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The spirit of entrepreneurship

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Introduction

THE SPIRIT OF ENTREPRENEURSHIP By Marvin Catacutan 011152667 Yonatan Kachko 013855978 Melanie Low 024803819 Qaiser Mian 015179260 Melissa Pereira 014713424 Winter 2004 Submitted to Dr. Mary Han School of Business Management in partial fulfillment of the requirements for ENT 526 - Introduction to Entrepreneurial Behaviour April 2, 2004 Ryerson University EXECUTIVE SUMMARY Planning is a critical stage in any new venture. Business plans offer a detailed outline of how an entrepreneur expects to run their new business, and forecasts how the new venture will do. It is said that this is a very important tool in any successful venture. However, is this really the case? As the business world changes everyday, an entrepreneur must be able to think quickly and respond to changes as they happen. Business plans can hinder a new venture's growth as the entrepreneur must then take the time to update their business plan. Time that otherwise could be used to make important business decisions. A substantial part of the business plan involves financial data. Most of this data consists of forecasts, which is open to interpretation by both the entrepreneur and the investors studying the document. Whether the forecasts are reliable is very subjective. On the other hand, business plans can be beneficial as it allows the entrepreneur to clearly define and communicate their goals and objectives. It also helps the entrepreneur establish a framework for making management decisions. It helps the entrepreneur establish their vision, and move towards their goals and objectives. ...read more.

Middle

If the Richard Branson's, Bill Gates, Donald Trumps, Vanderbilt's and Carnegies of the world where encumbered with the writing of business plans the business world would be the poorer for it. These entrepreneurs are and were successful, they had vision, passion and skills to make themselves successful, they were not people that would give thought to writing lengthy business plans, they were go-getters, they were people that relied on intuition to guide their business decisions, the bureaucracy of institutions would have stunted the creative energy and breadth of thought that these individuals brought to the business world. They managed to do quite well without having to ever write a one hundred page business plan. Were they lucky fools or entrepreneurial geniuses? The pendulum could swing either way, however, it is worthy of consideration that perhaps that the secret of their success was not in the rules they followed but rather those they didn't. Decisions have to be made immediately, reactions have to be instantaneous if all great entrepreneurs had to invest long lengths of time and great deals of money writing up documents that may or may not aid in the realization of their vision then a lot more trees would be sacrificed for a lot fewer results. The most critical of information contained in business plans i.e. the financials are based on forecasts and estimates, and they remain just that, whether they are a reliable tool for decision making is a question as subjective as the opinion of the person interpreting them. ...read more.

Conclusion

The framework can then be used as a basis for making important decisions. Joseph Mancuso backs up this statement claiming, "A business plan is a road map that gives a business direction." (Brown, 1996) Once the business plan is created and the venture is running, the business plan must not be forgotten. The plan should not only be viewed as a start-up document, but should be used as tool to help manage the business. As Shead, national account executive for Xerox, stated, "Unless you monitor and record ongoing trends in your market, it's impossible to chart your company's future" (Brown, 1996). An organization's business plan should be continuously updated and tailored to the most recent accomplishments of the venture. The process of strategically thinking through a business idea and documenting it on paper can potentially save a company valuable time and money. Crawford Lucas (1992) suggested that while a good business plan does not guarantee the success of a business, it can reduce the odds of failure. Further research by Crawford-Lucas (1992) indicated that businesses that employ business plans are typically more successful than those who do not develop their ideas on paper. CONCLUSION As discussed in the paper, there are disadvantages and advantages in writing up a business plan for a new venture. However, there is no final conclusion on this matter. An entrepreneur will need to determine themselves if a business plan is a suitable tool for their venture. Only they know the structure of their new business, and if a business plan will aid or hinder that new business's development and growth. ...read more.

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