what is a business plan scholarly articles

An official website of the United States government

The .gov means it’s official. Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

The site is secure. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Publications
Account settings
My Bibliography
Collections
Citation manager

Save citation to file

Email citation, add to collections.

Create a new collection
Add to an existing collection

Add to My Bibliography

Your saved search, create a file for external citation management software, your rss feed.

Search in PubMed
Search in NLM Catalog
Add to Search

Writing a successful business plan: an overview

Affiliation.

1 Drug Delivery Systems DIvision, #M, Northridge, CA 91324, USA. [email protected]
PMID: 23281606
DOI: 10.1177/216507991306100104

In creating and building a business, the entrepreneur assumes all the responsibilities for development and management, as well as the risks and rewards. Many businesses do not survive because business owners fail to develop an effective plan. The business plan focuses on major areas of concern and their contribution to the success of a new business. The finished plan communicates the product or service to others and provides the basis for the financial proposal.

PubMed Disclaimer

Related information

Linkout - more resources, full text sources, other literature sources.

scite Smart Citations

Citation Manager

NCBI Literature Resources

MeSH PMC Bookshelf Disclaimer

The PubMed wordmark and PubMed logo are registered trademarks of the U.S. Department of Health and Human Services (HHS). Unauthorized use of these marks is strictly prohibited.

The Value of Business Plans for New Ventures: Company and Entrepreneur Outcomes

Richard C. Becherer University of Tennessee at Chatanooga
Marilyn M. Helms Dalton State College

Allred, Anthony T. and Addams, H. Lon (2006). After Receiving Financing, Do Inc. 500 Companies Continue To Utilize Their Business Plan? Journal of Small Business Strategy. 17(1), 17-26.

Armstrong, J.S. and Overton, T.S. (1977). Estimating Nonresponse Bias in Mail Surveys. Journal of Marketing Research, 16(August), 396-492.

Bartlett, Sarah (2002). "Seat of their Pants," Inc. Magazine, October. Accessed May 14, 2009 at http://www.inc.com/magazine/20021015 /24772.html.

Bowers, Brent (2009) "In the Hunt: Investors Pay Business Plans Little Heed, Study Finds," New York Times, May 14, Small Business, p. 1

Delmar, Frederic and Shane, Scott (2003) "Does Business Planning Facilitate the Development of New Ventures?" Strategic Management Journal, 24, 1165-1185.

Fiet, James O. and Patel, Pankaj C. (2006). Evaluating the Wealth-Creating Potential of Business Plans. The Journal of Private Equity. 10(1), 18-32.

Fletcher, Margaret and Harris, Simon. (2002). Sever Aspects of Strategy Formation," International Small Business Journal, 20(3), 297-314.

Goldfarb, Kirsch, and Gera (2009) "Form or Substance? The Role of Business Plans in

Venture Capital Decision Making," Strategic Management Journal, May. Hand, H. W.; Sineath, P. and Howle, W. E. (1987) "Small Business Concepts and their Relationship to Performance: A Field Study of Retail Service Stations," Journal of Small Business Management, 25(2), 55-63.

Hannon, P. D. and Atherton, A. (1998) "Small Firm Success and the Art of Orienteering: The Value of Plans, Planning, and Strategic Awareness in the Competitive Small firm," Journal of Small Business and Enterprise, 5(2), 102-119.

Heriot, Kirk C.; Campbell, Noel D.; and Finney, R. Zachary (2004). "Omitted Variable Biases in the Link Between Planning and Performance," New England Journal of Entrepreneurship, 7(2), 27-31.

Hormozi, Amir M.; Sutton, Gail S.; McMinn, Robert D.; and Lucio, Wendy (2002). "Business Plans for New or Small Businesses: Paving the Path to Success," Management Decision, 40(7/8), 755-763.

Karlsson, Tomas and Honig, Benson. (2009). Judging A Business By Its Cover: An Institutional Perspective On New Ventures And The Business Plan. Journal Of Business Venturing. 24(1), 27-47.

Koh, Inkon; Kim, Dae Ho; and Lee, Sang Suk. (2008). A Study On The Relationship Between Business Plan Components And Corporate Performance. International Journal Of Entrepreneurship And Innovation Management. 8(4), 359-379.

Liao, Jianwen (Jon), and Gartner, William B. (2008). The Influence of Pre- Venture Planning on New Venture Creation. Journal Of Small Business Strategy. Fall/Winter, 18(2), 1-21.

Parks, Bill; Olson, Philip D. and Bokor, Donald W. (1991). "Don't Mistake Business Plans for Planning (It May Be Dangerous to Your Financial Health)," Journal of Small Business Strategy, 1(2), 15-24.

Perry, Stephan C. (2001). The Relationship between Written Business Plans and the Failure of Small Businesses in the U.S., Journal of Small Business Management, 39(3), 201-208.

Peters, T.J., and Waterman, R.H. (1982). In Search of Excellence: Lessons From America's Best Run Companies, New York, NY: Harper and Row.

Sharma, S., Netemeyer, R. G., and Mahajan, V. (1990). In Search of Excellence Revisited: an Empirical Evaluation of Peters and Waterman's Attributes of Excellence. In W. O. B. a. A. Parasuraman (Ed.), Enhancing Knowledge Development in Marketing (Vol. 1, pp. 322-328).

Rue, L. W. and Ibrahim, N. A. (1998) The Relationship Between Planning Sophistication and Performance in Small Businesses, Journal of Small Business Management, 36(4), 24-33.

Sahlman, W. A. (1997) "How to Write a Great Business Plan." Harvard Business Review 75(4), 99-110.

Shane, S. and Delmar, F. (2004) "Planning for the Market: Business Planning Before Marketing and the Continuation of Organizing Efforts," Journal of Business Venturing, 19, 767- 785.

Singhvi, S. S. (2000). Business Planning Practices In Small Size Companies: Survey Results. The Journal Of Business Forecasting Methods & Systems. 19(2), 3- 8.

Struebing, L. (1997). Recipe For Success: Prepare A Business Plan. Quality Progress. 30(8), 20.

Upton, N.; Teal, E. J.; and Felan, J. T. (2001). Strategic And Business Planning Practices Of Fast Growth Family Firms. Journal of Small Business Management, 29(1), 60-72.

How to Cite

Endnote/Zotero/Mendeley (RIS)

Information

For Readers
For Authors
For Librarians

Developed By

Submissions.

JSBS is now accepting submissions through our new site. Please click the following button to be directed to the new submission site.

Digital Scholarship Initaitives , Walker Library , Middle Tennessee State University

More information about the publishing system, Platform and Workflow by OJS/PKP.

Business Information Guide

Articles and News
Books/eBooks
Business Case Studies
Career Research This link opens in a new window
Company Research
Data and Demographics
Evaluate and Cite Your Sources
Industry Research
Market Research

Introduction

I. the company, concept, and product(s) or service(s), ii. the industry analysis, iii. market research & analysis, iv. economics of the business, v. the marketing plan, vi. design & development plan, vii. operations plan, viii. management team, ix. overall schedule, x. critical risks, problems and assumptions, xi. financial plan, xii. proposed company offering.

Organizational Behavior
Patents This link opens in a new window
Research Methods
Venture Capital Firms and Investors This link opens in a new window

The recommendations and resources on this page complement the Whitman School of Management's Nuts and Bolts of Great Business Plans , which was written by Department of Entrepreneurship and Emerging Enterprises . The sections on this page correspond to the Nuts and Bolts of Great Business Plan sections.

Nearly every part of your business plan will require some type of research. Since gathering and analyzing the amount of information and data this assignment requires can be time consuming, be sure to plan your time accordingly. These recommendations and resources are just starting points. Be prepared to gather information and data from many different sources as you research and put together your business plan.

The following video tutorials were developed to provide a refresher on general research and business research strategies. The four business research video tutorials, in particular, were developed by Business, Management and Entrepreneurship Librarian Stephanie JH McReynolds to support EEE 457 students in the development of Capstone business plans.

Video Tutorials for General and Business Research General Research Video Tutorials Include: "Research Starting Points," "Using Libraries Search," "Finding Journal Articles." Business Research Video Tutorials Include: "Industry Research Part 1: Identifying Industry Codes," "Industry Research Part 2: Discovering Industry Research Reports and Data," "Company Research," "Market Research Resources."

First outline the nature of the entity you plan to create and where you are in that process, then capture the essence of your business concept and explain that concept, then detail the products and services you anticipate selling, and then talk about your entry approach and your vision for growth over the next five years.

As you draft your idea, use the resources on the Article and News page of the Business Information Guide to explore trends and relevant company, industry, and product news and analysis. Refer to the resources on the Company Research page of the Business Information Guide to become familiar with other companies offering similar products or services.

