From the monthly archives: January 2010
Writing a Business Plan can be a daunting task. You have so many ideas floating around in your head that it can be difficult to capture them all in a logical format. However, committing time to writing an effective Plan can help improve your chances of success. In this article I will be giving you some tips on how to write a killer Business Plan!
Tip 1 Understand the Need for a Plan
Without a clear strategy and long term objectives you may be reducing your chances of success and so its important to commit time to plan ahead. Having put in time, energy and resources to come up with the ideas, why spoil it all by not having a structured plan for the future? The benefits of business planning cannot be underestimated. There are some potentially business-changing reasons to prepare a Business Plan. You must view planning as a crucial investment of your time, which could mean the difference between success and failure.
Tip 2 Dont Go It Alone, Ask For Help
Picture this. You’ve never written a Business Plan before; you sit down at your table and end up staring at a blank piece of paper for 3 hours! Then, another 3 hours later, all you have is a bin full of scrap paper. However, in order to help you put a plan together there are a variety of sources of help you can tap into:
Professional advisers
Business colleagues
Advice agencies
Your staff
Books (see our free e-book offer at the end of this article)
Tip 3 Follow a Framework
Having a framework or outline to follow can make the task of writing a Business Plan so much easier. The 3 parts to your Plan are:
Where you are now
Where you intend to be
How you are going to get there
This is your framework which will guide both you and the reader through your business and your idea.
Tip 4 Tell the Reader Where You Are Now
In your first section you want to paint a picture of where your business is now. These are the main areas to cover:
Business history
Location and premises
Your product or service
Your market
Your customers
Your competition
Your staff
Equipment
Provide an insight into each part of your business so that the reader of your Plan knows how the business looks now. Obviously if you are just starting up, give an idea of how you see these parts of your business once you get going.
Tip 5 Tell the Reader Where You Intend To Be
Having given an overview of your business, the next step is to tell them where you want to be. The main points to cover are:
Your objectives and goals
State what you want from the reader a loan or overdraft for example
Explain why you need and what it will be used for
Tip 6 Tell the Reader How You Are Going To Get There
Its all very well promoting your idea and business but the important point to put over is how you are going to get there. Here are the key points to cover:
Marketing plan
Additional resources needed to meet your objectives and goals
Your contribution in terms of cash or equipment
Security you can offer to support a request for finance
Profit and loss and cash flow forecast to show that you plan to make money and that you can pay back the loan
Tip 7 Provide Some Supporting Information
Your Plan will have contained a lot of information, so it is helpful to include supporting documentation to provide more background. Placing these additional items as an appendix ensures that the flow of the Plan has not been affected by additional information.
What sort of items could you include?
Letter of support from your Accountant
Confirmation of pending orders from customers
If you are purchasing a property, you could include the sales particulars
Independent industry surveys showing that your sector is doing well
If you are buying machinery, include quotations
If you business main asset is you, include your CV!
Tip 8 Ask Someone to Review It
When you are totally immersed in a task you can easily miss obvious mistakes. Ask someone to review your Plan to ensure there are no spelling or grammatical errors dont rely on Spell Check! Does it all make sense? Have you been logical in your arguments?
Tip 9 Get the Presentation Right
After having spent a lot of time and effort on the content you dont want to spoil it all with poor presentation! Here are some tips:
Get the Plan typed; it will make it look more professional
Make sure all the papers are clean and that there are no dirt marks or coffee stains! Buy some good quality paper
Purchase a classy folder or binder to put your Plan in (paper clips or staples may not portray the right image!)
dont forget to include all your contact details
Tip 10 Deliver Your Plan to the Reader in Time
Once you are satisfied that your Plan is a good representation of your business you can post it but ideally you should deliver it, at least you know it has got there! Prior to a formal interview (if your aim is to obtain finance) you need to give the Manager time to read your plan. Ask to make an appointment with him in 3 days so he has time to read it.
Enclose a covering letter saying that you have made an appointment and your Plan is attached for him to review and to prepare any questions.
All that remains for you to do is to turn up at the agreed time and present your case!
Robert Warlow
Small Business Success
Author: Robert Warlow
Article Source: EzineArticles.com
Provided by: Excise Tax
Each year millions of people start their own business. Many of these new entrepreneurs are what I like to call “accidental entrepreneurs.” In other words, they became a business owner or entrepreneur by accident. The reasons vary but include: a job layoff, a new idea, a divorce, a relocation and many other reasons.
Many of these new entrepreneurs have no idea what they are getting themselves into. Chances are, they have zero entrepreneurial experience and zero sales and marketing experience. Sadly, most of these accidental entrepreneurs fail. Within a few short months or years, they are either at the unemployment office or searching for a new job.
If you are an accidental entrepreneur, that’s okay. In fact, I applaud you for starting your own business. Our country was founded by entrepreneurs and continues to thrive because of small business owners.
What I want you to understand is that you will need to develop what I call the “entrepreneur mindset.” This “entrepreneur mindset” will help you succeed as an entrepreneur. Here are some things you can do to establish an “entrepreneur mindset.”
1. Realize you get paid to produce, not to work. If you don’t produce anything, you won’t earn anything and you will be out of business fast.
2. Realize that most of the tasks you do in your business do not create any type of revenue. Therefore, you should spend a huge majority of time completing tasks that create revenue. This includes new customer acquisition, sales and marketing. All other tasks should be delegated or tended to after you complete these tasks.
3. Remember, it’s not the best written book that becomes the best-seller. It’s the best selling book that becomes the best seller. Therefore, if you have an idea for a product or service, you must spend as much or more time selling it than you did creating it. If you create a good product, but never market it; it won’t sell.
4. Realize that most businesses take a couple years of sweat equity before they make a dollar profit. In other words, you will have to invest your time and money before you see even $1 back. Some businesses take 5-10 years to create positive cash flow. That’s why you might want to have a full-time or part-time job while you get started with your new business.
5. Realize that a down economy is a great time to start a business. Many of America’s largest businesses were started during economic downturns or depressions.
6. Realize that most small businesses fail because of two reasons. Number One is lack of knowledge and Number Two is lack of money. If you are under-capitalized, you are hurting your chances of success. Make sure you have enough capital to market your business and pay your living expenses.
7. Finally, you must work on your personal growth. You must read publications, journals and books about becoming an entrepreneur. You must commit yourself to learning. Listen to tapes. Attend seminars. Network with other entrepreneurs.
In summary, being an entrepreneur is a wonderful experience. Many successful entrepreneurs first started out as “accidental entrepreneurs.” If you want to increase your chances of success, you must follow the 7 steps outlined above.
Author: Charles Holmes
Article Source: EzineArticles.com
Provided by: Import duty tariff
Small business grants are closer than you think. They can also be the ideal way to fulfill your dreams of becoming a business owner. It is often a hot topic among entrepreneurs with limited funds and access to capital. They are given to those people who want to start their own small business as a means of supporting themselves while at the same time contributing to the US economy. Business grants are also provided by the US government. Remember, Small Business Grants are not loans and that’s why many people refer to them as Free Grant Money!
