CHAPTER 14 Flashcards
COMMON TYPES OF BUSINESS
To develop goals and objectives for the coming year (strategic plan)
● To identify customers and explain how the company will serve them (marketing plan)
● To submit monthly sales statistics to management (operating report)
● To summarize what occurred at the annual sales conference (personal activity report)
● To explain building access procedures (policy implementation report)
● To submit required information to the Securities and Exchange Commission (compliance report)
In general, business plans can be written during three separate phases
(1) before the company is launched, when the founders are defining their vision of what the company will be;
(2) when the company is seeking funding, in which case the business plan takes on a persuasive tone to convince outsiders that investing in the firm would be a profitable decision
(3) after the company is up and running and the business plan serves as a monitor-and-control mechanism to make sure operations are staying on track.
BUSINESS PLAN
comprehensive document that describes a company’s mission, structure, objectives, and operations
PLAN WRITTEN
to attract outside investors:
SUMMARY
In one or two paragraphs
defines how the company will generate revenue and produce a profit.
be compelling, catching the investor’s attention and giving him or her reasons to keep reading.
Describe your product or service and its market potential.
Highlight some things about your company and its leaders that will distinguish your firm from the competition.
Summarize your financial projections and indicate how much money you will need from investors or lenders and where it will be spent.
Design and development plans.
If your product requires design or development, describe the nature and extent of what needs to be done, including costs and possible problems. For new or unusual products, you may want to explain how the product will be manufactured.
EXIT STARTEGY
Explain how investors will be able to profit from their investment, such as through a public stock offering, sale of the company, or a buyback of the investors’ interest. A
●● Reports to assess opportunities
Every business opportunity carries some degree of risk and requires a variety of decisions and actions in order to capitalize on the opportunity. For instance, market analysis reports are used to judge the likelihood of success for new products or sales initiatives by identifying potential opportunities as well as competitive threats and other risks. Due diligence reports examine the financial aspects of a proposed decision, such as acquiring another company.
●● Reports to solve problems.
Managers often assign troubleshooting reports when they need to understand why something isn’t working properly and what can be done to fix the situation. A variation, the failure analysis report, studies events that happened in the past, with the hope of learning how to avoid similar failures in the future.
Reports to support decisions.
Feasibility reports are called for when managers need to explore the ramifications of a decision they’re about to make (such as replacing an advertising agency or switching materials used in a manufacturing process). Justification reports justify a decision that has already been made.
PROBLEM FACTORING
tackle a complex problem is to divide it into a series of logical, connected questions, a process
three most common structural approaches
conclusions (a direct format),
recommendations (another direct format),
logical arguments (an indirect format).
FOCUSING ON CONCLUSION
Direct approach
Communicates the main idea quickly
FOCUSING ON RECOMMENDATION
Five Steps
Establish or verify the need for action in the introduction by briefly describing the problem or opportunity
Introduce the benefit that can be achieved, without providing any details
List the steps (recommendations) required to achieve the benefit, using action verbs for emphasis
Explain each step more fully, giving details on procedures, costs, and benefits
Summarize your recommendations
PROPOSAL
written for both internal and external audiences.
