Business Plan Discussion Question

Business Plan Discussion Question

Part 1 Business plan

Physical facility

Include a description of the physical facility location for your business. Discuss the zoning and parking

requirements.

Supply chain and inventory management

If application, provide a description of how your business will manage and distribute its inventory.

The attachments are for the business plan all you are doing is just doing this part.

Part 2(a)

Some small business fails when they don’t do the proper viability study containing a market research before getting into the venture. The lack of research and planning puts the small business in total disadvantage. Lack of research about potential market price and market participants can induce the entrepreneur to enter in crowded niche making competition very difficult. On the other hand, if the entrepreneur carefully researches and invests in a viability study, he can learn about the market price and market participants because there is a limited amount of business that succeed. “According to the Bureau of Labor Statistics, about 20 percent of new businesses fail in their first two years. Within five years, about 45 percent have closed up shop. Just over a third of new businesses make it past their first decade.” (Wolstenholm 2020) No matter what the market is where the entrepreneur plans to compete in, there is only a limited number of businesses. Therefore, the entrepreneur must evaluate who is already getting the business and decide if he will succeed in getting customers to switch to the prospect venture and if the study indicates the venture can grow the entire size of the market. The entrepreneur needs to make sure there is enough demand for the service or product the venture will offer.

Even if viability study projects success, the entrepreneur can fail if he does not prepare an effective business plan. The business plan is essential for the success of the venture. “Without this detailed roadmap, the entrepreneur may not discover until it’s too late that: the barrier to entry in the market is higher than you anticipated; the business structure and processes are inefficient and creating too much overhead; the product mix doesn’t fit the market he is trying to reach, and he does not have enough capital to keep the venture going until it generates enough cash flow.” (Wolstenholm 2020)

The business plan must contain a company description, the organizational structure, market analysis, detail of products and/or services, sales and marketing strategies, distribution, funding needs, and revenue and profit projections. Any information missing may result in a very high probability of failure.

Another way an entrepreneur can fail is by not having an effective digital marketing plan. Times now, make digital marketing strategies very important. These techniques include but are not limited to learning proper on-page search optimization techniques, publishing regular blog content on your website, as well as other websites relevant to your industry, regular social media presence, including targeted ads, on the platforms its potential customers likely use pay-per-click advertising, in which you purchase, via an auction format, high search engine ranking ad space for specific keywords and phrases, collecting email addresses from customers and sending recurring e-newsletters with company updates and special offers, encouraging customers to leave online reviews to build credibility and social proof, and developing a mobile app to provide a better customer experience.” (Wolstenholm 2020).

A website or a Facebook page is not sufficient for people to find a business. The prospect business has to captivate potential customers through search activity. Failure to accomplished this will result in diverting visible customers to competitors.

To avoid failure, every business plan and strategy has to include a digital marketing plan. Failing during these pandemic times, digital marketing is the only channel to some customers. The digital marketing strategy includes online visibility, that can succeed or break the business in today’s digital world. Failure to stay updated and adapt to new trends is a frequent reason why small businesses fail. “While it’s never a good sign for any small business owner, failing at time management is particularly problematic for service providers. A number of providers charge by the job, not by the hour. This is fine, except when the business owner starts crunching the numbers.” (Wolstenholm 2020).

Another problem with time entrepreneurs faced into is spending too much of it on tasks they are effective. Instead of contracting a professional website designer, they try to do it themselves and fail because they are not experts. While they believe to be saving money on outsourcing now, inefficient work will cost the venture in the long run. Sometimes paying twice because they end up paying again for the inefficient task in the best scenario. The chances are the inefficient work led them to failure. The time waste includes the time the entrepreneur spends on these tasks.

The time you spend on these tasks is time you’re not doing what you do bet to make money for your business. If plying your trade earns you, say, $100 an hour, then the six hours you spent trying to build a website just cost you $600 (and probably left you with more frustration than results). Chances are, you could have put that towards a professional web designer for less the investment and time you put into doing it incorrectly.

To avoid this waste in time and money, entrepreneurs should analyze and measure the time in dollars to determine how long it will take to complete the job, then charge an appropriate amount based on how much the entrepreneur skill and expertise are worth. If after that analysis the entrepreneur feels is charging too much, then he should find a way to finish jobs faster or outsource it. “When it comes to outsourcing, compare how much you’ll spend on a third-party professional to what you’ll lose in revenue by not focusing on your customers. Perhaps above all though is the need to optimize your online calendar”. (Wolstenholm 2020).

