CHAPTER 1 INTRODUCTION 1.1 Research Background As the fourth biggest populated country in the world, Indonesia will soon face the so- called demographic bonus, which is predicted will occur in 2025-2035, when the number of people within the productive age bracket is higher than the number of elderly people and children (Jakarta post, “RI must prepare for demographic bonus”). One of the major challenges is providing new jobs in order to sustain this demographic bonus. As we cannot be dependent solely in government providing jobs, entrepreneurship has become a viable solution for the upcoming state. Luckily, Indonesia has seen a rise in the number of entrepreneurs throughout these years. Many factors contribute to this but some prominent ones include changes in societies, growth of the internet, government grant programs, and event-related-business such as business plan competition, business seminar, workshop, and numerous marketing event giving ways for new product to be quickly introduced to market. But most of all is success stories of entrepreneurs being picked up and exposed to public through media, magazine, seminars, radio and other form of public communication channels. Indeed, the title entrepreneur is now being worshipped by young adults that are eager to quickly reach prosperity. Although the environment is at a good stage for people to start their own business, the fact remains that the majority of business fail in its first year. Looking at the high numbers of failures brings us to the questions of why so many businesses fail. One common reason is related to capital, of not having enough to begin with. Other popular reason favors the people behind the wheel, mismanagement. But all in all, it comes down to two things; planning and executing. Talk about planning and executing, usually first entrepreneurs using business plan as a guide line. As SBM student I also got this lesson when running the IBE program. During one semester we are required to make a business plan as good as possible so that later we get funding from banks. One semester is enough time to make a good business plan and a product that ready for market. As a comparison in Ideosource, they only take 3 months for start-up companies to prepare a solid and marketable product or business. 1 1.2 Problem Formulation Up until now, the business plan approach has been formally taught as the gateway to start a business. In fact, it is so popular that many grants and business related competition relies heavily on business plan. Whether plans today are long, short, elaborate or simple, they still contain the same basic elements they always have. Typically, most have an executive summary, a marketing plan, a management team description and financials (income, cash-flow and balance sheet projections). The researcher wants to evaluate the effectiveness of using a business plan approach to develop a business for first time entrepreneur. Therefore, the researcher chose IBE program developed by SBM ITB as the main research subject. IBE is a two-semester course in SBM ITB where students are divided into a group of 20 people, namely company, for the purpose of creating their own business. In the first semester, each company undergoes the business preparation stage.