The "industry" refers to the larger landscape, as in the "computer hardware wholesale trade industry" or the "card and gift industry" or the "architectural services industry." The focus here is on what is happening in the industry and on the relative attractiveness of the industry as a whole.

Refer to the Industry Research page of the Business Information Guide for recommendations and guidance.

This section should convince the reader or investor that you truly know your customers. It should convince the reader that your product or service a) solves a customer need that customers want solved; b) will have a substantial market in a growing industry; and c) can achieve sales in the face of competition. For example, the predicted sales levels directly influence such factors as the size of the manufacturing operation, the marketing plan, and the amount of debt and equity capital you will require. Yet most entrepreneurs seem to have great difficulty preparing and presenting market research and analyses that show that their ventures' sales estimates are sound and attainable. Consult industry publications, articles in trade magazines and trade associations to understand how the industry defines, identifies and segments its customers. Then apply yourself creatively by integrating the information in a unique way.

Explore resources on the Business Information Guide for Market Research , Data & Demographics , and Articles and News .

The economics of the business is the section addressing the basic logic of how profits are earned in your business as well as the sales level required to breakeven. Two companies in the same industry might make profit in very different ways. Will this be a high margin, low volume business with low fixed costs? Will it be a low margin, high volume business where the cost structure is predominantly variable? The story begins by identifying your sources of revenue and how much margin you make on each of them.

Explore Company Research resources on the Business Information Guide to find revenue and expenses of similar companies. Find industry ratios (such as profit/loss ratio by sales class) in Industry Research resources, such as Bizminer.

The Marketing Plan describes how your projected sales will actually be attained. How will you make sales actually happen? A great idea is meaningless if you cannot find customers. Thus, this section builds on the Market Section, where you defined your market and outlined your targeted segments and their buyer behavior. The marketing plan needs to provide detail on the overall marketing strategy that will exploit the opportunity and your competitive advantages. Include a discussion of sales and service policies, pricing, distribution, promotion and advertising strategies, and sales projections. The marketing plan needs to describe what is to be done, how it will be done, when it will be done, and who will do it.

Articles and News Search Tips:

Pay close attention to the words and terms in this section from The Nuts and Bolts of Great Business Plans. These words can be useful search terms. For example, sales and service policies, pricing, distribution, promotion, advertising strategies, and sales projections. As you review your search results, pay particular attention to the words and phrases in the keywords and subject terms of the article records, as these can yield additional search terms.

A basic search for marketing and strategy and (your product or concept term) can also yield relevant results. The databases will also suggest additional terms to use in your search, such as market research AND strategy, advertising agencies, advertising campaigns, marketing management, market research, marketing agreements for you to explore.

This is a very important section for those teams developing a non-existent product, doing research and development, having technical obstacles to overcome, or seeking patent or copyright protection. However, if you are in a business where research and development is not a major issue (e.g., retailing, many consumer services), then you can leave this section out and just address and technologies you plan to employ in the OPERATIONS section.

The nature and extent of any design and development work, and the time and money required before the product or service is marketable, need to be considered in detail. (Note that design and development costs are often underestimated.) Design and development might be the engineering work necessary to convert a laboratory prototype to a finished product; the design of special tooling; the work of an industrial designer to make a product more attractive and saleable; or the identification and organization of employees, equipment, and special techniques, such as the equipment, new computer software, and skills required for computerized credit checking, to implement a service business.

Refer to the Patents & Intellectual Property guide for resources and research tips.

The operations section outlines how you will run your business and deliver value to your customers. Operations is defined as the processes that deliver your products/services to a customer or user and can include the production process for delivering your service to a given customer, manufacturing process if you are a manufacturer, transportation, logistics, travel, printing, consulting, and after-sales service. It also includes such factors as plant location, the type of facilities needed, space requirements, internal processes, capital equipment requirements, and labor force (both full- and part-time) requirements.

Explore resources on the Business Information Guide for Market Research , Data & Demographics , and Articles and News . For the geographic subsection, the mapping features of some Company Research databases (such as Data Axle Reference Solutions) and the mapping feature, or geographic limiters, available in certain Market Research resources (such as SimplyAnalytics) may be especially useful. To help identify suppliers, explore Thomasnet.com .

This section of the business plan includes a description of the functions that will need to be filled, a description of the key management personnel and their primary duties, an outline of the organizational structure for the venture, a description of the board of directors and key advisors, a description of the ownership position of any other investors, and so forth. You need to present indications of commitment, such as the willingness of team members to initially accept modest salaries, and of the existence of the proper balance of technical, managerial, and business skills and experience in doing what is proposed.

Find articles on building your management team and board of directors with databases on the Articles and News page of the Business Information Guide. Explore the Career Research Guide for relevant information, such as salary research resources.

A graphical schedule that shows the timing and interrelationship of the major events necessary to launch the venture and realize its objectives is an essential part of a business plan. The underlying cash conversion and operating cycle of the business will provide key inputs for the schedule. In addition to being a planning aid by showing deadlines critical to a venture's success, a well-presented schedule can be extremely valuable in convincing potential investors that the management team is able to plan for venture growth in a way that recognizes obstacles and minimizes investor risk. Since the time necessary to do things tends to be underestimated in most business plans, it is important to demonstrate that you have correctly estimated these amounts in determining the schedule.

what is a business plan scholarly articles

Gantt Charts as Planning Tools Part of Project Management Tools tutorial from Boston University.
How to Use a PERT Chart for Project Planning Project planning overview from the Motley Fool.

The development of a business has risks and problems, and the business plan invariably contains some implicit assumptions about these issues. You need to include a description of the risks and the consequences of adverse outcomes relating to your industry, your company and its personnel, your product's market appeal, and the timing and financing of your startup. Be sure to discuss assumptions concerning sales projections, customer orders, and so forth. If the venture has anything that could be considered a fatal flaw, discuss why you do not see it as a problem or how you intend to overcome it. The discovery of any unstated negative factors by potential investors can undermine the credibility of the venture and endanger its financing. Be aware that most investors will read the section describing the management team first and then this section.

To inform this section, explore resources on the Business Information Guide for Market Research , Data & Demographics , Company Research , Industry Research ,and Articles and News .

This section lays out a picture of the financial performance of the firm as it is started, stabilizes and grows. The financial plan is basic to the evaluation of an investment opportunity and needs to represent your best estimates of financial requirements. The purpose of the financial plan is to indicate the venture’s potential and to present a timetable for financial viability. It also can serve as an operating plan for financial management using financial benchmarks. In preparing the financial plan, look creatively at the venture and think about bootstrapping techniques, especially in the early days.

Explore Company Research resources (such as PrivCo, which includes venture capital financial data, and Mergent Online, which includes 10-K reports) on the Business Information Guide to find revenue and expenses of similar companies. Find industry ratios (such as profit/loss ratio by sales class) in Industry Research resources, such as Bizminer.

Beginners' Guide to Financial Statements Guide to financial statements from the SEC.
Business Startup Financing Startup financing guidance from BizFilings, part of Wolters Kluwer.
Financial Statement Analysis: The Basics for Non-Accountants Guide to financial statement analysis from Harvard Business School.
Preparing Financial Business Statements Guide to preparing financial statements from BizFilings, part of Wolters Kluwer.

The purpose of this section of the plan is to indicate the amount of any money that is being sought, the nature and amount of the securities offered to the investor, a brief description of the uses that will be made of the capital revised, and a summary of how the investor is expected to achieve its targeted rate of return. It is important to realize the terms for financing your company that you propose here are only the first step in the negotiation process with those interested in investing, and it is very possible that your financing will involve different kinds of securities than originally proposed.

Discover relevant articles with the resources on the Article and News page of the Business Information Guide.

A Beginner’s Guide to Startup Valuation Overview of startup valuation
Business Calculators Business Calculators recommended by the Motley Fool.
How Much Is Your Slice of That Unicorn Really Worth? Stanford Business article on how to determine startup shares value. Includes link to free online calculator to help estimate the worth of startup shares.
How to Value Private Companies Overview from Investopedia on how private companies are valued.
“Valuing the Business” Chapter from eBook Creating Services and Products Overview of business valuation methods for entrepreneurs.
<< Previous: Market Research
Next: Organizational Behavior >>
Last Updated: Jun 28, 2024 1:03 AM
URL: https://researchguides.library.syr.edu/business
Print This Page

The Business Plan and Formation of the Enterprise

Cite this chapter.

Christine K. Volkmann 4 ,
Kim Oliver Tokarski 5 &
Marc Grünhagen 6

The future of an enterprise depends on sound prior planning; business planning contains the intellectual anticipation of the future of an enterprise , forming the nucleus for the later development of the enterprise. In advance of working out a comprehensive business plan, a short feasibility study is often carried out in order to investigate the fundamental practicability of the envisioned venture project by means of a preliminary rough analysis [Allen (2003)]. If no customer demand or willingness of customers to pay is detected for the intended product or service offer, this particular venture-project should, if considered realistically, already be abandoned in the phase of the feasibility study. Alternatively, after a successful rough analysis a detailed business plan can be prepared.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Subscribe and save.

