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Encyclopedia > Business plan
Corporate finance

Working capital management
Cash conversion cycle
Return on capital
Economic value added
Just In Time
Economic order quantity
Discounts and allowances
Factoring (finance)
Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... Image File history File links Download high resolution version (1031x740, 688 KB)Midtown Manhattan looking North from the Empire State Building, 2005. ... Corporate finance is a specific area of finance dealing with the financial decisions corporations make and the tools as well as analysis used to make these decisions. ... Cash conversion cycle or CCC, also known as the asset conversion cycle, net operating cycle, working capital cycle or just cash cycle, is used in the financial analysis of a business. ... Return on capital, also known as Return On Invested Capital (ROIC) is defined as NOPLAT / Invested Capital usually expressed as a percentage. ... Economic Value Added (EVA) is an estimate of true economic profit after making corrective adjustments to GAAP accounting, including deducting the opportunity cost of equity capital. ... Just In Time (JIT) is an inventory strategy implemented to improve the return on investment of a business by reducing in-process inventory and its associated costs. ... Economic Order Quantity (also known as the Wilson EOQ Model or simply the EOQ Model) is a model that defines the optimal quantity to order that minimizes total variable costs required to order and hold inventory. ... Discounts and allowances are modifications to the basic price. ... This article is about finance. ...

Capital budgeting
Capital investment decisions
The investment decision
The financing decision
Capital investment decisions
The process of determining which potential long-term projects are worth undertaking, by comparing their expected discounted cash flows with their internal rates of return. ... Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ...

Sections
Managerial finance
Financial accounting
Management accounting
Mergers and acquisitions
Balance sheet analysis
Business plan
Corporate action
Managerial Finance is that branch of finance that provide tools for a companys financial managers. ... Financial accountancy (or financial accounting) is the branch of accountancy concerned with the preparation of financial statements for decision makers, such as stockholders, suppliers, banks, government agencies, owners, and other stakeholders. ... Management accounting is concerned with the provisions and use of accounting information to managers within organizations, to provide them with the basis in making informed business decisions that would allow them to be better equipped in their management and control functions. ... Acquisition redirects here. ... This article needs additional references or sources for verification. ... A corporate action is an event taken by a public company that has a direct financial impact on of its shareholders. ...


Finance series
Financial market
Financial market participants
Corporate finance
Personal finance
Public finance
Banks and Banking
Financial regulation
Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. ... This article does not cite any references or sources. ... There are two basic financial market participant catagories, Investor vs. ... Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... Personal finance is the application of the principles of finance to the monetary decisions of an individual or family unit. ... This article does not cite any references or sources. ... For other uses, see Bank (disambiguation). ... Financial supervision is government supervision of financial institutions by regulators. ...

v d

A business plan is a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals.


The business goals being attempted may be for-profit or non-profit. For-profit business plans typically focus on financial goals. Non-profit and government agency business plans tend to focus on service goals. Business plans may also target changes in perception and branding by the customer, client, tax-payer, or larger community. A business plan having changes in perception and branding as its primary goals is called a marketing plan. A marketing plan is a written document that details the necessary actions to achieve one or more marketing objectives. ...


Business plans may be internally or externally focused. Externally focused plans target goals that are important to external stakeholders, particularly financial stakeholders. They typically have detailed information about the organization or team attempting to reach the goals. With for-profit entities, external stakeholders include investors and customers.[1] External stake-holders of non-profits include donors and the clients of the non-profit's services.[2] For government agencies, external stakeholders include tax-payers, higher-level government agencies, and international lending bodies such as the IMF, the World Bank, various economic agencies of the UN, and development banks. A corporate stakeholder is a party who affects, or can be affected by, the companys actions. ... Investment is a term with several closely related meanings in finance and economics. ... A customer is someone who purchases or rents something from an individual or organisation. ... A charitable organization (also known as a charity) is a trust, company or unincorporated association established for charitable purposes only. ... The flag of the International Monetary Fund (IMF) The International Monetary Fund (IMF) is the international organization entrusted with overseeing the global financial system by monitoring foreign exchange rates and balance of payments, as well as offering technical and financial assistance when asked. ... The International Bank for Reconstruction and Development (IBRD, in Romance languages: BIRD), better known as the World Bank, is an international organization whose original mission was to finance the reconstruction of nations devastated by WWII. Now, its mission has expanded to fight poverty by means of financing states. ... This article is about the United Nations, for other uses of UN see UN (disambiguation) Official languages English, French, Spanish, Russian, Chinese, Arabic Secretary-General Kofi Annan (since 1997) Established October 24, 1945 Member states 191 Headquarters New York City, NY, USA Official site http://www. ... A Multilateral Development Bank (MDB) is an institution, created by a group of countries, that provides financing and professional advising for the purpose of development. ...


