Growing a Web-Development Company (Scenario)
Vincent and Alice are partners in a one-year-old web development business called Spy-der Web Execution. Vincent comes from a graphic design background and specializes in the look and feel of web projects. Alice comes from the computer gaming industry and is a highly experienced programmer and web developer—with a particular leaning toward Wordpress as a website backbone.
So far they have brought in less business than they had anticipated—about 25 percent less. As a result, they are operating at just a little below break even, and it is costing them about $500 a month to cover expenses (including rent on a small office space where they meet clients). The situation is disappointing and was not anticipated by either Vincent or Alice.
As with many businesses like this that are easy to get into with little investment, they did not do a full feasibility study or business plan. They are unsure about how to divide up their responsibilities (who is responsible for what), and therefore neither person is proactively going after new business, managing each project's budget, and determining even if they are making money on the work.
You are now in the role of advising the partners about a number of issues.
-You notice that the possibility of operating at a loss was not even considered a possibility by Alice and Vincent.Had they done a proper ________,they probably would have at least been aware that this could happen.

Question

Quizplus · Accepted Answer

A business plan includes a thorough evaluation of a business's potential risks, including the possibility of operating at a loss. It also includes key responsibilities and strategies for managing finances, marketing, and operations. Had Vincent and Alice done a proper business plan, they would have been more prepared and aware of potential challenges and had a clearer understanding of their goals and responsibilities.