Business Plan Analysis

Introduction

The business plan analysis below relates to the areas identified in the business plan with room for improvement. The analysis includes the weakness observed in the plan, the rationale, and suggestions for improvement. Covello & Hazelgren (2005) attest that it is crucial to follow certain rules to make a business plan. Without proper presentation, a plan may fail to provide the direction it promises.

Risk Assessment

The section dealing with the assessment of risk requires some improvements. As it stands, it identifies the risks to the business and in some cases predicts their possible impact on the business. The assessment presents all the risks in prose. The entire presentation fits in two small paragraphs. This is incongruent to the average length per section in the business plan. These weaknesses have a number of ramifications.

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First, the assessment does not provide for weighted-criteria for the determination of the “seriousness” of the risks. There is no way of knowing which risks have the highest likelihood of happening, and if they happen, there is no way of determining the kind of consequences that will accrue.

Secondly, having a section of the plan significantly shorter than others gives the impression that the section did not receive much attention during the preparation of the plan. Thirdly, while there is no problem with putting down the risks in prose, the nature of the information is such that presenting it in prose only, reduces the efficacy of communicating. This is because the risks are distinct. A reader of the plan does not have a means of appreciating the gravity of each risk.

There are a number of ways to improve the section. One of them is to use a list containing the risks in a numbered or bulleted fashion. This will make each risk stand out and will make it easy for someone looking at the plan to see the distinctness of each risk. This method will not make it possible to add conveniently weighted-criteria. The second method involves tabulation of the risks and providing columns for putting up the weighted-criteria.

To make the presentation of risks more effective, the following format may be useful. First, a paragraph written in prose will introduce the section. Secondly, a general assessment of the risks will take place. Thirdly, there should be a risk-matrix table to display the risks and their probability of happening, and the consequences of such risks.

This is a strong indicator of a “carefully prepared business plan” (DeThomas & Derammelaere, 2008, p. vi.) Finally, a paragraph explaining the risk management strategy will close the section. A sample risk matrix used in project management follows below.

RiskProbability of occurrenceConsequencesMitigation measure
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