Evaluation Study On A Business Plan | Suggestions For Improvement

Language and Professionalism

Discuss about the Cognitive Characteristics and Human Capital.

A business plan is always not perfect. It must be read again by the professionals to evaluate that whether the stated items in the report are perfect or not. The report shows a concern on the business plan of Mazin and Abdullah on the basis of the evaluation report and market study. The evaluation study on the business plan has been portrayed below:

• However, the business plan has failed to describe about the main strength of the business swiftly.  The executive summary and the business description only briefs about the analysis and the result of the report. The business plan does not explain about the main strength such as how the customer base could be improved.
• The business owners i.e. Mazin and Abdullah of the business are enough qualified and both of them are enough experienced.
• The business plan explains that the financial requirement of the company has been met by the company perfectly. Entire study and the statements have been shown in the report.
• Zahra is the president and founder of the business which holds a diploma degree of higher diploma in accounting. Whereas, Abdullah has 4 year of experiences and a degree of higher diploma and would work as director of sales. It explains that both of them have leadership tactics which would help them to run the business efficiently and it would also make them easier to set the better market base in market efficiently and effectively.
• The vision and the mission of the business plan states the loyalty, customer devotion, high quality product, children suitability, excellence in the process, meet the demand etc. It evaluates that the mission and vision statement of the business plan has been prepared swiftly. But the words of the mission and vision statement are not professional and explain that the Mazin and Abdullah should use the professional language while describing about the mission and vision statement of the business.
• Owner and the manager position of the business are handled by the Mazin and Abdullah only. Due to the small business and the thought of the entrepreneur that they could manage it by themselves. It is the reason due to which no managers have been hired and the business in owner-manager business.
• Yes, the owner-manager of the company are entrepreneurial and they are enough motivated and innovative to manage and run the business efficiently. It has been found that they have made enough efforts to manage the performance of the company.
• The long term objectives of the business are to manage the loyalty in the market and enhance the market base and the revenue of the business. The long term objectives of the business briefs about the loyalty, customer devotion, excellence in the process, meet the demand, high quality product, children suitability etc (Brinckmann and Kim, 2015).

• The business idea is about the “scientific library for children”. It is an innovative idea as no businesses related to this industry is existed in the market.  The business is different in its nature. The business plan explains that if the business plan would be implemented than it would offer great market base to the business.
• The business description part of the business plan has briefly explained about the entire business functions, activities and the operations of the company. It clearly explains about the main business and its process.
• The business plan has been prepared after evaluating all the related factors such as market place, technological factors, financial factors, operations factors and the implementations which clearly state that the business would be very successful. Entire points such as market place, technological factors, financial factors, operations factors and the implementations have been focused while preparing the report so that a better decision could be made.
• The most exciting thing about the executive summary of the business plan is that it includes all the analysis part and the study of the report in brief. Further, the executive summary is quite interesting for the reader to get the entire idea about the business plan and the business description. The business plan briefs that how would be the performance of the business.  
• On the basis of the executive summary, it could easily be recognized that the business would run in the market in a well manner and the investors would also get huge return from the business. The business plan has prepared after evaluating all the related points and has focused on all the factors, so it could be said that this is a well researched plan. The business planner have given enough time to study all the related factors of the business such as economical changes, technological changes, trends in the market etc and on the basis of that, they have prepared the report.

On the basis of the above study, it has been recognized that the business plan of the company is efficient. However few improvements are required to be done. The owners have not used the professional and formal language as well as main points such as main strength and mission, vision statement, financial projections have not been added by them in the executive summary and the introduction part. So, it is suggested to the owners of the company to make the changes into the language, mission and vision statement and must add the strength of the business report.

The executive summary should also include about the financial projection of the company such as how much profit would be achieved by the company in the initial years and how much cost would occur to implement the business plan (Brooks, 2015). An executive summary should be in such a manner that the entire report could be summarized in minimum words.

PEST analysis has been studied further from the business plan and it has been evaluated that the analysis over the political, economical, social and technological factors has been done by the business owners efficiently.

• Business owners have used the proper logic and the rationale to evaluate the political factors. All the factors of politics have been written after conducting a good research.
• The political evaluation analysis explains that the owners were just required to add some statistical data in the report. Rest, the analysis is way better. 

• The ranking factor explains that if the business plan would be implemented than no political factors would impact on the business.  
• The political factor of the country explains that the proper language has not been used by the owners and the opportunity gap explains there is no huge opportunity gap among the business and the industry situations.

The owners have not used the professional language as well as statistical points have not been added by them in the PEST analysis. So, it is suggested to the owners of the company to make the changes into the language, and must add the statistical data in the analysis part.

