are discussed more fully in Entrepreneurial Finance and Accounting .

Step 5: Business Plan

The ability to travel and visit new locations is a privilege and a great opportunity to gain exposure to new experiences and opportunities. In addition to the work involved in preparing for a trip, the act and process of traveling involves constant decision making to achieve your desired goals and outcomes. For instance, should you travel to one location in Glacier National Park and explore that area in depth? Or should you attempt to visit as many areas of the park as possible with your given resources and abilities?

The challenge at this step of your entrepreneurial journey is to remain focused on managing your resources to meet your goals and outcomes as you write your business plan for your new venture. You will need to focus on the skills, experience, and resources necessary for your venture, and the management and decision making required to ensure success and adjust your plan based on changes and new information. Just as you might find a location in Glacier National Park where you want to stay for a couple of nights, a deviation from your original business plan (discussed in Business Model and Plan ) will also require adjustments and changes based on new information and insights.

Be honest with yourself by running a reality check about your ability to manage a venture, especially from a personal-capacity perspective. For example, if you start a business, will it be a part-time or full-time venture? Will you start while in school? Or will you wait until after graduation? The timing of opening the venture can be the difference between success and failure. Consider the difference between hiking in Glacier National Park in the middle of winter, when the daytime temperature is thirteen degrees below zero, and hiking in the middle of summer, when the daytime temperature is seventy-nine degrees. The timing of your visit to the park is an important part of your enjoyment and success in reaching your destination. In planning for your trip, you would pay attention to your departure time to ensure enjoyment and success in your adventure. Similarly, as part of your business plan, you would also research the best time to open your venture.

Finally, during your travels, getting lost, overwhelmed, or sidetracked is always possible. If you get lost when traveling, you might refer to social navigation apps such as Google Maps , Waze , or HERE WeGo , to find turn-by-turn directions and information. Or you might refer to a weblink, a printed map, or a local expert or guide familiar with the area. The business plan is your map. You should identify decision points and milestones , significant key accomplishments, in your plan. Milestones could include points such as hitting your breakeven point , the point at which income from operations results in exactly enough revenue to cover costs. If the financial projections in your business plan are unattainable, what is your next move within the plan? If you don’t reach the milestones identified in your business plan, what alternative choices can you make to redirect your venture? The business plan, in its first draft, should inform you whether your venture has a chance at success. If there are negative areas, what can you change? Building this plan before starting the business provides you with knowledge and insights about your idea. Make any necessary changes to the plan to strengthen the possibility of success. Then when you open the venture, track whether the reality of the venture aligns with your business plan’s projections and expectations. The business plan functions as both a road map to help you see where you are going next in building your venture and as a checklist to track whether you are on course or need to make adjustments. When entrepreneurs get off track, they can check out self-help websites, speak with a business coach or counselor, or contact local agencies or organizations, including those affiliated with the federal SBA. Organizations that offer free (or low-cost) small business counseling, mentoring, and training, include:

  • SCORE (Service Corps of Retired Executives): https://www.score.org/
  • Small Business Development Center (SBDC): https://www.sba.gov/offices/headquarters/osbdc/resources
  • Women’s Business Center (WBC): https://www.sba.gov/local-assistance/find/?type=Women%27s%20Business%20Center&pageNumber=1
  • US Export Assistance Center: https://www.export.gov/welcome
  • Veterans Business Outreach Center (VBOC): https://veteransoutreachcenter.org/
  • Other organizations include locally organized support such as pop-up entrepreneurial schools like PopUp Business School (https://www.popupbusinessschool.co.uk/) and https://www.pbs.org/newshour/show/this-free-program-trains-people-how-to-start-a-business-but-without-debt

These and other resources will be discussed in more depth in Building Networks and Foundations . Look at the review questions and the discussion questions at the end of this section to prepare for creating your business plan. Business plans ( Figure 2.10 ) are discussed more fully in Business Model and Plan .

Step 6: Navigation

Once you’ve completed your trip, reflect on the experiences you had. No matter how well you feel you have planned, there is no way you can prepare for all of the potential challenges, changes, and obstacles that may occur: missed or changed flights, poor weather, an unexpected illness, a trail or road closed for repairs, or sudden good fortune. What parts of the trip went well? If you ran into a problem, how did you handle it? Was the problem something you could have anticipated and planned for? Or was it unexpected? What did you learn from the experience? If you were planning a trip to another national park, what would you do differently in your planning stage? Just as seasoned travelers adjust to their circumstances and learn from their experiences, so should you, as an entrepreneur, learn to adjust by meeting and managing challenges head on.

After completing your business plan, you will probably need to adjust your plan ( Figure 2.11 ). You might decide that you will not have enough resources to survive the time until your venture reaches the breakeven point, or you might determine that the location you selected is no longer available. There are multiple variables that require further exploration and research.

By nurturing an entrepreneurial mindset , you will be better prepared when opportunities, challenges, or obstacles surface. Although you won’t be able to predict or plan for every potential scenario along the entrepreneurial journey, an entrepreneurial mindset helps you to be resourceful when opportunities, challenges, or disappointments occur. By unpacking, or by taking an inventory of your available resources, you can also get a better picture of what you may need to unload, retain, or discard, or even if a new direction is the best course of action. On your entrepreneurial journey, evaluating the experience or situation is a perfect opportunity for you to determine how realistic, overambitious, or shortsighted your dreams and goals for your venture may be. This chapter will explore your vision for your future and your venture. Does your vision include a level of flexibility when you discover new information that supports exploring a new area?

Step 7: Launch

The actual launch is the exciting event when you open your business. By this point, you have made improvements to your product through feedback received in your trial run; you’ve identified the value or benefits provided by your product; you’ve identified your target market; and you’ve identified the location of your launch, whether it is a geographical location or an Internet location.

Inc . magazine provides an analysis of the best locations to launch a new venture, with Austin, Texas, taking the lead (see “Surge Cities: These Are the 50 Best Places in America for Starting a Business,” in Suggested Resources ). Consider your target market and the resources necessary to support your venture when choosing the location for your launch. Advice from within the entrepreneurial world suggests that sometimes the launch should take place “under the radar,” meaning in a location where you can make mistakes, fine-tune your business model and offerings, and even become successful without competitors noticing that you have created a disruption within the industry. (You will learn more about this in Launch for Growth to Success ).

Even as you are launching your venture, many variables will require your attention, just as we covered in Step 7. Navigating through these variables as your venture grows requires constant attention as new potential opportunities arise.

