The Master Plan


Many people assume that a formal business plan is only for big time businesses. Wrong. A business plan is for anyone who wants to give their enterprise their best possible shot. It is where you detail out all the operational, marketing, and money matters of your business. It is, in essence, a road map. With it, you will better be able to reach your goal. Without it, you run the risk of spending precious time and money traveling in circles or unwittingly wandering into danger zones.

In response to the question, what a business plan is, follow the following”

  • A business plan is written by the home-based business owner with outside help as needed.
  • It is accurate and concise as a result of careful study.
  • It explains how the business will function in the marketplace.
  • It clearly depicts its operational characteristics.
  • It details how it will be financed.
  • It outlines how it will be managed.
  • It is the management and financial “blueprint” for startup and profitable operation.
  • It serves as a prospectus for potential investors and lenders.

A study for “why” of creating it, note:

  • The process of putting the business plan together, including the thought that you put in before writing it, forces you to take the objective, critical, unemotional look at your entire business proposal.
  • The finished written plan is an operational tool, which, when properly used, will help you manage your business and work toward its success.
  • The complete business plan is a means for communicating your ideas to others and provides the basis for financing your business.

While you are to be the author of the document, you shouldn’t hesitate to get professional help when it comes to areas outside your ken, such as accounting, insurance, capital requirements, operational forecasting, and tax and legal requirements. Finally, in response to the question, “When should Business Plan be used?” note:

  • To make crucial startup decisions
  • To reassure lenders and backers
  • To measure operational progress
  • To test planning assumptions
  • As a basis for adjusting forecasts
  • To anticipate ongoing capital and cash requirements
  • As the benchmark for good operational management

If you have been doing your research and homework all along, you probably have most of the raw material for the business plan, so it won’t be such an awesome task.

Business plans differ greatly, depending on the nature and scope of the enterprise. Some elements a person in a retail sales business would need in his or her business plan may be totally irrelevant for your service business. Similarly, business plans vary in length—from five or six pages or a virtual booklet; some are written in an engaging narrative style while others take another approach—just the facts. However, while business plans may differ in style, tone, length, and components, there is some common ground. Below is a list of items that should be in almost every business plan:

  • A summary of the nature of your business and its principal activity with a detailed description of the product(s) or service(s) you will offer.
  • A statement as to the form your business will take (sole proprietorship, partnership, incorporation) and how it will be managed and operated (with information on employees or subcontractors if applicable).
  • A discussion of any extra-ordinary (and potentially problematic) matters revolving around such things as space requirements, production processes, and operating procedures.
  • A discussion of major trends in your trade or profession.
  • A discussion of your competition and the basis on which you will compete.
  • A description of your target market that might include a profile of a typical customer or client.
  • A discussion of your plans for pricing, sales terms, and distribution.
  • A discussion of how you intend to advertise and promote your products or services.
  • A detailed statement of startup and operating costs for at least the first year.
  • A discussion of how your business will be financed.
  • Profit and loss and cash flow statements for at least the first year of business.

If this list has made a business plan seem all the more scary and arduous a task, don’t panic. There are books on the market that will guide you through the process.

A clean attractive business plan is a sine qua non if you will be applying for a loan or looking for investors. But even if the document is for your eyes only, you owe it to yourself to produce a professional-looking document. Since it is your road map, the neater it is the better it will serve you when you refer to it at various stages of your entrepreneurial journey.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, and my Lectures.

Innovation Defined


Innovation is the use of new knowledge to offer a new product or service that customers want. It is invention together with commercialization. It is a new way of doing things (termed invention by some) that is commercialized. The process of innovation cannot be separated from a firm’s strategic and competitive context. The new knowledge can be technological or market related. Technological knowledge is knowledge of components, linkages between components, methods, processes, and techniques that go into a product or service. Market knowledge is knowledge of distribution channels, product applications, and customer expectations, preferences, needs, and wants. The product or service is new in that its cost is lower, its attributes are improved, it now has new attributes, it never had before, or it never existed in that market before. Often the new product or service itself is called an innovation, reflecting the fact that it is the creation of new technological or market knowledge.

Innovation has also been defined as the adoption of ideas that are new to the organization. Generating good ideas or adopting a new one, in and of itself, is only a start. To be an innovation, an idea must be converted into a product or service that customers want. Coming up with the idea or prototype—invention—is one thing. Championing it, shepherding it, and nurturing it into a product or service that customers want is another. Innovation entails both invention and commercialization.

A distinction has also been made between technical and administrative innovation. Technical innovation is about improved products, services, or processes or completely new ones. This contrasts with administrative innovation, which pertains to organizational structure and administrative processes and may or may not affect technical innovation. Technical innovation may or may not require administrative innovation. A technical innovation can be a product or a process.

Product innovations are new products or services introduced to meet an external and market need whereas process innovations are new elements introduced into an organization’s production or service operations—input materials, task specifications, work and information flow mechanisms, and equipment used to produce a product or render a service.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact www.asifjmir.com, Line of Sight

Just about Technology Transfer


The type of technology transfer that takes place depends on which level of its value stock the firm is using to enter the new market. If the firm is exporting products as they are, then the knowledge that underpins these products is encoded in them. For example, If a German firm is exporting cars to China, knowledge of the car’s engines, transmission, electronic fuel injection, and cooling system, and the linkages between them, is already embedded in the car. So is knowledge of the manufacturing processes that were used to build the car. In either case, the technology transfer is said to be product embodies since the physical product itself is being transferred.

 

If a firm uses core products to enter the market, the results of the technology transfer are the same as those for exporting fully assembled products if all the firm does is sell the core components to the emerging economy. If it uses the core components to build products for the foreign market, the firm must also transfer the knowledge of how to link the components and manufacture the end product. In the automobile example, the German firm not only exports the drive trains for cars, it also transfers the manufacturing knowledge that is needed to produce the cars locally. The manufacturing knowledge is said to be process and people embodied. The process being transferred is in the form of equipment, flowcharts, blueprints, microcodes, software, routines, and the knowledge embedded in employees. It is more tacit than product-embodied knowledge. The transfer of such knowledge requires personal interaction between the transmitter and the receiver and relatively more absorptive and delivery capacities than the transfer of the more explicit product-embodies knowledge.

 

If the firm decides to transfer capabilities and the knowledge that underlines them, then the knowledge is a lot more people and process embodied than product embodies. It also has a much larger tacit component to it than the other forms of transfer. This suggests that most of the measures for improving the effectiveness of technology transfer apply. For example, prior to the transfer, employees of the receiver nation can be sent to the transmitter country to study at universities, or to work at research centers or related industries to better prepare for receiving the technology. Training sessions in which members from both nations explore their cultures can help diffuse some of the tensions that occur. The transfer can take the form of joint ventures or acquisitions. During the transfer, continued workshops in the challenges of cultural differences can help keep reducing the impedance mismatch between the two entities.

My Consultancy–Asif J. Mir – Management Consultant–transformserorganizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact Asif J. Mir

Creative Product Design


An emerging area of importance is product/process design. In increasingly competitive, sophisticated markets, attractively designed products or processes sell well; shoddily designed products are left alone on the shelves.

Excellent product design requires high orders of essence creativity (novel ideas), elaborative creativity (contextually relevant elaborations of ideas that are unique because of the kinds of components utilized and the way they are fitted together), and expressive creativity (unique aesthetic features).

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please contact Asif J. Mir.