Factors affecting

Entrepreneurship
Development
Entrepreneurship is influenced by four distinct factors: economic development,
culture, technological development and education. In areas where these factors are
present, you can expect to see strong and consistent entrepreneurial growth.

These conditions may have both positive and negative influences on the emergence
of entrepreneurship. Positive influences constitute facilitative and conducive
conditions for the emergence of entrepreneurship, whereas negative influences
create inhibiting milieu to the emergence of entrepreneurship.

Let us look at each one of them in details.

Economic Factors
Economic environment exercises the most direct and immediate influence on
entrepreneurship. This is likely because people become entrepreneurs due to
necessity when there are no other jobs or because of opportunity.

The economic factors that affect the growth of entrepreneurship are the following:

1. Capital

Capital is one of the most important factors of production for the establishment of an
enterprise. Increase in capital investment in viable projects results in increase in
profits which help in accelerating the process of capital formation. Entrepreneurship
activity too gets a boost with the easy availability of funds for investment.

Availability of capital facilitates for the entrepreneur to bring together the land of one,
machine of another and raw material of yet another to combine them to produce
goods. Capital is therefore, regarded as lubricant to the process of production.

France and Russia exemplify how the lack of capital for industrial pursuits impeded
the process of entrepreneurship and an adequate supply of capital promoted it.

2. Labor

Easy availability of right type of workers also effect entrepreneurship. The quality
rather than quantity of labor influences the emergence and growth of
entrepreneurship. The problem of labor immobility can be solved by providing
infrastructural facilities including efficient transportation.

The quality rather quantity of labor is another factor which influences the emergence
of entrepreneurship. Most less developed countries are labor rich nations owing to a
dense and even increasing population. But entrepreneurship is encouraged if there
is a mobile and flexible labor force. And, the potential advantages of low-cost labor
are regulated by the deleterious effects of labor immobility. The considerations of
economic and emotional security inhibit labor mobility. Entrepreneurs, therefore,
often find difficulty to secure sufficient labor.

3. Raw Materials

The necessity of raw materials hardly needs any emphasis for establishing any
industrial activity and its influence in the emergence of entrepreneurship. In the
absence of raw materials, neither any enterprise can be established nor can an
entrepreneur be emerged

It is one of the basic ingredients required for production. Shortage of raw material
can adversely affect entrepreneurial environment. Without adequate supply of raw
materials no industry can function properly and emergence of entrepreneurship to is
adversely affected.

In fact, the supply of raw materials is not influenced by themselves but becomes
influential depending upon other opportunity conditions. The more favorable these
conditions are, the more likely is the raw material to have its influence of
entrepreneurial emergence.

4. Market

The role and importance of market and marketing is very important for the growth of
entrepreneurship. In modern competitive world no entrepreneur can think of
surviving in the absence of latest knowledge about market and various marketing
techniques.

The fact remains that the potential of the market constitutes the major determinant of
probable rewards from entrepreneurial function. Frankly speaking, if the proof of
pudding lies in eating, the proof of all production lies in consumption, i.e., marketing.

The size and composition of market both influence entrepreneurship in their own
ways. Practically, monopoly in a particular product in a market becomes more
influential for entrepreneurship than a competitive market. However, the
disadvantage of a competitive market can be cancelled to some extent by
improvement in transportation system facilitating the movement of raw material and
finished goods, and increasing the demand for producer goods.

5. Infrastructure

Expansion of entrepreneurship presupposes properly developed communication and

transportation facilities. It not only helps to enlarge the market, but expand the
horizons of business too. Take for instance, the establishment of post and telegraph
system and construction of roads and highways in India. It helped considerable
entrepreneurial activities which took place in the 1850s.
Apart from the above factors, institutions like trade/ business associations, business
schools, libraries, etc. also make valuable contribution towards promoting and
sustaining entrepreneurship’ in the economy. You can gather all the information you
want from these bodies. They also act as a forum for communication and joint action.

The Entrepreneurial Process

The entrepreneurial process stages that needs to happen to start a business is not
easy for anyone. Many people have reasons to be an entrepreneur, many say the
things that should be done, and a few are the ones who really do what is needed to
start. It is very common to see people who think, but a few who act. The
entrepreneurial process stages can be developed one step at a time, but some
entrepreneurs are the ones who continue on this lifestyle.

