Engineering of Management - Case Study Example

Engineering of management: Business Plan Analysis Name: Course: Institution: Outline Case i i. Introduction This contains an overview of the business idea in the first sample business plan; supply and retail selling of wines and spirits. It is also accompanied by a brief summary of the man aspects of the business plan, the intended management strategy, market entry techniques and an overall assessment of the success chances of the intended business. ii. Strengths sThis section highlights the major market survival methods as presented in the plan that will guarantee successful implementation of the proposed business idea. In this case I have discussed the impact of the suggested experienced management team as well as the precise financial records. iii. Weaknesses This section explores the evident loopholes in the analyzed business plan. Such weaknesses include lack of clear outline of the intended organization structure to be adopted. Another weakness is the failure to disclose the sources of funding for initial capital investment Case ii i. Introduction The introduction contains an overview of the business idea as presented in the business plan. It is presented as a summary of the whole business plan in a single page. It can thus be said to be an executive summary of the business plan. ii. Strengths The strengths of the sample business plan include the double presentation of the owner as the manager as well as operating the intended business as a home based enterprise to cut on operational costs. i. Weakness The shortcomings of the business plan are explored in this section. The section discusses unexhausted financial records together with extra training cost incurred as the major weaknesses of the business plan. Comparison This section presents the differences between the two sample business plans. The three differences discussed here are: Service delivery business against product supply business Sole proprietor entity against partnership The level of capital investment Contrast This section discusses the similarities between the two sample business plans. Identified similarities include: Presence of objectives and mission statements in both samples The expectations for profit and marginal revenue returns in both cases Presence of competition survival techniques discussed in the two samples Lack of clear details on the organizational structure to be adopted in both samples Five lessons learnt This final section presents the five aspects of business planning learnt from the two business plan samples. These are: Opportunism and innovation as a major characteristic of entrepreneurs The need to give clear exhaustive details when developing a business plan Importance of conducting extensive research in the intended industry before developing a business plan The role of precise and clear financial statement in the success of a business The need to include all stakeholders in the society when developing a business plan. Case 1: Vino Maestro Wines and Spirits Introduction Vino Maestro Wines and Spirits is an intended business meant to supply wines and spirits on retail. The business will be established as a partnership between two entrepreneurs and will be located in the newly developing Southside Towers residential hi-rise project in Boston. The site has been so chosen due to its dense population and an established culture of wines and spirits consumption. The business plan for Vino Maestro Wines and Spirits is likely to culminate into a viable business enterprise due to the precision and keen attention in its development. The involved entrepreneurs seem to have a firm grip on the wines and beverage industry as well as a vast knowledge about the overall alcohol consumption averages within the region. They have carried out an intensive survey on the intended investment industry as an attempt to assess the implementation viability as well as the success rates of the business idea. For instance a major scoring factor for the intended business enterprise is that the entrepreneurs have capitalized on the well-established wines and spirits consumption culture in Boston which currently exceeds the national averages. This guarantees a given minimum number of sales to be made on daily basis. The business plan as presented as also dwelled so much on assessing the possible competition from current entrepreneurs within the same industry. This is further accompanied by enumeration of various competition survival strategies as well as comprehensive market entry and penetration plan. The intended business for instance intends to incorporate online marketing, a new technology that will serve to increase customer efficiency hence a competitive advantage. Such aspects greatly increase the overall chances of establishment and success in a given existing market. Generally, it a well-researched and developed business plan whose implementation stands higher chances of yielding the projected revenue. Strengths The proposed business is likely to succeed due to the managerial experience that comes with its top management. The two entrepreneurial partners have each had a stint in managerial positions hence have vast knowledge in enterprise management. While martin has served as a manger in a news publishing firm, his compatriot Robert has also served in the same capacity in a beverages firm. This is likely to result into implementation of best managerial policies that will spearhead the expected performance of the enterprise. The business plan also contains carefully drafted financial projections. For instance, at each point of expenditure, the respective statement of account presents the projected revenue to be made at that instance. This becomes a major strength in analyzing the stage to stage performance of the firm. It is easy to point out the exact point of focus in case the enterprise performs dismally. It is also easy and quicker to identify areas of emphasis to maximize revenue using such financial records. Weaknesses Despite the extensive research and appealing design, the above business plan fails to address certain key components of a successful business plan. For instance, the organization structure of the intended business is neither given nor outlined. It only elaborates on the qualifications of the two top most managers. This therefore fails to establish the exact chain of command and flow of authority at the organization. Such scenarios can easily result in managerial conflicts and authority clashes. The business plan also fails to give details on the expected source of funding for the investment capital. It only gives the expected capital investment without citing the sources and individual contributions from each source. Whether the proposed business will be funded by the business partners or an outside well-wisher is not stated hence keeping one speculative as he