Critical Appraisal of Business Planning Process Essay

Critical Appraisal of Business Planning Process - Essay Example In most cases, the entrepreneur himself will not be capable of raising the required capital for the business. Sometime, even when the initial capital is brought in by the owner, further expansion or the need for additional working capital requirements will force him/her to approach a venture capitalist or financial institution. In any of these cases, the clarity of the business plan is what convinces the concerned institution for granting finance. A good business plan should be prepared based on an outside-in approach. An entrepreneur should have a good understanding of the external environment in which the business will operate. A vision and mission for the business forms the two main components of the business plan. Vision is the ultimate goal that the business wants to achieve and mission statement states in brief about how the vision will be achieved by the business. Thus a well charted out business plan is an inevitable component for a successful business venture. The following section will give a critical analysis of the various steps of the business planning process. ... Identification of a problem that exists in the market is the first step that an entrepreneur should take. â€Å"If you keep up with your industry, talk to customers, study what is not working in your business, you should have a ton of problems you would like to solve.† (Starak, 2006) Identification of problem will lead to finding of various alternative solutions for the problem. All ideas should be screened well and the entrepreneur should select the one best solution that becomes the real business idea. Thus it can be said that the first thought that should come into the minds of an aspiring entrepreneur is a market problem. Strategic Objectives: Strategic objectives refer to the core business objectives of the venture. It mainly consists of the vision and mission of a business. Apart from that, it also consists of the other objectives of the business. Formulating good strategic decisions are extremely important for the success of a business. Most of these objectives are long term in nature. Therefore, an entrepreneur should have good foresight in order to formulate clear business objectives. Also, the entrepreneur should have a good understanding of the market and environment situation in order to make the objectives clear, focused, realistic and achievable. The objectives are the motive behind a business success. The various strategies that the business should take will depend mainly on the business objectives. Clear objectives imply that half the work of an entrepreneur is complete. He/she just have to manage the business to make sure that it is operating as per the objectives. Market Analysis and Research: It was mentioned that an understanding of the market is very much essential for idea generation