Business Grant or Business Loan…?
Grant programs don’t require credit checks, collateral, security deposits or co-signers. In some cases recipients are required to submit periodic progress reports to demonstrate that the grant funds are being utilized properly and goals are being achieved as projected in the application. Grants differ from loans in that they are not repayable. We all know what it takes to get a common loan…like auto loans, home loans, cash loans, etc. Why not try a free grant program that writes the grant for you and also addresses every issue you’ll need to cover before submitting it to the proper agency.
Business Grants Do What?
Business grants are one way that women can run successful businesses whether they have a home-based business or a business outside of the home. They are available to start a new or expand an existing business, equipment financing, acquisition of a new or existing business, rent, salaries, office expenses and overhead. Given to women who are small business owners to encourage and promote economic growth as well. Grants are available to anyone over 18 years of age. In fact, the small business grant you need to start or expand your business may be available right in your own home state.
The Purpose of Grants
A grant supports the business idea and turns the dreams of an entrepreneur in to reality. There are many types of grants offered by the government that include individual grants for personal necessities, business grants for starting new business, housing grants, ,education grants for funding education and many more.
Business Grants & Women
Grants are also available for women who want to buy an existing business. They are also available for women who want to attend business school so that they gain the knowledge they need to start their own business. They are also awarded to women who excel in their respective fields. The best part about business grants is that they are free in the sense that you do not have to pay back the money to the funding agency or the government. Women can also get money to encourage advanced online education have a distinct advantage over any business that leaves advanced learning to chance. Businesses that fall into this arena often find they are eligible for small business grants.
There are Other Options…
Also remember that the federal government, through the SBA, does offer a fine array of very attractive loans to start or expand a small business. There are also low interest and no Interest Government loans available for you to take full advantage of. Most small business owners have to look to personal resources and loans to finance their small business. You may have looked into bank loans, asked friends and family for a loan or looked into getting a few credit cards to pay for you to set your business up.
Women have the largest opportunity of any group to benefit from the generosity of the Government Grant Programs. Women are taking more initiative to work for themselves. Womens small business grants are available in many forms. Women continue to account for the majority of stay at home parents. Women interested in accessing small business grants to start or expand their own businesses should understand certain limitations inherent in small business grant funding. Women have a 75% greater chance of success in business ownership.
Grants for Education
Education is a priority for any government, and for this reason the government. Education grants are available from various sources and are generally funded by the government, although many are established and sponsored by private institutions. They can vary in the amount of the grant as well as the period the grant is made available to the student. Women are also much easier to qualify for and get than education grants. Scholarships are also available for a myriad of situations.
A Little Info about the SBA
SBA does not provide lower interest rates for small businesses. SBA is not related to granting any free government grants, but instead it provides counseling, technical trainings and assistance in areas which are required to run a small business management using its resourceful SBDC or Small Business Development Center at absolutely NO extra Cost to you, its totally FREE. SBA has offices in every state and worked with various non-profit, lending and educational and training organizations nationwide. SBA also runs programs that are intended to help women with training and technical assistance, access to credit and capital, government contracts and such. As far as individuals are concerned, SBA does not offer business grants to any entrepreneur but it does help the minority groups, the women entrepreneurs, economic development of underdeveloped regions, and numerous such activities.
Author: J Pickett
Article Source: EzineArticles.com
Provided by: Creditcard Currency Conversion Fee
Introduction
In the year, prior to the turn of the millennium, Nissan was a company in a serious financial crisis. Debt had approached $22 billion by 1999. The company had been too complacent, and had taken its prior success, for granted [2].
Did Nissan’s decision to outsource their IT Infrastructure to IBM in 1999 make good sense? Nissan was a very troubled auto-manufacturer in the late 1990′s. Senior executives from the company were known for their conservative outlook on business, and their ‘old boy’s network,’ mentality. Profits were dropping dramatically, eventually forcing the company into the $22 Billion debt that it then faced. There were no signs indicating a change in the market that would encourage profit growth. The vehicle sales needed invigoration.
Mergers were the flavor of the day in the automotive industry during the late 1990′s. Nissan executives approached Daimler Chrysler and Ford to discuss a possible merger, but there was no interest from either of the companies [2]. There was only one alternative left, which was to reinvent themselves and reduce unnecessary overheads. This was the defining point that led to the business process outsourcing decision.
This paper seeks to answer the question “Does the cost of implementing an in-house solution outweigh the benefits or does Business Process Outsourcing (BPO) make more sense?” We reviewed the example of the automotive manufacturer, Nissan, when they decided to outsource their entire Information Technology department to IBM in late 1999, to answer our question.
Nissan – A brief history and the events leading up to the BPO decision
I. The Boom years
Nissan was established in Japan in 1933 as a heavy industry manufacturer. After the Second World War they turned their attention to automotive vehicles. In the 1950′s, they finally had an impact on the global market with the introduction of the Datsun branded sedans and small pickup trucks. The company eventually opened full-time operations in the USA in September 1960 [6].
The company experienced dramatic growth with the introduction of the ‘Z’ series sports sedans in the early 1970′s, with the 240Z becoming the fastest selling sports car of all time. This success led Nissan to the top of the U.S. vehicle importers market by 1975. Vehicle sales in the USA topped over 250,000 units per annum by 1970 [6]. The company was young, its leaders dynamic and the future looked very bright. They were competing for the U.S. market with the likes of Ford, Chrysler, and General Motors, showing improved quality and production efficiencies over their competitors.
The company was growing at a phenomenal rate, opening new manufacturing plants around the world on a regular basis such as Australia (1976), Spain (1980) and the United Kingdom (1984) [6]. There was no respite to the pace of growth and new business generation coming from the company.
In 1983, the company began the worldwide marketing of vehicles under the Nissan name which was felt to have a stronger quality image and started the six year transition from Datsun to Nissan on vehicles, dealerships, facilities and marketing materials. Sales continued to grow, eventually reaching 830,767 in 1985 [6]. The decade closed out with resounding success for Nissan with their domination of the North American market.
In 1993, the mid-line Stanza sedan was replaced with an all-new Altima and non-competitive Japanese-designed minivan was replaced with a new U.S. created Quest, which was the first minivan with car-like handling. Sales came roaring back in 1994 to near-peak levels of 774,405 [6].
In 1996, sales began to slip once again, fueled by a change in American vehicle tastes. Trucks and SUVs gained market share at the expense of sedans and sports cars [2]. Nissan’s position as a manufacturing driven company, which helped them in the ’80′s and early ’90′s, then had new problems with the dollar/yen balance which began to hurt their competitiveness against market driven companies.
Unlike their competitors, Toyota and Honda, which were focused on key volume segments, Nissan did not dominate any individual segment and competed in identical segments against Toyota and Honda.