Sixto Cancel and Think of Us

Sixto Cancel successfully faced the harsh challenges of aging out of the foster-care system without adult support or guidance. He imagined a better foster-care system for young people then cofounded the firm Think of Us. Think of Us is a platform that helps young people in foster care build their own personalized digital advisory board of supportive adults who act as a virtual life-coaching group. The adults guide the young people through the foster-care system and ensure that they are able to become independent when they leave the system at age eighteen. For more information about this venture, visit www.thinkof-us.org.

  • 1 David Pridham. “Entrepreneurs: Here’s Good News for 2018.” Forbes . 2018. https://www.forbes.com/sites/davidpridham/2018/01/10/entrepreneurs-heres-good-news-for-2018/#660f5ebd6659
  • 2 UpWork and Freelancers Union. “Freelancers Predicted to Become the U.S. Workforce Majority within a Decade, with Nearly 50% of Millennial Workers Already Freelancing, annual ‘Freelancing in America’ Study Finds.” UpWork . October 17, 2017. https://www.upwork.com/press/2017/10/17/freelancing-in-america-2017/
  • 3 UpWork. “Sixth Annual ‘Freelancing in America’ Study Finds That More People Than Ever See Freelancing as a Long-Term Career Path.” UpWork . October 3, 2019. https://www.upwork.com/press/2019/10/03/freelancing-in-america-2019/
  • 4 David Pridham. “Entrepreneurs: Here’s Good News for 2018.” Forbes . 2018. https://www.forbes.com/sites/davidpridham/2018/01/10/entrepreneurs-heres-good-news-for-2018/#660f5ebd6659; Lawrence F. Katz and Alan B. Krueger. “The Rise and Nature of Alternative Work Arrangements in the United States, 1995–2015.” 2016. https://scholar.harvard.edu/files/katz_krueger_cws_final_nov2018.pdf.
  • 5 Elka Torpey and Brian Roberts. “Small-Business Options: Occupational Outlook for Self-Employed Workers.” US Bureau of Labor Statistics . May 2018. https://www.bls.gov/careeroutlook/2018/article/self-employment.htm
  • 6 Carly Moulton and Dave Cosgrave. “Second Annual Self-Employment Report.” FreshBooks . 2017. https://www.freshbooks.com/wp-content/uploads/2018/04/2018selfemploymentreport.pdf
  • 7 OECD Data. “Self-employment Rate.” OECD.org . n.d. https://data.oecd.org/emp/self-employment-rate.htm.
  • 8 Arnobio Molrelix. “The Biggest Reason the U.S. Needs Small Businesses to Thrive Has Nothing to Do with Taxes or the Economy.” Inc ., Dec. 20, 2018. https://www.inc.com/arnobio-morelix/inc-entrepreneurship-index-2018-q3.html
  • 9 David Jolley. “America Needs Immigrant Entrepreneurs.” Business Insider . September 5, 2017. https://www.businessinsider.com/america-needs-immigrant-entrepreneurs-2017-9
  • 10 Dinah Wisenberg Brin. “Immigrants Form 25% of New U.S. Businesses, Driving Entrepreneurship in ‘Gateway’ States.” Forbes . July 31, 2018. https://www.forbes.com/sites/dinahwisenberg/2018/07/31/immigrant-entrepreneurs-form-25-of-new-u-s-business-researchers/#10ee8099713b
  • 11 “Ease of Doing Business Rankings.” Doing Business . May 2019. http://www.doingbusiness.org/en/rankings
  • 12 Niels Bosma and Donna Kelley. “Global Entrepreneurship Monitor 2018/2019 Global Report.” GEM Consortium . January 21, 2019. https://www.gemconsortium.org/report/50213
  • 13 Gary Stockton. “Statistics and Obstacles Facing Women Entrepreneurs.” Experian . January 29, 2018. http://www.experian.com/blogs/small-business-matters/2018/01/29/statistics-and-obstacles-facing-women-entrepreneurs/

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  • Authors: Michael Laverty, Chris Littel
  • Publisher/website: OpenStax
  • Book title: Entrepreneurship
  • Publication date: Jan 16, 2020
  • Location: Houston, Texas
  • Book URL: https://openstax.org/books/entrepreneurship/pages/1-introduction
  • Section URL: https://openstax.org/books/entrepreneurship/pages/2-1-overview-of-the-entrepreneurial-journey

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When is the ideal time for entrepreneurs to write a business plan?

a full business plan should be written at the beginning of the entrepreneurial process

Writing a business plan is an important step for entrepreneurs seeking to frame their overarching purpose and goals. However, timing is important and businesses that formulate a plan from the very beginning may actually be doing more harm than good.

Francis J Greene, University of Edinburgh Business School chair in entrepreneurship, and Christian Hopp, RWTH Aachen University chair in technology entrepreneurship in the TIME Research Area, write at the Harvard Business Review that their research “shows that writing a plan first is a really bad idea”.

“It is much better to wait, not to devote too much time to writing the plan, and, crucially, to synchronise the plan with other key startup activities,” Greene and Hopp write.

Planning is important – but when is the ideal time to take this step?

As revealed by previous research , success rates for entrepreneurs who plan are higher, but getting the timing right is key. Greene and Hopp contend that “the real key to succeeding in business is being flexible and responsive to opportunities”.

They observe that entrepreneurs will often need to change course as various realities become apparent, such as a product or service being better suited to an alternative market than the one it was originally intended for.

Meanwhile, the time-consuming process of writing a plan could hinder the pursuit of other opportunities, or lock entrepreneurs into a false sense of security, preventing them from seeing actual opportunities – as opposed to imagined ones.

Drawing on the data of 1,000 would-be US entrepreneurs, Greene and Hopp charted the entrepreneurs’ attempts to create a viable new venture from 2005 through to 2011, controlling for influences such as an entrepreneur’s background and startup conditions, and separating the entrepreneurs into two groups: planners and non-planners.

Their findings revealed that “on average, the most successful entrepreneurs were those that wrote their business plan between six and 12 months after deciding to start a business”.

“Writing a plan in this timeframe increased the probability of venture viability success by 8%,” they write. “But writing one earlier or later proved to have no distinguishable impact on future success.”

How long to spend writing a plan?

When it comes to how long founders should devote to writing a plan, Greene and Hopp found that three months was the optimal time, increasing the chances of creating a viable venture by 12%.

“Spending any longer than this was futile, mostly because the information used to inform the plan loses its currency,” they write. “Spending just a month or two on the plan was just as bad. If the choice was between quickly writing a plan or not writing a plan, the entrepreneur was better off not writing a plan at all.”

Sequencing should also be a key consideration for entrepreneurs, who should take care to ensure their planning coincides with complementary business activities.

