Business Plan Assignment.
Please refer to the provided guide before attempting this assignment. Also, refer to the ebook Small Business 101
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for additional tips and examples). Make sure you have completed Module 3.
Please use the outline and headings provided. Please keep to the section order provided to you.
Any data etc. must be referenced appropriately.
There is no set word limit. You need to ensure you answer all the sections as asked of you and remember a business plan is a roadmap for you to follow, and to assess yourself against and as such needs to be detailed enough yet succinct. It is NOT an essay.
Please read again the textbook Developing New Products and Services and review the checklist in Section 12.11 before you submit. Does your assignment answer most of these questions?
At the end of this module, you should be comfortable with the writing and presentation of a business plan? These concepts are as important as the actual content of the plan? This resource will serve as a refresher: Developing New Products and Services, v.1.0: “Chapter 12: Developing a Business Plan.”
As you would have learnt through your university studies, not all fonts are appropriate for a professional document, and it is of course, all too easy to mischaracterize facts and figures by presenting them in an inappropriate format.
You should be to :
explain why plain fonts, plain language, and proper margin settings are vital to an attractively written report?
identify the proper charts and graphs for illustrating particular kinds of facts and statistics?
Having the right information in the Business Plan helps to demonstrate your professionalism and your commitment to making the undertaking successful.
You should be able to:
explain the importance of the executive summary and what should be included in it?
identify and explain the various sections of a business plan? This includes the market analysis, financial analysis, marketing plan, mission statement and business philosophy, SWOT analysis, and management structure., styles and models
Before attempting your final Business Plan assignment-read the following for more detail about how a business plan should look to the reader: Developing New Products and Services, v.1.0: “Chapter 12: Developing a Business Plan”
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. For even more information listen to Maureen Burke’s “How to Write a Business Plan” podcast again.
Small Business Planning 101: It’s a Process Not a Goal
The first thing to understand about a business plan and financial projections is that the process of compiling them is often more important than the final product. Sure, the actual sheets of paper, filled with spreadsheets and graphs with pretty arrows pointing up and to the right are great — and can be very important in helping you to secure funding — however, when it comes down to the brass tacks of starting a successful business, it’s the process, not the paper, that counts.
For example, at a certain point, you will be asked to project how much cash you’ll spend in your fifth year of business. You’ll think, “Are you kidding? I haven’t even opened my doors yet and you want me to describe what my expenses and revenue will be like in five years?” Well, the quick answer is yes. Nobody ever said that starting a small business would be an easy feat.
Now nobody reasonably expects you to actually hit that exact number in five years time, but the point here is accountability. A really great small business plan forces you to think through your goals, associate a dollar value with each, and articulate clearly how you will make them a reality. By declaring your projected revenue in month seven or your expenses in year five, you are giving yourself a benchmark for success.
That’s why it’s also important to include a mission statement in your business plan. This is your chance to clearly state exactly who you are, the kind of business you want to forge, and how you are going to make it happen. A good mission statement is clear, with memorable and concise sentences that boils down the priorities of your new business.
Just in case you’re still having trouble, here’s what that might look like for an aspiring bakery owner who is starting their first small business:
Blue Sheep Bakery brings quality and integrity to the bakery business by baking gluten-free treats that taste as good as they are for you
What Goes Into a Small Business Plan?
Think of your business plan as a roadmap that outlines how you plan to start and grow your small business.
You’ve probably considered what goods and services you’ll be offering, but have you researched the cost of sourcing your raw materials? How about the cost of turning those raw materials into your finished product?
Do you understand how much you’ll need to charge for your products/services in order to cover the expenses of renting a space, paying employees, leasing equipment, and paying for permits and regulations? Moreover, have you considered if the answers to these questions will provide the kind of operating margin you’ll need to pay yourself a salary?