Unfortunately for Nissan in the 1990s, the Japanese “bubble economy” burst, a downturn in Europe coincided, so there was more pressure in the U.S. to perform. Unfortunately U.S. customers didn’t have a genuine brand reason to shop Nissan except for the ‘best price’ deal.
Former Nissan president, Mr. Nakamura, announced a “Back-to-Basics” plan. The key elements of the plan were to reduce inventories, eliminate unrealistic sales targets, and increase dealer profitability. Unfortunately for Nakamura and Nissan, the plan did not work [2].
II. Trouble looms for the auto-manufacturer in 1990′s
In the early 1990′s, trouble began to brew in the organization. The once revered executives at Nissan were now viewed as arrogant members of the old-boys club and were ignorant to the changing needs of their customers and the overall automotive market, in general.
As the company progressed deeper into debt, it met with more challenges. Nissan’s business partners and suppliers were charging a premium for their goods and services. Nissan was obliged to meet its financial commitments and by so doing placed itself further into debt. Finally, the company was in debt to the tune of $22 billion. Even the company’s financers were tightening the noose around them. Nissan felt the situation was hopeless.
III. Steps taken to address issues
Nissan executives were looking for a way out, a way to rescue the company from entering into bankruptcy. The first approach was to find a partner. Both the newly established DaimlerChrysler and the Ford Motor company were approached, but both organizations rejected the idea of a merger [2]. Finally, Renault, the French automotive company recovering from a similar predicament, decided to enter into negotiations with the flailing Japanese company. A senior executive at Renault, Carlos Ghosn, was a huge supporter of the merger idea.
After much negotiation, the Japanese Ministry of Economy, Trade and Industry agreed to allow Renault to purchase a substantial stake in Nissan. The Nissan-Renault alliance was born and Ghosn was appointed Chief Operating Officer.
Nissans Executive decisions and major events
I. Creating a global alliance vision:
The following is excerpted from the Nissan/Renault alliance vision:
“The Renault-Nissan Alliance is a unique group of two global companies linked by cross-shareholding. They are united for performance though a coherent strategy, common goals, and principles, results-driven synergies, shared best practices. They respect and reinforce their respective identities and brands.”[2]
The Alliance set itself three objectives, with the goal of being amongst the best three automotive groups in the following areas:
1. Quality.
Achieve customer recognition as being a quality and value added product.
2. Technology.
Lead in key technology development and implementation with a focus on excellence in specific areas of the automotive business.
3. Operating Profit.
Consistently generate a high operating profit margin and vigorously pursue growth.
II. Appointing a new leader
Ghosn, given his enthusiasm for the merger, his demonstrated tenacity, and his experience of the automotive industry, was a natural choice for a senior position at Nissan. His initial appointment as Chief Operating Officer (COO) was just a temporary assignment. In 2000, he was named President and in 2001, he was appointed Chief Executive Officer (CEO).
As CEO, Ghosn was very aware that the ‘buck’ stopped with him. He was the final decision maker. Some important and very serious decisions were made to save the ailing company. Ghosn had to use all of his valuable experience gained from rescuing other organizations, such as Michelin and Renault, to save Nissan.
III. Decision making to save a troubled auto-manufacturer
With Ghosn’s arrival in Japan in the spring of 1999, he immediately set about researching Nissan’s root problems. The newly appointed COO had a management philosophy that stated “you must always start with a clean sheet of paper because the worst thing you can have is prefabricated solutions… you have to start with a zero base of thinking, cleaning everything out of your mind.”[2]
For the first few months, Ghosn flew around Japan, meeting and greeting employees at all levels, absorbing information and formulating a plan. He used this information to plot a picture of Nissan from a global perspective, identifying issues, and problems that had created the dispersed, unprofitable organization.
One of the many issues Ghosn identified was the lack of communication around the organization. Seniors managers around the world were aware of some of the issues that caused the downturn of fortune in the company. They even had solutions to them, but had lacked the necessary authority to implement or communicate the solutions back to Corporate Headquarters.
Finally, the major issues were whittled down to five key issues: [2]
• Lack of clear profit orientation. Nissan was not focused on driving profit, but were rather focused on market share and ended up having to buy their market share at the expense of the declining profits.
• Insufficiently focused on customers and too much focus on competitors. The company was too concerned about the competition introducing a new line which would have dug into the Nissan market share. For example when Volkswagen introduced their new Jetta sedan Nissan saw a significant decline in their Maxima sales.
• Lacked cross-functional, cross-border, and intra-hierarchical lines of work in the company. Nissan seemed to operate as separate islands scattered throughout the globe. There was no centralized purchasing function or in fact any of the other major business activities. The organization was not making maximum use of its global presence or buying power.
• Lack of sense of urgency. The executives in Nissan were complacent in their activities. Things had gone so well for the company in the preceding 60 years that they felt that there was no reason to embrace change.
• No shared vision or common long-term plan. Senior management within Nissan did not have a joint plan for the different brands within the company. Each division did their own thing with little or no thought for the greater good of the company. An example was the Z series that had achieved phenomenal success throughout the 1970′s and ’80′s but was suddenly dropped from production when sales dropped. The obvious thing to have been done was to test the market with a modernized design. Instead Nissan chose to ignore the market and drop the brand.
To address the issues, Ghosn announced the Nissan Revival Plan on October 18, 1999. This seven-point plan was aimed at reducing costs and debt as well as creating and launching new automotive brands to raise sales and market awareness. The goals announced in the plan were far-reaching and encompassed: [2]
• The reduction of operating costs, net debt, global head count, and vehicle assembly plants and manufacturing platforms (the latter in Japan).
• The generation of new product investment through the launch of twenty-two new models.
The cost-cutting plan called for centralization of purchasing, procurement, human resources and information technology. By centralizing these essential functions, the plan aimed to assist the company in achieving its aggressive cost reductions.
Expenditure, particularly in the information technology function, was perceived as being out of control. Ghosn’s message to senior level executives was clear, “cut costs in every possible area.” If that meant outsourcing non-core activities because somebody else could do it cheaper, then that had to be fully investigated and determined. The management was ruthless in their execution of the plan [2].
Nissan looks at Business Process Outsourcing as a means
I. Will outsourcing non-core activities save money?
There are well-documented records of company’s saving money and others of outsourcing horror stories. Success really depended on the situation and the provider.
Most experts agreed, though, that you needed to use BPO in strategic decisions, for example refocused efforts on core competencies and not merely for cost cutting activities [1]. Stephen Withers of ZDNet said in his on-line article that you should only “use BPO for strategic purposes, not to take advantage of a (possibly transient) cost saving.” Withers then asked the reader, “Does outsourcing the IT Infrastructure make sense?” To answer that question corporate Chief Information Officer’s (CIO’s) would need to have completed extensive research and have done a thorough analysis of their business processes.