The entrepreneurial culture and spirit is on those who decide to take one step ahead
to achieve success. It is a long-term process, that visionaires will have to keep on
working to transform their environment.

The entrepreneurial process is a set of stages and events that follow one another.
These entrepreneurial process stages are: the idea or conception of the business, the
event that triggers the operations, implementation and growth. A critical factor that
drive the development of the business at each stage as with most human behavior,
entrepreneurial traits are shaped by personal attributes and environment.

Steps
1. Idea generation
The entrepreneur begins to wonder why there is not available a product or service,
why not improve certain things, how to generate income to cover their expenses, etc.
Thousands of questions might rise, so them will help to identify opportunities to
meet the market needs. In previous years, there where not enough amount of goods
and services. It was a little bit easier to position a business, however now it requires a
search for information and market analysis to see the possibility of success.It is
possible that at this point in the entrepreneurial process, there are many people,
since the generation of ideas can be much easier. However, the step towards a
decision making is where many can stop and perhaps even abandon the idea from
the starting a business.
2. Decision making and business planning
A critical point in the entrepreneurial process is deciding to start the project. Be
active and stay motivated are the main factors for the entrepreneur to start landing
his idea. Asking what resources are needed and where he will get them, is vital to
generate at least one way forward for the entrepreneur. The development of the
business plan will mark only a guide that can be used as reference.

3. Project creation
The project is conducted when the entrepreneur decides to seek and obtain
resources. Getting financiation is difficult, and perhaps one of the main obstacles to
start a business. When the entrepreneur begins to invest the resources and and
begin operating, it is a point release of stress, as the entrepreneur will see the first
steps of his company.

4. Management and control

After having pass through the first months of operation, the company will see if it
decreases, maintains or increases in sales. The entrepreneur should strive to maintain
revenue growth before worrying about having a nice office. Managing a business is
not easy, but the experience that entrepreneurs acquire over time will surely ease the
handling of all resources.Perhaps one could say that the entrepreneurial process
ends here, but I think it is no longer an entrepreneur, and he becomes a full
businessman or businesswoman.
Female entrepreneurs
Definition[edit]
Main article: Entrepreneurship
Entrepreneurship has traditionally been defined as the process of designing,
launching and running a new business, which typically begins as a small business,
such as a startup company, offering a product, process or service for sale or hire.[4] It
has been defined as the "...capacity and willingness to develop, organize, and
manage a business venture along with any of its risks in order to make
a profit."[5] While definitions of entrepreneurship typically focus on the launching and
running of businesses, due to the high risks involved in launching a start-up, a
significant proportion of businesses have to close, due to "lack of funding, bad
business decisions, an economic crisis – or a combination of all of these"[6] or due to
lack of market demand. In the 2000s, the definition of "entrepreneurship" has been
expanded to explain how and why some individuals (or teams) identify opportunities,
evaluate them as viable, and then decide to exploit them, whereas others do
not,[7] and, in turn, how entrepreneurs use these opportunities to develop new
products or services, launch new firms or even new industries and create wealth.[8]
Traditionally, an entrepreneur has been defined as "a person who organizes and
manages any enterprise, especially a business, usually with considerable initiative
and risk".[9] Rather than working as an employee, an entrepreneur runs a small
business and assumes all the risk and reward of a given business venture, idea, or
good or service offered for sale. The entrepreneur is commonly seen as a business
leader and innovator of new ideas and business processes."[10] Entrepreneurs tend
to be good at perceiving new business opportunities and they often exhibit
positive biases in their perception (i.e., a bias towards finding new possibilities and
seeing unmet market needs) and a pro-risk-taking attitude that makes them more
likely to exploit the opportunity.[11][12] While entrepreneurship is often associated with
new, small, for-profit start-ups, entrepreneurial behavior can be seen in small-,
medium- and large-sized firms, new and established firms and in for-profit and not-
for-profit organizations, including voluntary sector groups, charitable
organizations and government.[13] For example, in the 2000s, the field of social
entrepreneurship has been identified, in which entrepreneurs combine business
activities with humanitarian, environmental or community goals.
An entrepreneur is typically in control of a commercial undertaking, directing
the factors of production–the human, financial and material resources–that are
required to exploit a business opportunity. They act as the manager and oversee the
launch and growth of an enterprise. Entrepreneurship is the process by which an
individual (or team) identifies a business opportunity and acquires and deploys the
necessary resources required for its exploitation. The exploitation of entrepreneurial
opportunities may include actions such as developing a business plan, hiring
the human resources, acquiring financial and material resources,
providing leadership, and being responsible for the venture's success or
failure.[14] Economist Joseph Schumpeter (1883–1950) stated that the role of the
entrepreneur in the economy is "creative destruction"–launching innovations that
simultaneously destroy old industries while ushering in new industries and
approaches. For Schumpeter, the changes and "dynamic disequilibrium brought on
by the innovating entrepreneur ... [are] the ‘norm’ of a healthy economy."[15]
Entrepreneurship typically operates within an entrepreneurship ecosystem which
often includes government programs and services that promote entrepreneurship
and support entrepreneurs and start-ups; non-governmental organizations such as
small business associations and organizations that offer advice and mentoring to
entrepreneurs (e.g., through entrepreneurship centers or websites); small
business advocacy organizations that lobby the government for increased support
for entrepreneurship programs and more small business-friendly laws and
regulations; entrepreneurship resources and facilities (e.g., business
incubators and seed accelerators); entrepreneurship education and training
programs offered by schools, colleges and universities; and financing (e.g., bank
loans, venture capital financing, angel investing, and government and private
foundation grants). The strongest entrepreneurship ecosystems are those found in
top entrepreneurship hubs such as Silicon Valley, New York
City, Boston, Singapore and other such locations where there are clusters of leading
high-tech firms, top research universities, and venture capitalists.[16] In the 2010s,
entrepreneurship can be studied in college or university as part of the disciplines
of management or business administration.