Get 10 units per month
Download Article/Chapter or Ebook
1 Unit = 1 Article or 1 Chapter
Cancel anytime
Available as PDF
Read on any device
Instant download
Own it forever
Compact, lightweight edition
Dispatched in 3 to 5 business days
Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Unable to display preview. Download preview PDF.

Recommended Literature

Business plan.

Allen, K. R. (2003): Launching new ventures – an entrepreneurial approach, 3 rd edition, Boston 2003.

Google Scholar

DeThomas, A. R./Derammelaere, S. A. (2008): Writing a convincing business plan, 3 rd edition, Hauppauge 2008.

Dollinger, M. J. (2003): Entrepreneurship, strategies and resources, 3 rd edition, Upper Saddle River 2003.

Ford, B. R./Bornstein, J. M./Pruitt, P. T. (2007): The Ernst & Young business plan guide, Hoboken 2007.

Sahlman, W. A. (2008): How to Write a Great Business Plan, Boston 2008.

Stutely, R. (2002): The Definitive Business Plan: the fast-track to intelligent business planning for executives and entrepreneurs, 2 nd edition, London 2002.

Choosing a legal form for a new enterprise

Delmar, F./Shane, S. (2004): Legitimating first: organizing activities and the survival of new ventures, in: Journal of Business Venturing, 19 (3), 2004, pp. 385–410.

Article Google Scholar

Grundei, J./Talaulikar, T. (2002): Company law and corporate governance of start-ups in Germany: legal stipulations, managerial requirements, and modification strategies, in: Journal of Management and Governance, 6 (1), 2002, pp. 1–27.

Maentysaari, P. (2005): Comparative corporate governance: shareholders as a rulemaker, Berlin et al. 2005.

Oplustil, K./Teichmann, C. (2004): The European company – all over Europe: a stateby-state account of the introduction of the European company, Berlin 2004.

Download references

Author information

Authors and affiliations.

University of Wuppertal, Germany

Christine K. Volkmann

University of Applied Sciences, Switzerland

Kim Oliver Tokarski

Marc Grünhagen

You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

Copyright information

About this chapter

Volkmann, C.K., Tokarski, K.O., Grünhagen, M. (2010). The Business Plan and Formation of the Enterprise. In: Entrepreneurship in a European Perspective. Gabler. https://doi.org/10.1007/978-3-8349-8752-5_3

Download citation

DOI : https://doi.org/10.1007/978-3-8349-8752-5_3

Publisher Name : Gabler

Print ISBN : 978-3-8349-2067-6

Online ISBN : 978-3-8349-8752-5

eBook Packages : Business and Economics Business and Management (R0)

Share this chapter

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

Publish with us

Policies and ethics

Find a journal
Track your research

A business journal from the Wharton School of the University of Pennsylvania

Knowledge at Wharton Podcast

Why creating a business plan is a ‘waste of time’, may 24, 2018 • 23 min listen.

What entrepreneurs need is flexibility and innovation -- not a traditional business plan -- says economist and author Carl Schramm.

Economist and author Carl Schramm discusses his new book, 'Burn the Business Plan.'

The following is an edited transcript of the conversation.

Knowledge at Wharton: Why is a business plan unnecessary?

Carl Schramm: It’s the basis of much of the teaching about how to start a business, and so much of what’s taught is basically conjecture. My book is developed off 10 years of research that we did at the Kauffman Foundation. If you look at all our older major corporations — U.S. Steel, General Electric, IBM, American Airlines — and then you look at our newer companies like Amazon, Apple, Facebook, Microsoft, none of these companies ever had a business plan before they got started. Empirically, it appears as if you don’t need a business plan.

Second, the business planning process is largely generated as a preview for venture capital. As I show in my book, from empirical studies, much less than 1% of all new startups ever see a venture capitalist. Much less than 1% of all new companies every year have venture backing of any kind. So, I largely view the creation of a business plan as something of a waste of time.

The third problem is that it seems to make starting a business somewhat like a cookbook. If you do this, and then you do this, and then you do this, the cake will come out okay. And that’s really not how it happens.

“Empirically, it appears as if you don’t need a business plan.”

Knowledge at Wharton: Let’s talk about age because many entrepreneurs are in their late 30s or 40s. These are people who made a shift in their career paths.

Schramm: Precisely. It goes to this question of, “What are we doing when we’re trying to teach high school kids?” Even grammar school children get courses and exposure to entrepreneurship. At the university level, it’s now a major in probably 3,000 colleges and universities. And the whole schema, including the notion of a business plan as the formal way to teach how to start a business in a college classroom, is geared to 20-year-olds.

Much of our mythology is that unicorn companies are started by people, like Mark Zuckerberg, who are in their 20s. But the reality is, the vast majority of people who start businesses are middle-career people who have been surprised by the fact that they actually had an idea, and their idea was good enough to build a business around.

Another thing wrong with how we write about entrepreneurship, how it’s taught, is that somehow people set out to be entrepreneurs as if they set out to be a dentist or an accountant. The vast majority of entrepreneurs were really amazed to find out that they became an entrepreneur. In my case, I was a professor at Johns Hopkins for 15 years, and then one day my research sort of slapped me in the face. I said, “Holy smokes, if I want to really make this work and actually change the world, I can’t do it by writing an academic paper. I have to start a business.”

Knowledge at Wharton: How should we teach our kids about entrepreneurship?

Schramm: I don’t think [the current curriculum] can be tweaked. I think it should be abandoned. I think it should be overthrown. Because if you look empirically at where entrepreneurs come from, if they have formal training, it’s not in entrepreneurship. It’s in engineering or the STEM subjects, the technical subjects.

Many, many more entrepreneurs come out of MIT because it’s an engineering and a technical school. Same thing for Caltech. Caltech doesn’t even teach entrepreneurship. At MIT, there’s one professor in the business program there who teaches entrepreneurship. But it doesn’t matter because if they didn’t teach it at all, these schools would be producing many, many new businesses all the time.

Knowledge at Wharton: You said not much funding comes from venture capitalists or angel investors. How are entrepreneurs getting the money they need to execute their ideas?

Schramm: One reason people can become entrepreneurs at midlife is they turn to their own savings, their own assets, to friends and families for loans. By the time you’re 40, which is the average age at which people start businesses, you’ve settled your student debt. You’ve got a house. You’re likely to have a spouse who has a job, which is a huge protection if you start a new company because she or he has health insurance and other benefits. So, most companies are self-funded.

Knowledge at Wharton: In the book, you also talk about the incubator. But you think the incubator isn’t having the desired effect that a lot of people are hoping for. Can you explain?

Schramm: Again, empirically, very few companies come out of these incubators. I was trained as a labor economist. I’m in the middle of writing an essay about incubators, and the premise is that as we turn towards 3% and 4% GDP, and much lower rates of unemployment and much higher demand for well-trained people, no one is going to want to spend time in an incubator. They can get a job. And that’s a really important part of the drama of becoming an entrepreneur.

In the book, I make the case that the most effective place to learn how to be entrepreneurial is to go into a big company. That’s where you see innovation happen. More innovation happens in big companies than, for example, university laboratories. It’s also where you learn all the skills that make a business work, where you’re exposed to what scale looks like in a business. This is critical and this is experiential knowledge. You can’t teach scale in a classroom. It has to be felt. You have to see it, to experience it.

“The vast majority of people who start businesses are middle-career people.”

Knowledge at Wharton: You give real-world examples in the book, including the story about vacuum cleaning company Dyson.

Schramm: Yes, Dyson is a fantastic story. James Dyson was an industrial designer by background, and he came to the view that vacuum cleaners had been a technology that hadn’t moved very far. He was using a vacuum cleaner and noticed that the more you used it, and the dirtier the dustbin got, the less power it had. This became the question that triggered his search.

Dyson built over 1,000 prototypes. He quit his job. His wife was a teacher, and he lived off a much more modest income. His wife did all the money-earning in the family. When he began to push his product out, no companies in the United States or England wanted any part of it. They resisted it because they were making a lot of money on selling paper bags for conventional, old-fashioned vacuum cleaners. He had to take it to Japan. When it became successful in Japan, American and British companies tried to steal his design. He successfully defended against that.

The best part of Dyson’s story is he never had outside investors. [Dyson] never wanted to be a public company. It’s a huge company now. He’s like most entrepreneurs. If your idea clicks and you can make it work, and you haven’t taken your company public — that is, you still control it — you’re going to work there for the rest of your life. They become places where your own creativity works, and you can keep at it. You can keep designing. Really, it becomes your life.