Internally focused business plans target intermediate goals required to reach the external goals. They may cover the development of a new product, a new service, a new IT system, a restructuring of finance, the refurbishing of a factory or a restructuring of the organization. An internal business is often developed in conjunction with a balanced scorecard or a list of critical success factors. This allows success of the plan to be measured using non-financial measures. Business plans that identify and target internal goals, but provide only general guidance on how they will be met are called strategic plans. In 1992, Robert S. Kaplan and David P. Norton introduced the balanced scorecard, a concept for measuring whether the activities of a company are meeting its objectives in terms of vision and strategy. ... Critical Success Factor (CSF) is a business term for an element which is necessary for an organization or project to achieve its mission. ... Strategic planning is an organizations process SCREW YOU, RILEY of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. ...


Operational plans describe the goals of an internal organization, working group or department.[3] Project plans, sometimes known as project frameworks, describe the goals of a particular project. They may also address the project's place within the organization's larger strategic goals.[4][5] Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. ... Project planning is part of project management, which relates to the use of schedules such as Gantt charts to plan and subsequently report progress within the project environment. ...

Contents

Business Plan Content

For more details on this topic, see Content of a business plan.

Business plans are decision-making tools. There is no fixed content for a business plan. Rather the content and format of the business plan is determined by the goals and audience. A business plan should contain whatever information is needed to decide whether or not to pursue a goal. This article explains what goes into a business plan and why. ...


For example, a business plan for a non-profit might discuss the fit between the business plan and the organization’s mission. Banks are quite concerned about defaults, so a business plan for a bank loan will build a convincing case for the organization’s ability to repay the loan. Venture capitalists are primarily concerned about initial investment, feasibility, and exit valuation. A business plan for a project requiring equity financing will need to explain why current resources, upcoming growth opportunities, and sustainable competitive advantage will lead to a high exit valuation. For other uses, see Bank (disambiguation). ... This does not cite its references or sources. ... Venture capital is a general term to describe financing for startup and early stage businesses as well as businesses in turn around situations. ... Companies that compete by selling similar products (or even substitutes) to the same group of customers constitute an industry. ...


Preparing a business plan draws on a wide range of knowledge from many different business disciplines: finance, human resource management, intellectual property management, supply chain management, operations management, and marketing, among others.[6]. It can be helpful to view the business plan as a collection of sub-plans, one for each of the main business disciplines.[7] Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. ... Human resource management (HRM) is the strategic and coherent approach to the management of an organizations most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business. ... For the 2006 film, see Intellectual Property (film). ... Supply chain management (SCM) is the process of planning, implementing, and controlling the operations of the supply chain as efficiently as possible. ... Operations management is an area of business that is concerned with the production of goods and services, and involves the responsibility of ensuring that business operations are efficient and effective. ... Next big thing redirects here. ...


Business

Support services

  • books, portals, and other sources of written information
  • consulting services
  • electronic planning templates (software)
  • face to face help: mentoring programs, training courses
    • Germany: Bundesministerium für Wirtschaft und Technologie (BMWi) [1].
    • Morocco: CRI (Centre Régional d'Investisment)
    • Pakistan: SMEDA (Small and medium enterprise development authority)
    • UK: Business Link
    • USA: SCORE, SBA centers
    • Canada: Industry Canada, [2]
    • India : Allindialive Business Planing Portal,[3]
    • Switzerland : venturelab (Förderprogramm der Bundes für innovative Start-ups mit Wachstumspotenzial)
    • Other countries: needs research

Resources for researching facts and figures

Internal corporate records

Free information

  • published statistics on the web
  • business libraries

Fee-based services

  • marketing reports from subscription services
  • archive and journal services
  • books