The analysis part must also be clear and must be written in such a way that anybody could understand it easily. It is quite tough to understand and evaluate the current analysis report (Brown, 2012). The business plan must evaluate the political factors and its impact on the total business of the company.

• Business owners have not used the proper logic study and evaluation on all the factors to evaluate the economical factors. Various important factors have been ignored by the business plan.
• The economical evaluation analysis explains that the owners were also required to add some statistical data in the report.

• The ranking factor explains that it does not describe about the business economical factors well. 
• The economical factor of the country explains that the proper language has not been used by the owners and the opportunity gap explains there is no huge opportunity gap among the business and the industry situations.

The owners must add the proper formatting and language in the business plan as well as various other economical factors and their impact on the business must be described in better way. The business plan must evaluate the economical factors and its impact on the total business of the company. The analysis part must also be clear and must be written in such a way that anybody could understand it easily.

• Business owners have failed to describe about the society factor and the importance of the social factor in the business.
• The social evaluation analysis explains that the owners have not added any statistical data in the report.

• The ranking factor explains that if the business plan would be implemented than no social factors would impact on the business (Finch, 2016). 
• The social factor’s opportunity gap explains there is no huge opportunity gap among the business and the industry situations.

PEST Analysis

The business plan must evaluate the social factors and its impact on the total business of the company. The owners are required to add the statistical data and its impact on the business plan.  The analysis part must be written by the company in explanation way so that it could be easily understood.

• Technological issues explain that the no brief introduction as well no business relevant information has been given.
• The proper statistical data and the language have also not been used by the company.

• The technological evaluation explains about huge opportunity gap.

Business plan must be changed again in context with the technological factors. The business plan must evaluate the technological factors and its impact on the total business of the company. It has not briefed anything about the business as well as the description has also not been given in proper way (Gibson, 2011).

• Competitive environment of the business plan has been studied and it has been recognized that the business owners have also undertaken a study on the competitors of the company but it has not been performed in an expected way.  

• The main competitors of the business are “hkayat library” and “open children library”. The business plan only explains that both the companies are operating in the same industry and almost same products are offered.  However, no substitute competition has been explained in the business plan. The Owner explained that no substitution effect would impact on their business.
• In the business plan, success of the competitions has been described in perfect way. The main strength behind the success of the competitors in the market is their numerous outlets. The competitors have mainly focused on the incorporate superb, enormous size business sector and low valuing procedure which has helped them to enhance the market share.
• The main weakness of both the competitors is huge employee turnover and the strength is huge market share. The quality and the technology of both the competitors are also impressive and explain that the performance of the company is quite better (Higgins, 2012). 
• On the basis of the competitive analysis, the business has recognized that the business must be focus on the employees, proper training and a better implementation on the business plan.
• The business plan explains that the business must concentrate of the staffing and training process so that the employee turnover of the business could be reduced and the company could perform well in the market.
• The sustainable level of the business plan is quite competitive on the basis of the business plan.

The owners have not used the perfect study to evaluate the competitors market. So, it is suggested to the owners of the company to make the changes into the competitors’ analysis part. The analysis part must also be clear and must be written in such a way that anybody could understand it easily. It is quite tough to understand and evaluate the current analysis report.

The competitors of the company must be evaluated in depth to measure the performance and the position of the business in the market. The performance of the business plan explains about few changes which would make it more important and attractive. The language must also be professional and formal.

The customer profile of the business plan includes the information about the customers, their characteristics, target market etc.

• The target market has been explained in the business has been identified perfectly by the owners of the business. The main target of the business would be schools where they will promote the business (Finch, 2016). However, the target market could have been larger.
• The customers need have not been described well in the business report. The business has only focused on enhancing the quantity of the customers without understanding their actual needs.
• The target customers have not been divided on the basis of the geographical, psycho graphical and demographical segment of the company. The business plan clearly explains that the segmentation of the customers would be according to the age group of the company.
• The business plan has not planned for any customer retention strategy. It has focused on the customer attractiveness only.

The above evaluation process explains that few improvements must be done in the business plan to make it more competitive and practical. The owners have not used the proper strategy and the proper needs of the customers. So, they are required to make the changes into the customer needs segment.

The customer’s retention strategies and other related strategies must also be prepared in the business plan (Gibson, 2011). The analysis part is also required to be written in a well and professional way. The owners have made many efforts to accomplish the consumer analysis still they failed to add all the related parts.

Marketing mix study of the business report explains about the clear details of the price, product, place and promotion of the business. Following is the evaluation and the suggestions for the business plan:

• Product evaluation explains that the business plan clearly states about the products of the business. The main products of the company are quite innovative and it would attract the customers of the company to come to the outlet and purchase the products of the company and avail the services as well.
• No benchmark information has been given. However, the business plan explains that the company would offer few contests, offering the toys and the books to the children etc. to set a benchmark.
• The company has differentiated the books into 2 segments, one segment is for the children and other one is for the adults. It explains that the difference among the products is sustainable.

