Business Plan Assignment

Due:Thursday, 6/18, by 11:59 PM CT

Worth:300 points (30% of your final grade)

Deliverable:A 12-15-page academic research paper

For this assignment, you will need to create a business plan for a hypothetical product of your choosing. The product you imagine should be similar to an existing product (or several) with one or more variations which make it unique. This/these variations(s) should likely be in the product’s capabilities/features, but you can attempt to make a case that your approach is fundamentally different from competitors due to pricing, staffing, organization, etc. as long as you make a strong case that is supported by credible and verifiable information.

You will follow the “Key Parts of the Business Plan” template laid out in the appendix to our text book exactly, including all sections and subsections as laid out below. There is also an example Business Plan on the hypothetical “Fraudian Slip” directly after the “Key Parts of the Business Plan” section which will be extremely helpful to you as you work through your plan.

While the product you imagine and a few aspects of the business plan are hypothetical, the vast majority of your business plan should be firmly bolstered by scholarly sources. If you make an assertion, it needs to be supported by the academic literature. For example, if you choose to make your store hours from 9:00 AM to 9:00 PM, you need to provide the justification for this decision by means of a scholarly/credible source. This is an academic research paper and it will require a great deal of researching, reading, thinking, and synthesizing of information. Of the sources you draw upon, at least five need to be peer-reviewed articles. If you are unfamiliar with how to conduct academic research, how to write an academic research paper, or what a peer-reviewed article is, please email Professor Starr immediately.

I am happy to review and comment on rough drafts as long as they are received no later than Thursday, 6/11.

This is a college-level, term-length, academic research paper so expectations are high. There should be few, if any, common writing errors (spelling, word usage, grammar, etc.) and you should adhere to the APA style/writing guide throughout. You should begin work on your Business Plan as soon as possible so that you can email me as you develop questions.

Your Business Plan should contain all the following sections (taken verbatim from the appendix in our course text):

Executive Summary

Brief Description of the Company

Mission Statement/Value Proposition

The Product and/or Services Being Offered

Competitive Advantages

Brief Financial Forecast

Management Team

Current Advisors

Financing Requirements and Return Expected

You can conceive of this particularly critical section of the plan as the “hook” that encourages the reader to examine the entire plan. The executive summary is very useful in ensuring that you, the entrepreneur, remain focused in your analysis. If you cannot briefly explain your complete business concept in one to two pages, then you have not thoughtfully and thoroughly analyzed the potential business. You should be clear about how you will provide value to the customers, what the value proposition is for the business, what your competitive advantage is, and how your background has prepared you for this business.

History and Position of the Business to Date

The Company’s Mission

Company History from Business Conception to This Point

Management Team and Key Personnel

Business Structure

This is the section of a business plan, which many entrepreneurs choose not to include. If you have created other businesses and your new business is somehow dependent on those businesses for success, then such information is important. However, for most entrepreneurial businesses, the issues highlighted here simply provide context to potential investors, clients, and/or suppliers.

Market Research

Target Markets

Geographic Area Within Which the Business Will Operate

Competitive Environment and Opportunity Space

Competitor Analysis

Position of the Firm

Market Description

The Desired Customer

Market Growth Opportunities

Market research codifies and describes the specific market space that you hope your new business will occupy. The preparation of this section helps assure that there is a group of customers available for your business and that the business will be in a position to acquire these customers.

Business Strategy

Mission of the Small Business

Strategy

Value Proposition

Evaluation of Competitive Advantage

Length of Time Before Imitation

Comparison to Substitutes

You need to specify how the firm will compete in its targeted market. The firm’s strategy details not only how you expect it to compete, but it also begins the process of exploring the expected outcomes of that strategy and the potential dangers to the firm from its competitors. The issue of imitation is a continuing one for all organizations as they try to achieve and maintain what is unorthodox about their businesses.

Financial Analysis

Cash Flow Projections and Analysis

Ratio Analysis

Break-Even Analysis

Expected Gross and Operating Margins

Financial analysis is a major concern for all new businesses. This section in your plan will focus on a discussion of the various financial concerns related to the start-up and running of your business. Tables with your actual data should appear as support for this discussion at the end of your plan. A key part of financial analysis is the funds use. The topics covered here include:

Funds Required and Timing

Use of Funds

Funding Sources

Valuation

Distribution of Control

Ultimately you will need money from others and/or will need to be clear about how you will spend the money if you are self-funding the business. Therefore, your business plan needs to specify those numbers. The greater the detail provided, the more help the plan will provide you in establishing benchmarks that can be evaluated to judge your new firm’s progress.

Operations

Location

Accounting Systems

Quality Control

Build Out

Hours of Operation

Processes

Equipment

Staffing Schedule

Critical Path Analysis to Start the Business

Operations include the details about how you will operate your business, and these details will differ widely depending on the type of business you are launching. If it is a manufacturing business, then the operations section will be central to your plan. For example, your equipment may be part of the competitive advantage of your manufacturing firm and as such you will want to spend considerable time on that aspect of the business. On the other hand, if your new business is a restaurant then the equipment is typically generic and not a major factor in the firm’s success, so your business plan will minimize its discussion. The location of your restaurant would be an important element of its success, however, so you should elaborate on that aspect of your business.

A particularly important part of the business plan is the marketing. Sometimes it will be a separate section. It addresses issues that include:

Target Customer

Sales Forecast

Pricing

Methods of Promotion

Promotion Scheduling and Placement

The marketing plan specifies how your firm will reach the target customer. Particularly critical here is the specification of the customers and the details of how you actually will price and promote the product to those customers. One of the most difficult areas for any new business is how to actually reach the customers in a way that they will want to buy your product or service. Getting customers to change to your firm from another is very hard to accomplish.

Risk Analysis

Discussion of Systems Risks and Controls

Discussion of Business Risks and Controls

There are risks in every business. You do not need to spend extensive effort detailing the risks, although you want to acknowledge them. For example, we mentioned that young people starting a business may not have extensive prior experience in business. In this section you may wish to acknowledge those risks and illustrate what actions you are taking to ensure the success of the business. For example, if you have obtained a board of advisors consisting of successful business people who will work with you to reduce your risk, then this is an important point to illustrate.