“We found that the sweet spot for writing a plan was around the time when the entrepreneur was actually talking to customers, getting their product ready for market, and thinking through their promotional and marketing activities,” Greene and Hopp write.

“Committing a plan to paper alongside these activities increases a startup’s chance of venture viability by 27%.”

NOW READ: Do you need a business plan when you start out?

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7 Entrepreneurial Process

Task Summary:

Lesson 3.1.1: The Entrepreneurial Process: Part 1

Lesson 3.1.2: The Entrepreneurial Process: Part 2

Lesson 3.1.3: Entrepreneurial Planning: Part 1

Lesson 3.1.4: Entrepreneurial Planning: Part 2

Lesson 3.1.5: Entrepreneurial Planning: Part 3

Activity 3.1.1: SDG Simulation

Unit 3 Assignment: Your Plan of Action

Learning Outcomes:

  • Identify exciting entrepreneurial opportunities
  • Evaluate exciting entrepreneurial opportunities
  • Model the entrepreneurial process for the exciting entrepreneurial opportunities
  • Create entrepreneurial planning documents

Successful entrepreneurship occurs when creative individuals bring together a new way of meeting needs and or wants. This is accomplished through a patterned process, one that mobilizes and directs resources to deliver a specific product or service to those in a way that is financially viable. While these could be 100% business ideas, they could also be concepts that are based in the spirit of altruism or non-profit. For innovative ideas that are strictly business concepts. sustainability can (and should) be embedded in the design of a product and operations by applying the criteria of reaching toward benign (or at least considerably safer) energy and material use, a reduced resource footprint, and elimination of inequitable social impacts due to the venture’s operations, including its supply-chain impacts.

Entrepreneurial innovation combined with sustainability principles can be broken down into the following four key elements, each of which requires analysis. Each one needs to be analyzed separately, and then the constellation of factors must fit together into a coherent whole. These four elements are as follows:

  • Opportunity
  • Entrepreneur/team

Successful ventures are characterized by coherence or “fit” across and throughout these steps. The interests and skills of the entrepreneur must fit with the product design and offering; the team’s qualifications should match the required knowledge needed to launch the venture. There needs to be a financially viable demand (enough people at a financially viable price) for the product or service, and of course, early adopters (those willing to purchase) have to be identified. Finally, sufficient resources, including financial resources (e.g., operating capital), office space, equipment, production facilities, components, materials, and expertise, must be identified and brought to bear. Each piece is discussed in more detail in the sections that follow.

Identify, Analyze, and Plan the Opportunity

As discussed in the last section, Opportunity Recognition is the active, cognitive process (or processes) through which individuals conclude that they have identified the potential to create something new that has the potential to generate economic value and that is not currently being exploited or developed and is viewed as desirable in the society in which it occurs (i.e. its development is consistent with existing legal and moral conditions). (Baron, 2004b, p. 52) Because opportunity recognition is a cognitive process, according to Baron (2004b), people can learn to be more effective at recognizing opportunities by changing the way they think about opportunities and how to recognize them.

The opportunity is a chance to satisfy the needs and desires of a certain group of people while generating returns that enable you to continue to operate and to build your organization over time. Many different conditions in society can create opportunities for new goods and services. As a prospective entrepreneur, the key questions are as follows:

  • What is a need that is not being met?
  • What are the conditions that have created an opportunity for my idea?
  • Why do people want and need something new at this point in time?
  • What are the factors that have opened up the opportunity?
  • Will the opportunity be enduring, or is it a window that is open today but likely to close tomorrow?
  • If you perceive an unmet need, can you deliver what the customer wants while generating durable margins and profits?
  • How can I take on this venture while supporting the Sustainable Development Goals?

Opportunity conditions arise from a variety of sources. At a broad societal level, they are present as the result of forces such as shifting demographics, changes in knowledge and understanding due to scientific advances, a rebalancing or imbalance of political winds, or changing attitudes and norms that give rise to new needs. Certain demographic shifts and pollution challenges create SDG opportunities. When you combine enhanced public focus on health and wellness, advanced water treatment methods, clean combustion technologies, renewable “clean” energy sources, conversion of used packaging into new asset streams, benign chemical compounds for industrial processes, and local and sustainability has grown organic food, you begin to see the wide range of opportunities that exist due to macrotrends.

Identify, Analyze, and Plan the Market

What are you offering/doing/selling/contributing? New ventures offer solutions to people’s problems. This concept requires you to not only examine the item or service description but also further understand the group of people whose unmet needs you are meeting (often called market analysis). In any entrepreneurial innovation circumstance you must ask the following questions:

  • What is the solution for which you want someone to pay?
  • Is it a service or product, or some combination?
  • To whom are you selling it? Is the buyer the actual user? Who makes the purchase decision?
  • What is the customer’s problem and how does your service or product address it?

Understanding what you are selling is not as obvious as it might sound. When you sell an electric vehicle you are not just selling transportation. The buyer is buying a package of attributes that might include cutting-edge technology, lower operating costs, and perhaps the satisfaction of being part of a solution to health, environmental, and energy security problems.

Identify, Analyze, and Plan the Entrepreneur & Entrepreneurial Team

The opportunity and the entrepreneur must be intertwined in a way that optimizes the probability for success. People often become entrepreneurs when they see an opportunity. They are compelled to start something to find out whether they can convert that opportunity into an ongoing source of fulfillment and potential financial gain. That means that, ideally, the entrepreneur’s life experience, education, skills, work exposure, and network of contacts align well with the opportunity. We have covered this in previous sections, so if you need to refer back to consider the role of the entrepreneur’s skills, abilities, and cognition.

Entrepreneurs sometimes act alone, but this can only take us so far. A good entrepreneurial plan, an interesting product idea, and a promising opportunity are all positive, but in the end it is the ability of the entrepreneur to attract a team, get a product out, and provide it to customers is the thing that counts.

Typically there is an individual who initially drives the process through his or her ability to mobilize resources and sometimes through sheer force of will, hard work, and determination to succeed. In challenging times it is the entrepreneur’s vision and leadership abilities that can carry the day.

Ultimately, led by the entrepreneur, a team forms. As the organization grows, the team becomes the key factor. The entrepreneur’s skills, education, capabilities, and weaknesses must be augmented and complemented by the competencies of the team members they bring to the project. The following are important questions to ask:

  • Does the team as a unit have the background, skills, and understanding of the opportunity to overcome obstacles?
  • Can the team act as a collaborative unit with strong decision-making ability under fluid conditions?
  • Can the team deal with conflict and disagreement as a normal and healthy aspect of working through complex decisions under ambiguity?

