MGT602 Entrepreneurship GDB Solution

[sobiameer]

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Ahmed wants to purchase a departmental store from one of his family friends. Ahmed does not think he needs to write a business plan because it is a running business. Do you agree or disagree with his opinion? Why or why not?

Business plan:-A written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement of a new or a running business is called Business Plan.


I disagree with Ahmad’s opinion because:
Business Plan is essential for a running Business to keeping the business up-to-date, to introducing any new products or restructuring, to get started expenses and to keeping the long term business success.
................
I disagree with his opinion. He has to write a new business plan. The reasons are as following:

Existing plan was not prepared by Ahmad and it’s old also so there can be many aspects that he would like to change. Business plan must be re-written with updates. Strategies of running business operations, market situation must be analyzed and operations of business must be reviewed, significant and needed changes must be made. Relationship with Suppliers may not be good so he have to make new policies and new terms of credit and payment with the suppliers. Management structure would be changed to make the business more efficient. Customer relationship and satisfaction level may not be much good or developed so Ahmad must include these all aspects in his own business plan.

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Existing personnel may be not experienced and relationship with them may be conflicting so he will have to make strategies for hiring new workers, their pays timing must be specified. Sources of finance, Ahmad have to identify and specify his sources of finance from he can get financial assistance and they will be different from his friend’s sources. Profit expectations of Ahmad may be different from his friend so strategies for profit maximization must be explained in his own business plan. So there may be so many changes that the existing business plan has to be replaced with new plan.
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Yes I agree with the statement. As it is a running business and Ahmad’s family friend’s business on whom Ahmad can trust so it’s not necessary to make a new business plan. Reasons can be Plan is already in operation and if you will implement a new business plan it will disturb the routine of the business. And it will take time to develop a new plan and then implementation will also take time this will effect the operations, cash flows of business. The customers and employees are also there and when you implement the new plan they may not like it in this way you can lose existing customers and personnel, losing experienced workers can be a big loss. Relationship with suppliers, and finance providers is already developed and in operation if you implement the new plan it will take time to rebuild the relations with suppliers and financial assistance providers.

So due to these reasons Ahmad must run business with existing plan.
...........

In my opinion, Ahmed should write a new business plane with his perception because he may have different business objectives from previous plane which is already running. He is performing as an entrepreneur Ahmed has to develop new strategy about credit polices, specifying the sources of finance, customer relationship management, inventory management.

The written business plan can be very helpful for ahmed because:

1. It gives the guidance in planning activity
2. It serves an important tool to obtaining finance
3. It also provides him a self assessment.
............
in my opinion he should write the business plan

I. Why Write a Business Plan?

Why should a business go through the trouble of constructing a business plan? There are five major reasons:

1. The process of putting a business plan together forces the person preparing the plan to look at the business in an objective and critical manner.

2. It helps to focus ideas and serves as a feasibility study of the business's chances for success and growth.

3. The finished report serves as an operational tool to define the company's present status and future possibilities.

4. It can help you manage the business and prepare you for success.

5. It is a strong communication tool for your business. It defines your purpose, your competition, your management and personnel. The process of constructing a business plan can be a strong reality check.

6. The finished business plan provides the basis for your financing proposal.

Planning is very important if a business is to survive. By taking an objective look at your business you can identify areas of weakness and strength. You will realize needs that may have been overlooked, spot problems and nip them before they escalate, and establish plans to meet your business goals.

The business plan is only useful if you use it. Ninety percent of new businesses fail in the first two years. Failure is often attributed to a lack of planning. To enhance your success, use your plan! A comprehensive, well constructed business plan can prevent a business from a downward spiral.

Finally, your business plan provides the information needed to communicate with others. This is especially true if you are seeking financing. A thorough business plan will have the information to serve as a financial proposal and should be accepted by most lenders.

If you have decided to start your own business, one of the first things that you need to do is to work on a business plan. A business plan is so important because it actually serves as a compass for the direction your business will take in the future. Having a plan will also help you achieve the things you want to achieve and will help your business to find success as well.

Consider the Details

One of the reasons that having a business plan is essential is that it will help you to consider the details of your business and its' future. As you are working on your plan, you will probably find that there are many aspects of your new business that you have not considered. Getting started with a business plan will help you to save money and time since you will be able to deal with issues before they become a problem.

Helps You Get Funding

Another great reason for having a business plan is that it can help you if you are trying to get outside funds for your business. Most lenders and investors want to see that you have a clear business plan before they take a risk on your business. Having a plan already drawn up shows them that you are serious about being successful at your business. If you are going to show your business plan to potential lenders and investors, make sure that the figures you use are accurate so your plan is credible.

Management Tool

Starting a business is a huge job and it is helpful if you have something that can help you manage the business. A business plan can act as a management tool that can help you focus on where you are and where you want to be in the future. This will help you to keep your daily tasks well managed and will also help you to accomplish long term goals as well.

If you decide to go without a business plan, chances are that your business is going to end in disaster. You can use a business plan throughout all stages of your business to guide your business towards success. While it may take some time and energy to get a business plan together, in the end it will be well worth taking the time to get it done right

[Xpert]

Thanks for posting this GDB here.

[Xpert]

· I disagree with this opinion because a business plan is always necessary for every business whether Ahmad is starting a new business or buying a running business. As we know the goals and strategies of every businessman are different like seizing opportunities in future, allocation of resources and tackling of problem to be faced by business in future. That’s why business plan is necessary for every business whether it is new or in running condition.

· In my opinion a business plan is essential for every business man whether he is starting a new business or purchasing a running business. So I disagree with this statement because every business man has their own business strategies like financial, marketing, production & pricing strategies. The thinking of every business man is also different from one another therefore a business plan is essential for every new or running business to optimize expansion.

· Idid not agree with this statement because for a new business man a business plan is using as an important tool because the objectives and goals of every businessman are different like allocation of resources, getting opportunities in future and tackling of problem to be faced by business in future. So new business plan is essential for Ahmad because he is at initial stage of business that’s why he makes his business plan.


· I disagree for this statement because he is purchasing a running business and the thinking for every businessman is different as well as the goals and objectives of the business. Due to this he should prepare his own business plan according to his nature. Even business is old & in running stage but Ahmad is at initial stage of business that’s why he makes his business plan.

[Xpert]

In my point of view Ahmed should write the business plan, even it is running business but Ahmed is the new owner of the departmental store, He may have some different objectives from the previous owner of the store. so his business plans may also differs from the old owner.
Some very common reasons to write the business plans:

• To set the business objectives
• Ideas and services for success and growth.
• To define the present and future status of the company.
• A strong communication tool which defines your competition, purpose and management.

Planning is the most important function of business; you set you business goals in planning. Mostly the businesses are failed in the beginning stages, the cause of failure is lacking in planning. A business plan can act as a management tool which helps you to focus on where you are and where you want to be in future.
So Ahmed should write his business plans if he want to become a successive businessman.