BUSINESS PLAN PROPOSAL – TEAM ASSIGNMENT

You must hand in an outline of your business idea early in the semester.  This initial outline should describe your product/service idea, how you arrived at the idea, and what you feel the market potential is for this proposed venture.

Preparation

Begin by reading Chapters 1-3 of your textbook Small Business: An Entrepreneur’s Plan.  If you are experiencing difficulty with the development of your business idea, consult the

The B.C. Government’s website for starting a business:

http://www.bcbusinessregistry.ca/introduction/startingabusiness.htm

Or check out www.trendwatching.com for the latest consumer trends and opportunities.

When developing your business idea, keep the following requirements in mind:

• The idea must be a business startup, not a buyout or existing business. If you are seriously planning to buy an existing business, or if you are involved in an existing business, you should discuss this with your instructor.  You may do a business plan for an existing business only with approval of your instructor and permission from the business.

• If the business idea is seasonal, you need to find another complementary business to support the months your business is not in operation (how will you support yourself when the business is not operating?). Also, the business can not be a hobby, but rather show a reasonable expectation of a profit.

• You may do a business plan for a franchise, but the franchise rights must be available for the geographic region you want to operate your business in. Otherwise, the franchisor will not cooperate in providing information.  Check with your instructor for advice regarding pursuing a franchise.

• The idea must not have been used for project credit in any other class. If you wish to build upon a previous project, or use the same idea concurrently in another class, you must obtain the permission of your instructor.

• The business idea must be both legal and ethical. If in doubt, consult with your instructor in advance of submitting your proposal.

• Ideal team size is three (3) students on this project, with competencies in finance and marketing in particular. Look for team members with strengths in areas where you may be weaker, and who share an interest in the business idea or industry.

• You may be able to work in groups of more or less with permission from your instructor.

Instructions

1. You are going to have to choose one business idea and prepare a Business Plan Proposal for approval by your instructor. Keep in mind that you may not be able to justify the viability of your idea as a business venture until you have completed the entire business plan.  Your grade will not reflect whether or not the business is forecast to make a substantial profit.  Rather, it will evaluate the analysis presented on the feasibility of your idea once your plan is completed and assess whether the forecasts prepared were realistic.
2. Complete the following Business Planning exercises that are provided at the end of this assignment. Make sure to include these completed exercises (need to be TYPED) with your Business Plan Proposal as you are graded on them.

• Exercise #1: Opportunity Selection
• Exercise #2: Focusing on Your Business Idea
• Exercise #3: Description of Your Business
• Exercise #4: Identifying Information Needs

3. You are now ready to prepare your Business Plan Proposal and Research Fact Sheet worth 10% of your final grade. The proposal should be a 4-6 page summary of your business idea.  It should be typed, double-spaced and have a cover page identifying the team members who will be working on the project.  This document should address the following points:

1. Description of your business idea (Refer to Business Planning Exercise 2 & 3)
2. Discussion of why your business will be successful and the strengths of your business idea (for example, does it satisfy a market gap, does it fulfill a new market trend, is it an innovation on a previous successful idea, are you confident it will have enough sustainability through its position in the product  life cycle, what is its competitive advantage)?
3. Identification of some of the challenges and risks of your proposed business idea and how your team will overcome these weaknesses?

4. Description of the team and ability/competence of the person/s proposing this business (include the key players of the team). What will your roles be in the company, what are your skills, experience and education, who else will be supporting your management team? You need to make sure your idea fits with the skills and expertise of your management team.
5. Projection of your estimated start-up costs and the realistic identification of where these resources will be obtained. The sources of financial capital will fall into three categories:
6. Funds provided by the founders in the form of Equity (secret investors or silent partners are not permitted)
7. Funds provided from lenders (banks and other lenders) in the form of Debt (the Bank of Mom & Dad is not permitted)

• “Other Sources” could include BDC, Community Futures and other providers of “hybrid” and/or non-commercial funding

Remember: The objective of this proposal is to stimulate the interest of the reader to the extent that they will want to review the full business plan.

Make sure to include the TYPED Business Planning Exercises in your Proposal.  It is not necessary to retype these exercises as you have access to this assignment online.  Refer to the Evaluation Form provided with the assignment and include in your proposal. Your instructor will return your proposal as quickly as possible, stating whether your idea has been approved.  If you have questions about the proposal or the possibility that the idea may not be approved, you should discuss it with your instructor prior to the proposal due date.