Strategic Analysis

Industry or market research is the acquisition of corporate intelligence on a broad range of issues including: Macroenvironment economy government legal technology ecological sociocultural Market Analysis and Competitor analysis market definition market size market segmentation industry structure and strategic groupings Porter 5 forces analysis supply chain competition and market share... For a company to gain or maintain a sustainable competitive advantage, it must be ever vigilant, watching for changes in the business environment. ... Consumer research redirects here. ... only joking Competitor analysis in marketing and strategic management is an assessment of the strengths and weaknesses of current and potential competitors. ... Porters 5 forces analysis is a framework for industry analysis and business strategy development developed by Michael E. Porter in 1979 of Harvard Business School. ...

Forecasts: Modeling Techniques

Presentation Formats

The format of a business plan depends on its presentation context. It is not uncommon for businesses, especially start-ups to have three or four formats for the same business plan:

  • an "elevator pitch" - a three minute summary of the business plan's executive summary. This is often used as a teaser to awaken the interest of potential funders, customers, or strategic partners.
  • an oral presentation - a hopefully entertaining slide show and oral narrative that is meant to trigger discussion and interest potential investors in reading the written presentation. The content of the presentation is usually limited to the executive summary and a few key graphs showing financial trends and key decision making benchmarks. If a new product is being proposed and time permits, a demonstration of the product may also be included.
  • a written presentation for external stakeholders - a detailed, well written, and pleasingly formatted plan targeted at external stakeholders.
  • an internal operational plan - a detailed plan describing planning details that are needed by management but may not be of interest to external stakeholders. Such plans have a somewhat higher degree of candor and informality than the version targeted at external stakeholders.

Revisiting the Business Plan

Cost overruns and revenue shortfalls

Cost and revenue estimates are central to any business plan for deciding the viability of the planned venture. But costs are often underestimated and revenues overestimated resulting in later cost overruns, revenue shortfalls, and possibly non-viability. During the dot-com bubble 1997-2001 this was a problem for many technology start-ups. However, the problem is not limited to technology or the private sector; public works projects also routinely suffer from cost overruns and/or revenue shortfalls. The main causes of cost overruns and revenue shortfalls are optimism bias and strategic misrepresentation.[8][9] Reference class forecasting has been developed to reduce the risks of cost overruns and revenue shortfalls. Cost overrun is defined as excess of actual cost over budget. ... The dot-com bubble was a speculative bubble covering roughly 1995–2001 during which stock markets in Western nations saw their value increase rapidly from growth in the new Internet sector and related fields. ... Optimism bias is the demonstrated systematic tendency for people to be over-optimistic about the outcome of planned actions. ... Strategic misrepresentation is the planned, systematic distortion or misstatement of fact—lying—in response to incentives in the budget process. ...


Legal and Liability Issues

Disclosure requirements

An externally targeted business plan should list all legal concerns and financial liabilities that might negatively affect investors. Depending on the amount of funds being raised and the audience to whom the plan is presented, failure to do this may have severe legal consequences.


Limitations on content and audience

Non disclosure agreements (NDAs) with third parties, non-compete agreements, conflicts of interest, privacy concerns, and the protection of one's trade secrets may severely limit the audience to which one might show the business plan. Alternatively, they may require each party receiving the business plan to sign a contract accepting special clauses and conditions. A non-disclosure agreement (NDA), also called a confidential disclosure agreement (CDA), confidentiality agreement or secrecy agreement, is a legal contract between at least two parties which outlines confidential materials the parties wish to share with one another for certain purposes, but wish to restrict from generalized use. ... A non-compete agreement is an employment agreement that prohibits an employee from directly competing with their employer during the term of their employment and for some time afterwards. ... A conflict of interest is a situation in which someone in a position of trust, such as a lawyer, a politician, or an executive or director of a corporation, has competing professional or personal interests. ... Privacy is the ability of an individual or group to control the flow of information about themselves and thereby reveal themselves selectively. ... A trade secret is a confidential practice, method, process, design, or other information used by a company to compete with other businesses. ...