If an organization has been established and the team has not yet been formed, these questions will be useful to help you understand what configuration of people might compose an effective team to carry the business through its early evolutionary stages.

Identify, Analyze, and Plan the Resources

Successful entrepreneurial processes require entrepreneurs and teams to mobilize a wide array of resources quickly and efficiently. All innovative and entrepreneurial ventures combine specific resources such as capital, talent and know-how (e.g., accountants, lawyers), equipment, and production facilities. Breaking down an opportunity’s required resources into components can clarify what is needed and when it is needed. Although resource needs change during the early growth stages of an opportunity, at each stage the entrepreneur should be clear about the priority resources that enable or inhibit moving to the next stage of growth. What kinds of resources are needed? The following list provides guidance:

  • Capital. What financial resources, in what form (e.g., equity, debt, family loans, angel capital, venture capital), are needed at the first stage? This requires an understanding of cash flow needs, break-even time frames, and other details. Even non-profits need to make money to stay afloat. Back-of-the-envelope estimates must be converted to pro forma income statements to understand financial needs.
  • Know-how. Record keeping and accounting and legal process and advice are essential resources that must be considered at the start of every venture. Access to experts is important, especially in the early stages of making an opportunity happen. New opportunities require legal incorporation, financial record keeping, and rudimentary systems and resources to provide for these expenses need to be considered.
  • Facilities, equipment, and transport. Does the venture need office space, production facilities, special equipment, or transportation? At the early stage of analysis, ownership of these resources does not need to be determined. The resource requirement, however, must be identified.

The Overall Process

The process of entrepreneurship melds these pieces together in processes that unfold over weeks and months, and eventually years if the business is successful. Breaking down the process into categories and components helps you understand the pieces and how they fit together. What we find in retrospect with successful launches is a cohesive fit among the parts. The entrepreneur’s skills and education match what the start-up needs. The opportunity can be optimally explored with the team and resources that are identified and mobilized. The resources must be brought to bear to launch the opportunity with an entry strategy that delivers the value-driven concept in a way that solves customers’ problems.

With all of these things in mind, documenting answers to the questions above, and the analysis undertaken to answer them is contained in an entrepreneurial plan. This is a document that you would use to plan out the details for the elements outlined above. Making sure you identify, analyze, and plan these elements is a great starting point, and to make sure this is all done really well, have a look at the principles below.

Entrepreneurial Plan Communication Principles

As Hindle and Mainprize (2006) note, business plan writers must strive to communicate their expectations about the nature of an uncertain future. However, the liabilities of newness make communicating the expected future of new opportunities difficult (more so than for existing organizations).  They outline five communications principles:

  • Translation of your vision of the venture and how it will perform into a format compatible with the expectations of the readers
  • you have identified and understood the key success factors and risks
  • the projected market is large and you expect good market penetration
  • you have a strategy for commercialization, profitability, and market domination
  • you can establish and protect a proprietary and competitive position
  • Anchoring key events in the plan with specific financial and quantitative values
  • your major plan objectives are in the form of financial targets
  • you have addressed the dual need for planning and flexibility
  • you understand the hazards of neglecting linkages between certain events
  • you understand the importance of quantitative values (rather than just chronological dates)
  • Nothing lasts forever—things can change to impact the opportunity: tastes, preferences, technological innovation, competitive landscape
  • the new combination upon which venture is built
  • the magnitude of the opportunity or market size
  • market growth trends
  • venture’s value from the market (% of market share proposed or market share value in dollars)
  • Four key aspects describing context within which new opportunity is intended to function (internal and external environment)
  • how the context will help or hinder the proposal
  • how the context may change and affect the organization and the range of flexibility or response that is built into the venture
  • what management can or will do in the event the context turns unfavorable
  • what management can do to affect the context in a positive way
  • A brief and clear statement of how an idea actually becomes a business that creates value
  • Who pays, how much, and how often?
  • The activities the company must perform to produce its product, deliver it to its customers, and earn revenue
  • And be able to defend assertions that the venture is attractive and sustainable and has a competitive edge

Entrepreneurial Plan Credibility Principles

Entrepreneurial plan writers must strive to project credibility (Hindle & Mainprize, 2006), so there must be a match between what the entrepreneurship team (resource seekers) needs and what the resource providers expect based on their criteria. A take it or leave it approach (i.e. financial forecasts set in concrete) by the entrepreneurship team has a high likelihood of failure in terms of securing resources. Hindle and Mainprize (2006) outline five principles to help entrepreneurs project credibility:

  • Without the right team, nothing else matters.
  • What do they know?
  • Who do they know?
  • How well are they known?
  • sub-strategies
  • ad-hoc programs
  • specific tactical action plans
  • Claiming an insuperable lead or a proprietary market position is naïve.
  • Anticipate several moves in advance
  • View the future as a movie vs. snapshot
  • Key assumptions related to market size, penetration rates, and timing issues of market context outlined in the entrepreneurial plan should link directly to the financial statements.
  • Income and cash flow statements must be preceded by operational statements setting forth the primary planning assumptions about market sizes, sales, productivity, and basis for the revenue estimate.
  • If the main purpose is to enact a harvest, then the entrepreneurial plan must create a value-adding deal structure to attract investors.
  • Common things: viability, profit potential, downside risk, likely life-cycle time, potential areas for dispute or improvement

General Entrepreneurial Plan Guidelines

Many entrepreneurs must have a plan to achieve their goals. The following are some basic guidelines for entrepreneurial plan development.

  • A standard format helps the reader understand that the entrepreneur has thought everything through and that the returns justify the risk.
  • Binding the document ensures that readers can easily go through it without it falling apart.
  • everything is completely integrated: the written part must say exactly the same thing as the financial part
  • all financial statements are completely linked and valid (make sure all balance sheets validly balance)
  • the document is well-formatted (layout makes the document easy to read and comprehend—including all diagrams, charts, statements, and other additions)
  • everything is correct (there are NO spelling, grammar, sentence structure, referencing, or calculation errors)
  • It is usually unnecessary—and even damaging—to state the same thing more than once. To avoid unnecessarily duplicating information, you should combine sections and reduce or eliminate duplication as much as possible.
  • all the necessary information is included to enable readers to understand everything in your document
  • For example, if your plan says something like “there is a shortage of 100,000 units with competitors currently producing 25,000. We can help fill this huge gap in demand with our capacity to produce 5,000 units,” a reader is left completely confused. Does this mean there is a total shortage of 100,000 units, but competitors are filling this gap by producing 25,000 per year (in which case there will only be a shortage for four years)? Or, is there an annual shortage of 100,000 units with only 25,000 being produced each year, in which case the total shortage is very high and is growing each year? You must always provide the complete perspective by indicating the appropriate time frame, currency, size, or another measurement.
  • if you use a percentage figure, you indicate to what it refers, otherwise, the figure is completely useless to a reader.
  • This can be solved by indicating up-front in the document the currency in which all values will be quoted. Another option is to indicate each time which currency is being used, and sometimes you might want to indicate the value in more than one currency. Of course, you will need to assess the exchange rate risk to which you will be exposed and describe this in your document.
  • If a statement is included that presents something as a fact when this fact is not generally known, always indicate the source. Unsupported statements damage credibility
  • Be specific. An entrepreneurial plan is simply not of value if it uses vague references to high demand, carefully set prices, and another weak phrasing. It must show hard numbers (properly referenced, of course), actual prices, and real data acquired through proper research. This is the only way to ensure your plan is considered credible.

