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and indicate how much money you will need from investors or lenders and where it
will be spent.
Mission and objectives. Explain the purpose of your business and what you hope to
accomplish.
Company and industry. Give full background information on the origins and structure
of your venture and the characteristics of the industry in which you plan to compete.
Products or services. Concisely describe your products or services, focusing on their
unique attributes and their appeal to customers.
Market and competition. Provide data that will persuade investors that you understand your target market and can achieve your sales goals. Be sure to identify the
strengths and weaknesses of your competitors.
Management. Summarize the background and qualifications of the key management
personnel in your company. Include résumés in an appendix.
Marketing strategy. Provide projections of sales volume and market share; outline
a strategy for identifying and reaching potential customers, setting prices, providing customer support, and physically delivering your products or services. Whenever
possible, include evidence of customer acceptance, such as advance product orders.
Design and development plans. If your product requires design or development,
describe the nature and extent of what needs to be done, including costs and possible
problems. For new or unusual products, you may want to explain how the product
will be manufactured.
Operations plan. Provide information on facilities, equipment, and personnel
requirements.
Overall schedule. Forecast important milestones in the company’s growth and development, including when you need to be fully staffed and when your products will be
ready for the market.
Critical risks and problems. Identify significant negative factors and discuss them
honestly.
Financial projections and requirements. Include a detailed budget of start-up and
operating costs, as well as projections for income, expenses, and cash flow for the first
few years of business. Identify the company’s financing needs and potential sources,
if appropriate.
Exit strategy. Explain how investors will be able to profit from their investment, such
as through a public stock offering, sale of the company, or a buyback of the investors’ interest.
As Chapter 13’s Communication Close-Up on page 411
notes, not everyone believes a conventional business plan is the
right approach for every start-up company. If a company still
needs to prove the viability of its business model or key product,
the time it would take to write a full business plan might be
better spent on getting the product or service operational and
in front of customers in order to prove its viability. A regular
business plan would make more sense after that, when the company needs to transition from start-up to ongoing operations.
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Planning analytical reports
The purpose of analytical reports is to analyze, to understand, or to explain a problem or
an opportunity and figure out how it affects the company and how the company should
respond. In many cases you’ll also be expected to make a recommendation based on your
analysis. As you saw in Figure 14.1, analytical reports fall into three basic categories:
●●
Reports to assess opportunities. Every business opportunity carries some degree of
risk and requires a variety of decisions and actions in order to capitalize on the opportunity. For instance, market analysis reports are used to judge the likelihood of success
3
LEarninG OBJECTiVE
Discuss three major ways to
organize analytical reports.
Analytical reports are used to
assess opportunities, to solve problems, and to support decisions.
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for new products or sales initiatives by identifying potential opportunities as well
as competitive threats and other risks. Due diligence reports examine the financial
aspects of a proposed decision, such as acquiring another company.
Reports to solve problems. Managers often assign troubleshooting reports when
they need to understand why something isn’t working properly and what can be
done to fix the situation. A variation, the failure analysis report, studies events that
happened in the past, with the hope of learning how to avoid similar failures in the
future.
Reports to support decisions. Feasibility reports are called for when managers need
to explore the ramifications of a decision they’re about to make (such as replacing an
advertising agency or switching materials used in a manufacturing process). Justification reports justify a decision that has already been made.
Writing analytical reports presents a greater challenge than writing informational
reports, for three reasons. First, you’re doing more than simply delivering information;
you’re also analyzing a problem or an opportunity and presenting your conclusions.
The best writing in the world can’t compensate for flawed analysis. Second, when your
analysis is complete, you need to present your thinking in a credible manner. Third, analytical reports often convince other people to make significant financial and personnel
decisions, so your reports carry the added responsibility of the consequences of these
decisions.
In some situations the problem or opportunity you address may be defined by the person who authorizes the report. In other cases you will have to define it yourself. Be careful
not to confuse a simple topic (quarterly profits) with a problem (the decline in profits over
the past six quarters). Moreover, if you’re the only person who thinks a particular issue
is a problem, your readers won’t be interested in your solution unless your report first
convinces them that a problem exists. As with marketing and sales messages, sometimes
you need to “sell the problem” before you can sell the solution.
To help define the problem that your analytical report will address, answer these
questions:
Clarify the problem in an analytical report by determining what
you need to analyze, why the issue
is important, who is involved,
where the trouble is located, and
how and when it started.
Use problem factoring to divide a
complex problem into more manageable pieces.
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What needs to be determined?
Why is this issue important?
Who is involved in the situation?
Where is the trouble located?
How did the situation originate?
When did it start?
Not all these questions apply in every situation, but asking them helps you define the
problem being addressed and limit the scope of your discussion.