Present challenges[edit]
Even though female entrepreneurship and the formation of female-owned business
networks is steadily rising, there are a number of challenges and obstacles that female
entrepreneurs face. One major challenge for female entrepreneurs face traditional
gender-roles that are structurally internalized by society. Entrepreneurship is still
considered as a male-dominated field, and it may be difficult to surpass these
conventional views. Other than dealing with the dominant stereotype, female
entrepreneurs are facing several obstacles related to their businesses.
Human, social, financial capital barriers[edit]
One of the arguments the study of gender discrimination in venture capital funding is
that the demand for skilled women entrepreneurs is greater than the supply. In 1999, the
Diana Project showed that contrary to conventional wisdom, many of the women who
were not financed through growth capital had the necessary skills to build a high-growth
business.[31]
Other research has shown that women entrepreneurs are already launching ambitious
businesses in the high-technology industry, expanding their social networks, and making
their pitches more relatable to the male-dominated VC industry, despite many industry
people believing that women are not doing that. Some studies, though, have looked at
the social networks of women entrepreneurs, showing that their networks are different
from that of their male counterparts and aren't overlapping as much with financial
networks.[32] An entrepreneur's social capital is defined by the networks they have access
to, and receiving private equity funding is heavily influenced by an entrepreneur's social
capital and whether it overlaps with that of venture capitalists. [33] Thus, women continue
being disadvantaged in that respect when looking for private equity funding.[33]
Another important factor in receiving private equity funding is an entrepreneur's human
capital, derived from education, training and experience. Some studies have shown that
women were less likely to have the necessary experience in executive or technical
management, since they tended to be more present in the retail, finance, service and
real estate sectors.[33] This has led other researchers to study female entrepreneurs with
extensive human capital, to identify whether they still face discrimination in their funding
search. In a study that used data from MIT Venture Mentoring Service, it was found that
women with strong human capital were still less likely to pursue their high-growth
business ideas full time.[34] Education, especially in the STEM fields, is another barrier
that women face in achieving the necessary human capital.[35]
Obstacles in Supply Specifically in STEM[edit]
STEM related fields are heavily populated by men, and women are extremely
underrepresented. Many people believe this issue to be getting better, and although it
may be, it is still a large issue that must be addressed on a larger scale. [opinion] From a
study done in 2010 by AAUW, it seems as though the underrepresentation stems from
societal norms that cause barriers.[36] Some of these barriers include stereotypes and
gender bias. But one of the most important aspects that is often not recognized as much
is that some of these barriers come from the way that engineering and mathematics
programs at universities are geared more towards men. An example outlined in this
study was that a woman going into a math exam naturally feels more pressure due to
the idea that men are better at math, and the environment of being in a room with more
men would subconsciously affect performance as well. In addition, women having the
ability to get out of the mindset that they have a fixed amount of intelligence is
imperative in achieving more in the scientific world. There are hundreds of peer-
reviewed research papers written focusing on many different aspects of education,
specifically regarding STEM, that explain the implicit bias against women.[citation needed] For
example, a review, “Males under-estimate academic performance of their female peers
in undergraduate biology classrooms”, stated that men rank their fellow male classmates
as more knowledgeable than their female peers.[37]
There are also issues regarding occupational sex segregation because there is hiring
discrimination in the technology and mathematics fields. This is partially due to the way
society makes it seem as though it is socially abnormal for women to work in STEM-
related fields.[opinion] In addition, this issue is extremely hard to fix because it is so
ingrained in society, but it is important that there are options for girls to get involved in
STEM related classes and extracurriculars at a young age in order to create less of an
inequality of opportunity. This will also help break the norm that STEM is a man’s field. [37]
Gendered processes in finding financing[edit]
A different approach to researching the gender discrimination in venture capital funding
is studying the gendered processes of looking into financing.[citation needed]