reads through the document. Case 2: Mother's House Cleaning Service Introduction The second case business plan is for Mother's House Cleaning Service (MHCS). The proposed business plan is for a home based service delivery enterprise that will seek to offer residential house cleaning services such as general room cleaning to child/pet disasters for the upper class families in Cleanly, WA. The business is to be established and operated as a sole proprietor entity with the owner, Sara Tookleen, serving as the overall manger. The enterprise seeks to exploit its high level of professionalism and outstanding service quality as a selling strategy to obtain service delivery contracts from the wealthy and affluent residential households. The entry strategy and market segmentation of the prosed business plans seeks to capitalize on the financial status and personal as well as professional commitment among the households in order to realize its viability potential. The business for instance will offer services to those households that are either too busy to attend to their household cleaning chores or are financially well off hence can afford to pay for such services and attend to their luxury and comfort needs. In order to reach out to such potential clients and customers, the firm intends to conduct extensive advertisement as well as offer reputable services in order to expand its operational market. This also is expected as a major strategy to establish itself in the market. The business plan suggests that the manager and owner of the proposed business will be responsible for training the employees before they are admitted to work in the organization. This might serve the competency, efficiency and effectiveness’s of service delivery since the training program will be designed by the manager. There are higher probabilities that such training program will be service- oriented and specifically addressing the requirements of the proposed business. The target market of the proposed business is not only wide and extensive but also has potential to provide the projected revenue. The proposed business plan is thus touted to flourish if implemented to the later. Strengths The proposed business plan intends to engage the owner of the proposed business enterprise as the manager. This is a major strength especially in policy development and implementation. In most small scale enterprises and sole proprietor businesses, the manager is the overall policy implementer and often strives to implement the best suited strategies. Such policies are bound to succeed if a sense of ownership is attached to the managerial responsibilities such as the case with the proposed Mother's House Cleaning Service. The manager is in position to observe the performance of the enterprise and makes subsequent. The fact that the proposed business is a home based greatly reduces the operational expenditure incurred such as office rent, storage facility and upkeep of the various office staff and personnel. Home based businesses often require a single room which then serves as an office, storeroom and managers chambers. The owner is likely to multitask; engaging in other home based activities besides managing the business. She therefore won’t need to employ anybody to take care of her domestic chores hence adding on the economic task. Weaknesses While the business plan talks of training the employees before they commence their duties, the level and mode of training is not elaborated. The business plan with it various financial statements do not show any amount set aside to cater for such expenses as employee training. The initial capital investment for the proposed business likely to go upon the case where the training services will be outsourced or hired from some other third party who will demand payment in this case. The second weakness of this proposed business plan is that it hasn’t been developed on a strong analysis of existing threats and competitors. For instance, under potential competitors, the business plan has only addressed the issue of existing firms and businesses offering similar services. The developer of such a business plan fails to identify the potential threat offered to the proposed business by domestic house helps and individual cleaners who may offer exactly similar services as the intended business yet at a greatly reduced price. Hence the business plan needs to factor in this group of people as in fact a major competitor and device subsequent counter measures. New market entrants often find it camber sum to penetrating existing markets characterized by similar products hence stiff competition. In this case, the new entrants must develop strategies that will help them maneuver around such existing conditions in order to obtain a significant share in the same job market. This is an aspect that is missing from the proposed business plan for Mother's House Cleaning Service. Despite suggestions to offer high quality services and enhance professionalism in service delivery, the proposed plan does not give the market penetration strategies vital for new entrants’’ survival in the market. Comparison There are several differences between the business plan for the proposed Mother's House Cleaning Service and that for the proposed Vino Maestro Wines and Spirits. To begin with, the two businesses fall in different entries of business types basing on the intended activities. For instance, the proposed Vino Maestro Wines and Spirits is a product based business involved in stocking and retail selling of wines and spirits. Mother's House Cleaning Service on the other hand is a service delivery based business often involved in no tangible product but services only. The nature of business and the proposed management between the two proposed business plans are also different. Mother's House Cleaning Service is proposed as a sole proprietor business, with a single manager and owner who will control all the activities of the proposed business. The business will have no commercial office but will operate from the owner’s house in her residential home. Vino Maestro Wines and Spirits business on the other hand is to be established as a partnership between two entrepreneurs who will jointly manage and control the activities of the business. The proposed business will have an office and retail store from where transactions will be conducted. The level of capital investment between the two proposed businesses is also different. For n stance, Vino Maestro Wines and Spirits, a proposed business partnership, intends to invest more initial capital of $475,000 in their proposed business. Mother's House Cleaning Service, a sole proprietor, on the other hand has a low initial capital investment of $ 13000. Contrast The sample business plans contain some similarities at several stages of their development. They both have well illustrated and elaborated objectives