The purpose of this assignment is to connect all of the dots that you have been learning about and engaging with over the past unit when it comes to the entrepreneurial planning process. Watch this video on developing a process map . You are going to develop your own process map outlining the steps you need to take to develop a robust and well-thought-out entrepreneurial plan. Have a look at the Unit 4 Assignment: Entrepreneurial Plan for more information on what you’re going to be building.

The submission should be methodical and outline the process you will go through (i.e. what steps you will complete), and the information sources you will need to fill in the gaps and fill out your plan. Your submission should include a process map diagram, and be about 250 words, which is one page double spaced, or it could be done as an infographic, or a two-three minute presentation. If you are doing this as part of a formal course and have a different approach that you would like to take for developing this assignment, please check with your instructor.

Text Attributions

The content related to how it all starts and the process steps was taken from “ Sustainability, Innovation, and Entrepreneurship” by LibreTexts (2020) CC BY-NC-SA

The content related to the opportunity identification cognition and the entrepreneurial plan was taken from “ Entrepreneurship and Innovation Toolkit, 3rd Edition ” by L. Swanson (2017) CC BY-SA

Baron, R. A. (2004b). Opportunity recognition: Insights from a cognitive perspective. In J. E. Butler (Ed.), Opportunity identification and entrepreneurial behavior (pp. 47-73). Greenwich, Conn.: Information Age Pub

Hindle, K., & Mainprize, B. (2006). A systematic approach to writing and rating entrepreneurial business plans. The Journal of Private Equity, 9 (3), 7-23.

Introduction to Entrepreneurship Copyright © 2021 by Katherine Carpenter is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License , except where otherwise noted.

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📖 4 Entrepreneurial Process Stages [Model]

entrepreneurial process

  • Carlos Barraza
  • October 23, 2018
  • Business Planning , Entrepreneurship

The  entrepreneurial culture  and spirit is on those who decide to take one step ahead to achieve success. It is a long-term process, that visionaires will have to keep on working to transform their environment. There are several models created by academics, that shows what is the entrepreneurial process about.

Entrepreneurial process definition

The entrepreneurial development of a person goes beyond education, which requires various factors to take place this complex process. I added the definition of  William Bygrave , a professor at Babson College, about the entrepreneurial process.

The entrepreneurial process is a set of stages and events that follow one another. These entrepreneurial process stages are: the idea or conception of the business, the event that triggers the operations, implementation and growth.  A critical factor that drive the development of the business at each stage as with most human behavior, entrepreneurial traits are shaped by personal attributes and environment.

The attitudes of the people are those who are shaping their own surroundings, if an entrepreneur looks for the characteristics of successful people, their chances of success increase, specially if they belong to an  entrepreneurial ecosystem .

Entrepreneurial process stages

In the rest of the article it can be found two models that reflect what the entrepreneurial process is. In this section I will mention the stages of the model of the University of Pretoria, trying to simplify main points that an entrepreneur should consider.

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1. Idea generation

The entrepreneur begins to wonder why there is not available a product or service, why not improve certain things, how to generate income to cover their expenses, etc. Thousands of questions might rise, so them will help to identify opportunities to meet the market needs. In previous years, there where not enough amount of goods and services. It was a little bit easier to position a business, however now it requires a search for information and market analysis to see the possibility of success. It is possible that at this point in the entrepreneurial process, there are many people, since the generation of ideas can be much easier. However, the step towards a decision making is where many can stop and perhaps even abandon the idea from the starting a business.

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2. Decision making and business planning

A critical point in the entrepreneurial process is deciding to start the project. Be active and stay motivated are the main factors for the entrepreneur to start landing his idea. Asking what resources are needed and where he will get them, is vital to generate at least one way forward for the entrepreneur. The development of the business plan will mark only a guide that can be used as reference.

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3. Project creation

The project is conducted when the entrepreneur decides to seek and obtain resources. Getting financiation is difficult, and perhaps one of the main obstacles to start a business. When the entrepreneur begins to invest the resources and and begin operating, it is a point release of stress, as the entrepreneur will see the first steps of his company.

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4. Management and control

After having pass through the first months of operation, the company will see if it decreases, maintains or increases in sales. The entrepreneur should strive to maintain revenue growth before worrying about having a nice office. Managing a business is not easy, but the experience that entrepreneurs acquire over time will surely ease the handling of all resources. Perhaps one could say that the entrepreneurial process ends here, but I think it is no longer an entrepreneur, and he becomes a full businessman or businesswoman.

The entrepreneurial process model of the University of Pretoria

proceso-emprendedor-Universidad-de-Pretoria

Within the study and analysis of the University of Pretoria, they made its own model, which mixes different ideologies of different authors to adapt their entrepreneurial model. This model stands out more for its definition of stages and events throughout the process.

4 Entrepreneurial process events stages

Within the entrepreneurial process, there are different events that are generated along the process.

1. Innovation

It is the time when the entrepreneur generates the innovative idea, identifies the market opportunity, and look for information. Also, it begins to see the feasibility of ideas, the ability to get value from it and how to generate the development of the product or service.

2. Triggering event

This event is the gestation time of the project. The entrepreneur begins to motivate himself to start a business and to decide to proceed with. The business plan is created, as well as the identification of the resources required, the project risk, the source of the funds and how they would use them.

