Eric's Case Study Essay Example | Topics and Well Written Essays - 1000 words

Eric's Case Study - Essay Example Such schooling/training expands one’s vision to available opportunities and strategies, and inculcates professionalism. Business plans reflect the professional approach to entrepreneurism. Key words: Small businesses, entrepreneurs, competition, customer preferences, survival, growth. Eric: A Case Study for Small Business Entrepreneurs Q. 1: Factors for success/failure of small businesses Entrepreneurship is characterized by either family tradition or an individual’s desire to break free from routine - to give expression to adventurous ideas. Eric falls in the later category and has been exhibiting traits of an entrepreneur – be it in his vision to head a large and successful corporation in later life or his demonstrated risk taking ability in starting two small ventures and selling them off even before he reached the age of 20 or his determination to pursue college education on full time basis for long-term success. The main ingredients of success for small busi nesses, as Eric would vouch for us, are enthusiasm for backing an idea with hard work, firm belief and commitment to ideas, practical thinking as opposed to sentimental approach, and the importance of formal training for achieving higher goals. As Milton Friedman famously stated, â€Å"The social responsibility of business is to increase its profit† (The New York Times Magazine, September 13, 1970). All businesses, and more so the small businesses, must make adequate profits to survive and grow and in Eric’s case, it has been the profits from his ventures that kept him self-sustained and are now enabling him to join college for full time. On the other hand, had Eric not backed his ideas with hard work or was afraid of competition or was content to hang on to his profitable ventures for sentimental or other reasons, his small businesses would have failed in the long run for want of competitive edge. In market conditions characterized by intense competition, small busine sses fail if they do not adapt to changing customer preferences. Finally, formal training through college education brings in its wake a clearer perspective of the market opportunities, competitive forces and strategies for survival and growth of businesses. Q. 2: Business plan A business plan is a document that gives shape to the vision of an entrepreneur and to that extent helps the key management team to assume ownership the business idea and work towards its success. It is also presented to investors for availing financial support and is essentially a road-map for the proposed business from inception to the time of repayment of loan and interest (Ed., ehow.com, 2011). Its key components are briefly described as below: Cover letter: While forwarding the business plan document, the cover letter spells out the request being made for financial support on behalf of the business in a legally binding manner between the loan seeker and the loan giver. It identifies the parties to a deal and commits to discuss details and offer any clarifications that may be needed. Executive summary: Executive summary is especially meant for senior managers/decision makers, to quickly grasp the key elements of a proposal and decide whether it is worth their time to go into details or not. Hence this is a very important document in marketing a proposal for financing by investors. Company background: It spells out the credentials of a company and its promoters. In respect of existing companies, it briefly describes the lines of business,