Running head: TYPICAL BUSINESS PLAN MODELS 1

Typical Business Plan Models

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Institution
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Typical Business Plans

According to Hiduke & Ryan (2013), there are different types of business models. Each

model is important and is actually necessary at a certain time in a business’s life. A business plan

follows the principle of “form following function”. This means different situations in a particular

business necessitates use of a different business plan model. Kaplan & Warren (2009) argues that

an effective business plan is one that matches its intended use. Knowing the difference between

the business plan models will help a business effectively plan for its future using the right model.

A business plan in its basic form acts as a guide that shows the direction a business should follow

and what is needed to get there from the current position. This paper compares and contrasts the

four typical business plan models. In addition, it analyzes their strengths and limitations and

compares them with models in the Microsoft Project.

i. Start-up business plans

A start-up business plan is the first step any business must pass through before

commencing operations. It acts as a business’s blue print in directing the business during its

initial stages. It covers topics relevant to a new business such as its target market, its products

and/or services it intends to offer, management team and a market analysis. It also outlines a

financial analysis that includes projected income, cash flows and profits among others (Brad,

2014).

ii. Operating business plan

Ochtel (2009) argues that an operating business plan is a plan that includes particular

implementation milestones, responsibilities of employees and managers and project deadlines.

They are used to ensure a business stays on track to achieve its goals. This plan covers the

delicate activities of a business by outlining specifics in regards to who should do what as well as
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when it should be done. Information on these plans may be presented in many forms such as

bullet form or in diagrams or charts of operations.

iii. Growth/expansion business plans

According to Ochtel (2009), growth/expansion business plans are plans that focus on a

particular area of a business such as particular product or market segment for the purpose of

expansion, for example, developing a business plan for creation of a new product. These types of

plans are usually sub plans that can be conducted even under a single department. This ensures

the business does not deviate from following its major plan that is meant to achieve its main

objectives. Although financial projections are not required for such a plan, the plans should

include sales forecasts and projected expenses for the new product or venture.

iv. Feasibility plan

A feasibility business plan is a plan that helps to validate a product, technology or

market. It involves determining who will buy the product or service a business intends to sell and

whether the undertaking can post a profit. This plan includes a description of the need for the

particular product or service, required capital and the target market. It also includes a

recommendation for the action that needs to be taken (Kaplan & Warren, 2009).

Strengths the above business plan models

Every business needs a sustainable business plan. Such plans keep organizations orderly.

Business plans align management to the organization’s goals. Business plans also give guidance

to relevant parties on how to execute their activities. A business plan also helps a business to

retrace its steps when it loses its way. By reviewing a business plan, a business can refocus its

efforts and move forward as projected (Hiduke & Ryan, 2013).

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Business plans also ensures the management considers all aspect of the business to

eliminate possible aspects that can lead to failure. It also makes a business aware of what skill

sets it misses enabling the business to hire experts to fill the identified gaps (Hiduke & Ryan,

2013).

A good business plan also attracts investors, particularly, a start-up business plan. It gives

investors confidence that the business knows what it intends to do as it details all information

regarding the business including the potential returns the investors stand to gain (Hiduke &

Ryan, 2013).

Limitations of the above business plan models

Business plans tend to lack homogeneity. This renders them sometimes unreliable when

dealing in a market with intense competition. Developing a business plan is also tedious and time

consuming and many businesses often fail to complete development of the final chapters of the

business plan. This renders the business plan less effective as it should be. Businesses may also

experience financial constraints as researching on how to develop the plan is time consuming,

tedious and consumes a lot of resources. Changes in international law or administration

regulation may interfere with some models. These plans are also weak regarding information on

the competitors of the business.

Comparison of the above models to the business plan models in Microsoft Project

According to Brad (2014), the business plan models in the Microsoft Project largely

mimic the above typical business plan models. Just like the typical models described above, the

Microsoft Project provides for easy supervision of projects via use of project plans. The project

plans enable managers of businesses to setup projects tasks and milestones. It also enables

managers to identify task dependencies, estimate durations for each phase and assign resources
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optimally. This makes the software a good tool to manage a business’s projects. In this regard,

these models serve the purpose that the traditional business models described above usually

serve. In addition, like the typical models, models in the Microsoft Project allow tasks to be

arranged logically; this promotes easy coordination of work activities. This shows that the

Microsoft Projects are just a computerized form of the typical business plan models. Ideally, they

are almost similar in terms of their functioning.

The model that I believe will work best for my CLC Business Plan

I think the Start-up business plan model is the best model to use for my CLC Business

Plan. Considering my business is new, I need to effectively lay down strategies that direct the

business accordingly to the right direction. A Start-up business plan will help me to cover all the

relevant aspects of the business. This in turn will help to attract investors to the business as this

model includes a financial analysis. Most investors evaluate a financial analysis of a business

before making their decision whether to invest in a specific business (Ochtel, 2009).

Conclusion

Business plans are prepared to act as a guide to managers, investors and owners of a

business. It outlines relevant aspects of a business. There are different types of business plan

models. Each type is applicable at different stages and situations of a business. Despite their

importance in guiding businesses, these models have some limitations, which businesses must

consider before using them to formulate the future strategies of their businesses. A good business

plan will guide a business accordingly towards achieving its objectives and winning over

investors (Kaplan & Warren, 2009).

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References

Brad, I. (2014). Business Plan -- Major Management Tools In Development Of A

Business. Agricultural Management / Lucrari Stiintifice Seria I, Management

Agricol, 16(2), 214-217.

Hiduke, G., & Ryan, J. D. (2013). Small business: an entrepreneur's business plan. Cengage

Learning.

Kaplan, J. M., & Warren, A. C. (2009). Patterns of Entrepreneurship Management. New Jersey:

John Wiley & Sons Publishers

Ochtel, R. T. (2009). Business planning, business plans, and venture funding: a definitive

reference guide for start-up companies. Carlsbad Publishing.