This blog serves to communicate to its users about the different aspects of business. We aim to cover business aspects relating to marketing, management, e-commerce, business planning, financial planning, human resource management etc. We will start by tackling issues relating to business planning by answering a few questions :
1. What is a business plan?
A business plan is a carefully laid out plan for a potential/ actual business which clearly outlines the methods the entrepreneur is going to employ to ensure the success of the business.
2. What is a business plan used for?
A business plan is used primarily for these four basic objectives:
a) To identify the nature and the context of the business oportunity and the causes of such an opportunity.
b) It clearly outlines the methods the entrepreneur is going to employ to exploit the opportunity.
c) It helps identify the factors that will lead to the success of the business (Situational Or SWOT Analysis).
d) Lastly, it serves as a document that will aid the entrepreneur raise capital to start the business.
3. Why are business plans for e-commerce businesses considered volatile?
This is because the internet is has placed a level ground for businesses because of the cost structure of doing business on the net. Doing business on the internet is relatively cheap, and therefore even small inexperienced companies can trade on the internet without being specialists in their fields of business which makes it difficult for prospective financiers to gauge the potential success of such businesses.
4. Why do businesses which are profitable on paper fail the practical test?
Most entrepreneurs try to make their businesses to be profitable by putting more emphasis on accounting profitability profitability. They put in less effort in improving service quality in an effort to reduce operating costs therefore leading to less customers patronizing their businesses so at the end of the day they end up losing because of their lack of understanding that their success depends on their ability to satisfy the needs of their target market. They fail to grasp the reality that business with a marketing orientation survives in the long term.
5. What are the causes of most small business failures?
a) Not having a sound management structure.
b) Having poor internal systems of financial control.
c) Not adhering to the dictates of Sound Corporate Governance.( Creative accounting, Lack of transparency, Lack of accountability, honesty and integrity.
