Your good friends, Wilber and Orville, have just invented a new type of flying m
ID: 465140 • Letter: Y
Question
Your good friends, Wilber and Orville, have just invented a new type of flying machine and want to start a business to manufacture the new invention. They need several million dollars to get the production operation going. They have read several articles that suggest only a few businesses actually have or need a formal business plan. Explain why a formal business plan would be a good idea in their case (i.e., the benefits of a plan for them) Outline what they should include in the plan. Would some parts of the plan be more important than others?Explanation / Answer
As per my understanding, a formal business plan is an essential roadmap not only for starting a business but also for the growth of existing business. In the present case Wilber and Orville needs to first define their individual roles, responsibilities, authorities, delegation of power, size and structure of the organization, private firm or partnership unit or any other types of collaborations, role of the financers, other stakeholders etc. It is also essential for them to have information and knowledge about the business industry related to their product (flying machine), markets and competitors, what should be the sales strategy, what is the product life cycle, from where to get the funds and other resources required for production of their new type of flying machine etc. In short there are very many questions with very many answers and or options, alternatives courses of actions that needs pre- determinations and thus a formal business plan is a must. Although there may be many successful companies that started without a formal business plan but I am sure that a good formal business plan helps in obtaining financing (on best terms), strategic alliances (forming good supply chain), good workforce to achieve the objectives, defining vision and mission for the organization.
Business plan should be unique to the extend possible but must take care of worst scenario ( in case of failures related to environmental factors or economy downturns etc.). Business plan must include SCM and CRM strategies alongwith the targets to be achieved in the next two-three years. Contigency plans to overcome the teething problems, if any during the initial stages of operations. Normally formal business plan includes: Executive summary, Mission Statement, About the Company, Product Description, Marketing Plan, Operations, Financial Planning, SWOT and Competitors Analysis and a Timeline. In the present case it is important to have patent and exclusive rights for commercial exploitation of the invention made by Wilber and Orville. Product differentiation with added advantages of new flying machine may be highlighted in proper perspectives.
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