A business plan is a twenty-five to forty-page written document that describes where a business is heading, how it hopes to achieve its goals and objectives, who is involved in the venture, why its product(s) or service(s) are needed in the marketplace, and what it will take to accomplish the business aims. 

There are three essentials reasons to prepare a business plan: 

1. Entrepreneurs reap benefits from the planning activity itself

2. The plan provides a basis for measuring actual performance against expected performance.

3. The plan acts as a vehicle for communicating to others what it is that the business is trying to accomplish. 

The most common use of business plans by businesses is for funding, to attract/convince investors (and/or venture capitalists), bankers, corporate partners.

I believe business plans fail because:

• you do not take the time to do it right, prepare it for the audience you are going to be presenting the plan to 
• you business plan is static: you do not update it and you don’t really focus on the business environment in which you are operating
• you focus too much on the expected results rather than on the actual results
• there are the wrong people at certain management positions

Why is innovation important, and how is it changing?

Innovation is important because it helps a business deliver a product/service that is perceived as more valuable to the customers compared to the product/service of a competing business. Therefore, innovation in this sense might help the company increase it’s sales (and profits). However some things have changed in the last 20 years. 

The internet and the access to the global market (less trade barriers) has drastically that changed the way companies operate 

Businesses have a better access to knowledge and skills and are no longer, or at least not as strongly as in the past, constrained by their geography. However, the fact that the internet is widely used today makes it easier for buyers (whether it’s the consumer or another business) to compare products/services before purchasing them. And they also have higher requirements and expectations because they know if certain company can’t offer them want they want, they might find another one. Customers do no longer just want a product. They want a service, an experience.

Innovation is more important today because customers are more fickle, therefore, harder to retain.

Growth is important to companies and innovation enhances growth. However, this may require investment capital, that most companies don’t have. Furthermore, “the competition for growth capital is becoming tougher” due to the fact that firms compete internationally also for finance. An innovative company has more chances to attract investors. 

Today more than never, innovation is important for a company if it wants to keep up with the environment in which it’s operating because “life cycles are continually declining.” Early 2000s, Nokia was a leader in the mobile telephony industry but with the arrival of the iPhone, things changed. Nokia didn’t really innovate and/or try to move towards smartphone technology, which was fatal for the company. 

Why do you think Dell was successful when other companies trying the same model failed?

What made Dell successful was the way it sold, manufactured and delivered its products (direct sale, made-to-order). It think companies that tried that model and failed was first of all because Dell had a first-mover advantage which meant customers knew Dell for that model and not the other companies. And probably locked in suppliers and partners. Plus, computer companies didn’t see the opportunity at the right time (they kept doing business the old-fashioned way, the way that they “knew”).

According to the definition in the course material, entrepreneurship is “the process of planning, organizing, operating, and assuming the risk of a business venture”. In the US, a small business is usually a business that has less than 250 employees.

I don’t really think one should dissociate both ideas because usually as an entrepreneur, when you start a new venture, it tends to have less than 250 employees.

However, being an entrepreneur nowadays also means investing in businesses, which sometimes are already well established businesses. It is possible for an entrepreneur to buy or invest in a business that  has more than 250 employees. In this sense,  entrepreneurship would be different than owning a small business.

If I start a business, I think I will share control with others and make all the participants wealthier because today, as the owner of a business, you do not necessary have all the skills or resources. For example, if I were to launch a project and I didn’t have all the financial means, I would try to find investors or business partners.

Secondly, I may not have skills in accounting/finance or in marketing, or even to recruit new employees, therefore I would find a manager in those fields. Because he has better skills and knowledge and would do the job better than I would.

The growth issues entrepreneurial companies face in my opinion would be finding the financial resources to grow or/and convincing potential investors about the project so they put their money in it.