It’s an important point, particularly for people who are in higher education. Students in universities are programmed to think that somehow people who work in the government or in nonprofit or NGOs are somehow more creative. They’re like the people who take art and art history and design in college, or people who write music. They’re a different breed, and they’re really geniuses.

The reality is that 95% of kids graduating from college this year are going to work in companies. They’re not not creative. Look at our huge economy. That all happens because of people who are creative and gifted in business and the invention of things that help other people. And [taking] these things to market [requires] very, very creative skills.

Knowledge at Wharton: Would you say that passion and determination are two of the great qualities that a lot of entrepreneurs have?

Schramm: Yes, it’s true. Students in college are told to follow your passion and start a company. But a lot of times, the passion doesn’t make any sense. I’ve seen students who are passionate about having a web app for frying pans. I sort of make fun of it in the book. I’ve judged business plan competitions at the college level and seen the same idea come up five times. Invent a sensor for a frying pan, and it tells you on your phone when your eggs are cooked. Kids are passionate about that, but it’s not an idea that’s ever going to work. They’re making the simplicity of cooking an egg into a complex technical project.

Passion really clicks when you’ve got an idea and it starts to have market feedback. The thrill of it is when other people are saying, “What you came up with is valuable.” What they’re telling you is, “You created something out of your head that makes my life easier, and I value it. So, I’ll give my money to you for your idea.”

Knowledge at Wharton: Is Yeti one of those great ideas?

Schramm: Yeti is a fabulous story. It’s one of those things where those guys didn’t expect to be entrepreneurs. The idea snuck up on then. They love to go fishing, and they fell through regular Igloo boxes because they’re not all that well made. One of the two brothers said, “You know, what we ought to do is make a cooler that’s so sturdy, you could stand on it.” Yeti cooler came out of something just that simple.

Knowledge at Wharton: What are 20-somethings missing to be able to build that great company?

Schramm: They’re missing experience. If you really want to be an entrepreneur and you don’t have a really great idea when you’re 21, getting out of school, don’t fret. Just wait. What shall you do while you wait? Go learn stuff. The stuff you should learn is easiest learned in big businesses because you’ll go out there and watch the innovation process work.

I consult at several companies, and what I’m watching all time is these companies constantly trying to renew themselves with new, better products. They spend a lot of money on research and development. Anybody who’s working in one of these companies can see the constant iterative change that’s taking place. You actually get innovation into your normal daily routine. I think that’s one of the greatest things that you can learn.

The book points to the fact that many new companies come out of old companies. The entrepreneurs see stuff, and two routes are the way this happens. The companies decide that they’re going to stick to their core competency and reject a brand new idea. They often say to people, “if you love this idea so much, go do it with our blessing. You can have the intellectual property.” In some cases, like IBM, they actually finance the startups. That was the case with Cerner, the health care data company.

“More innovation happens in big companies than, for example, university laboratories.”

The other thing is a much more difficult problem. That is, people who go to management and say, “This is the better way to do it,” or “Here’s a new application or a new market, and we have all the technology. If we configure it differently, we can own and capture this market.” MBA-type managers often say, “no, we’re going to stick to our core competency. We don’t know how to do that. It’s not our karma, it’s not our destiny.” And frustrated employees walk out. I interview people like that in the book. They say again and again, “I could have made all this money for my old employer, but they just wouldn’t listen to me.”

Knowledge at Wharton: Are companies wasting their human capital?

Schramm: It’s happening in every single company. You’ve got creative people in there. They might be running a machine. They might be on the production line. They could be any place in your company. They could be at the loading dock. They see things, and they could do things differently.

One of my favorite examples that’s not in the book is container boxes. It’s one of the great logistics revolutions that permits all of our prices for consumer goods to be much, much lower than they would have been. The boxes on the back of a trailer that come off the trailer, go right on a ship.

That was developed by a truck driver in Newark, N.J., In the old days, when trailer trucks were inflexible, they were fixed. Every time you went into a yard or a loading dock, people had to go on the dock, take the stuff off and reload it. He said, “You know, it’s a big steel box. Why don’t you just take the whole box, the whole back end of the truck, and put it on a ship?” This is a truck driver who saw that. He gave us the container revolution that made a world revolution in logistics.

Knowledge at Wharton: There are some very well-known companies like Microsoft and Apple and Facebook that didn’t have a plan at the outset. But now they are working through a variety of plans.

Schramm: That’s right. They went and tried it. We have this drive in our society. I think it’s in human nature. We don’t think that important things happen by chaotic means. If you look around, there are academics and experts who are struggling constantly to make the process of starting a business somehow logical, planned, orderly. These are sort of cookbook approaches.

You don’t have the right answer at the beginning. You never have the right answer. The market changes, technology changes. Your customers’ tastes are changing. Price points change. Your competitors change. You’ve got to be at this all the time. And a lot of times, that’s a hidden assumption in all the advice that’s given to entrepreneurs. If you crack it once, you can go right to the bank. You buy a jet. You’re over with. You do a public offering, and you’re rich and out by 30.

That’s not the case at all. You start a business, that’s only the beginning. And it’s the beginning of trying to make it big because growth is what’s important. Scale is the critical issue. The only way you can get there is constantly reacting to the market and all the signals it’s sending as to what it needs.

More From Knowledge at Wharton

For New Ideas, Think Inside (This) Box

Why a Partnership With OpenAI Benefits All Parties

How the pandemic accelerated the use of digital wallets, looking for more insights.

An official website of the United States government

The .gov means it’s official. Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

The site is secure. The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Publications
Account settings

Preview improvements coming to the PMC website in October 2024. Learn More or Try it out now .

Advanced Search
Journal List
J Oncol Pract
v.5(3); 2009 May

Strategic Planning: Why It Makes a Difference, and How to Do It

Short abstract.

Take action before problems reach crisis level. Strategic planning provides the structure to make day-to-day decisions that follow a larger vision, creates a direction for your practice, and maximizes your options for influencing your environment.

In oncology practice, where dramatic changes in reimbursement, technology, and the marketplace are just a few of the driving forces, “the future,” as Yogi Berra once said, “ain't what it used to be.” You may not be able to control the future, but strategic planning can create a direction for your practice and maximize your options for influencing your environment. Without it, your group will likely take action only to address immediate problems—a kind of crisis management approach. Strategic planning gives a practice the structure to make day-to-day decisions that follow a larger vision. This article presents the principles of strategic planning and outlines processes that your practice can adapt for short- or long-term planning. Strategic decision making is needed now more than ever for success in oncology practice.

A strategic plan is a tool that moves your practice toward a goal you have set. However, the definition of a strategic plan differs among different people, according to management consultant Teri Guidi, MBA. Guidi, chief executive officer of Oncology Management Consulting in Philadelphia, Pennsylvania, points out that although there is “no wrong idea” of what a strategic plan encompasses, people often do have misconceptions about it. “Some expect a strategic plan to be precise—it's not. Some think that it will take you forward forever—it won't. The biggest mistake people make is already having the end result in mind when they start.”

Of all the compelling reasons for your group to engage in strategic planning, perhaps the most critical is the speed at which forces in your environment are changing. “Physicians who try to keep practicing as they have in the last five years will be at a disadvantage,” says Dawn Holcombe, MBA, president of DGH Consulting in South Windsor, Connecticut. “The world swirling around oncologists is changing, and things they may not even know about will affect their practice.”

Engaging in the process of strategic planning has benefits in addition to the plan that comes out of it. For starters, having everyone in the same room fosters collegiality and creates a milieu in which you can focus on the direction of your practice, away from patient care and other duties. In addition, the process promotes the open and creative exchange of ideas, including putting disagreements on the table and working out effective solutions.

Short- and Long-Term Planning

Establishing the direction of your practice and identifying overarching goals provide the foundation for strategic planning, whether short or long term. In the field of health care today, a long-term plan will likely address no more than the next 3 years. After the strategic course is determined in the initial planning session, the group should meet at least annually. During these sessions, the partners should revisit the practice goals, update the environmental assessment with new data, and identify strategies needed to address issues that will arise within the next 12 months. For example, as the retirement of one or more partners approaches, a succession plan may need to be developed (as described in related article on page 136). Meanwhile, growth in patient volume may call for recruitment strategies for both physicians and midlevel providers.

Should You Use a Consultant?

Although use of an outside facilitator entails expense, turning to a strategic planning professional has a number of advantages that can contribute greatly to success, especially if you are undertaking strategic planning for the first time. A professional has done this before—many times—and thus can direct the process efficiently. He or she knows how to collect and analyze diverse information—opinions, practice data, and market reports, for example—and present it in a concise way, thereby saving you and your administrator many hours of work. As a moderator, a consultant knows how to keep a group moving forward, prevent it from getting bogged down in side issues, and objectively help participants resolve disagreements and develop effective solutions.

