MGTA01H3 Chapter Notes - Chapter 7: Sole Proprietorship, Business Plan, Risk-Seeking
●Business plan
○The written document that lays out, in black and white and in a structured fashion,
all of the things that you need to do, and have to happen, if the business you are
planning is to succeed
●Why entrepreneurs should write a business plan
○The entrepreneur should write the plan for him/herself in order to articulate all of
the known facts, the assumptions, the list of tasks and resources needed, the
timelines and all of the necessary forecasts so that they are not taking a leap into
the dark. This is because entrepreneurs are not risk seeking, they are risk tolerant.
A well-known phrase that sums up the reason for writing a business plan is: “It is
better to fail on paper, than fail in real life.”
○The entrepreneur should bear in mind all the other groups and individuals who
can help him make the business a success. Everyone need help, advice, and
guidance. A business needs suppliers, customers, and to maybe borrow some
additional capital as it is growing. For each of these groups, the business plan is
the black-and-white evidence of the planning and research that you have put into
your business before starting
●Contents of a business plan
○Three key elements
■People
●A team of clever, highly motivated people with energy and
enthusiasm and relevant experience may have a business idea
■Market
●If the good or service that excites the team doesn’t excite the
market, the business won’t succeed
■Resources
●There might be a large market of willing consumers crying out for
a product. The banks may be willing to lend to the right team of
qualified and experienced managers
●The Market
○A business plan must demonstrate that there is a market for the proposed business
products
○Desirable qualities in a market include
■A large number of potential buyers
■A growing number of potential buyers
■Potential buyers have the money to spend
■Potential buyers are willing to spend
■There are no existing suppliers
■Existing suppliers are unsatisfactory
●Sole proprietorship
○A business which is directly owned by one person
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MGTA01H3 Full Course Notes
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Document Summary
The written document that lays out, in black and white and in a structured fashion, all of the things that you need to do, and have to happen, if the business you are planning is to succeed. Why entrepreneurs should write a business plan. This is because entrepreneurs are not risk seeking, they are risk tolerant. A well-known phrase that sums up the reason for writing a business plan is: it is better to fail on paper, than fail in real life. The entrepreneur should bear in mind all the other groups and individuals who can help him make the business a success. A business needs suppliers, customers, and to maybe borrow some additional capital as it is growing. For each of these groups, the business plan is the black-and-white evidence of the planning and research that you have put into your business before starting.