The product description must be given in such a state that the benchmark must be set by the company and the competitor’s product must also be evaluated before depicting about the products of the business. The language must also be professional and formal. The benchmark of the company must also be better than the current benchmark.

• The information about the place of the outlet is clearly stated and the area is on the main road near many distinguished shops so it would be easier for the people to find the store.
• The benefits of the place have been clearly stated in the business plan. The information about the cost effectively has not been given in the business plan.
• However, the place of the business is accessible and it is visible as well. The company has not compared its place with the competitors and the choices about the place have also not been mentioned by the owners in the business plan.

Owners are required to evaluate the study on “Place” again as they have not included various information about the cost effectively, competitive advantage, benchmark of the place etc. The language must also be professional and formal.

• Price of the product has been mentioned properly. It is better price as it has been set after analyzing the customer’s price.
• This price strategy is appropriate according to the pricing model and it would be effective for the business according to the industry.
• Low cost and differentiation strategy has been followed for the business.
• The company has not compared the prices of the business with the competitors.
• The customer’s price has been discussed briefly in the report and lastly, the little information about the price competition has also been given in the report.

The information about competitive advantage, pricing model etc. are required to be added.  The language must also be professional and formal. The business plan must be studied again and few changes would make it more competitive.

• Promotion strategy defines about the advertising and sales promotion. 
• It is quite specific and clear in the business plan.
• The strategies does not emphasise on something which makes the business unique.
• The strategies would help the business to reach to its customers easily.

The language must also be professional and formal. Business planners are just required to manage the study on “Promotion” again as they have not included various information about the promotion activities.

• Owners of the company would manage the business only. They have not hired anybody for the management.
• The owners have enough experience, skills and qualification about the business.
• There is no team and skill gap among the team and the firm.  There is no proper organizational structure as the business would be handled by 2 of them only.
• A proper human resource plan has been prepare to recruit, manage and train the employees.

Business planners are just required to add some strategies of organizational structure which would help them to manage the business.

Lastly, the financial statements have been recast on the basis of assumptions and the forecasting. Following are recast financial statements and the assumptions:

1. Loan from ODB would be taken on 5% interest rate. Thus the loan amount would be $ 31,200.
2. Cash savings should be $ 15,000 for the business.
3. Depreciation rate on delivery van and kitchen equipment must be 15$ according to their uses and the industry evaluation.
4. Electricity and water expenses would be $ 1500 according to the nature of the business.
5. Total sales of the business would be 150 meal, 200 meals and 280 meals in year 1, 350 meals in year 2 and next would be same (Brigham and Daves, 2012).
6. Cost of production would be different according to the sales.
7. The production cost and the sales cost would be same according to the industry.
8. Salary, stock and other fixed expenses of the company would also be same.

Conclusion:

• The business plan of the company is efficient. However, the owners have not used the professional language as well as main points have not been added by them in the executive summary and the introduction part. So, it is suggested to the owners of the company to make the changes into the language, mission and vision statement and must add the strength of the business report.
• The PEST analysis of business plan explains that the owners have not used the statistical points in the PEST analysis.
• On the basis of the competitor analysis of business plan, it has been recognized that the study on the competitors of the company is efficient. Further, the customer analysis of business plan explains that the customers’ analysis of the company is efficient.
• However, the owners have not used the proper strategy and the proper needs of the customers. The analysis part must also be clear and must be written in such a way that anybody could understand it easily.
• Owners have not included information about the competitive advantage, pricing model etc in pricing and promotion market mix.
• Business planners are just required to manage the study on “Promotion” again as they have not included various information about the promotion activities. Business planners are just required to add some strategies of organizational structure which would help them to manage the business.
• To conclude, few changes are required to be done in the business plan. Such as, the Rest, the business plan of the company is quite competitive and it would offer higher returns to the owners of the company.

References:

Brigham, E. and Daves, P., 2012. Intermediate financial management. Nelson Education.

Brinckmann, J. and Kim, S.M., 2015. Why we plan: the impact of nascent entrepreneurs’ cognitive characteristics and human capital on business planning. Strategic entrepreneurship journal, 9(2), pp.153-166.

Brooks, R., 2015. Financial management: core concepts. Pearson.

Brown, R., 2012. Analysis of investments & management of portfolios. Pearson Higher Ed.

Finch, B., 2016. How to write a business plan. Kogan Page Publishers.

Gibson, C.H., 2011. Financial reporting and analysis. South-Western Cengage Learning.

Higgins, R.C., 2012. Analysis for financial management. McGraw-Hill/Irwin.