It has been shown that in the venture capital world there is a strong tendency towards
homophily, meaning that people with a certain backgrounds will associate themselves to
individuals with a similar background. This leads to entrepreneurs seeking financing from
members of their sex. Their results confirm this hypothesis since only 8.9% of proposals
brought to VCs were put forward by women, even though the authors couldn't find a
statistically significant difference between the probability for women and men to receive
equity.[38] This poses a huge challenge for women entrepreneurs seeking financing from
other women, since the number of women venture capitalists has decreased from 10%
in 1999 to 6% in 2014, which is why the Diana Project argues that for increasing women-
led ventures' access to capital there should be more women VCs.[31]
At the same time, these statistics could also be explained by the higher requirements
that women face when submitting a proposal for VC financing. In one study, it was found
that financing evaluators see women without a technical background as less capable
than males without a technical background. Women with a technical background had an
advantage to their male counterparts for being evaluated as more sociable and having
better leadership skills. This also meant that for women to be seen as legitimate
entrepreneurs they needed to exhibit higher qualifications than male entrepreneurs,
needing both a technical background and a higher social capital, thus strong social ties
with people from the industry. This shows that for evaluators to trust women
entrepreneur's abilities they need to see a greater potential in them than in their male
counterparts, likely due to gender stereotypes.[35]
Other studies, though, have shown that these are not the only obstacles women face
due to the stereotypes associated to their gender. Multiple studies on discrimination
faced by women seeking financing for their ventures have been built on top of the
gender role congruity theory, which states that individuals expect men and women to act
in ways that match their gender stereotypes. In one study it was observed that qualities
associated to successful entrepreneurs converged to attributes that evaluators assigned
to male entrepreneurs, while the characteristics opposite to those of an ideal
entrepreneur were generally attributed by evaluators to femininity. This highlights the
fact that gender stereotyping is consistently being used in venture capitalists' decision
making process.[39] Gender stereotyping in the VCs' decision making was also
emphasised in a different study that showed that men and women get asked different
questions during their pitches. The questions targeted towards the women
entrepreneurs are focused on prevention and loss, while their male counterparts receive
questions focused on potential gains. While women got asked questions like: "How
predictable are your future cash flows?", men were asked: "What major milestones are
you targeting for this year?". The authors note that this approach sets up women for
failure from the very beginning.[40]
Entrepreneurs are not the only ones affected by gender stereotypes. The whole process
of seeking financing, from the relationships between entrepreneurs and investors, to the
human and social capital have been shown to have gender embedded in them. It has
been shown that women tend to emphasise the human and social capital they have, in
an effort to compensate for the lack of resources usually associated to the ideal
entrepreneur, especially since other studies have shown that the ideal entrepreneur
usually has attributes generally associated to male entrepreneurs.[3]In an effort to
emphasise their potential, women also tend to stress the involvement of men as board
members and board chairs in their ventures. The authors have classified women
entrepreneur's strategies that emphasise more "masculine" attributes of their venture,
such as growth ambitions, as compensatory signalling strategies.[41] Another aspect
highlighted by this study is that industry experience in "feminine" industries, such as the
spa and fitness industry, is seen as less valuable by investors than experience in
industries generally associated to masculinity, such as the petrol industry. [41]
Venture capitalist's gendered view of entrepreneur's experience is only one of the
examples of having women entrepreneurs held at different standards than their male
counterparts.In a study focusing on the financing received by entrepreneurs from banks
it was found that male entrepreneurs received more funding than their female
counterparts, despite having the same number of employees and past performance
track record (two factors that show viability for a business). Thus, women's strong track
records did not correlate as strongly with the funding received as for men, and so for the
same business attributes their reward was lower.[42]
Obstacles specific to starting new firms[edit]
The theory of "homophily," is a concept described by social scientists as the tendency
for people to seek out or be attracted to those who are similar to themselves.[43] This