Once you’ve considered the questions in the previous paragraph, start thinking about how your products/services stack up against the local competition. Because unless you are offering something ground-breaking and innovative, chances are that your potential customers are currently having their needs met by another business. That means it’s going to be your job to convince them that Blue Sheep Bakery is a better option than Bob’s Bake Shop. If your first thought was to compete on price, sorry to break it to you but, that’s not going to cut it. There is more to starting a successful small business than matching the price to the guy down the street.
Trying to compete on price is rarely an effective long-term strategy, so it’s important to consider how you will differentiate your offering. Will this be with amazing customer service? Or maybe with superior product quality? Regardless of what you choose, how will you allocate your budget to make it possible? How will you market your small business? How will you get customers through the door? Your assignment considers only a few of these, you are not being asked for a dull business plan.
Those are a lot of questions we just threw at you. Essentially, your plan has to answer one critical question: How will you achieve the kind of sales volume required to keep the doors open and set your business up for growth?
Types of Business Structures
There are a variety of structures to choose from when starting a small business. However, the most common business structures include sole proprietorship, partnership, LLC, and trust. The structure you choose determines which income tax return form you have to file, which, you guessed it, dictates your legal and financial responsibilities as a small business owner. Because of this, you’ll want to make sure you understand the options that are available to you and weigh the pros and cons before incorporating your business.
Why You Should Choose the Right Business Structure Early On
Commercial law exists for one simple reason: money and trust have a long and storied history of mixing like oil and water. Throughout the millennia-long history of commerce, aspiring businessmen and women have been lied to, cheated, scammed, cajoled, bullied, and otherwise disconnected from every single cent they had by unscrupulous suppliers, greedy investors, and dishonest business partners.
There’s a lot of blood, sweat, tears, and cash that goes into starting and running your own small business. One of the primary benefits of incorporating is that it limits the liability and risk of any losses your business may accumulate along the way. In other words, when you incorporate a business, you are typically not personally responsible for business debts. So if life happens and something goes wrong, as long as you and your business are not legally considered the same, your house, your car, and your goldfish are all safe.
How To Choose The Right Business Structure
When starting your small business, the type of business structure you choose will depend on three primary factors: liability, taxation, and record- keeping. Most small business owners begin their commercial life as a sole proprietor because it’s the easiest way to get started. In fact, if you’re in business and you haven’t taken any action to incorporate, you are most likely deemed a sole proprietor by default. You are entitled to all the profits of your business but also responsible for all its debts, losses, and liabilities.
There are, therefore, a lot of benefits to researching alternatives to this setup, which include Limited Liability Companies, Partnerships, Corporations, or even a Cooperative.
By setting up a separate legal entity, you limit the financial fallout from a failed business, you shield yourself from legal risks (such as someone injuring themselves in your store), and you potentially put yourself in a more advantageous tax situation. Equally, if you are working with partners, ensuring you are set up with the appropriate partnership will give all parties reassurance about their legal standing, obligations to, and expectations from the business in question.
On a more mundane, but equally important note, the costs of retroactively fixing errors in a name choice or a business structure can be enormous, both in your time and in real-terms. It is therefore important that you do your research and establish the correct legal structure for your business early on.
Reading lists:
Developing New Products and Services: “Chapter 12, Section 4: Business Plan Template”
https://www.thebalancesmb.com/business-plan-format-1794224
https://ctb.ku.edu/en/table-of-contents/leadership/effective-manager/management-plan/main
https://en.wikibooks.org/wiki/Organic_Business_Guide/Planning_and_managing_your_business
I have received a few questions regarding the final Busines Plan Assignment so have added a few thoughts and further hints that may be of use to you.
Please ensure you read all the hints etc in the announcements, look at the assignment guides and review the rubric.
Please stick to the format provided to you in the guide and rubric. Note that this is not a full business plan, only parts of one to give you an understanding of how to apply the various concepts and learnings you have gained during this course. Do not use a business plan template even though you will notice these being advertised through some of the provided links). There is no word limit but as a guide, around 2000 words should provide for a reasonable response. Ultimately it depends on your business choice etc.