and mission. Each of the involved entrepreneurs fully understand the existing gaps in society and have well spelled out missions as to why they wish to engage in the business ventures detailed in their business plans. Objectives and mission statements act as the guidelines and fundamental principles on which the organization is established and operate on. Entrepreneurs venture into business with a core objective of making profit on their capital investment. All the two business plans have financial statements showing the initial capital investment and the expected revenue margins expected after some specified period of time. They all anticipate making profit from the capital invested. Another similarity between the two business plans is a common shortcoming in which both have failed to give details of the authority hierarchy as well as the organizational structure to be employed in their businesses. The two business plans only mention the top managers and fail to give details of the expected subordinate staff, the total number of employees expected as well as their professionalism. The final similarity between the two business plans is that they all expect stiff competition in their various areas of interest. Both of them have information on existing participants n the field they intend to venture. As a result, they all give information on how they intend to counter some of the expected competition in order to survive in the market. As a result, all the two business plans have laid emphasis on high quality service delivery and strong customer relations as the major competition survival technique. Five lessons learnt from business planning The two samples of business plans analyzed above present key components and considerations in business planning. The first such item learnt from the two samples is that business ideas are usually built from an existing entrepreneurial gap in society. An entrepreneur is thus that innovative and opportunistic individual who realizes such an existing gaps and forges ahead to develop a business plan for an intended business plan that will serve to fill the existing entrepreneurial void in society. Covello & Hazel, 2006). For instance Sara Tooklen has realized the increasing number of residential household who are so committed to an extent that they can sufficiently attend to their homesteads tidiness requirements. He therefore developed a business palm with an intention of starting a cleaning firm hence helping fill the existing void. Business plans are a documented business idea and should therefore be as exhaustive as possible. One should clearly explain what the intended business s what actual engagements will deal with and the nature of the business operations. Business plans are written for different audiences for different reasons. For example a business may be written to solicit for funding from major funding or lending financial institutions. Whichever reason a business plan is written for, it must cover on all the aspects of the intended business. This is a personal idea and in order to be understood by others, it must therefore be clearly explained inn an exhaustive manner. In order to give such an elaborative and exhaustive description, one is therefore required to clearly understand all the aspects and future trends in the intended industry. Another lesson that is easily inferred from the business plan samples s that the extent of research carried out as well as information contained presented in business planning usually depend on the nature of the expected business. Small enterprises such as sole proprietorships often require less market research. However, large enterprises require intensive exploration of the existing opportunities. This is usually manifested in the depth of information as presented in the business plan. The extent of research also determines the amount of capital investments to be incurred in a given business. For instance, one cannot invest lump sum amounts in a venture whose revenue payback is projected to be at a slow rate hence elongating the payback period. There must also be possibilities of one making maximum revenue before opting to engage in any given business venture. Financial records, as established from the analyzed sample business plans, are major components of a business plan. No business plan is complete without the relevant financial records and statements. As much as the business plan represents a documented business idea, the idea must be governed by subsequent financial statements to ascertain its economic viability. Financial statements play a crucial role in the implementation phase of business plans.(Lee, 2011). They determine and control the amount of capital investment, the nature of expenditure to be made and the various remunerations for the various stakeholders involved. Financial records also give an indicator of the projected revenue to be accrued at each stage of implementation of the business plan. This therefore makes it possible to quickly and easily point out flaws and underperformances. Corrective measures can also be effectively undertaken since the point of emphasis is picked out easily. Carefully designed financial statements therefore greatly impact on the general success in implementation of a proposed business idea. The fifth lesson learnt in relation to business planning in an all-inclusive undertaking that involves all aspects of society. Business ventures revolve around society and hence all the members of society are part and parcel of the business organization structure; they must feature somewhere in the organization hierarchy. (McKeever, 2012). In business planning, one must consider the ethical inclination alongside tastes and preferences of the society in which the business will operate. This determines the best market entry strategy as well as market penetration methods to be employed. One must also expect the financial allocation patterns together with the purchasing and consumption patterns of the same society. This helps in estimation of projected profit margins and product or service sales expected. Business planning also puts into consideration other existing similar ventures as well as individuals who might develop similar but modified ideas. This is vital in determining the competition sustenance tricks as well as survival I the market. In designing a business plan, one must clearly understand the society in which the plan is to be implemented. References Covello, J. A., & Hazelgren, B. J. (2006). The complete book of business plans: Simple steps to writing powerful business plans. Naperville, Ill: Sourcebooks. McKeever, M. P. (2012). How to write a business plan. Berkeley, CA: Nolo. Lee, J. (2011). The right-brain business plan: A creative, visual map for success. Novato, Calif: New World Library. Finch, B. (2013). How to Write a Business Plan. London: Kogan Page.s Read More