Another effective way to tackle a complex problem is to divide it into a series of
logical, connected questions, a process sometimes called problem factoring. You probably subconsciously approach most problems this way. When your car won’t start, what
do you do? You use the available evidence to organize your investigation and to start a
search for cause-and-effect relationships. For example, if the engine doesn’t turn over,
you might suspect a dead battery. If the engine does turn over but won’t fire, you can
conclude that the battery is okay, but perhaps you’re out of gas. When you speculate
on the cause of a problem, you’re forming a hypothesis, a potential explanation that
needs to be tested. By subdividing a problem and forming hypotheses based on available evidence, you can tackle even the most complex situations. With a clear picture
of the problem or opportunity in mind, you’re ready to consider the best structure for
your report.
Whenever you are preparing an analytical report, make sure you are clear in your
own mind about whether you are advocating one particular line of thought or objectively
exploring all the available options.3 Even if advocating one position is appropriate in the
circumstances, your readers will expect you to have considered the other options so that
you can help them understand why your answer is preferred.
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oRgAnIzATIonAL STRATEgIES FoR AnALyTICAL REPoRTS
When you expect your audience to agree with you, use the direct approach to focus attention on conclusions and recommendations. When you expect your audience to disagree
with you or to be hostile, use the indirect approach to focus attention on the rationale
behind your conclusions and recommendations.
The three most common structural approaches for analytical reports are focusing on
conclusions (a direct format), focusing on recommendations (another direct format), and
focusing on logical arguments (an indirect format) (see Table 14.3).
Before you choose an approach,
determine whether your audience
is receptive or skeptical.
Focusing on Conclusions
When writing for audiences that are likely to accept your conclusions—either because
they’ve asked you to perform an analysis or they trust your judgment—consider using
a direct approach that focuses immediately on your conclusions. This structure communicates the main idea quickly, but it presents some risks. Even if audiences trust your
judgment, they may have questions about your data or the methods you used. Moreover,
starting with a conclusion may create the impression that you have oversimplified the situation. You’re generally better off taking this direct approach in a report only when your
credibility is high—when your readers trust you and are willing to accept your conclusions
(see Figure 14.5 on the next page).
Focusing on conclusions is often
the best approach when you’re
addressing a receptive audience.
Focusing on recommendations
A slightly different approach is useful when your readers want to know what they ought
to do in a given situation (as opposed to what they ought to conclude). You’ll often be
asked to solve a problem or assess an opportunity rather than just study it. The actions
you want your readers to take become the main subdivisions of your report.
When structuring a report around recommendations, use the direct approach as you
would for a report that focuses on conclusions. Then unfold your recommendations using
a series of five steps:
1. Establish or verify the need for action in the introduction by briefly describing the
problem or opportunity
2. Introduce the benefit that can be achieved, without providing any details
3. List the steps (recommendations) required to achieve the benefit, using action verbs
for emphasis
4. Explain each step more fully, giving details on procedures, costs, and benefits
5. Summarize your recommendations
If your recommendation carries any risks, be sure to clearly address them. Doing so
not only makes your report more ethical but also offers you some protection in the event
TABLE 14.3
When readers want to know
what you think they should do,
organize your report to focus on
recommendations.
Whenever a recommendation
carries some element of risk, you
owe it to your audience to make
this clear.
Common ways to Structure Analytical Reports
Focus on Logical argument
Element
Focus on Conclusions or
recommendations
Reader mindset
Approach
Writer credibility
High
Low
Low
Advantages
Readers quickly grasp conclusions or recommendations
Works well when you need to show readers
how you built toward an answer by following clear, logical steps
Works well when you have a list of criteria
(standards) that must be considered in
a decision; alternatives are all measured
against the same criteria
Drawbacks
Structure can make topic seem
too simple
Can make report longer
Readers must agree on criteria; can be
lengthy because of the need to address all
criteria for every alternative
use 2 + 2 = 4 Model
use Yardstick Model
Are likely to accept
Hostile or skeptical
Hostile or skeptical
Direct
Indirect
Indirect
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Figure 14.5 Preliminary Outline of a Research Report Focusing on Conclusions
A year after a bank decided to have an outside firm handle its employee training, an analyst was asked to prepare a report
evaluating the results. The analysis shows that the outsourcing experiment was a success, so the report opens with that
conclusion but supports it with clear evidence. Readers who accept the conclusion can stop reading, and those who desire
more information can continue.
that your recommendation is implemented but doesn’t work out as you had hoped. In
short, make sure your readers know the potential disadvantages as well as the potential
benefits.
Focusing on Logical arguments
Two common logical patterns
arguments are the 2 + 2 = 4
approach (adding everything up)
and the yardstick approach (comparing solutions against criteria).
Start by considering using the
2 + 2 = 4 approach; it’s familiar
and easy to develop.
The yardstick approach compares
a solution or several solutions to a
set of predetermined standards.