This is exactly what Nissan’s CIO did, or rather what Ghosn told him to do. The company had invested over 80 billion yen (over $US760million) in 1998 on IT services, but their processes were still not providing the management with the infrastructure that would assist in building their competitive edge [5]. The final decision was made to approach various outsourcing service providers for the much needed help.
II. Does outsourcing the IT infrastructure make sense?
If Information Technology (IT) truly was a commodity, like gasoline or electricity, then companies only competed on price, with very small profit margins. In that event, the decision to turn over IT to an outsourcer was as simple as it was a century ago to turn to motor vehicles instead of using the horse and cart. However, while personal computers and the networks they run on may be standardized, the services provided by IT outsourcers vary in many ways. Services such as data analysis, application development, and IT decision-making allowed companies more competitiveness in the market therefore, those elements of IT are far from being viewed as commodities [8].
With regards the decision to outsource, many factors were considered in Nissan’s case. Ann Moynihan in her article in the Albany Business review states “Outsourcing can help you: [3]
• Reduce and control operating costs.
• Free staff to focus on core business.
• Gain access to specialized skills and technologies.
• Introduce positive change.
• Gain control over a difficult-to-manage function resulting from uneven workloads, insufficient or unskilled resources.”
With Nissan, in 1999, this was exactly what they were looking for. Refocused staff efforts, introduction of positive change and control gained in all critical areas led to the outsourcing decision.
The choice of IBM as Nissan’s outsourcing partner was a strategic one. In the late 1990′s there were not many outsourcing companies that had the breadth or the global reach that IBM had. Competitors such as EDS and CSC were not considered because they were only outsourcers and could not offer the hardware and software technology that Nissan required to update their infrastructure [5]. If either one of those competitors were selected over IBM as a partner Nissan would still have faced the same infrastructure issues. IBM was the only logical partner.
Did the relationship work between Nissan & IBM?
I. A further look at the relationship between IBM and Nissan
In a joint IBM and Nissan press release published in Tokyo on June 19, 2000, the two companies announced that they were “Extending their global partnership for information system (IS) operations which Nissan Motor Co., Ltd. and IBM agreed in October 1999, Nissan and IBM today jointly announced that Nissan will outsource its IS operations in Japan, to IBM Japan.
The service includes Nissan’s regular maintenance and operational activities as well as part of its application development, but excludes the planning and design of new systems. The two companies will start operations from October 1. [7]
In North America, Nissan has outsourced these same operations to IBM Corp. since October 1999. This latest agreement in Japan is expected to further accelerate the standardization, integration and centralization of Nissan’s IS on a global level.”
Ghosn further noted, “The Nissan Revival Plan cannot be accomplished without effective information systems. Following upon the recent agreement with Japan Telecom, this latest partnership with IBM puts in place the global infrastructure which is key to support Nissan’s long term profitable growth.” [4]
II. Hypothetical view of the Return-on-Investment model used
Before they could calculate their Return on Investment (ROI), Nissan first had to look at the Total Cost of Ownership model proposed by IBM. Total Cost of Ownership (TCO) is a type of calculation designed to help consumers and enterprise managers assess both direct and indirect costs and benefits related to the purchase of any IT component. The intention was to arrive at a final figure that will reflect the effective cost of purchase, overall [8].
The TCO model used, had to calculate the costs that were required, beyond the fees of outsourcing. The organization had to evaluate specific criteria’s that could have added expense to the outsourcing project. They also had to calculate the ongoing expenses throughout the lifetime of the contract [8].
Then, after calculating the payback period, Nissan were in a position to calculate their ROI. Once the numbers were crunched, a thorough financial and risk analysis was conducted. The ROI measured the profit or cost savings realized. It was calculated by estimating, for a 3-year period, the investment was made and the resulting profit created through that investment.
The results were conclusive. Nissan and IBM entered into their agreement and operations scheduled to commence on October 1, 1999.
Conclusion
I. Did Nissan’s BPO reach its stated objective?
Nissan’s stated objective for the outsourcing of the IT infrastructure was to control expenditure, improve efficiencies, and update the infrastructure. By outsourcing to IBM, Nissan achieved all of its goals.
In controlling expenditure, outsourcing gave companies the opportunity to have a predictable monthly budget for expenditure. That amount may or may not have been lower than current expenditures but the component that was crucial to a large organization such as Nissan was that the amount is predictable. There was no variable component to the pricing. The only time the pricing may have fluctuated was when additional services, which were out of scope of the contract, were required.
In Nissan’s case, that was never a requirement. The company was in the first stage of a major, global, restructuring project and there were no new initiatives taking place.
The second objective in the BPO was to improve efficiencies. IBM is the world’s largest information technology company with revenues close to $100 billion [9]. When companies outsource their operations to IBM they are gaining best-of-breed technologies, excellent consultants and some of the best systems architects money can buy.
The way that any global outsourcer makes its money is by achieving economies of scale. The only way to achieve these economies of scale is to ensure that they deploy the best hardware, software, and infrastructure possible and make that equipment work to maximum efficiencies. By taking full advantage of this best-of-breed technology, Nissan met its second and third stated objectives.
II. What if the IT Infrastructure had been retained in-house?
If Nissan had decided to retain its IT infrastructure in-house and attempted to implement an updated and modernized system, it would have lead to a significant increase in their expenditure. Ghosn’s prime objective, when he took over the company in 1999, was to reduce expenditure by 700 billion Yen [2]. He was not interested in spending any additional money to modernize existing equipment.
To support the intended improvement in competitiveness, Nissan had to ensure that their infrastructure supported the additional workload. There was no way they could do the intended improvement in efficiencies without external support. Nissan did not have the expertise and the additional work force to handle the required upgrades and the reengineering of business processes.
III. Final assessment and summation of the relationship
Robert Greenberg, Nissan’s CIO of North America was on record as saying in 2006 that, “We were happy with the services from IBM but the world had changed.” This comment sums up the relationship as it stands now, almost 8 years later [5]. When Nissan announced its Revival Plan, in 1999, the company had very clear objectives; cut costs, and return to profitability.
Nissan was looking for help in 1999 and IBM fulfilled this role for their IT Infrastructure. Greenberg also stated in his Q&A that “One of the things that also took place with the original outsourcing to IBM was we probably outsourced too much.” [5]
Greenberg was not working for Nissan when the original outsourcing decision was made in 1999; he only joined the company in 2005. He is on record though as saying that he thought that they should have either retained some of the infrastructure in-house or perhaps have multi-sourced, thereby ensuring that they had the best possible solution and price.
In 2006, when the contract came up for renewal, the CIO decided to put everything out to bid and compare what the other vendors were offering with what IBM had provided for so many years. The decision to look at new vendors was actually excellent timing for the company as Nissan had decided to relocate their North American corporate headquarters from Los Angeles, CA to Nashville, TN and any transition could be timed to coincide with the move.