This situation is complicated by the fact that many venture capitalists will refuse to sign an NDA before looking at a business plan, lest it put them in the untenable position of looking at two independently developed look-alike business plans, both claiming originality. In such situations one may need to develop two versions of the business plan: a stripped down plan that can be used to develop a relationship and a detail plan that is only shown when investors have sufficient interest and trust to sign an NDA. Venture capital is a general term to describe financing for startup and early stage businesses as well as businesses in turn around situations. ...


Open Business Plans

Traditionally business plans have been highly confidential and quite limited in audience. The business plan itself is generally regarded as secret. However the emergence of free software and open source has opened the model and made the notion of an open business plan possible. Free software is software that can be used, studied, and modified without restriction, and which can be copied and redistributed in modified or unmodified form either without restriction, or with minimal restrictions only to ensure that further recipients can also do these things. ... Open source refers to projects that are open to the public and which draw on other projects that are freely available to the general public. ...


An Open Business Plan is a business plan with unlimited audience. The business plan is typically web published and made available to all.


In the free software and open source business model, trade secrets, copyright and patents can no longer be used as effective locking mechanisms to provide sustainable advantages to a particular business and therefore a secret business plan is less relevant in those models. A trade secret is a confidential practice, method, process, design, or other information used by a company to compete with other businesses. ... Not to be confused with copywriting. ... A patent is a set of exclusive rights granted by a government to an inventor or applicant for a limited amount of time (normally maximum 20 years from the filing date, depending on extension). ...


While the origin of the Open Business Plan model is in the free software and Libre services arena, the concept is likely applicable to other domains.


Examples

How Business Plans are Used

Venture Capital

  • business plan contests - provides a way for venture capitals to find promising projects
  • venture capital assessment of business plans - focus on qualitative factors such as team.

Public Offerings

  • in a public offering, potential investors can evaluate perspectives of issuing company [11]

Within Corporations

Fundraising

Total Quality Management

For more information see Total Quality Management Total Quality Management (TQM) is a management strategy aimed at embedding awareness of quality in all organizational processes. ...


Management by Objective

For more information see Management by objectives Management by Objectives (MBO) is a process of agreeing upon objectives within an organization so that management and employees buy in to the objectives and understand what they are. ...


Strategic Planning

For more information see Strategic Planning Strategic planning is an organizations process SCREW YOU, RILEY of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. ...


Education

K-12

Business plans are used in some primary and secondary programs to teach economic principles.[12] Wikiversity has a Lunar Boom Town project where students of all ages can collaborate with designing and revising business models and practice evaluating them to learn practical business planning techniques and methodology. Wikiversity logo Wikiversity is a Wikimedia Foundation beta project[1], devoted to learning materials and activities, located at www. ...


Higher Education

  • BA, MBA programs
    • integrative team projects
    • projects for specific course work
    • Business plan contests

GetSet for Business [4] provides UK educational establishments with the facility for students to learn about starting a business and produce a professional and bespoke business plan online.


Satires of Business Plans

The business plan is the subject of many satires. Satires are used both to express cynicism about business plans and as an educational tool to improve the quality of business plans. For example,

Dilbert (first published April 16, 1989) is an American comic strip written and drawn by Scott Adams. ... MBA redirects here. ... The University of California, Berkeley (also known as Cal, UC Berkeley, UCB, or simply Berkeley) is a prestigious, public, coeducational university situated in the foothills of Berkeley, California to the east of San Francisco Bay, overlooking the Golden Gate and its bridge. ... The Dilbert Principle refers to a 1990s satirical observation stating that companies tend to systematically promote their least-competent employees to management, in order to limit the amount of damage that theyre capable of doing. ... Dilbert (first published April 16, 1989) is an American comic strip written and drawn by Scott Adams. ... Scott Raymond Adams (born June 8, 1957) is the creator of the Dilbert comic strip and the author of several business commentaries, social satires, and experimental philosophy books. ...

  • In the article "South Park's" Investing Lesson, the The Motley Fool columnist "Fool on the Hill" uses the Underpants Gnomes to illustrate the fallacy of focusing on goals without a clear implementation strategy. The Underpants Gnomes episode satirizes the business plans of the Dot.com era. It features a three-part business plan for a new coffee shop:
  1. Collect underpants
  2.  ???
  3. Profit!