theory impacts the number of women who are able to start new firms, because there are
less women than men who own their own companies; women compose about half of the
labor force, but own only 36 percent of US companies.[44] This statistic shows how it is
evident that the number of women in this field is disproportionate to the population.
Recent data suggests that when female entrepreneurs start their businesses, they have
significantly lower levels of capital than men.[45] A disproportionate access to capital,
compared to male entrepreneurs, also serves a systemic barrier to creating a new
firm.[46] Women who start their own firms have a higher likelihood of success if they have
disposable financial or social capital.[47] Without this opportunity, there are many more
obstacles that place women at a disadvantage compared to their male counterparts.
Women entrepreneurs are starting as a disadvantage when starting their firms, making it
more difficult to navigate the initial stages of growing a personal business. Other
obstacles include the fact that firms owned by women tend to be smaller than men, are
more likely to fail, and have lower levels of sale, profits and employment. [48] Knowing that
these barriers exist may serve as a deterrent to female entrepreneurs, or alternatively
increase the chance of less successful firms. Structural elements include sex
discrimination and internalized stereotypes create these barriers. Furthermore, firms
owned by women are predominately part of the service and retail sector.[49] Consolidation
of female-run firms in a specific sector highlights internalized stereotypes regarding
abilities and interests of female entrepreneurs.[45]
External finance and sex discrimination.[edit]
In general, women have lower personal financial assets than men. This means that for a
given opportunity and equally capable individual, women must secure additional
resources compared to men in order to exploit the opportunity; because, they control
less capital. The question of whether women have a harder time getting finance than
men for the same business opportunity has developed into its own sub-field.[50][51][52] One
possible issue in raising outside capital is that 96% of senior venture capitalists are men
and may not be as understanding of female-centric businesses.[53] However, the situation
seems to be improving. A study by Babson College showed that in 1999, fewer than 5%
of venture capital investments went to companies with a woman on the executive team.
In 2011, it was 9% and in 2013 it had jumped to 18%. [54]
A specific solution for solving women's difficulties for obtaining financing has been micro-
financing. Microfinance is a financial institution that has become exceptionally popular,
especially in developing economies. Female entrepreneurs have also been especially
successful in getting funded through crowdfunding platforms like Kickstarter.[54]
Due to lack of funding for women in new businesses many women founders have had to
hire or create fake male profiles to act as co-founders, executives, or the face of their
businesses to make progress.[55]
Obstacles to managing a small firm[edit]
Studies on female entrepreneurs show that women have to cope with stereotypical
attitudes towards them on a daily basis. Business relations—from customers to suppliers
and banks—constantly remind the entrepreneur that she is different, sometimes in a
positive way such as by praising her for being a successful entrepreneur even though
she is a woman. Employees tend to mix the perceptions of the manager with their
images of female role models, leading to mixed expectations on a female manager to be
a manager as well as a "mother". The workload associated with being a small business
manager is also not easily combined with taking care of children and a family. However,
even if the revenues are somewhat smaller, female entrepreneurs feel more in control
and happier with their situation than if they worked as an employee. [56] Female
entrepreneurship has been recognized as an important source of economic growth.
Female entrepreneurs create new jobs for themselves and others and also provide
society with different solutions to management, organisation, and business problems.
However, they still represent a minority of all entrepreneurs. Female entrepreneurs often
face gender-based barriers to starting and growing their businesses, like discriminatory
property; matrimonial and inheritance laws, and/or cultural practices; lack of access to
formal finance mechanisms; limited mobility and access to information and networks,
etc.
A woman's entrepreneurship can make a particularly strong contribution to the economic
well-being of the family and communities, poverty reduction and women's
empowerment, thus contributing to the Millennium Development Goals (MDGs). Thus,
governments across the world, as well as various developmental organizations, are
actively undertaking the promotion of female entrepreneurs through various schemes,
incentives and promotional measures. Female entrepreneurs in the four southern states