When readers are likely to be skeptical or hostile to the conclusion or recommendation
you plan to make, use an indirect approach. If you guide people along a logical path
toward the answer, they are more likely to accept it when they encounter it. The two
most common logical approaches are known as the 2 + 2 = 4 approach and the yardstick
approach.
The 2 + 2 = 4 Approach The 2 + 2 = 4 approach is so named because it convinces readers
of your point of view by demonstrating that everything adds up. The main points in your
outline are the main reasons behind your conclusions and recommendations. You support
each reason with the evidence you collected during your analysis.
Because of its natural feel and versatility, the 2 + 2 = 4 approach is generally the most
persuasive and efficient way to develop an analytical report for skeptical readers. When
organizing your own reports, try this structure first. You’ll find that many business situations lend themselves nicely to this pattern of logical argumentation.
The Yardstick Approach The yardstick approach is useful when you need to use a number of criteria to evaluate one or more possible solutions. These criteria become the
“yardstick” by which you measure the various alternatives. With this approach, you begin
by discussing the problem or opportunity and then list the criteria that will guide the
decision. The body of the report then evaluates the alternatives against those criteria.
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449
The main points of the outline are either the criteria themselves or the alternatives (see
Figure 14.6).
The yardstick approach is particularly useful for proposals when the audience has
provided a list of criteria the solution must meet. Imagine that your company has been
asked to bid on a contract to design and install a factory-floor distribution system for a
large corporation. The client has listed the requirements (criteria) for the system, and
you’ve developed a preliminary design to meet them. In the body of your proposal, you
could use the client’s list of requirements as the main headings and under each one explain
how your preliminary design meets the requirement.
The yardstick approach has two potential drawbacks. First, your audience members
need to agree with the criteria you’re using in your analysis. If they don’t, they won’t agree
with the results of the evaluation. If you have any doubt about their agreement, build
consensus before you start your report, if possible, or take extra care to explain why the
criteria you’re using are the best ones in this particular case.
Second, the yardstick approach can get tedious when you have many options to consider or many criteria to compare them against. One way to minimize repetition is to
compare the options in tables and then highlight the most unusual or important aspects of
each alternative in the text so that you get the best of both worlds. This approach allows
you to compare all the alternatives against the same yardstick while calling attention to
the most significant differences among them.
Main Idea: We should move into the commercial irrigation equipment market but not into the residential market.
These five criteria (standards or rules) that will
be used in the evaluation
make up the “yardstick”
in the yardstick approach.
She will evaluate the two
alternatives by judging
them according to the
five criteria.
I. Introduction
II. Criteria for entering new markets
A. Size and growth
B. Profit potential
C. Ability to compete
D. Distribution costs and opportunities
E. Fit with current capabilities
III. Irrigation equipment trends
A. Water shortages leading to demand for more efficient
irrigation
B. Labor costs encouraging automation
C. More homeowners attempting do-it-yourself projects
IV . Comparison of new market opportunities
A. Commercial landscapers and building owners
1. Size and growth
2. Profit potential
3. Ability to compete
4. Distribution costs and opportunities
5. Fit with current capabilities
B. Residential landscapers and homeowners
1. Size and growth
2. Profit potential
3. Ability to compete
4. Distribution costs and opportunities
5. Fit with current capabilities
V. Recommendations
A. Enter the commercial segment
1. Select a test market
2. Learn from the test and refine our approach
3. Roll out product marketing nationwide
B. Do not attempt to enter the residential market at this
point
Here she will give readers important background
information about current
trends in the marketplace.
She will recommend in
favor of one alternative
and against the other,
based on how each
fared in the “yardstick”
measurement.
Figure 14.6 Outline of an Analytical Report Using the Yardstick Approach
This report was drafted by a market analyst for a company that makes irrigation equipment for farms and ranches. The company has
been so successful in the agricultural market that it is starting to run out of potential customers. To keep growing, it needs to find another
market. Two obvious choices to consider were commercial buildings and residences, but management needed to evaluate both carefully
before making a decision.
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PART 5
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EFFECTIvE AnALyTICAL REPoRTS: An ExAMPLE
As national sales manager of a New Hampshire sporting goods company, Binh Phan was
concerned about his company’s ability to sell to its major accounts, the giant national
chains that now dominate retailing. Even though these customers are getting bigger, the
company’s sales to them are dropping, and it’s critical to figure out why and propose a
solution. Phan’s boss, the vice president of marketing, asked Phan to analyze the situation
and make a recommendation.
Phan’s troubleshooting report appears in Figure 14.7. The main idea is that the
company should establish a separate sales team for each these major national accounts
rather than continuing to service them through the company’s four regional divisions.
However, Phan knew his plan would be controversial because it requires a big change in
the company’s organization and in the way sales reps are paid. His thinking had to be
clear and easy to follow, so he used the 2 + 2 = 4 approach to focus on his reasons.
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