Ultimately, what Greenberg opted to do was to accept IBM’s proposal to “manage desktop systems, network services, help desks, dealer systems, and other key infrastructure elements for Nissan North America.” He then outsourced the application and maintenance to an Indian firm, Satyam and brought the remainder of the services back in-house [5].
When asked about the decision to bring IT back in-house, Greenberg said, “By bringing it in-house you increase the alignment. It’s a matter of building the knowledge internally [that] can be used to help drive the business activity, which is much harder when a business analyst function is sitting within a third party.” [5]
IV. Does the cost of implementing an in-house solution outweigh the benefits or does BPO make more sense?
As Stephen Withers stated in his article, BPO decisions should not be made for cost-cutting exercises but rather for strategic directions [1]. In other words, companies should not view BPO as a cost saving tool. Outsourcing the IT operation makes sense when an organization is looking to improve efficiencies and business processes or when they cannot attract, or retain, the human capital who have the expertise and ability to modernize or improve the infrastructure.
Nissan’s CIO Robert Greenberg thought that he would actually save money by bringing some of the work back in-house because he was “not paying margin on the individual [headcount].” [5]
Some of the individual lessons that Nissan’s Greenberg has learnt from the outsourcing agreement with IBM has been that certain services developed by the IT organization can indeed be outsourced or developed externally. However, he felt strongly about retaining in-house IT skills in such value generation areas as business analysts who have a strong understanding of the business, sometimes even better than the business customer does. Insourcing these skills could result in ideas and dialog with the business, with the end result being a service delivery or product development than can then be outsourced.
In summary, the answer to the question, ‘Does the cost of implementing an in-house solution outweigh the benefits or does Business Process Outsourcing make more sense?’ is that it depends. It depends on the available skills; it depends on the overall objectives (cost saving vs. process improvement) and it depends on the organization. For the most part the majority of major corporations world wide that have been through an outsourcing contract or are in an outsourcing contract will agree that there are substantial benefits to implementing an outsourcing contract and there substantial benefits in retaining those skills in-house. What each organization needs to do is ascertain which of those benefits outweigh the other and base their decision on that analysis.
Works Cited
[1] Withers, Stephen. “BPO: Save money or fix your processes?” ZDNet.com
[http://www.zdnet.com.au/insight/business/soa/BPO-Save-money-or-fix-your-processes-/0],139023749,139156391-10,00.htm 17 August 2004. Downloaded October 22, 2007
[2] Magee, David. Turn Around: How Carlos Ghosn rescued Nissan. New York: HarperCollins Publishers Inc, 2003.
[3] Moynihan, Ann. “Outsourcing enables owner to focus on core business.” http://www.bizjournals.com/albany/stories/2002/10/14/focus10.html October 11, 2002. Downloaded October 22, 2007
[4] IBM Press room press releases. IBM.com “Extending Their Global Partnership, Nissan, and IBM Announce IS Outsourcing for Japan” http://www-03.ibm.com/press/us/en/pressrelease/1670.wss June 19, 2000. Downloaded October 19, 2007
[5] Thibodeau, Patrick. “Q&A: Nissan CIO reshapes automaker’s IT”
http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=110024&intsrc=industry_list March 29, 2006. Downloaded October 23, 2007
[7] McDougall, Paul. “IBM, Nissan Outsourcing Deal Spans The Globe” http://www.informationweek.com/outsourcing/showArticle.jhtml?articleID=181502685 March 10, 2006 10:00 AM. Downloaded November 02, 2007
[8] Ikin, Paul. IBM Representative on Nissan Global team. 1998 to 2001.
Author: Paul Ikin
Article Source: EzineArticles.com
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Many people have what they think is a great idea and would love to set up their own small business. The problem many of these people face is how to fund this idea, to get the business off the ground. Unfortunately many of these ideas never come to fruition because of these lack of funds, where in reality there are many avenues people could take to find this initial start-up capital.
I run a small business and have been doing so for about ten years. I remember at the outset worrying about how I would be able to afford to advertise the services that I offer. I would also need a certain amount of money to pay for marketing, such as producing brochures and leaflets, money to have a website built and many other initial costs.
I would also need to be able to pay my bills and to basically live while the business was in its infancy, as I realised business would be slow to start with.
I have to say that I am extremely lucky as I have a superb family who are in a position, and are happy to back me financially from time to time. This was my first port of call. I did not just go to see my parents looking for a hand-out, I also went to tell them about what I thought was a brilliant idea.
I discussed with them my plans and about where I believed the business could get to within a few years. They both seemed impressed with not only my idea but also in the belief that I had in it. I also spoke about my short term fear of not having enough money to start the business and to pay the rent etc.
I asked them if they would like to invest in the idea by giving me a short term loan. I planned to pay this loan back in the future when the business would be in a position to make a profit. Luckily for myself, my parents agreed to do this and I have never looked back since. They also gave me the loan interest free, which was a real bonus.
My father also suggested that I might benefit by having a partner. This person could not only bear half of the initial start-up costs but could also help with even more ideas. He stated that he knew somebody who might well be interested. The person in question had been in business a long time and could also teach me a thing or two.
I agreed that the idea was a good one and my father then approached his friend who eventually agreed to become my business partner.
I am aware that I was extremely lucky and that not everyone is as fortunate as myself. There are other areas people can try to get funding however. One of these is to go to the bank to attempt to obtain a business loan, this would probably be a better idea than loading up debt on things such as your credit cards.
Approaching friends could be the next place to look. I have a couple of friends who are not my business partners but are in a way a form of shareholder.
If you have any investments you could dip into these to fund the business at the outset. In my eyes this is the whole point of investing in the first place and the business is also another form of investment.
These are a few of many avenues which people can try. Give it a go you may be surprised at the response people give you. At the end of the day if you do not attempt these avenues you will always be left thinking of what might have been.
If you try all of the options that are available to you but are still not successful in obtaining help, at least you gave it your best shot. Good luck.
Author: Steve Hill
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‘Where do you want to go today?’ asks Microsoft’s advert. When Microsoft wrote that they knew that many people and firms have no idea where they want to go, or more importantly, how they will get there.
This item touches on work planning and presents a few ideas for you to consider when planning for your department or small business. Surprisingly, the benefits of strategic and operational planning are often overlooked. Many firms which spend money on planning often make it a once per year task and then, having developed their plans, let them sit unused on a shelf, in a file, or in drawer.
Each year they pull them out, dust them off and go through the planning process again only to see them filed away at the end of the process? Why? There are various reasons including: the organisational culture doesn’t support planning; the plans are irrelevant; they are too complex or too lengthy; they are unachievable.
Some time ago I reviewed and rewrote a Work Plan (Operational) for a small organisation. It reminded me that throughout the years I have always planned within areas for which I have had responsibility. Planning helps avoid crises and achieve outcomes. Here are some tips for your work planning.