and Maharashtra account for over 50% of all women-led small-scale industrial units in
India[citation needed].
Obstacles to growing firms[edit]
A specific problem of female entrepreneurs seems to be their inability to achieve growth,
especially sales growth.[57] Another issue is finance and, as stated previously, the
entrepreneurial process is somewhat dependent on initial conditions. In other words, as
women often have a difficult time assembling external resources, they start as less
ambitious firms that can be financed to a greater degree by their own available
resources. This also has consequences for the future growth of the firm. Basically, firms
with more resources at start-up have a higher probability to grow than firms with fewer
resources. Resources include the following: societal position, human resources, and
financial resources. This initial endowment in the firm is of great importance for firm
survival and especially for firm growth.[58][59][60][61]
A study by the Kauffman Foundation of 570 high-tech firms started in 2004 showed that
women-owned firms were more likely to be organized as sole proprietorships, both
during their startup year and in the years to follow. Female entrepreneurs were also
much more likely to start their firms out of their homes and were less likely to have
employees. This fact may serve as an indication that women either anticipated having
smaller firms or were operating under resource constraints that did not allow them to
launch firms requiring more assets, employees, or financial resources. This study also
found that women only raised 70% of the amount that men raised to start their firms,
which ultimately impacted their ability to introduce new products and services or expand
their business in terms of employees or geographic locations.
Role of Women entrepreneurs:-
Basically a woman entrepreneur is a women who initiates, organise and operate business
enterprise for their personal gain. It is the concept which is relevant and related to the
concept like Women empowerment and emancipation .Women entrepreneurs role is quite
challenging, they have a duel role; their personal life and as an entrepreneur1 .Women
entrepreneur has a self role or personal role like a parent, wife, daughter, etc. Their main
role tends to focus on improving the living standards for women on education and
personnel development.Many women entrepreneurs work on empowering women and
solving there specific issues2 .They have different roles, they try to do something to this
society which should be impacted on the development and growth of the society. Basically
women entrepreneurs have a well planned approach which helps them examine the existing
situation and identify the available opportunities which is awaiting in this society.Women
entrepreneurs have a fair play in their enterprise and work hard to sustain their business in
this society. They are persistent and strong in their desire which is the willingness to take
risk and proficiency in planning, making forecast estimates and calculations.Women
entrepreneur are quite dynamic in their leadership styles and art of managing their
business. They majorly have macro and micro enterprises which is being a part . Women
entrepreneurs have increased the economic liberalisation and globalisation. These
entrepreneurs has the role of change makers in both family and also in the society. Women
have the responsibility of taking care of her family, belongings and surroundings. Their
responsibility towards the nation is very important so they play a vital and integral aspect in
both family and as an entrepreneur3 . Basically our society is a patriarchal society where
there is gender inequality. The inequality towards women is not now it was from
generations to generation and decades to decades of evil practices in our society which
were and are the hurdles that makes a women’s life harder. In 1 (Kumar 2016) 2 (Coughlin &
Thomas 2002) 3 (Tuominen 2008) International Journal of Pure and Applied Mathematics
Special Issue 4202 spite of their hindrances they work hard to sustain their enterprise
efficiently and dynamically. They create more awareness among the public. Nowadays
women are in different fields when we compare to the past. Hardly women entrepreneurs
in India are basically and mostly engaged in different types of self employment. They have
and make lots of opportunities. Various regulatory, promotional, credit and representational
institutions are established for promoting women by successful women entrepreneurs.
These institutions established by women entrepreneurs provide a ground to train, protects,
represent and provides finance for establishing and running a firm to help women. So
women entrepreneurs have vital role in developing the nation towards the path of
enrichment and making our country more wealthy. The development of the nations
democracy is enormously and tremendously changed because women entrepreneurs who
are taking part in the society which becomes a great and one of the reason.
 Business planning process