3. Implementation

This event includes the incorporation of resources and arm the project to launch their new business to the market. The strategy and business plan begin to develop day by day, and the use of resources are invested in favor of building a successful company. Marketing is vital in every company, especially for a start-up. Once you launch your business to the general public, you need to market your products or services to attract customers and generate more sales. Online marketing is a promotional technique with great promise, and SEO is the primary method to make a mark in today’s digital landscape. A surefire way to appeal to search engines is to tap the help of the appropriate SEO expert. Hiring an experienced SEO expert can help with keyword research and target the most relevant ones for your industry and audience, ensuring that your content ranks well for the terms potential customers are searching for. They can optimize your website's structure, meta tags, and content, enhancing its search engine visibility and user experience. SEO experts can guide your content strategy to create informative, engaging, and valuable content that attracts search engine traffic, keeps visitors engaged, and converts them into customers. They use various tools and analytics to monitor your website's performance, track keyword rankings, and make data-driven decisions to improve your online presence continuously. For instance, if you are a home service business, hiring an SEO company like Digital Shift can help you optimize your website to increase your search engine rankings, drive more web traffic, and establish a solid online presence. Aside from SEO, entrepreneurs can leverage other digital marketing strategies. Build a verified email list and send promotional emails or newsletters to nurture leads, retain customers, and drive sales. The same is true with pay-per-click (PPC) advertising. PPC allows businesses to display targeted ads and pay only for clicks. Affiliate marketing, influencer collaborations, and video marketing are additional strategies to expand reach and credibility. Remarketing, local SEO, and data analysis provide opportunities for further engagement and insights. By employing these diverse digital marketing strategies, entrepreneurs can create a comprehensive online presence and achieve their marketing objectives.

The ideal event for any entrepreneur is to see how their company is constantly growing. The activities of the previous event, ideally lead the business to a stage of maturity to maximize profitability for better benefits. Growth is the stage of the entrepreneurial process in which is reflected time and effort spent by the entrepreneur. At this time, to keep up the pace of the business growth, the entrepreneur must keep up his personal development to continue also his internal growth. This growth is eventually collaborative it there is an entrepreneurial ecosystem improvement that also aids the mutual work.

The entrepreneurial process model by Hisrich and Peters

proceso emprendedor Hisrich

One of the models on the entrepreneurial process is of Robert Hisrich, a professor at the Thunderbird School of Global Management and Michael P. Peters author of several books on entrepreneurship. This model establishes the various factors and events surrounding the entrepreneurial process.

Developing a business plan early on your entrepreneur path

It is generally advisable to write a business plan as early as possible step in the entrepreneurial process of starting a new venture.

A business plan is a written document that describes in detail how a business, usually a new one, is going to achieve its goals for entrepreneurial success.

Creative individuals bring together their ideas in such plan and develop a clear roadmap for moving forward.

It is also a good idea to update your business plan regularly as your business grows and changes, as it is a big picture of your idea and it can help you to be guided of what new products or services should be implementend when you are about to start and are already on the go.

Often, a business entrepreneurial plan is prepared for investors or as a way to get a small business loan by many entrepreneurs.

A business plan lays out a written plan from a marketing, financial and operational standpoint. 

The components of a business plan vary depending on the type of business, but generally, they should include an executive summary, a business description, a market analysis, a competitive analysis, a service or product line section, and a marketing and sales strategy.

Additionally, a business plan should include financial projections for the business, including a balance sheet, income statement, and cash flow statement.

In creating a business plan, you should also consider some of these tips:  

  • Define your audience : Make sure you know your target market so you can tailor your content according to what’s relevant, helpful, and appropriate for them.   
  • Establish a clear vision : It’s essential to have a clear vision or an image of where you want to be in the near future.   
  • Conduct a business analysis : Doing this will help you find some crucial factors which aren’t initially considered in your business plan. You can also detect threats, discover market gaps, and maximize specific business opportunities.   
  • Write plans with different time frames : This will let you know which plan can provide the most value to your target audience. Generally, a time frame can help your business attain goals and how you’ll do it over a certain amount of time.   

A business plan is essential before kickstarting your business. It serves as a beacon in order to stay productive and strive for the best practices to be profitable and competitive.

The Entrepreneurial Process Video Example

Developing a business idea, how can you brainstorm and generate a successful business idea.

Brainstorming is a creative process that involves generating multiple ideas, evaluating them based on market trends and consumer needs, and selecting the most viable option. Successful business ideas often stem from addressing a gap in the market or offering a unique solution to a common problem.

What are the ways to validate a business idea before execution?

Validating a business idea involves conducting market research, gathering feedback from potential customers, and testing the concept through prototypes or minimum viable products. This validation process helps in determining the feasibility and potential success of the idea in the market.

Why is researching the market crucial in developing a business plan?

Researching the market is crucial in developing a business plan as it provides valuable insights into consumer preferences, market competition, pricing strategies, and potential growth opportunities. A well-researched business plan is more likely to attract investors and secure funding for the startup.

Creating a Solid Business Plan

What elements should be included in a comprehensive business plan.

A comprehensive business plan should include an executive summary, market analysis, product or service description, marketing and sales strategy, financial projections, and operational plan. These elements are essential for outlining the roadmap to success for the business.

How can you project profitability and scalability in your business plan?

Projecting profitability and scalability in a business plan requires realistic financial forecasts, growth projections, and a clear understanding of the target market. By demonstrating potential profitability and scalability, entrepreneurs can attract investors and secure resources for business growth.

Why is it essential to outline your target audience in the business plan?

Outlining the target audience in the business plan helps in tailoring marketing strategies, product development, and customer acquisition efforts towards the specific needs and preferences of the identified consumer group. Understanding the target audience is key to building a loyal customer base and driving business success.

Launching and Scaling Your Business

What steps are involved in launching a new venture successfully.

Launching a new venture successfully involves setting up operations, marketing the product or service, acquiring customers, and establishing a strong brand presence. It also requires effective team collaboration, financial management, and continuous adaptation to market changes.

How can you scale your business while maintaining sustainability?

Scaling a business involves expanding operations, entering new markets, and increasing production or service capacity to meet growing demand. To maintain sustainability during the scaling process, entrepreneurs need to focus on improving efficiency, managing resources effectively, and fostering innovation.

What are some common challenges faced by every entrepreneur during scaling?

Some common challenges faced by entrepreneurs during scaling include managing cash flow, hiring and retaining talent, adapting to regulatory changes, and maintaining consistent quality standards. Overcoming these challenges requires strategic planning, resilience, and a clear focus on long-term objectives.

Turning Your Business Idea into a Reality

What is the process of transforming your business idea into a profitable business model.

Transforming a business idea into a profitable business model involves refining the concept, identifying revenue streams, setting prices, creating a marketing strategy, and establishing operational processes. It requires continuous innovation and adaptation to market dynamics to drive sustainable growth.

How can one start a new business and ensure its long-term success?

Starting a new business involves thorough planning, market research, financial management, and effective marketing strategies. To ensure long-term success, entrepreneurs need to stay agile, monitor industry trends, listen to customer feedback, and continuously improve their products or services.