TIP ONE: Make sure you find out what policies, plans and procedures exist in your organisation that should be taken into account in your work plan. For example, is there a corporate plan, information technology plan, diversity plan, safety plan? If you don’t take into account existing plans, policies and procedures, you may plan to do something that is unacceptable, unhelpful to the organisation, or otherwise counterproductive.
TIP TWO: Don’t overplan. What’s overplanning? Overplanning is producing a plan that has hundreds of key achievement objectives. Make your plan large or small enough to be achievable with your existing or expected future resources.
TIP THREE: Make your planning document in two parts. Part one contains any information you wish to include about your organisation, it’s mission, how you determined the key achievement items etc. Make part two, or an attachment, the work plan proper. That way you can circulate or update the attachment without all the PR stuff .
TIP FOUR: Use a simple, tabular layout. Headings could be something like: Item No – Objective – How you will achieve the objective – When you will achieve it – How you will know you have achieved it – Who will be responsible
TIP FIVE: Don’t include the routine in your plan. If you sell scrambled eggs and have been doing it very well for years, for heaven’s sake don’t waste your time creating a work plan that states how you will sell scrambled eggs. Focus your planning on issues you have that need to be resolved eg, strategies to increase market share.
TIP SIX: Make your plan the focus for your work efforts. This seems trite, but really, you need to integrate your plan into your daily work routine. Place a standing agenda item on planning in your staff meetings; schedule review meetings each month, quarter or less frequently.
TIP SEVEN: Ensure those affected by the plan share ownership. This can be done by seeking their help in developing, implementing and evaluating the plan. Make different people personally responsible for specific outcomes and link it with their performance management agreement.
TIP EIGHT: Think about having a limiting framework for your plan eg, ‘… our work plans will have no more than three key achievement focii, three levels of strategy and three action statements per plan.
TIP NINE: Celebrate your successes! When you achieve something in your plan, celebrate in some small way … give yourself a pat on the back. It does wonders. If you keep the above tips in mind when writing your work plan, you should produce a worthwhile and useful document.
Copyright 2005 Robin Henry
Author: Robin Henry
Article Source: EzineArticles.com
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Never forget that entrepreneurs are not born – they are created! Within you already lie the essential elements to be successful as an entrepreneur – and in anything in life – because you literally are capable of becoming and accomplishing anything. Remember though that an understanding of the principles below will certainly contribute to the accomplishment of your dreams and goals, but only if they are applied and acted upon continually. Perhaps most importantly, the attribute, characteristic, and action that will contribute most to your success is determining now to never quit. Despite the fears and doubts, the opinions or critiques of others, and the possible failures – success only comes to the individual who never quits!
1) Master-Mind Group: Successful entrepreneurs surround themselves with like-minded as well as more talented and brilliant individuals than themselves. They seek, listen to, and follow the advice, opinions, and experiences of others. They ensure that every idea, venture, and opportunity is critiqued, analyzed, watched over, and improved upon by those close individuals, associates, and friends in the master-mind group. They understand that developing and strengthening relationships and partnerships is absolutely vital to their success.
2) Step Back & Evaluate: They take time – often – to evaluate, think upon, critique, change, and improve what they are doing. Whether individually, or the business as a whole, they ensure that the goals, objectives, processes, business model, daily habits, revenue streams, work ethic, and relationships are adjusted accordingly, changed if necessary, and improved upon always.
3) Declare: Every entrepreneur starts out small, inexperienced, and unknown. Successful entrepreneurs understand this, but they certainly do not communicate it in their thoughts, words, or actions. In every setting and conversation, they declare what they will be (not necessarily what they currently are). They literally believe and practice the clich: ‘fake it till you make it.’ Before and after they achieve success, they declare and portray themselves as being experienced, knowledgeable, effective, and successful.
4) Moments of Thinking: Every success in life, and especially in entrepreneurialism, starts as a thought or an idea. Because this is true, successful entrepreneurs make time to think. They specifically set time aside, and often, to allow their minds to ponder, reflect, analyze, create, wonder, and think. It is no wonder that during these times that ideas on how to improve their business are thought of, and occasionally new ideas and strokes of genius come.
5) Help to Produce: Similar to the concept of ‘give and receive,’ they take the initiative to help increase the profits for others, grow the business of others, and limit or make easier the work others will need to do. By so doing, these ‘others’ are naturally much more inclined to return the favor and help them do the same. Instead of thinking ‘how can I make money from this relationship or opportunity,’ rather they think, ‘how will they make money?’ This mentality and approach will always be rewarded, because others reciprocate it.
6) Informed Ignorance: Successful entrepreneurs are always staying up to date with the latest information, technology, laws, and developments within their industry. Likewise, they distinctly know and follow what their competition is doing, to ensure their own competitive advantage. At the same time, they ironically develop the ability of selective ignorance. They understand that certain information as well as listening to the news and critiques of others too often will halt their progress. They also are wise enough to realize that obtaining all the knowledge possible and following every new piece of information regarding their industry will never produce any result unless they take action. Being informed, developing selective ignorance abilities, and taking daily action is a large result of their incredible success.
7) Improve vs. Invent: Let’s be honest, the vast majority of inventions are thought of and created by scientists or engineers. Very rarely do successful entrepreneurs actually re-create the wheel – they only make it better. Developing a better but similar product, slightly changing a business model, improving customer service, or even doing what everyone else does with a different company name – this is the reality of most entrepreneurial ventures. Ideas and opportunities are everywhere – successful entrepreneurs look for and take advantage of them. And therein is the secret to their success – that it ultimately is not the business or idea that is all-important – it is the desire, belief, work ethic, and persistence of the entrepreneur that makes the venture a success, not necessarily the product.
Pen & Paper: Isn’t it ironic, considering all the essential elements discussed in this Entrepreneurial Success article series, that perhaps one of the greatest indicators of successful entrepreneurs is that they always carry a pen and small notepad with them. They realize that ideas come to their minds at random times, and they believe the Chinese proverb that says: “the faintest ink is more powerful than the greatest memory.” Their dreams, goals, and successes are dependent upon writing down and acting upon these ideas that often come to their mind. And yet, they also understand that having a pen and notepad and writing down the ideas as they come is not enough – they most importantly act upon and implement those ideas.
9) Time is a Friend: In relation to the point above, while they certainly write down and act upon their ideas, they are also wise enough to realize that after the excitement of a good idea dies down, that logic, practicality, and reason always set in. Thus, rather than rushing into anything, they collaborate with their master-mind group, analyze and ask questions before moving forward, test the market before investing time or money, and they allow time to determine whether the idea is good and will work or not. With that said, unlike the majority of people who have great ideas, they never allow the voices of fear and doubt to dictate their actions – because inevitably, during this time, those voices become very persuasive. If the idea, over time, is still good (or gets better), then they will completely commit to their decision to move forward, take action every day, believe in themselves and their idea, and never quit regardless of what temporary failures happen along the path.
