A business plan gives the first impression to investors of the company (McKeever, 2001). Business plan of Market Plaza Showplace is reasonably structured starting with proper packaging including title page, table of contents and executive summary. The plan wraps up the overall company analysis with its clear future goals and targets. It provided comprehensible information about services, organizational structure, competitors and financial plan.
Despite of its conciseness, the plan lacks many key elements, to bring up adequate information about the industry, market and the company, that are necessary for an investor to make a proper investment decision. Although the plan covers most of the essential points, but it does not provide the thorough information about financial projections for future, market research, price patterns, comparison with competitors, and sales projections in terms of percentages. Such lacking make a business plan a complete trash (Rich & Gumpert, 1985).
This plan fails to overlook the following key elements that are necessary to include providing the complete information:
Industry Analysis: The business plan does not include a proper industry analysis. It is a very practical tool for business strategist to determine the attractiveness of an industry and identify the varying profit margins between industries, which give the complete overview of the industry’s structure. It includes the complete Five Forces model to reflect the intensity of competition within the industry, a comprehensive PESTLE and SWOT analysis to highlight the company’s strengths and weaknesses, and the areas that are signifying opportunities and threats, company’s position in the industry, and major strategic changes. However, the analysis also provides a starting point for formulating strategy and understanding the competitive landscape in which a company operates
Five Year Projections of Financial Statement: Provide at least the five year forecasts of profitability that helps the investors to judge the future performance of the company. These projections will support the ratio analysis performed in the plan.
Marketing Analysis: Without marketing analysis, the plan seems unfinished. The plan must include the market growth rate, market size, market trends, market profitability, industry cost structure and key success factors along with relevant statistics (Schilit, 1987).
Marketing Mix Strategies: Plan lacks the proper projection of its marketing strategies including 4Ps and 4Cs that give an insight of the methods to promote and deliver the products/services.
Detailed Sales and Market Growth Projection: Forecast the market and sales in the future years with the percentage change and illustrate the reasons behind the radical sales growth in 2002. Mention the strategies, the company will follow.
Complete Budget Plan: Forecast the future activities and prepare a flexible budget plan with proper allocation of various activities. This will give an image of whether a company can meet the future expenses through its operations.
Payback Period: Investors can identify the worth of the company through the payback period. A company must mention the payback period, which helps the investor to know the time span your product will take to pay for itself.
Contingency Plan: Defining the best scenario of the company is not a winning approach. Anticipate risks such as seasonal drops in sales, profits, and other unforeseeable events that may occur and consequently develop a contingency plan describing that how will one respond in such situations with a proper backup plan.
OPPORTUNITY PRESENTED IN THE PLAN:
As the plan described, the Market plaza Showplace offers a wholesome opportunity of live entertainment for the families of urban Trinity. This gives an opening to the community who cannot go to nightclubs or artists concerts; they can attend such family events in their community at a very reasonable cost. It provides the fair parking accommodation within the ticket cost, unlike its competitors.
REASONS TO INVEST:
The business plan represents the potential to grow in the future as it is targeting the community where organizing live musical concerts is not a trend. Also, company offers various accommodations as parking, different themes, which gives an edge over competitors. People of those areas are willing to attend such events and this rate will increase by the time meaning that the company will increase its revenues through extensive sales. The business seems to be a better project for investment. However, the plan does not include any statistical evidence of its sales projection or financial ground for higher ratios; this may divert the investors’ intention to invest in this project.
The plan does not include any risk projections.
Competition Risk: It possesses the intense competition risk as the existing players in the market would try to come up with better customer services in the coming years.
Operational Risk: Entertainment companies require well-trained employees. Market Plaza Showplace does not embrace any training program for its employees. The employees will be less skilled or qualified for the task, and this can harm the company’s image. Loss of the management team is another risk that dangles. Manager may terminate their job at any point due to unattractive salary packages or any other issues.
Market Risk: If the economy slows down resulting in a rise, in prices, people will first cutoff their entertainment activities. This risk will unfavorably affect the sales of event’s tickets.
INVESTMENT IN BUSINESS:
With this poor structured business plan, I would not prefer to invest in this project. As it does not involve any financial projections and proper capital budgeting plan, one cannot take investment decision without the evaluation of net present value and IRR.
McKeever, M. P. (2001). How to write a business plan. Nolo.
Rich, S. R., & Gumpert, D. E. (1985). How to write a winning business plan.Harvard Business Review, 63(3), 156.
Schilit, W. K. (1987). How to write a winning business plan. Business Horizons, 30(5), 13-22