Even if the entrepreneur did all the above, unexpected things still happen. A good example is the challenges and forced changes the pandemic did to the market. Other unexpected occurrences include property loss uninsured; liability claims uninsured or a natural disaster.

Other reasons for failure are no vision, no niche, no action , no commitment to learning and innovation, no follow up, no consistency, lack of desire to invest the required time. “Failure to understand customer behavior, inventory mismanagement, unsustainable growth, lack of sales, trying to do it all, underestimating administrative tasks, poor management, refusal to pivot and lack of data.

To avoid falling into any of these failure possibilities, the entrepreneur has to build a contingency fund or credit availability to cover for the business interruption of any potential shutdown. The entrepreneur must make sure the business is adequately insured in case the unexpected happens and property, content, and liability insurance. An entrepreneur must also analyze professional liability, workmen compensation to employees, and others.

The entrepreneur should also be prepared from injury and illness to protect you and your business against the risk of injury and illness,

“Business overhead expense (BOE) disability insurance, as its name suggests, is designed to cover your monthly business overhead expenses if an injury or illness impacts your ability to work. This includes everything from employee salaries and benefits to utilities, supplies, services, and taxes. Your BOE policy will quite literally keep the lights on for your business if you become too sick or hurt to work for an extended period of time.” (Wolstenholm 2020)

Additionally long-term disability insurance coverage can be designed to replace a major portion of your income if the entrepreneur is unable to work for an extended period of time due to injury or illness.

Although external factors can affect a small business, most failures result from failure to plan. “Entrepreneurs often get so caught up in the excitement of running a business that they don’t take the time to plan their operations, marketing, and finances.” (Wolstenholm 2020)

The entrepreneur needs a clear mission, and a business plan to be the map to success.

References:

Wolstenholm Marketing, J. (2020, October 5). 5 reasons why small businesses fail (and how to avoid each of them). Calendar. https://www.calendar.com/blog/reasons-why-small-businesses-fail/.

Ellevate. (2021, January 8). Eight common reasons small businesses fail. Forbes. https://www.forbes.com/sites/ellevate/2019/10/24/eight-common-reasons-small-businesses-fail/?sh=49ef7f54fbb5.

Lightspeed 2021-03-15, Lightspeed, Lightspeed, 2021-03-15, Written by Lightspeed , by, W., & Lightspeed is a cloud-based commerce platform powering small and medium-sized businesses in over 100 countries around the world. With smart. (2021, May 11). 10 reasons why small businesses fail (and how to avoid them). Lightspeed HQ. https://www.lightspeedhq.com/blog/why-small-businesses-fail/.

Part 3(b)

Entrepreneurs have ideas that they hope will allow them to one day operate their own businesses. Yet, many new businesses often fail. According to Zen Business ( Schaefer 2020 ), the top 8 reasons businesses fail are the following:

Getting into business for the wrong reasons: A lot of people want the perks of having money, but fail to consider how hard the task to get there may be. Additionally, they lack the passion for what it is they are selling. A person who has a true love in what they do will naturally try harder.
Not considering the market : In order to sell items or offer services, consumers must have a demand for what is being offered.
Poor management: A successful business needs to have a leader with a vision and employees who understands the mission of the company and has a follow through.
Not enough money: Underestimating what is needed to run a business is a quick way to get shut down.
Picking the wrong location: Traffic, traffic, traffic! Having a product in demand does no good if there are no consumers to purchase it. Researching the area, surveying potential customers, and having a game plan in advance can prevent slow traffic and get more customer reach.
Improper planning: Even if a business has a business plan, it has to be well executed. Understanding the risk of the business, the strengths, and opportunities for success is a must.
Attempting to grow too fast: Some businesses appear as if they popped up over night and are generating funds. Many get excited and try to expand, yet do not consider if the income that is being generated will still be the same in the long-term.
No social media presence: Staying local will only generate local income and potentially a bit of word-of-mouth. Expanding the business presence online will help drive income and gain new customers.

References

Schaeffer, P. (2021, August 11). Why Small Businesses Fail: Top 8 Reasons for Startup Failure. ZenBusiness Inc. https://www.zenbusiness.com/blog/why-small-businesses-fail/

For part 2(a) and 2(b) it must be 150-200 words with references that are based in the United States and only use websites.