10) Employee Assets: Without question, successful entrepreneurs understand that their greatest assets are their employees. Because of this, they treat their employees accordingly. Now don’t get me wrong, these entrepreneurs still demand that their employees work hard and be honest, they ensure relationships are appropriate and even hierarchical, and provide commission and bonus structures to incentivize ultimate performance. But, they also ensure that their employees are highly valued, appreciated, befriended, recognized, feel important, and that they are engaged, committed, informed, and feel as thought they are contributing to something great.
11) There is No Guarantee: Every entrepreneurial venture ever thought of or attempted has had absolutely no guarantee of success. Successful entrepreneurs realize this, but they choose to focus on the fact that there is also no guarantee that that their venture will fail. Perhaps another word for faith is optimism! The revered U.S. founding father, George Washington, had absolutely no guarantee for victory during perhaps the most important war of our modern day, the Revolutionary War. When all odds were against him, he still took a risk, desired freedom and independence, believed it was achievable, and then went to work every day to obtain it. He had faith and hope, but no guarantee. The victory only came after the attempt. When questioning whether now is the ‘right time’ to attempt your entrepreneurial venture, be wise enough to recognize that there never is a ‘right time’ – you just need to do it, in spite of the fact that there is no guarantee for victory.
12) Failures Feed: Successful entrepreneurs understand that failures breed progression, mistakes are lessons learned, weaknesses are potential strengths, and loses precede profits. Every failed attempt should be viewed as a successful step closer to the goal. Ironically, the majority of successes in life are usually accomplished after the individual determines to not give up when they experience failure.
13) It’s Up to You: Successful entrepreneurs never give excuses! While the majority complains that they don’t have the time, knowledge, or money to achieve their goals and dreams, these entrepreneurs make time, acquire the knowledge, and understand that you do not need money to make money. The only limitations in life are the ones we create and nourish in our own minds. In fact, as important as the master-mind group and other relationships are to these entrepreneurs, at the end of the day, they realize that their success is determined by them, and them alone. Their goals, dreams, and potential are determined and achieved not because of talents or brilliance, degrees or awards, race or gender, experience or from others – but because they personally desire success, believe it is possible, think big, take daily action, and do whatever it takes – giving no excuses.
To your entrepreneurial and life success!
Author: Matthew Toone
Article Source: EzineArticles.com
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The most important thing you can do for your business is to hire the right people. We all know that, but do we all act on that, all the time? Probably not. In my experience as an entrepreneur, it is too easy to focus on the tasks on hand, to worry about the budget, and to not hire when we should. Raising money, building a network and honing your pitch are all essential first steps in starting a business. And all of this work goes down the drain if you hire the wrong people.
Attracting and hiring talent depends on you. It will be your network through which you find the right people. It will be your ability to sell your vision that gets them excited to join. Most importantly, it will be your ability to intuit the fit with you and your team that makes your team a team. So, keep working your network and your pitch, they are always evolving and are critical to all aspects of your business.
Assembling a great team is no small feat. Attracting the right people to your company involves a number of things: your location, your company’s culture and then how they (the talent) fit with the existing team. The last point is really important. Building a team is very different than hiring an individual. You have to look for balance and traits that complement each other. It’s critical to balance both your management team (and your employees in general) with personalities and work styles that complement your own personality and the others on the team. AT my company, I made sure to get a range of personalities that complemented each other. As a result, we have a well-balanced executive team feeding off of each other all the time.
This is one of the biggest lessons I’ve learned in my career so make sure you think about how the team will work together before you hire. In the end, it’s not just about hiring and retaining, it’s figuring out who and what you want to hire. When you are starting a company, not only do you have to think about your culture and your product, you also have to think about your own skills and personality and how great talent can balance and improve upon that.
An excellent book on balancing work personality styles is People Styles at Work: Making Bad Relationships Good and Good Relationships Better.
STEP 1: Network
How do you get access to the right people? Networking. All the great people that I’ve hired have always come through networking. Sometimes I knew them before, but often I did not. Sometimes it was an explicit referral for an open position but sometimes I didn’t even know the position was open. Yes, that is correct, some of my best hires are for positions that I didn’t know I needed. I realized during the conversation that someone could solve a problem for me. So, while a job description is nice, it is not required. (In fact, at my current business, I have asked all of my key hires to write the job description. This is an extremely useful tool to see if the person understands the job the way you do and saves you a little work). When you are a manager, you must always be open to rethinking your organization and you must always be networking. You just never know when that natural athlete is going to cross paths with you.
What do I mean by natural athlete? Natural athletes are individuals that are independent self starters. No matter what you throw at them they will figure it out. In a startup you can never have enough of these. While star athletes, those that are experts in one thing, are important as well, the natural athlete will be more capable of adapting to the changing world of a startup.
STEP 2: Intuit
I believe there is a “love-at-first-sight” equivalent when you are hiring somebody. I’ve gotten to the point where I can tell within the first five or 10 minutes whether or not I am excited by the conversation. If I am excited, I am talking to a great hire. Usually, after the interviews are complete I can figure out what it was that caused me to be excited in the first 10 minutes. It’s a gut feeling. I have had lots of training from HR professionals that will tell you the gut is wrong more than it is right. That is true in the beginning of your career but less and less so as you mature as a manager. It is your job to hone that instinct and your gut so that the “love at first sight” can happen for you. Also, for me, part of the gut feel is whether or not I think the person is going to be a lot of fun to work with. Life is too short to not work with people you enjoy. The good news is that you are in a position to make sure that is true. So if your gut doesn’t tell you something, don’t hire the person if it is a key hire. Otherwise, you’ll end up with just a “relationship” not a great relationship.
Step 3: Sell
Most of the time the best people that I hired weren’t even looking for a job. That means that once you find the people, you have to sell them. There are different components that you have to keep in mind when you are recruiting. Like all selling, think about your target audience and adjust your pitch. When you are pitching an employee, they need to see someone who has leadership and vision for the company, the product and the culture. Employees like to know that there’s a captain of the ship, on board to make the hard decisions and plotting a course. Without that, people typically don’t want to jump on board, too. For a smaller company, it’s really important to hire people who are resourceful and willing to get into the trenches and do things beyond the specific job description that you’ve laid out for them. So if you are hiring the natural athlete, they want to hear all the different ways they get to pitch in.
Author: Rene Lacerte
Article Source: EzineArticles.com
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Small business grants are closer than you think. They can also be the ideal way to fulfill your dreams of becoming a business owner. It is often a hot topic among entrepreneurs with limited funds and access to capital. They are given to those people who want to start their own small business as a means of supporting themselves while at the same time contributing to the US economy. Business grants are also provided by the US government. Remember, Small Business Grants are not loans and that’s why many people refer to them as Free Grant Money!
Business Grant or Business Loan…?