1. Research, research, research.

“Research and analyze your product, your market and your objective expertise,” William
Pirraglia, a now-retired senior financial and management executive, has written. “Consider
spending twice as much time researching, evaluating and thinking as you spend actually
writing the business plan.

“To write the perfect plan, you must know your company, your product, your competition
and the market intimately.”

In other words, it’s your responsibility to know everything you can about your business and
the industry that you’re entering. Read everything you can about your industry and talk to
your audience.

Related: Do You Really Need a Business Plan?

2. Determine the purpose of your plan.

A business plan, as defined by Entrepreneur, is a “written document describing the nature of

the business, the sales and marketing strategy, and the financial background, and containing a
projected profit and loss statement.” However, your business plan can serve several different
purposes.

As Entrepreneur notes, it’s “also a road map that provides directions so a business can plan
its future and helps it avoid bumps in the road.” That’s important to keep in mind if you’re
self-funding or bootstrapping your business. But, if you want to attract investors, your plan
will have a different purpose and you’ll have to write a plan that targets them so it will have
to be as clear and concise as possible. When you define your plan, make sure you
have defined these goals personally as well.

Related: 3 Apps to Help You Write a Business Plan

3. Create a company profile.

Your company profile includes the history of your organization, what products or services
you offer, your target market and audience, your resources, how you’re going to solve a
problem and what makes your business unique. When I crafted my company profile, I put
this on our About page.

Company profiles are often found on the company’s official website and are used to attract
possible customers and talent. However, your profile can be used to describe your company
in your business plan. It’s not only an essential component of your business plan; it’s also one
of the first written parts of the plan.

Having your profile in place makes this step a whole lot easier to compose.
Related: Conducting a Market Analysis for Your Business Plan

4. Document all aspects of your business.

Investors want to make sure that your business is going to make them money. Because of this
expectation, investors want to know everything about your business. To help with this
process, document everything from your expenses, cash flow and industry projections. Also,
don’t forget seemingly minor details like your location strategy and licensing agreements.

Related: How Do I Build a Business Plan? (Infographic)

5. Have a strategic marketing plan in place.

A great business plan will always include a strategic and aggressive marketing plan. This
typically includes achieving marketing objectives such as:

 Introducing new products

 Extending or regaining market for existing products
 Entering new territories for the company
 Boosting sales in a particular product, market or price range. Where will this business
come from? Be specific.
 Cross-selling (or bundling) one product with another
 Entering into long-term contracts with desirable clients
 Raising prices without cutting into sales figures
 Refining a product
 Having a content marketing strategy
 Enhancing manufacturing/product delivery

“Each marketing objective should have several goals (subsets of objectives) and tactics for
achieving those goals,” states Entrepreneur.

“In the objectives section of your marketing plan, you focus on the ‘what’ and the ‘why’ of
the marketing tasks for the year ahead. In the implementation section, you focus on the
practical, sweat-and-calluses areas of who, where, when and how. This is life in the
marketing trenches.”

Of course, achieving marketing objectives will have costs. “Your marketing plan needs to
have a section in which you allocate budgets for each activity planned," Entrepreneur says. It
would be beneficial for you to create separate budgets for for internal hours (staff time) and
external costs (out-of-pocket expenses).

Related: Why You Must Have a Business Plan

6. Make it adaptable based on your audience.

“The potential readers of a business plan are a varied bunch, ranging from bankers and
venture capitalists to employees,” states Entrepreneur. “Although this is a diverse group, it is
a finite one. And each type of reader does have certain typical interests. If you know these
interests up-front, you can be sure to take them into account when preparing a plan for that
particular audience.”

For example, bankers will be more interested in balance sheets and cash-flow statements,
while venture capitalists will be looking at the basic business concept and your management
team. The manager on your team, however, will be using the plan to “remind themselves of
objectives.”

Because of this, make sure that your plan can be modified depending on the audience reading
your plan. However, keep these alterations limited from one plan to another. This means that
when sharing financial projections, you should keep that data the same across the board.

Related: 7 Steps To A Winning Business Proposal

7. Explain why you care.

Whether you’re sharing your plan with an investor, customer or team member, your plan
needs to show that you’re passionate and dedicated, and you actually care about your
business and the plan. You could discuss the mistakes that you've learned, list the problems
that you’re hoping to solve, describe your values, and establish what makes you stand out
from the competition.

When I started my payments company, I set out to conquer the world. I wanted to change the
way payments were made and make it easier for anyone, anywhere in the world to pay
anyone with few to no fees. I explained why I wanted to build this. My passion shows
through everything I do.

By explaining why you care about your business you create an emotional connection with
others so that they’ll support your organization going forward.