Give consideration to the hints provided to you but remember, the final decision is yours and is based around the type of business you choose.
Review the Module on Business Plans. In particular, ensure you have listened to Yale University: Maureen Burke’s “How to Write a Business Plan”.
The Executive Summary
According to Anthony Cerminario’s “How to Write an Executive Summary” most guides to write an executive summary miss the key point: The job of the executive summary is to sell, not to describe.
The executive summary is often your initial face to a potential investor, so it is critically important that you create the right first impression. Contrary to the advice in articles on the topic, you do not need to explain the entire business plan in 250 words. You need to convey its essence and its energy. You have about 30 seconds to grab an investor’s interest. You want to be clear and compelling.
Forget what everyone else has been telling you. Here are the key components that should be part of your executive summary:
The Grab: You should lead with the most compelling statement of why you have a really big idea…
The Problem: You need to make it clear that there is a big, important problem (current or emerging) that you are going to solve…
The Solution: What specifically are you offering to whom?…
The Opportunity: Spend a few more sentences providing the basic market segmentation, size, growth and dynamics…
Your Competitive Advantage: No matter what you might think, you have competition…
The Model: How specifically are you going to generate revenues, and from whom?…
The Team: Why is your team uniquely qualified to win?…
The Promise ($$): You should show five years of revenues, expenses, losses/profits, cash and headcount… for this assignment however one year is sufficient
The Ask: This is the amount of funding you are asking for now… if you are
You should be able to do all this in six to eight paragraphs, possibly a few more if there is a particular point that needs emphasis. You should be able to make each point in just two or three simple, clear, specific sentences. This means your executive summary should be about two pages, maximum.
Business Philosophy / Mission Statement
Remember, the vision is what you want to accomplish.
Mission is a general statement of how you will achieve your vision.
Goals are statements of what needs to be accomplished to implement the strategy.
Objectives are specific actions and timelines for achieving the goal.
Elements of Mission and Vision Statements are often combined to provide a statement of the company’s purposes, goals and values.
For further information look at
https://www.effectivegovernance.com.au/page/news/vision-mission-and-purpose-statements-what-is-the-difference
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https://blog.hubspot.com/marketing/inspiring-company-mission-statements
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4. Income Statement
In a full plan, the very least this section should include your projected sales forecast
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, profit and loss
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and cash flow
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statement, and balance sheet
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, along with a brief description of the assumptions you’re making with your projections. You may also want to include your sales forecast,
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business ratios,
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and break-even analysis.
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For the assignment, you only need to include an income statement with some explanation regarding it. Do not just add the statement.
Finally, if you are raising money or taking out loans, you should highlight the money you need to launch the business
5. Ownership Choices, Personnel Needs and Hiring Strategy
The company and management section is an overview
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of who you are.
It should describe the organization of your business, and the key members of the management team
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, and the main staff roles, how they are hired and what will they be paid, and a staff organisational chart, who is/are the owner(s), what state your company is registered in and where you do business, and when/if your company was incorporated and why this business type was chosen.
Be sure to include summaries of your own and key managers backgrounds and experience—these should act like brief resumes—and describe their functions with the company. Full-length resumes should be appended to the plan but are not required for this assignment. If you do not have these staff as yet then give a description of their role.
Do not forget the self-analysis section. This is very important for you to demonstrate your education and experience that you will bring to this venture in order for it to be successful. Note this is about you.
6. Market Segment analysis
You need to know your target market
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—the types of customers you are looking for—and how it’s changing, and your research sections will help you get clear on it.
Use this business plan component to discuss your customers’ needs, where your customers are, how to reach them and how to deliver your product to them. Link it back to your research sections
Competition
You’ll also need to know who your competitors are and how you stack up against them—why are you sure there’s room for you in this market? What is it that will make you successful compared to these competitors (both direct and indirect)? Do not just list them. Describe them and identify and evaluate their traits.
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