Perhaps the biggest value added by a consultant is guidance in assessing your environment. A well-qualified strategic planning consultant should have a thorough and current knowledge of national trends in medicine as well as detailed knowledge about oncology practice. Regarding your community, although your group naturally knows the local marketplace well, an outsider can provide a fresh and objective perspective; in fact, the familiarity of physicians with the local scene may create blind spots. Similarly, in assessing the strengths and limitations of a group, a consultant can contribute objectivity and should be able to provide national benchmarks for objective comparison.

In choosing a consultant, look for an individual or firm that will contribute valuable knowledge about national reimbursement, patient care, and business initiatives and trends affecting oncology practice. Many management consultant firms offer strategic planning services, but you will be best served by a consultant who has worked with physician practices and has significant recent experience with oncology practice.

Scheduling a Strategic Planning Session: Who, When, and Where

Just as there is no one way to define strategic planning, there is no single way of doing it. Examples and guidelines are presented here that you may draw on to implement a process that makes sense for your practice.

The decision makers of the practice should be the ones who conduct strategic planning. If your practice is so large that including all partners could make a meeting unwieldy, it might make sense to have a smaller group, such as the executive board, do the planning. In addition to shareholders, you may want physician associates and key managers to participate. Inclusion of individuals who are not partners, at least for some parts of the meeting, may also have advantages. This can foster buy-in to the strategic direction, thereby contributing to the success of the resulting action plan. The oncology group at the Toledo Clinic, a large multispecialty center in Toledo, Ohio, found it beneficial to include the executive director of the clinic. By participating, the director gained valuable insight into the special administrative and practice needs of oncology.

Setting aside at least one day for strategic planning is recommended, especially if this is the first time your group has undertaken it. Distribute an agenda ahead of time, and use a moderator to keep the meeting on track. The location should be comfortable and private. The participants must be able to focus solely on strategic planning, without interruption, so arrange to have patient-related calls covered. Members of the Toledo Clinic used a consultant to guide them through strategic planning, and the consultant facilitated a one-day retreat at a country club. The meeting began around 9 am , after physician rounds, and the nurse practitioners of the group provided patient coverage. Other oncology groups may have conference space available in their office. A half-day meeting can be adequate for groups that have been doing strategic planning for many years.

Starting Point: Mission and Values

Developing a mission statement for your practice—a statement of its basic purpose—is the first step of strategic planning and provides the foundation for the entire process. You may think that putting your mission in writing is a bureaucratic waste of time, but in fact, determining how to articulate your mission is a productive experience. It sets the stage for later prioritization, and the process compels the shareholders to reflect on and express the purpose of the practice. Is providing high-quality care to patients with cancer your entire mission? What about research? Does your practice have a mission to serve the community through education? Answering questions such as these helps spell out the core mission of the group.

Once you succinctly define the mission of your organization, you should develop value statements expressing your core beliefs regarding issues such as patient care, interaction with the community, and how members of the practice work together. In the framework of a traditional strategic plan, the mission statement is concisely expressed in not more than one or two sentences, with value statements articulated separately. However, some organizations combine the mission and values into a narrative of one or more paragraphs. The format used is inconsequential; most important is that your group express the enduring elements of your practice, which will form the foundation on which the practice direction and strategies are expounded.

For a practice that is hospital based or part of a larger organization, the mission and values of the group should be consistent with those of the larger organization. Your group may want to state its own distinct mission or simply adopt that of the larger organization, as did the group of nine oncologists affiliated with the Toledo Clinic. “In practices like ours, which are within a larger organization, it's important to support the larger organization's mission,” says Peggy Barton, group manager. “It could lead to confusion if the broad organization and the practice are going in different directions.”

Vision: Where Do You Want to Go?

With the mission and values defined, the next step for the group is determining what kind of practice you want in the future. Again, the words of Yogi Berra apply: “If you don't know where you're going, you'll wind up somewhere else.” A vision statement—whether just a few words or a longer document—creates the desired image of the future state of your practice. Do you want to be recognized for treatment of a certain type of cancer? Is your vision to be the leader in clinical research in your state? Do you want to grow larger and have a network of practice sites? The vision of the group must complement your practice environment, so you may find that your review of internal and external information (described in SWOT Analysis) leads you to revise your vision statement to some extent as you continue planning strategically.

The vision statement for your group should be painted in broad strokes, not in detail, and it should represent the end point, not the strategy for achieving it. For example, your vision may be to provide multidisciplinary services to your community, but your vision statement would not include a specific strategy, such as merging with a certain radiology group or recruiting two physicians. When developing a vision statement, an atmosphere of openness should prevail to encourage creativity and thinking beyond current boundaries.

As in all stages of strategic planning, disagreements may surface. “Different opinions about the direction of a practice are very healthy,” says Guidi. “The ideas might be in conflict, but getting them out on the table helps [you] to see what is really important.”

Barton agrees. “One purpose of the strategic planning meeting was to get everyone in the room at the same time to identify where we agree and disagree and to reach compromise. The process encouraged input from everyone, and the group made some important decisions that have helped them over the past year.”

SWOT Analysis

The SWOT analysis—an assessment of the strengths, weaknesses, opportunities, and threats of your practice—is a staple of strategic planning. This analysis uses a mix of quantitative and qualitative information, most of which should be gathered and analyzed before the planning meeting. The process for gathering information and performing a SWOT analysis varies greatly, and there is no single correct method. The size of the group, the frequency of strategic planning meetings, and how fast changes are taking place both nationally and locally are all significant factors affecting the process.

Internal Assessment: Strengths and Weaknesses

In identifying internal strengths and weaknesses, include hard data such as the number of new consults, cost of drugs per full-time-equivalent physician, and financial reports. It is useful to benchmark aspects of the quality and efficiency of the practice against data on other oncology practices (Sources for Benchmarking Data provides references for locating this information).

If possible, investigate the perceptions of individuals outside the practice—patients, hospital administrators, and referring physicians, for example. A consultant naturally has an advantage in gathering candid assessments from such individuals, unless an anonymous survey is used. How others view the practice can be critical to performing an accurate SWOT analysis, as demonstrated in an experience reported by consultant Guidi. In one practice that had rather long wait times, the physicians believed that the patients did not mind, because “they know that when it's their turn, they'll get just as much attention as the patient before.” But the patients interviewed by Guidi cited long wait times as a top complaint and said they would mention it to others considering the practice for treatment.

Gather qualitative information and opinions from physicians and staff. What do they see as the top issues facing the practice, and what do they consider to be the strengths and weaknesses of the practice? These perspectives can be provided during the meeting, but it is useful to collect information ahead of time, so a larger group can be polled, and anonymity can be assured. Holcombe distributes a questionnaire to solicit information from each physician and also interviews key individuals. Her summary is then reviewed and discussed during the strategic planning retreat.

Sources for Benchmarking Data

ASCO Quality Oncology Practice Initiative (QOPI). http://qopi.asco.org
Medical Group Management Association: Performance and practices of successful medical groups. www.mgma.com/surveys or call 877-275-6462
American College of Physicians: Practice management check up: Examining the business health of your practice. www.acponline.org/pmc/new_checkup.htm
Akscin J, Barr TR, Towle EL: Benchmarking practice operations: Results from a survey of office-based oncology practices. J Oncol Pract 3:9-12, 2007
Akscin J, Barr TR, Towle EL: Key practice indicators in office-based oncology practices: 2007 report on 2006 data. J Oncol Pract 3:200-203, 2007
Barr TR, Towle EL, Jordan W: The 2007 National Practice Benchmark: Results of a national survey of oncology practices. J Oncol Pract 4:178-183, 2008

Oncology Associates in Cedar Rapids, Iowa, uses its face-to-face planning meeting to share personal perspectives about the practice. The group is small—currently five oncologists—and has been doing strategic planning for many years. SWOT data for analysis is gathered ahead of time, but at the beginning of the meeting, each physician discusses how he feels about his own practice, including his workload, his satisfaction with the schedule, and other aspects of practice. “With everyone in the room, they all hear each other's perspective, which helps later on when we are talking about the practice as a whole and making decisions about issues such as expanding services or recruiting a new provider,” says Carole Dzingle, practice manager.

A third method is used at the Mark H. Zangmeister Center in Columbus, Ohio. The executive board of the 16-oncologist practice holds an annual strategic planning session. Glenn Balasky, executive director, obtains input from six or seven staff managers and works with the managing partner to complete a SWOT analysis that is presented at the meeting.

External Assessment: Opportunities and Threats

Data about the marketplace of the practice, such as demographics, economic trends, referral patterns, and competition, should be analyzed in light of whether they represent threats or opportunities. In addition to the local picture, the broader environment, including the regional health care system and approaching changes in reimbursement and regulation, should also be assessed. Although the physicians and staff in some groups stay abreast of local, regional, and national trends, a consultant knowledgeable about oncology market forces is often needed to provide an analysis of the environment. The Toledo Clinic found the report on the national picture prepared by the consultant significantly helpful.