The Motley Fool is a group of financial mavens founded in August 1994 in the USA by brothers Tom Gardner and David Gardner, who parlayed their investment newsletter into a content partnership with America Online service. ... Gnomes is the 30th episode of Comedy Centrals animated series South Park. ... The dot-com bubble was a speculative bubble covering roughly 1995–2001 during which stock markets in Western nations saw their value increase rapidly from growth in the new Internet sector and related fields. ...

References

  1. ^ Small Business Notes business plan outline for small business start-up
  2. ^ Center for Non-profit Excellence non-profit business plan
  3. ^ State of Louisana, USA government agency operational plan
  4. ^ Visitask project framework
  5. ^ Tasmanian government project management knowledge base government project plan
  6. ^ Boston College, Carroll School of Management, Business Plan Project The business school advises students that "To create a robust business plan, teams must take a comprehensive view of the enterprise and incorporate management-practice knowledge from every first-semester course." It is increasingly common for business schools to use business plan projects to provide an opportunity for students to integrate knowledge learned through their courses.
  7. ^ Eric S. Siegel, Brian R. Ford, Jay M. Bornstein (1993), 'The Ernst & Young Business Plan Guide' (New York: John Wiley and Sons) ISBN 0471578266
  8. ^ Bent Flyvbjerg, Mette K. Skamris Holm, and Søren L. Buhl (2002),"Underestimating Costs in Public Works Projects: Error or Lie?" Journal of the American Planning Association, vol. 68, no. 3, 279-295.
  9. ^ Bent Flyvbjerg, Mette K. Skamris Holm, and Søren L. Buhl (2005), "How (In)accurate Are Demand Forecasts in Public Works Projects?" Journal of the American Planning Associationsidoo kale ayaa waxaa, vol. 71, no. 2, 131-146.
  10. ^ Neda Open Business Plan - By* Services
  11. ^ Alternative Stock Library (2008-01-28). Successful Business Plan. Alternative Stock Library. Retrieved on 2008-02-28.
  12. ^ Pennsylvania Business Plan Competition - competition intended to teach economic principles to K-12 students
  13. ^ Tricia Bisoux, "Funny Business", BizEd, November/December, 2002

2008 (MMVIII) is the current year, a leap year that started on Tuesday of the Anno Domini (or common era), in accordance to the Gregorian calendar. ... is the 28th day of the year in the Gregorian calendar. ... 2008 (MMVIII) is the current year, a leap year that started on Tuesday of the Anno Domini (or common era), in accordance to the Gregorian calendar. ... is the 59th day of the year in the Gregorian calendar. ...

See also

Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... Cost overrun is defined as excess of actual cost over budget. ... Cost-benefit analysis is an important technique for project appraisal: the process of weighing the total expected costs against the total expected benefits of one or more actions in order to choose the best or most profitable option. ... Optimism bias is the demonstrated systematic tendency for people to be over-optimistic about the outcome of planned actions. ... A marketing plan is a written document that details the necessary actions to achieve one or more marketing objectives. ... Strategic planning is an organisations process of defining its strategy and making decisions on allocating its resources to pursue this strategy, including its capital and people. ... The phrase color of the bikeshed is a proverbial phrase, referring to the apparent ease of which one can get approval for building a large and complex project such as a billion-dollar laboratory, while it is hard to get consensus to build something conceptually simple — because everyone involved wants...

  Results from FactBites:
 
Business plan - Wikipedia, the free encyclopedia (483 words)
A business plan is a summary of how a business owner, manager, or entrepreneur intends to organize an entrepreneurial endeavor and implement activities necessary and sufficient for the venture to succeed.
Business plans are used internally for management and planning and are also used to convince outsiders such as banks or venture capitalists to invest money into a venture.
One common belief within business circles is that the actual plan may have little value, but what is more important is the process of planning, through which the manager gains a greater understanding of the business and of the options available.
Business plans, Business plan Consultants & Writers,Business Plan Developers (585 words)
Masterplans business plans are unique in nature as they represent the culmination of 8 years of precise trial and error in creating a document that elicits a call to action by investors.
As professional business plan consultants, we will doggedly pursue the refinement of your thought process until the end result is nothing less than a perfect business plan that addresses precisely your funding and operating requirements.
Masterplans business plans are distinguishable by their attention to detail, depth of research, and graphically rich design with less fluff and more content.
  More results at FactBites »

 
 

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