Importance of a Good Business Plan to an Organization

A Business plan will also influence the CEO to clearly outline the intended niche and target market through research; possessing a transparent understanding of the demographics, behaviors, geographic’s, and psychographics (lifestyle) argued Parmele (2013) from business plans.com. Additionally, completing a business plan will allow the company to be more realistic differentiating their products, marketing approach, and determining financial factors involved.

The firm's profit maximizing output is less than the output associated with minimum average cost. The firm’s demand curve is not flat but is downward sloping. Thus in the long-run the demand curve will be tangential to the long-run average cost curve at a point to the left of its minimum. The result is excess capacity.”

The market price of a good is determined by both the supply and demand for it. In the world today supply and demand is perhaps one of the most fundamental principles that exists for economics and the backbone of a market economy. Supply is represented by how much the market can offer. The quantity supplied refers to the amount of a certain good that producers are willing to supply for a certain demand price. What determines this interconnection is how much of a good or service is supplied to the market or otherwise known as the supply relationship or supply schedule which is graphically represented by the supply curve. In demand the schedule is depicted graphically as the demand curve which represents the

can interfere with the economy’s ability to produce or it can reduce demand, as it

Many firms may have to seek profit maximization through trial and error. e.g. if they see increasing price leads to a smaller % fall in demand they will try increase price as much as they can before demand becomes elastic.

For Cisco Systems, if the demand fluctuates more and more quickly therefore they have to supply their customers more and more quickly and efficiently. They also have to improve and adjust their products/supplies in order to satisfy their clients’ needs that would then satisfy the final consumers’ needs. For customers for Cisco Systems, this implies that they would want more and more or they would want less than what is supplied. This means that they want something more or they want something less or something else that makes the demand for business market fluctuate more and more quickly.

Economic: The industry’s performance is highly tied in with the economy. A weak economy will mean weak sales.

The demand curve shows what happens to the quantity demanded of a good when its price varies, holding constant all the other variables that influence buyers. When one or more of these other variables changes, the demand curve shifts leading to an increase or decrease in demand. The table below lists all the variables that influence how much consumers choose to buy cigarettes.4

A business plan is the core of your business and a must have. It is the roadmap that brings your business idea into a reality. A business plan is a written document that describes in detail how a business, usually a new one, is going to achieve its goals. It guides your business from the start- up stage to developing, growing and managing your business. It can also be used to get funding.

A business plan is a road map for a team or business and it can be used, as an eternal tool for potential customers and partners. The business plan should describe in details the entire business venture, technology behind it, the size of the target market, customers, competition, business model, team, financial needs and exit strategy. The business plan gives a company insight and allows them to think things through early enough in the process to ensure they have a well defined venture goals and objectives. It also gives the business direction to a clear path for the team to follow and implement on their venture.

When demand is strong and rising (e.g. during the upturn phase of the economic cycle), a business will

Starting a new business is an exciting venture and has its unique mix of challenges and rewards. Many are set-up for failure if no clear goals or measures are established and adhered. According to the Small Business Administration, “Planning is critical to successfully starting and building a business.” The best advice for a new entrepreneur interested in starting a business is to create a solid business plan that outlines the business in its entirety. A well-constructed, written business plan will help owners remain focused on their operations, marketing and financial measures through the duration of the business life. In addition, knowing the risks involved in starting a business can help prevent and minimize mistakes that cause many

The following graph demonstrate the demand curve of how many items of a product or service a consumer would like to purchase at different prices. Now by having the product at a lower price, the more a consumer is likely to buy. For that same reason it can be concluded that the price is one major factor of the product demand.

Supply and demand is perhaps one of the most fundamental concepts of economics and it is the backbone of a market economy. Demand refers to how much (quantity) of a product or service is desired by buyers. The quantity demanded is the amount of a product people are willing to buy at a certain price; the relationship between price and quantity demanded is known as the demand relationship. Supply represents how much the market can offer. The quantity supplied refers to the amount of a certain good producers are willing to supply when receiving a certain price. The correlation between price and how much of a good or service is supplied to the market is known as the supply relationship. Price, therefore, is a reflection of supply and demand.

Furthermore, the basic start of a business begins with a business plan. “A business plan precisely defines your business, identifies your goals, and serves as your firm’s resume”