Some groups work to keep up with trends on their own through active involvement in state and national oncology societies. The physicians of Oncology Associates are active in ASCO as well as in the Iowa Oncology Society, and the staff managers are involved with organizations such as the Association of Community Cancer Centers and the Medical Group Management Association. Physicians and staff leaders at the Zangmeister Center are involved with the Community Oncology Alliance and other oncology organizations at both national and state levels, and each staff manager actively participates in a professional organization. Monitoring the environment takes energy and commitment, but it produces advantages, according to Balasky. “It pays off in the raw market intelligence we get, and we stay in touch continually rather than having a once-a-year report.”

Developing Strategies

Once a clear picture of the practice and its environment has been established, the group should develop strategic options for moving the practice from its current status toward the desired future position. Be alert to the pitfalls of discussing operational issues and trying to decide on tactics instead of identifying strategies. For example, a strategic decision may be to go forward with implementing an electronic medical record system, but the strategic planning meeting is not the place to discuss available systems, preferred data fields, or training required. Managing these kinds of details will be the responsibility of individuals assigned in the action plan.

In some cases, the SWOT analysis can reveal weaknesses that call for implementing one or more strategic priorities before pursuing others. Practices sometimes realize they need to create the infrastructure necessary to reach their goals. For example, they may not have systems in place to provide data that will be needed to remain competitive.

In other cases, the group may come up with many strategies that need to be prioritized during the meeting or at a subsequent meeting. To narrow down big lists, Guidi describes two approaches that work well when groups meet more than once. One mechanism she uses is to put all the strategies in writing after the first meeting; she then asks individuals via e-mail to score the importance, difficulty, and cost of each strategy on a scale of one to five. In another approach, after one or two brainstorming sessions, Guidi boils down the information to three or four overarching goals for additional discussion by the group. Guidi finds that several short strategic planning sessions are often more productive than is a full- or half-day retreat, and in the end, the shorter sessions call for about the same total hours of physician time.

More Information About Strategic Planning

Soper WD: The meeting you won't want to miss: Annual strategic planning. www.aafp.org/fpm/20010200/28them.html
Holcombe D: Strategic planning and retreats for practices. www.dghconsulting.net/images/holcombe_strategic_planning_0908.pdf
McNamara C: Strategic planning (in nonprofit or for-profit organizations). www.managementhelp.org/plan_dec/str_plan/str_plan.htm

Action Plan

The outcome of developing strategies should be the prioritization of a few (ie, two to five) achievable strategies and creation of related action plans. Many strategic plans have faltered or failed because they were too ambitious or too complex. Do not try to take advantage of every opportunity or address every limitation identified in your SWOT analysis. Some goals may be important but can be scheduled for implementation in a year or two. By having an annual strategic planning meeting to update your plan, these goals will stay in sight and can be addressed successfully.

Create an action plan to address each strategic priority within the next 12 months. Spell out steps to be taken, who will have the lead responsibility, and the milestones that will show progress. For example, a strategy of adding midlevel providers might have a work plan with dates and assignments for finalizing a position description, creating a compensation package, recruiting, hiring, and conducting orientation. A strategy of building a new facility or merging with another practice will ultimately involve complex actions, but initially, the work plan might specify only the steps involved in finding and retaining a consultant to present a business plan by a certain date. Make sure the action plan is in a format that can and will be used by those with responsibility for implementation.

Communicate the strategic goals and action plan to all clinical and administrative staff. Everyone in the practice should know the goals and clearly understand his or her role in implementing strategies to achieve them. Effective communication and cultivation of a team culture are especially important if your strategic planning results in changes or begins moving the practice in a new direction.

Keep in mind that a strategic plan does not have to involve a lot of paperwork or a big report. The mission, values, and vision of the practice should be documented, and the group should revisit them at the beginning of subsequent strategic planning meetings to validate them or make revisions if appropriate. A summary of the SWOT analysis should be included, but this may be brief, with the data that went into it provided as appendices or even stored elsewhere while remaining easily available for updating. The action plan must be available for tracking progress. Your strategic plan must be a living document—a roadmap that guides what happens in your practice on a day-to-day basis—not a report that sits on a shelf.

SUGGESTED TOPICS
The Magazine
Newsletters
Managing Yourself
Managing Teams
Work-life Balance
The Big Idea
Data & Visuals
Reading Lists
Case Selections
HBR Learning
Topic Feeds
Account Settings
Email Preferences

Succession Planning: What the Research Says

Eben Harrell

While every organization inevitably must replace its CEO, most firms are ill-prepared for succession. In this article, HBR senior editor Eben Harrell reviews the most salient studies of succession planning and offers context from the experts. Some key takeaways:

Though turnover among CEOs is rising, only 54% of boards are grooming a specific successor, and 39% have no viable internal candidate. The consequences of poor planning are serious: Companies that scramble to find replacements forgo an average of $1.8 billion in shareholder value.
Grooming leaders takes years but pays off: Chief executives who have gone through executive development at “CEO factories” like GE deliver superior operating performance. But directors need to get more involved. The majority don’t understand the capabilities of the executives below the CEO, and only about a quarter participate in their evaluations.
The trend toward external hires is growing, and outsiders command higher median pay. But studies suggest that on the whole, insider CEOs deliver better returns.
More researchers are studying the traits of the ideal CEO. So far they’re finding that younger CEOs outperform, that execution matters more than interpersonal strengths, and that a military background makes leaders more honest, but this line of inquiry is in its early days, and the jury is still out.

Most organizations aren’t prepared.

All CEOs will inevitably leave office, yet research has long shown that most organizations are ill-prepared to replace them. In this article, we review the most salient studies of succession planning and offer context from experts on the process of picking new leaders for organizations.

Eben Harrell is a senior editor at Harvard Business Review. EbenHarrell

Partner Center

How to Write a Business Plan: Your Step-by-Step Guide

So, you’ve got an idea and you want to start a business —great! Before you do anything else, like seek funding or build out a team, you'll need to know how to write a business plan. This plan will serve as the foundation of your company while also giving investors and future employees a clear idea of your purpose.

Below, Lauren Cobello, Founder and CEO of Leverage with Media PR , gives her best advice on how to make a business plan for your company.

Build your dream business with the help of a high-paying job—browse open jobs on The Muse »

What is a business plan, and when do you need one?

According to Cobello, a business plan is a document that contains the mission of the business and a brief overview of it, as well as the objectives, strategies, and financial plans of the founder. A business plan comes into play very early on in the process of starting a company—more or less before you do anything else.

“You should start a company with a business plan in mind—especially if you plan to get funding for the company,” Cobello says. “You’re going to need it.”

Whether that funding comes from a loan, an investor, or crowdsourcing, a business plan is imperative to secure the capital, says the U.S. Small Business Administration . Anyone who’s considering giving you money is going to want to review your business plan before doing so. That means before you head into any meeting, make sure you have physical copies of your business plan to share.

Different types of business plans

The four main types of business plans are:

Startup Business Plans

Internal business plans, strategic business plans, one-page business plans.

Let's break down each one:

If you're wondering how to write a business plan for a startup, Cobello has advice for you. Startup business plans are the most common type, she says, and they are a critical tool for new business ventures that want funding. A startup is defined as a company that’s in its first stages of operations, founded by an entrepreneur who has a product or service idea.

Most startups begin with very little money, so they need a strong business plan to convince family, friends, banks, and/or venture capitalists to invest in the new company.

Internal business plans “are for internal use only,” says Cobello. This kind of document is not public-facing, only company-facing, and it contains an outline of the company’s business strategy, financial goals and budgets, and performance data.

Internal business plans aren’t used to secure funding, but rather to set goals and get everyone working there tracking towards them.

As the name implies, strategic business plans are geared more towards strategy and they include an assessment of the current business landscape, notes Jérôme Côté, a Business Advisor at BDC Advisory Services .

Unlike a traditional business plan, Cobello adds, strategic plans include a SWOT analysis (which stands for strengths, weaknesses, opportunities, and threats) and an in-depth action plan for the next six to 12 months. Strategic plans are action-based and take into account the state of the company and the industry in which it exists.

Although a typical business plan falls between 15 to 30 pages, some companies opt for the much shorter One-Page Business Plan. A one-page business plan is a simplified version of the larger business plan, and it focuses on the problem your product or service is solving, the solution (your product), and your business model (how you’ll make money).

A one-page plan is hyper-direct and easy to read, making it an effective tool for businesses of all sizes, at any stage.

How to create a business plan in 7 steps

Every business plan is different, and the steps you take to complete yours will depend on what type and format you choose. That said, if you need a place to start and appreciate a roadmap, here’s what Cobello recommends:

1. Conduct your research

Before writing your business plan, you’ll want to do a thorough investigation of what’s out there. Who will be the competitors for your product or service? Who is included in the target market? What industry trends are you capitalizing on, or rebuking? You want to figure out where you sit in the market and what your company’s value propositions are. What makes you different—and better?