Grant programs don’t require credit checks, collateral, security deposits or co-signers. In some cases recipients are required to submit periodic progress reports to demonstrate that the grant funds are being utilized properly and goals are being achieved as projected in the application. Grants differ from loans in that they are not repayable. We all know what it takes to get a common loan…like auto loans, home loans, cash loans, etc. Why not try a free grant program that writes the grant for you and also addresses every issue you’ll need to cover before submitting it to the proper agency.
Business Grants Do What?
Business grants are one way that women can run successful businesses whether they have a home-based business or a business outside of the home. They are available to start a new or expand an existing business, equipment financing, acquisition of a new or existing business, rent, salaries, office expenses and overhead. Given to women who are small business owners to encourage and promote economic growth as well. Grants are available to anyone over 18 years of age. In fact, the small business grant you need to start or expand your business may be available right in your own home state.
The Purpose of Grants
A grant supports the business idea and turns the dreams of an entrepreneur in to reality. There are many types of grants offered by the government that include individual grants for personal necessities, business grants for starting new business, housing grants, ,education grants for funding education and many more.
Business Grants & Women
Grants are also available for women who want to buy an existing business. They are also available for women who want to attend business school so that they gain the knowledge they need to start their own business. They are also awarded to women who excel in their respective fields. The best part about business grants is that they are free in the sense that you do not have to pay back the money to the funding agency or the government. Women can also get money to encourage advanced online education have a distinct advantage over any business that leaves advanced learning to chance. Businesses that fall into this arena often find they are eligible for small business grants.
There are Other Options…
Also remember that the federal government, through the SBA, does offer a fine array of very attractive loans to start or expand a small business. There are also low interest and no Interest Government loans available for you to take full advantage of. Most small business owners have to look to personal resources and loans to finance their small business. You may have looked into bank loans, asked friends and family for a loan or looked into getting a few credit cards to pay for you to set your business up.
Women have the largest opportunity of any group to benefit from the generosity of the Government Grant Programs. Women are taking more initiative to work for themselves. Womens small business grants are available in many forms. Women continue to account for the majority of stay at home parents. Women interested in accessing small business grants to start or expand their own businesses should understand certain limitations inherent in small business grant funding. Women have a 75% greater chance of success in business ownership.
Grants for Education
Education is a priority for any government, and for this reason the government. Education grants are available from various sources and are generally funded by the government, although many are established and sponsored by private institutions. They can vary in the amount of the grant as well as the period the grant is made available to the student. Women are also much easier to qualify for and get than education grants. Scholarships are also available for a myriad of situations.
A Little Info about the SBA
SBA does not provide lower interest rates for small businesses. SBA is not related to granting any free government grants, but instead it provides counseling, technical trainings and assistance in areas which are required to run a small business management using its resourceful SBDC or Small Business Development Center at absolutely NO extra Cost to you, its totally FREE. SBA has offices in every state and worked with various non-profit, lending and educational and training organizations nationwide. SBA also runs programs that are intended to help women with training and technical assistance, access to credit and capital, government contracts and such. As far as individuals are concerned, SBA does not offer business grants to any entrepreneur but it does help the minority groups, the women entrepreneurs, economic development of underdeveloped regions, and numerous such activities.
Author: J Pickett
Article Source: EzineArticles.com
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There are three reasons why you need a business plan…
To obtain funding.
Every good potential lender or investor, be they bank, angel investor, venture capitalist or business partner, will require a business plan. They want to be comfortable that you have thought long and hard about your business rather than jumping straight into a business. More importantly they want to ensure that they have a good chance of not only having their investment returned, but also making a profit out of the arrangement.
Your business plan is your sales tool – it explains your business and your strategies to make this business a success. It shows how detailed and organized you are and how you intend to make a success of your business.
To introduce your business to potential investors.
The Executive Summary in undoubtedly the most important part of your business plan. Investors receive hundreds of business plans. They decide on their initial sort of who they want to investigate more thoroughly, by viewing the Executive Summary. Yours should be short, concise and eye catching. Investors like entrepreneurs who can concisely and accurately describe their business, products and potential. If you think of it, this is what an effective sales person does every day. If your business model is not planned well enough to be able to describe in a few well written pages then it is unlikely to be successful and very unlikely to be funded.
Once a potential investor has viewed your Executive Summary and become interested in your potential business, then they will read the rest of your business plan in order to gain a greater understanding of your business and investment requirements.
Your Executive Summary should be written after the main part of the business plan and should be no more than 3 pages long. It should summarize your business plan and include an overview of your business, your business models, what you are selling and in which market. You should also summarize your financial requirements and projections as well as provide your investor’s exit strategy.
To ensure that you have a carefully planned business
A well planned business is a business likely to succeed. Do you know who your potential customers are? Do you really know who they are, where they are and what they are looking to buy that you might be able to sell to them?
Do you know how to define your company within a sales environment? Where do you want your company to be in three years?
Do you know how many staff you will need? How you will pay for these staff?
Do you have a vigorous business model? Even know what a business model is?
Have you really thought through how you will run your business?
The answers to all of the above, plus many more will be discovered, decided and defined during the business planning process. If you use a professional business planning company, you have the advantageous of not only having a well written business plan, but you also benefit from the business knowledge of the planning company.
A well written and thought out business plan will help you to clarify your own thoughts about your business, how you want to present your company to your peers, customers and investors. It will help you find out who your best customers are, where they are, what they want to buy and at what price. It will identify any weaknesses you may have in your thinking. Lastly it will provide you with a business and marketing strategy combined with a robust financial model and business model that will give you confidence to make the leap into entrepreneurship.
…..and one why you need to have it professionally written.
Why use a professional business planning company?
A professional company will have experience of writing many different kinds of business plan for many different types of companies. A plan written for a Venture Capitalist is totally different to that which an Angel Investor or a bank requires. A professional company understands this and how to answer the particular concerns of each type of investor or lender. They will pitch you plan to your potential audience.
Investors are risking their hard earned capital by investing in your business and they are entitled to be comfortable that you have a clear business strategy a robust business model and have researched your potential market in great details. They also want to be comfortable that you understand all the risks that your new business faces.
Many business owners, who write their own business plans, often do not include all the information required or include information that is not required. Many amateur plans are unfocussed and discuss information that is not required in detail. An unfocussed and unstructured business plan gives off the wrong impression that you are also unfocussed and unstructured.
To a new entrepreneur you will be very short on time – in order to produce a business plan you will not only need a great deal of time to produce the plan but will also need to take time on a steep learning curve. A professional business plan company has climbed this curve and has enough experience to guide you through the whole process, set your mind working in the right direction and prompt your thought processes.
Hiring a professional allows you to concentrate on finding and servicing your customers, although a good professional will involve you at every stage and your input is definitely required to ensure that the plan reflects YOUR business.
Your business plan consultant will be objective in reviewing your business and have the experience to offer suggestions and advice during the writing process.
The money you pay for a business planning consultant will give you a quality, investor ready business plan with some very useful business consultancy as a bonus!
Author: Lee Lister
Article Source: EzineArticles.com
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