What are the necessary steps to take to become a successful business owner?

Becoming a successful business owner requires a combination of vision, determination, resilience, and continuous learning. It is essential to build a strong team, establish a solid company culture, prioritize customer satisfaction, and adapt to changing market conditions to thrive in the competitive business landscape.

Launching a business venture involves navigating through several stages, each crucial for its success. It starts with ideation, where an entrepreneur identifies a problem and formulates an idea for a product or service.

 This initiates the process of creating a viable business model and turning the idea into reality. Bootstrap financing is often utilized in the early stages, as the entrepreneur starts to develop marketing campaigns and find buyers.

Crowdfunding can also be a valuable resource to secure necessary funding. Once the business reaches the next stage, the focus shifts towards building the business and implementing effective business processes. Marketing plans are put into action to attract customers and gain market share. 

As the business grows, new locations may be explored, and expansion becomes a goal. Finally, the business becomes a fully-fledged entity, with its products and services firmly established in the market. Throughout these growth phases, it’s important to create and adapt a business strategy to ensure long-term success.

What is entrepreneurial process?

What are the components of entrepreneurial process.

4 components in the entrepreneurial process are Idea generation, decision making and business planning, project creation and management and control.

Why entrepreneurship is a process?

Entrepreneurship is a process because there are different events that have to occur in order to develop a project.

As stated before, there are a set of events such as innovation, triggering event, implementation and growth.

To become an entrepreneur, different set of skills are develop under time, that is why along the entrepreneurial journey, he or she will learn along that path.

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Strategic planning: An entrepreneur's guide for success

Discover the 7 essential laws of success for entrepreneurs in 2024. learn strategies to thrive, innovate, and achieve lasting success in your business..

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Thursday July 04, 2024 , 4 min Read

The entrepreneurial journey is a challenging yet rewarding path. As we move into 2024, the landscape for entrepreneurs continues to evolve, demanding new strategies and insights. To help navigate this complex environment, we've distilled seven essential laws of success for entrepreneurs. These principles are designed to guide you in achieving sustainable growth, innovation, and prosperity in your business ventures.

1. Vision and purpose

Define your vision.

Every successful entrepreneur starts with a clear vision . Your vision is your guiding star, directing your efforts and decisions. Knowing what you want to achieve and how you plan to get there is essential. A compelling vision motivates you, inspires your team, and attracts customers.

Cultivate purpose

Purpose gives meaning to your vision. It’s the reason behind your business and the impact you want to create. A strong sense of purpose helps you stay focused and resilient, especially during challenging times. It enhances your brand's authenticity , building stronger connections with your audience.

2. Strategic planning

Develop a comprehensive business plan.

A well-thought-out business plan is crucial for success. It should outline your goals, strategies, market analysis, financial projections, and operational plans. A detailed plan helps you stay organised and provides a roadmap for growth.

Adapt and innovate

The business world is constantly changing, and staying flexible is key. Continuously evaluate and adjust your strategies to stay ahead of the curve. Innovation should be at the heart of your planning process, allowing you to adapt to market trends and customer needs.

3. Financial management

Budget wisely.

Effective financial management is fundamental to the success of any business. Create a realistic budget and stick to it. Monitor your expenses and revenue closely to ensure you’re on track to meet your financial goals.

Invest in growth

Reinvesting profits back into your business is essential for growth. Whether it’s in marketing, technology, or talent acquisition, strategic investments can drive your business forward. Make informed decisions to allocate resources where they will have the most significant impact.

4. Build a strong team

Hire the right people.

Your team is one of your most valuable assets. Surround yourself with talented, dedicated individuals who share your vision and values. Look for team members with diverse skills and perspectives to foster creativity and innovation.

Foster a positive culture

A positive work culture enhances productivity and employee satisfaction. Encourage open communication, provide growth opportunities, and recognise and reward achievements. A supportive environment helps retain top talent and drives collective success.

5. Customer focus

Understand your audience.

Knowing your customers is vital for success. Conduct thorough market research to understand their needs, preferences, and pain points. This knowledge allows you to tailor your products and services to meet their expectations.

Deliver exceptional value

Exceeding customer expectations should be a priority. Provide high-quality products, excellent customer service, and a seamless user experience. Building strong customer relationships and trust leads to repeat business and positive word-of-mouth.

6. Embrace technology

Leverage digital tools.

Technology is a powerful enabler of business success in today's digital age. Utilise digital tools and platforms to streamline operations, enhance marketing efforts, and improve customer interactions. From social media to e-commerce, technology can significantly boost your business.

Stay ahead with innovation

Keep an eye on emerging technologies and trends that can benefit your business. Early adoption of innovative solutions can give you a competitive edge and open new opportunities for growth.

7. Persistence and resilience

Stay determined.

The entrepreneurial journey is fraught with challenges and setbacks. Persistence is crucial for overcoming obstacles and achieving long-term success. Maintain a positive mindset and stay focused on your goals, even when the going gets tough.

Learn from failures

Failure is an inevitable part of entrepreneurship. Instead of fearing it, view failure as a learning opportunity. Analyse what went wrong, adapt your strategies, and use the experience to improve and grow. Resilience enables you to bounce back stronger and more prepared.

Success in entrepreneurship requires a blend of vision, strategic planning, financial acumen, team building, customer focus, technological adoption, and resilience. By embracing these seven laws of success, you can navigate the dynamic business landscape of 2024 and beyond, achieving lasting success and making a meaningful impact.

  • Entrepreneurship
  • early stage founders
  • Growing a Business

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IMAGES

  1. Entrepreneurial Process: Definition & Meaning

    a full business plan should be written at the beginning of the entrepreneurial process

  2. 11 Business Plan Templates

    a full business plan should be written at the beginning of the entrepreneurial process

  3. 9 Key Elements of an Effective Business Plan

    a full business plan should be written at the beginning of the entrepreneurial process

  4. Entrepreneurial Business Planning Learn why some companies grow and are

    a full business plan should be written at the beginning of the entrepreneurial process

  5. Creating a Business Plan: Why it Matters and Where to Start

    a full business plan should be written at the beginning of the entrepreneurial process

  6. How to Write a Business Plan

    a full business plan should be written at the beginning of the entrepreneurial process

VIDEO

  1. Important questions a Business Plan should answer

  2. Writing a Business Plan presented by Madeleine Wolske, Illinois SBDC at Champaign County EDC

  3. Unit

  4. How To Write A Business Plan: That Gets Results

  5. Various Steps that should be Considered while Preparing the Marketing Plan

  6. How to Convert an Idea into Business in 2024

COMMENTS

  1. Chapter 4 Flashcards

    a full business plan should be written at the beginning of the entrepreneurial process. false. a business plan is important not just for outside investors and suppliers, but also current and potential employees. true. the process of writing a business plan is NOT as valuable as the plan itself.