2. Define your purpose for the business plan

The purpose of your business plan will determine which kind of plan you choose to create. Are you trying to drum up funding, or get the company employees focused on specific goals? (For the former, you’d want a startup business plan, while an internal plan would satisfy the latter.) Also, consider your audience. An investment firm that sees hundreds of potential business plans a day may prefer to see a one-pager upfront and, if they’re interested, a longer plan later.

3. Write your company description

Every business plan needs a company description—aka a summary of the company’s purpose, what they do/offer, and what makes it unique. Company descriptions should be clear and concise, avoiding the use of jargon, Cobello says. Ideally, descriptions should be a few paragraphs at most.

4. Explain and show how the company will make money

A business plan should be centered around the company’s goals, and it should clearly explain how the company will generate revenue. To do this, Cobello recommends using actual numbers and details, as opposed to just projections.

For instance, if the company is already making money, show how much and at what cost (e.g. what was the net profit). If it hasn’t generated revenue yet, outline the plan for how it will—including what the product/service will cost to produce and how much it will cost the consumer.

5. Outline your marketing strategy

How will you promote the business? Through what channels will you be promoting it? How are you going to reach and appeal to your target market? The more specific and thorough you can be with your plans here, the better, Cobello says.

6. Explain how you’ll spend your funding

What will you do with the money you raise? What are the first steps you plan to take? As a founder, you want to instill confidence in your investors and show them that the instant you receive their money, you’ll be taking smart actions that grow the company.

7. Include supporting documents

Creating a business plan is in some ways akin to building a legal case, but for your business. “You want to tell a story, and to be as thorough as possible, while keeping your plan succinct, clear, interesting, and visually appealing,” Cobello says. “Supporting documents could include financial projects, a competitive analysis of the market you’re entering into, and even any licenses, patents, or permits you’ve secured.”

A business plan is an individualized document—it’s ultimately up to you what information to include and what story you tell. But above all, Cobello says, your business plan should have a clear focus and goal in mind, because everything else will build off this cornerstone.

“Many people don’t realize how important business plans are for the health of their company,” she says. “Set aside time to make this a priority for your business, and make sure to keep it updated as you grow.”

Who's the new dean of the University of Utah business school?

By marjorie cortez, deseret news | posted - july 1, 2024 at 7:59 p.m., dr. kurt dirks is the new david eccles school of business at the university of utah. dirks, formerly a professor at at washington university in st. louis, has worked extensively on values-based leadership. (university of utah).

Estimated read time: 3-4 minutes

SALT LAKE CITY — Kurt Dirks, a first-generation college student whose scholarly pursuits have focused on trust and values-based leadership, has joined the University of Utah's School of Business as its dean.

Dirks, the former Bank of American Professor of Leadership at the Olin Business School at Washington University in St. Louis, succeeds Dean Rachel Hayes, appointed in 2021.

In addition to teaching at the private, nonprofit Washington University, Dirks served in multiple senior leadership roles including stints as acting provost, senior adviser to the chancellor for leadership, vice chancellor of international affairs and at the business school as senior associate dean and interim dean.

Dirks earned his bachelor's and master's degrees from Iowa State University, as well as a doctorate from the University of Minnesota; Dirks is a strong advocate for the role public universities play in offering transformative education for students who seek opportunity.

"I'm excited to get to work helping students of all backgrounds reach their full potential," Dirks said in a statement.

" President (Taylor) Randall has a bold vision for making the U. a top-10 public university with unsurpassed societal impact, and I am committed to having the Eccles School play a key role in achieving that."

Research on trust

Dirks' research on trust has been published in leading scholarly outlets such as the Journal of Applied Psychology, the Academy of Management Journal, Organization Science and the Academy of Management Review. It has also been covered in popular media such as the New York Times, the Washington Post, Los Angeles Times, Business Week, Fortune and CNN.

His work has been cited nearly 27,000 times, according to Google Scholar, which is among the top 2% of scholars in the field.

Dirks has also excelled in the classroom, evidenced by multiple teaching awards from MBA students.

According to a university press release, Dirks prizes his work on student success, helping them to grow as leaders, who conduct themselves according to their values.

While at Washington University, he founded Bauer Leaders Academy for the university and Bauer Leadership Center at the business school, and he led the McDonnell International Scholars Academy.

Throughout his career, Dirks has placed significant focus on values-based leadership, which in turn has spurred work to boost access and success for all students. Across his roles, he has helped raise more than $30 million in gifts to support students and faculty research.

As dean of the Eccles School, Dirks will oversee multiple high-ranking programs, with eight ranked among the top 10 among public universities in the United States from various publications, such as TFE Times (formerly known as The Financial Engineer), Executive Education, Financial Times, U.S. News & World Report and Princeton Review.

President Randall a former dean

While business school dean is a high-profile position at any university, it is noteworthy that Taylor Randall held the post before he was appointed president of the university in 2021. Like Dirks, Randall was honored for his teaching in the business school, winning the career achievement Brady Superior Teaching Award.

The David Eccles School of Business endeavors to provide a world-class business education with a unique, entrepreneurial focus on real-world scenarios where students put what they learn into practice long before graduation.

The David Eccles School of Business was founded in 1917 and educates more than 6,000 students annually. It offers nine undergraduate majors, four MBAs, eight graduate programs in business, doctorate programs in five areas, and executive education curricula. The school is also home to more than 20 institutes, centers and initiatives.

Most recent Education stories

Utah's largest school district could split through interlocal agreements, us court allows part of biden student debt relief plan to resume, how will louisiana's new 10 commandments classroom requirement be funded and enforced, related topics.

Row, row, row your concrete: BYU hosts concrete canoe championships

Utah Tech receives NASA grant for water management solutions project

STAY IN THE KNOW

KSL Weather Forecast

Election 2024
Entertainment
Newsletters
Photography
AP Investigations
AP Buyline Personal Finance
AP Buyline Shopping
Press Releases
Israel-Hamas War
Russia-Ukraine War
Global elections
Asia Pacific
Latin America
Middle East
Election Results
Delegate Tracker
AP & Elections
Auto Racing
2024 Paris Olympic Games
Movie reviews
Book reviews
Financial Markets
Business Highlights
Financial wellness
Artificial Intelligence
Social Media

A scientist, a leftist and a former Mexico City mayor. Who is Claudia Sheinbaum?

Who is Claudia Sheinbaum, Mexico’s future first female president?

Ruling party presidential candidate Claudia Sheinbaum greets supporters after the National Electoral Institute announced she held an irreversible lead in the election in Mexico City, early Monday, June 3, 2024. (AP Photo/Eduardo Verdugo)

Copy Link copied

Presidential candidate Claudia Sheinbaum arrives at her closing campaign rally at the Zocalo in Mexico City, Wednesday, May 29, 2024. (AP Photo/Eduardo Verdugo)

A supporter of presidential candidate Claudia Sheinbaum takes a selfie with a campaign poster during Sheinbaum’s closing campaign rally at the Zocalo in Mexico City, Wednesday, May 29, 2024. (AP Photo/Matias Delacroix)

Ruling party presidential candidate Claudia Sheinbaum leaves the polling station where she voted during general elections in Mexico City, Sunday, June 2, 2024. (AP Photo/Eduardo Verdugo)

Ruling party presidential candidate Claudia Sheinbaum shows her ID as she leaves a polling station where she voted during general elections in Mexico City, Sunday, June 2, 2024. (AP Photo/Marco Ugarte)

MEXICO CITY (AP) — Claudia Sheinbaum, who will be Mexico’s first woman leader in the nation’s more than 200 years of independence, captured the presidency by promising continuity.

The 61-year-old former Mexico City mayor and lifelong leftist ran a disciplined campaign capitalizing on her predecessor’s popularity before emerging victorious in Sunday’s vote, according to an official quick count. But with her victory now in hand, Mexicans will look to see how Sheinbaum, a very different personality from mentor and current President Andrés Manuel López Obrador , will assert herself.

While she hewed close to López Obrador politically and shares many of his ideas about the government’s role in addressing inequality, she is viewed as less combative and more data driven.

Sheinbaum’s background is in science. She has a Ph.D. in energy engineering. Her brother is a physicist. In a 2023 interview with The Associated Press, Sheinbaum said, “I believe in science.”

Observers say that grounding showed itself in Sheinbaum’s actions as mayor during the COVID-19 pandemic, when her city of some 9 million people took a different approach from what López Obrador espoused at the national level.

While the federal government was downplaying the importance of coronavirus testing, Mexico City expanded its testing regimen. Sheinbaum set limits on businesses’ hours and capacity when the virus was rapidly spreading, even though López Obrador wanted to avoid any measures that would hurt the economy. And she publicly wore protective masks and urged social distancing while the president was still lunging into crowds.