• BUSINESS PLANNING EXERCISES [NEEDS TO BE TYPED]

BUSINESS PLANNING EXERCISE #1

Opportunity Selection

With your partners, work your way through steps 1-5 of the opportunity selection process in Chapter 3 of your text (pp. 72-79.) This is the pre-work for this assignment and does not have to be submitted.

Develop a matrix grid (Step 6 and Action Step 22, pp. 80) in the space below. Make sure to use a rating system to evaluate the opportunities.

Based on the matrix analysis you have performed, what are your top three opportunities? Which one business idea are you going to pursue and why?

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BUSINESS PLANNING EXERCISE #2

Focusing on Your Business Idea

Many people begin their businesses too hastily.  They open their doors without having a firm grip on what products or services they will offer or without determining why their business will be unique.

Instructions:  Think carefully about your answers to the following questions as they relate to your new venture idea.  Remember, well thought out answers will help you develop your final business plan.

1. What is your industry? What are the trends and characteristics of this industry?

2. What are the features of your product or service (what does it do)?

3. What are the benefits of your product or service (what will this product or service provide for your customers, what is in it for the customer)?

4. What is your market gap (what need in the market place will your business fill)?

5. Who will your target customers be?

6. What is your competitive advantage (what will make your business better than your competition)?

BUSINESS PLANNING EXERCISE #3

Description of Your Business

Developing a well-written, concise, and complete description of your business is one of the first tasks that you must complete before you can develop a business plan.  Describing your business idea will help you clarify your thinking. Think of yourself riding up 50 floors in an express elevator. You have 30 seconds to explain to the occupants what your business is all about.

Instructions:  Draft a brief description of your proposed business. Make sure to define your market, describe your focus, promote your management team and differentiate yourself from the competition.  Think of your audience as a potential source of investment capital.  Limit your description to 50 words maximum.  (Hint:  the answers to questions in Business Planning Exercise #2 will help you. You may also want to look at Develop Your Pitch, pg. 58 in the text)

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BUSINESS PLANNING EXERCISE #4

Identifying Information Needs

Identify the sources of information you need to complete your plan, where you are going to obtain the data, a time frame to realistically achieve these goals, and which team member is responsible for securing this information. Be as detailed and specific as possible.

Research FACT Sheet

Research is key to a successful start-up.  Most businesses fail because of a lack of upfront research and understanding of the industry, market and competition resulting in losses of money, relationship and personal well-being. This is a critical part of the course requiring early involvement and work to set your team up for success…just as it would in the real business world.

This is a 1-2 addendum showing relevant research information in three key areas of:

Industry

• NAICS Code – Industry Segment
• What are the current industry trends? e. growing annually at 6% or consumers buying demand is for more quality.
• Is the market saturated, mature, new?
• What is affecting the market? How are Porters 5 forces affecting this market?

From your industry research what assumptions can you make about your business – growth rate, trends, risks, opportunities etc. ?

Market

• Profile facts of your primary and secondary target markets.
• What is your geographic market?
• What are the characteristics and buying behaviours of your target market?
• What is the size of your target – National, your geographic area?.

From your research what assumptions can you make about your target market and sales expectations?

Competition

• Who are the main competitors in your market?
• Who are the direct competitors?

Is there a market gap?  If so, what?  If not, is there room for another competitor?

BUSINESS PLAN PROPOSAL

EVALUATION FORM

(Note:  Not all grading is of equal weight)

Name/s ___________________________     Company ____________________________

             ___________________________     Date Received____________________________

             ___________________________

RATING                                   Excellent       Satisfactory   Needs Improvement

Presentation and Writing Style

– General Organization                   10  9  8         7  6  5  4          3  2  1  0

– Spelling/Typos                             10  9  8         7  6  5  4          3  2  1  0

– Grammar                                     10  9  8         7  6  5  4          3  2  1  0

Business Proposal

– Idea Description                          10  9  8         7  6  5  4          3  2  1  0

clear, benefits, target customer

– Strengths of Idea                         10  9  8         7  6  5  4          3  2  1  0

market need, competitive advantage

– Weaknesses/Risks of Idea           10  9  8         7  6  5  4          3  2  1  0

Identification of risks/weaknesses, strategies to improve

– Management Team                      10  9  8         7  6  5  4          3  2  1  0

roles, experience, advisors

– Start-up Costs                              10  9  8         7  6  5  4          3  2  1  0

 projected costs, realistic resources

– Business Planning Exercises        10  9  8         7  6  5  4          3  2  1  0

thorough, prepared, completed

Research Fact Sheet                                            10  9  8            7  6   5  4                  3  2  1  0

Additional Comments:

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OVERALL EVALUATION               /10