  2. 11.4 The Business Plan

    There are also entrepreneurs who use the business plan earlier in the entrepreneurial process, either preceding or concurrently with a canvas. For instance, Chris Guillebeau has a one-page business plan template in his book The $100 Startup. 48 His version is basically an extension of a napkin sketch without the detail of a full business plan ...

  3. How to Write a Business Plan

    Add in the company logo and a table of contents that follows the executive summary. 2. Executive summary. Think of the executive summary as the SparkNotes version of your business plan. It should ...

  4. How to Write a Business Plan: A Step-by-Step Guide

    Sell your business and explain why it matters. Additionally, supplement your sell with a high level summary of your plan and operating model. However, don't go over one or two pages. Feel free to include the following as well: Business Name. Key Employees. Address.

  5. How to Write a Business Plan: Step-by-Step Guide

    3. Write your company description. Every business plan needs a company description—aka a summary of the company's purpose, what they do/offer, and what makes it unique. Company descriptions should be clear and concise, avoiding the use of jargon, Cobello says. Ideally, descriptions should be a few paragraphs at most.

  6. PDF The Elements of a Business Plan: First Steps for New Entrepreneurs

    Provide projections for two to four years in the future, including: 1. Forecasted income (monthly for first two years, then by quarter or year thereafter), 2. Forecasted cash flows by month (monthly for first two years, then by quarter or year thereafter), 3. Forecasted balance sheet for all years (year-end), and. 4.

  7. How To Write A Business Plan

    Within the overall outline of the business plan, the executive summary will follow the title page. The summary should tell the reader what you want. This is very important. All too often, what the ...

  8. Business Plan: What It Is, What's Included, and How to Write One

    Business Plan: A business plan is a written document that describes in detail how a business, usually a new one, is going to achieve its goals. A business plan lays out a written plan from a ...

  9. 1.1: Chapter 1

    As the road map for a business's development, the business plan. Defines the vision for the company. Establishes the company's strategy. Describes how the strategy will be implemented. Provides a framework for analysis of key issues. Provides a plan for the development of the business. Helps the entrepreneur develop and measure critical ...

  10. 3.2: Entrepreneurial Process

    A systematic approach to writing and rating entrepreneurial business plans. The Journal of Private Equity, 9 (3), 7-23. This page titled 3.2: Entrepreneurial Process is shared under a CC BY-NC-SA 4.0 license and was authored, remixed, and/or curated by Katherine Carpenter via source content that was edited to the style and standards of the ...

  11. Business Plan: What It Is + How to Write One

    And How to Create One. 1. Executive summary. This is a short section that introduces the business plan as a whole to the people who will be reading it, including investors, lenders, or other members of your team. Start with a sentence or two about your business, your goals for developing it, and why it will be successful.

  12. When Should Entrepreneurs Write Their Business Plans?

    Entrepreneurs who write business plans are more likely to succeed, according to our research, described in an earlier piece for Harvard Business Review. But while this might tempt some ...

  13. How to Write the Perfect Business Plan: A Comprehensive Guide

    Early on, your business is more of an idea than a reality, so your business plan can help prospective employees understand your goals--and, more important, their place in helping you achieve those ...

  14. The Business Planning Process: Steps To Creating Your Plan

    The Better Business Planning Process. The business plan process includes 6 steps as follows: Do Your Research. Strategize. Calculate Your Financial Forecast. Draft Your Plan. Revise & Proofread. Nail the Business Plan Presentation. We've provided more detail for each of these key business plan steps below.

  15. Entrepreneurial Process: Meaning, Overview & Stages

    The entrepreneurial process is the sequence of steps and activities involved in starting and managing a new venture. It encompasses the identification of opportunities, gathering resources, creating a business plan, launching the venture, and managing its growth and development.

  16. 5.1.5: The Business Plan

    There are also entrepreneurs who use the business plan earlier in the entrepreneurial process, either preceding or concurrently with a canvas. For instance, Chris Guillebeau has a one-page business plan template in his book The $100 Startup. His version is basically an extension of a napkin sketch, without the detail of a full business plan.

  17. 2.1 Overview of the Entrepreneurial Journey

    The business plan, in its first draft, should inform you whether your venture has a chance at success. If there are negative areas, what can you change? Building this plan before starting the business provides you with knowledge and insights about your idea. Make any necessary changes to the plan to strengthen the possibility of success.

  18. When is the ideal time for entrepreneurs to write a business plan

    When it comes to how long founders should devote to writing a plan, Greene and Hopp found that three months was the optimal time, increasing the chances of creating a viable venture by 12% ...

  19. Entrepreneurial Process

    7 Entrepreneurial Process. 7. Entrepreneurial Process. Successful entrepreneurship occurs when creative individuals bring together a new way of meeting needs and or wants. This is accomplished through a patterned process, one that mobilizes and directs resources to deliver a specific product or service to those in a way that is financially viable.

  20. 4 Entrepreneurial Process Stages [Model]

    4 Entrepreneurial process events stages. Within the entrepreneurial process, there are different events that are generated along the process. 1. Innovation. It is the time when the entrepreneur generates the innovative idea, identifies the market opportunity, and look for information. Also, it begins to see the feasibility of ideas, the ability ...

  21. 4.1: Entrepreneurial Process

    Entrepreneurial ventures can be start-ups or occur within large companies. Entrepreneurship is an innovation process that mobilizes people and resources. Key to entrepreneurial success is the fit among the entrepreneur/team, the product concept, the opportunity, the resources, and the entry strategy.

  22. Business Plan Flashcards

    summary, full, operational. Summary business plan. 10-15 pages. Works best for new ventures in the early stages of development. Full business plan. 25-35 pages. Works best for new ventures that are at a point where they need funding; serves as a blueprint. Operational business plan. 40-100 pages.

  23. Entrepreneurship Ch. 2 Flashcards

    Study with Quizlet and memorize flashcards containing terms like Which of the following is part of the entrepreneurial discovery process? A. Discovering different businesses B. Raising start-up capital C. Finding partners D. Recognizing a need or want not being met, Which of the following is described in the operations section of a business plan? A. Trade area analysis B. Business location C ...

  24. Strategic planning: An entrepreneur's guide for success

    2. Strategic planning Develop a comprehensive business plan. A well-thought-out business plan is crucial for success. It should outline your goals, strategies, market analysis, financial ...