Over 50 countries go to the polls in 2024

The year will test even the most robust democracies. Read more on what’s to come here .
Take a look at the 25 places where a change in leadership could resonate around the world.
Keep track of the latest AP elections coverage from around the world here.

Mexico’s persistently high levels of violence will be one of her most immediate challenges after she takes office Oct. 1. On the campaign trail she said little more than that she would expand the quasi-military National Guard created by López Obrador and continue his strategy of targeting social ills that make so many young Mexicans easy targets for cartel recruitment.

“Let it be clear, it doesn’t mean an iron fist, wars or authoritarianism,” Sheinbaum said of her approach to tackling criminal gangs, during her final campaign event. “We will promote a strategy of addressing the causes and continue moving toward zero impunity.”

Sheinbaum has praised López Obrador profusely and said little that the president hasn’t said himself. She blamed neoliberal economic policies for condemning millions to poverty, promised a strong welfare state and praised Mexico’s large state-owned oil company, Pemex, while also promising to emphasize clean energy.

“For me, being from the left has to do with that, with guaranteeing the minimum rights to all residents,” Sheinbaum told the AP last year.

In contrast to López Obrador, who seemed to relish his highly public battles with other branches of the government and also the news media, Sheinbaum is expected by many observers to be less combative or at least more selective in picking her fights.

“It appears she’s going to go in a different direction,” said Ivonne Acuña Murillo, a political scientist at Iberoamerican University. “I don’t know how much.”

Sheinbaum will also be the first person from a Jewish background to lead the overwhelmingly Catholic country.

Follow the AP’s coverage of global elections at: https://apnews.com/hub/global-elections/

COMMENTS

Writing a Successful Business Plan
The business plan should clearly and concisely define the mission, val-ues, strategy, measurable objectives, and key results the owner expects. It is important to set aside enough time to formulate the plan. Experts recommend starting the planning pro-cess at least 6 months before initiating a new business.
The road to entrepreneurial success: business plans, lean startup, or
Typically, business planning has been analyzed as the single act of writing a business plan (e.g. Honig and Karlsson, 2004).However, business planning is made up of a variety of activities (Gruber, 2007), which entrepreneurs may utilize as a whole, or simply choose parts of the business planning process.It is worth noting that these specific activities are not mutually exclusive with lean ...
Writing a Successful Business Plan: An Overview
Abstract. In creating and building a business, the entrepreneur assumes all the responsibilities for development and management, as well as the risks and rewards. Many businesses do not survive because business owners fail to develop an effective plan. The business plan focuses on major areas of concern and their contribution to the success of ...
Research: Writing a Business Plan Makes Your Startup More Likely to Succeed
A study by Francis J. Greene and Christian Hopp shows that entrepreneurs who write formal plans are 16% more likely to achieve viability than non-planners. The article explains the context and factors of entrepreneurial planning and provides a summary of the research.
Importance And Contents Of Business Plan: A Case-Based Approach
The article is devoted to the study of theoretical and methodological foundations of business planning of entrepreneurial projects. The purpose of the article is to deepen and generalize the ...
The Constructs of a Business Model Redefined: A Half-Century Journey
The article proceeds as follows. The "Literature Review" section provides a synthesized overview of the available literature, focusing on the emergence and popularity of the business model concept in academic literature as well as on business model definition. The "Method" section describes the methodology of research.
Business plans for new or small businesses: paving the path to success
A business plan is an effective tool used by businesses to organize these goals and objectives into a coherent format. It can be defined as operating a company on paper. No matter the size or stage of development, companies use business plans to improve internal operations and to describe and market the business to potential outside financiers ...
(PDF) Management and business plan
management and its main functions, with the aim of contextualizing the use of business plans. One of the most common definitions of management is the following: Management is the process of ...
The Road to Entrepreneurial Success Business Plans Lean Startup or Both
startup and business planning represents a false dichotomy. Practical implications - These findings suggest that entrepreneurs should engage in some lean startup activities and still write a business plan. Originality/value - This article offers the first quantitative, empirical comparison of lean startup activities and business planning.
Writing a successful business plan: an overview
Abstract. In creating and building a business, the entrepreneur assumes all the responsibilities for development and management, as well as the risks and rewards. Many businesses do not survive because business owners fail to develop an effective plan. The business plan focuses on major areas of concern and their contribution to the success of ...
The Value of Business Plans for New Ventures: Company and ...
Writing business plans is often the first step for entrepreneurs in developing new venture ideas. Trade press publications support their value and include templates or even software for crafting the business plan. However, the academic literature supporting the value of a business plan is limited, particularly on how the plan directly affects entrepreneurs and their standard of living.
Business Information Guide
The recommendations and resources on this page complement the Whitman School of Management's Nuts and Bolts of Great Business Plans, which was written by Department of Entrepreneurship and Emerging Enterprises.The sections on this page correspond to the Nuts and Bolts of Great Business Plan sections.. Nearly every part of your business plan will require some type of research.
Full article: Does writing a business plan still matter for searching
Similarly, entrepreneur no. 1 highlighted that investors who ask for a business plan should be considered with caution: "An investor who requires a business plan is not a sophisticated investor - he does not understand the dynamics of a technology start-up. The best investors I know did never require a business plan".
The Business Plan and Formation of the Enterprise
Abstract. The future of an enterprise depends on sound prior planning; business planning contains the intellectual anticipation of the future of an enterprise, forming the nucleus for the later development of the enterprise. In advance of working out a comprehensive business plan, a short feasibility study is often carried out in order to ...
How to Write an Effective Business Plan in Medicine
Therefore, a business plan is a standardized tool that can help to align the vision of a gastroenterologist with the hospital's mission to demonstrate investment value to hospital administrators. , , A business plan serves 2 main goals: (1) it allows a gastroenterologist to thoroughly analyze the various processes that contribute to an ...
PDF The Business Plan
ABSTRACT. The business plan is the product of a strategic thinking or planning process. The strategic direction developed in that process can then be communicated in the form of a business plan to lenders, potential investors and associates within your company. The development of a strategic direction is a critical step for your company.
Article Business Strategies and Competitive Advantage: The Role of
Business strategies are important for directing a company's goals to achieve virtuoso performance [11]. Business strategies focuses on improving the competitive position of a company's products and services in a particular industry or market segment served by the company [49]. Through a competitive position, the company's products can ...
PDF The Elements of a Business Plan: First Steps for New Entrepreneurs
Provide projections for two to four years in the future, including: 1. Forecasted income (monthly for first two years, then by quarter or year thereafter), 2. Forecasted cash flows by month (monthly for first two years, then by quarter or year thereafter), 3. Forecasted balance sheet for all years (year-end), and. 4.
The Importance Of A Good Business Plan
The business plan is the product of a strategic thinking or planning process. The strategic direction developed in that process can then be communicated in the form of a business plan to lenders ...
Perspectives on Learning and Business Plans—More in Common Than Meets
The self-regulated learner would argue that you would not, and although a learning plan does not guarantee success, it can increase the likelihood of achieving your learning goals. 4,-6 This article explores the components of structured learning plans, illustrating that they have more in common with business plans than first meets the eye ...
Why Creating a Business Plan Is a 'Waste of Time'
Knowledge at Wharton Staff. 00:00. 00:00. Economist and author Carl Schramm discusses his new book, 'Burn the Business Plan.'. A finely crafted, tightly defined, highly detailed business plan ...
Strategic Planning: Why It Makes a Difference, and How to Do It
Strategic planning gives a practice the structure to make day-to-day decisions that follow a larger vision. This article presents the principles of strategic planning and outlines processes that your practice can adapt for short- or long-term planning. Strategic decision making is needed now more than ever for success in oncology practice.
Succession Planning: What the Research Says
A version of this article appeared in the December 2016 issue (pp.70-74) of Harvard Business Review. Read more on Succession planning or related topics Leadership transitions and Boards
How to Write a Business Plan: Step-by-Step Guide
A one-page business plan is a simplified version of the larger business plan, and it focuses on the problem your product or service is solving, the solution (your product), and your business model (how you'll make money). A one-page plan is hyper-direct and easy to read, making it an effective tool for businesses of all sizes, at any stage ...
Who's the new dean of the University of Utah business school?
Dr. Kurt Dirks is the new David Eccles School of Business at the University of Utah. Dirks, formerly a professor at at Washington University in St. Louis, has worked extensively on values-based ...
Mexico's next president: Who is lifelong leftist Claudia Sheinbaum
Mexico's persistently high levels of violence will be one of her most immediate challenges after she takes office Oct. 1. On the campaign trail she said little more than that she would expand the quasi-military National Guard created by López Obrador and continue his strategy of targeting social ills that make so many young Mexicans easy targets for cartel recruitment.