2.

Writing an e-Business plan Description

2.1 What is the Business Description

The business description describes the nature and purpose of the business
and includes the firm's mission statement, goals, value proposition, and
description of products and services.

The business description delivers this content in a straightforward and

informative manner, but with an upbeat and inspiration tone. The purpose of
the business description is to objectively explain and justify your business
idea in a positive and enthusiastic manner.

The business description includes two sections with both required and
optional content. The business concept section includes an industry analysis,
the mission statement, business goals, value proposition, and, optionally, the
objectives and business model. The products and services section is a
concise description of what the business will sell or deliver to the customer.

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2.2 Business Concept

The business concept section gives the reader the big picture about what the
business will do and how it will succeed.

Industry analysis: A good way to open this section is with a brief industry
analysis. An industry is a group of businesses that manufacture, distribute, or
sell similar projects or services.

An industry analysis defines the industry in which the business will operate
(e.g., retail, information distribution, financial services) and uses reliable and
objective data to show the future prospects of the industry and, by
implication, the business.

Sources of information for the industry analysis include research companies

such as Dun & Bradstreet, Standard & Poor's Investor Services, and the Risk
Management Association who publish business directories and industry
surveys. Trade and industry journals publish articles that include quantitative
data, trend analysis, and influential environmental factors that are affecting
their respective industry sectors. These resources will be available in most
university libraries.

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However, in most e-business plans, the industry analysis does not have to be
very extensive. Generally, one page should be enough, perhaps two pages if
graphs or tables are included. Remember, this is a business plan, not an
industry plan, so briefly analyze the industry and then move the reader's
attention from the big industry picture to the smaller business picture.

2.3 Mission statement:

With the big industry picture in the reader's mind, narrow the focus to your
business. After a few words of introduction, state the mission of your
business and provide a brief justification and explanation about the
importance of this mission, perhaps in light of the industry analysis just
presented. Or, in the business case, explain how the e-business initiative will
contribute to the fulfillment of the company's mission.

A mission statement is a declaration of what a business aspires to be. This

can be an intimidating exercise, especially if your business idea is still being
formed in your own mind. It is also an important exercise because the
mission statement appears early in the plan and is a starting part for defining
the business and writing the plan.

The Mission Statement lesson provides explicit instructions to write the

mission statement and illustrates the process with sample mission
statements.

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2.4 Business goals
Stating what you intend to do in your mission statement is insufficient for
most business plan readers, and certainly so for all investors. In addition to
stating what you are going to do, you must also indicate how you are going
to do it. To do that you need to set some business goals.

A goal is a statement that clearly describes actions to be taken or tasks to be

accomplished by a company.

2.5 Project objectives

If a mission statement expresses what is to be done and goals state how the
promise of the mission statement is to be fulfilled, then project objectives
answer the when, where, who, and by how much questions.

Achieving goals doesn't just happen. Usually one or more projects are
initiated in order to accomplish the action or task stated in the goal. The
nature and scope of the project is expressed through its objectives.

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 So, there should be a clear link between a goal, its subordinate project(s),
and the project's objectives. Be aware that whereas a goal is a general
statement about what needs to be accomplished, an objective states a
specific, short-term, measurable, and verifiable condition that must exist to
fulfill the affiliated goal.

Most business plans don't include project objectives. Why? First, each goal
has a number of objectives, so this adds significant detail and length to the
plan.

Second, many plan writers see objectives as being too operational to include
in something as strategic as a business plan.

Third, from a practical viewpoint, the specificity required to write project

objectives is difficult to achieve in what is, in most cases, a prospective
business. Objectives are best written in consultation with the individuals
who will be responsible for carrying them out, and those people simply
aren't hired yet.

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2.6 Value proposition

So far you have told the business plan reader the answers to the what
(mission statement), how (goals), and when, where, who, and by how much
questions (objectives). What's missing? The answer to the why question.

The value proposition describes the benefits that a company's products or

services provide to customers and/or the consumer's need that is being
fulfilled. In other words, why should a customer buy your product or
service?

Since the focus of the value proposition is on the customer, the proposition
should be stated from the customer's perspective. Value propositions (with
examples) may be based on lowest cost (buy.com), superior customer
service (amazon.com), reduction in product search (autobytel.com) or price
discovery (deal-time.com) costs, product customization (dell.com), or
provision of niche products (anything left-handed).

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2.8 Business model

An optional part of the business description is the business model your

proposed business follows, such as virtual merchant, community portal,
transaction broker, or trust intermediary. Investors tend to be impressed
when business owners can classify their proposed business activities into
one or more business models that succinctly label those activities.

As defined in your e-commerce textbook, a business model is a method of

doing business by which a company can generate revenue to sustain itself.
The two principal components of the business model are the value
proposition, discussed above, and the revenue model -- how a business or
EC project intends to generate income.

Generally, businesses will begin with one or two business models. Over
time these models may change, or a third one may be added, but too many
models tend to indicate that a business doesn't know what it is about and is
focusing on too many activities, perhaps not doing any one of them well.

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2.9 What is a Business Goal

A goal is a statement that clearly describes actions to be taken or tasks to be

accomplished by a company, a department or an individual. A business will
have a number of goals, each describing a desired future condition toward
which efforts are directed. If the goals are accomplished, then the business
should be a success.

The dual purposes of goal setting are (a) to establish a measure for
evaluating the success of the business and (b) set priorities for its
management and staff, who should be held accountable for the
accomplishment of the goals. Goals help keep management focused on
success and away from distractive activities that drain business resources
and accomplish little.

Business goal characteristics

Common characteristics of a business goal are:

• Derived from the mission statement: The starting point in writing

business goals is to ask "what do we need to do to accomplish our
mission." In other words, a mission statement says "what" and
business goals say "how".

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• Task-oriented: A business goal must state what is to be accomplished
as clearly as possible. Effective goals use action-oriented verbs such
as deliver, implement, establish, and supply; avoid poor activity
indicators such as facilitate and analyze that can mean nothing
significant or measurable gets done.

• Short term: Goals used to be long term indicators, something an

organization would accomplish in three or more years. Today business
moves faster and e-commerce companies function at "Internet speed".
Accordingly, goals tend to have shorter durations, rarely more than
three years and frequently one year or less. Most business plans will
have a mixture of time frames for accomplishing goals.

• Specific: A goal must state, in one or two sentences, the conditions

that will exist if the goal is to be accomplished. The more well-
defined a goal is, the easier it will be to understand what is required
and to measure successful achievement.

• Challenging: A goal should challenge the people who are responsible

for its achievement. A goal should require considerable effort, but be
achievable.

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