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THE BUSINESS PLAN

The Venture Plan – Assignment

  • You will develop a BUSINESS PLAN for a business that you could see yourself owning and operating some day.
  • I would like you to think of this assignment not as a requirement of this course and not for marks, but AN INVESTMENT IN YOUR FUTURE.
  • You will get more value, appreciate and benefit from this assignment if you do it on a business idea that could lend itself to YOUR VERY OWN FUTURE.

What is a BUSINESS PLAN?

  • A business plan, also known as a venture plan, is a “roadmap” for running a business. It is a written summary used by businesses of all sizes to state their objectives and describe how they will be achieved over a specific period of time.
  • Business plans are used by businesses of all sizes to state their objectives and describe how they will be achieved over a specific period of time. In particular, your business plan should say:
  • What product or service your business will provide
  • How you will market your product or service to gain customers
  • How it will operate, where it will be located and what geographic regions it will serve
  • What your start-up costs, monthly expenses, sales forecast and expected profits are
  • The risks associated with your business and your plan to manage them.

Why do you need a Business Plan?

  • Your business plan is your first step toward starting your own business.
  • It guides you as you move through the stages of your business.
  • It is important to describe your business idea fully so that:
  • Lenders/investors get a sense that your business could be successful.
  • People can then help you develop your idea further.

Who Should Prepare a Business Plan?

YOU! Assistance from consultants, accountants, book-keepers and experienced business people is definitely helpful. However, business plans are best prepared by the person launching the business.

Think through the elements of your business plan thoroughly so you have a good understanding of your market and what you need to do to be successful. Show your plan to others for advice and comments, and modify it if necessary.

What's in it for me?

Having the clearest possible picture of your business idea is the only way you can start your business and the only way people will be interested in your business.

Most importantly, the business plan gets you to think about your products, customers, competition, marketing and financing so you can move on to the next step: putting your ideas into action.

How do I go about Completing a Business Plan?

  • Just like with a resume, there are many different ways to do a business plan… There are a multitude of different circumstances that will determine different plan lengths, sections, and styles used, etc. There isn’t really a right or wrong… just better and worse.
  • I will go through/outline a pretty standard set-up/format for the business plan but feel free to discuss any adapting that you would like to do to fit the needs of your particular situation. If you find a template online or anywhere else that you would like to use, please bring it to my attention and we will adapt…. But please make sure that you see me to discuss.
  • On my website, I have listed a number of resources that might help you with your plan. You should check some of them out.
  • Some are about the entire business plan, some are about sections.
  • Some will work for you, some won’t… you just have to sift through them to find what fits with your application and your style…. And/or take bits and pieces/ideas from each.

TEMPLATES/WORKSHEETS

  • As we work through this project, I will provide you with some templates/worksheets just to get you thinking about information and/or to DRAW OUT the information out of you for your business plan. POINT FORM is fine for these.
  • This will be your rough work and I may be collecting these or ask to see them at any point. YOU WILL FIND YOU END UP WITH A BETTER PRODUCT IF YOU USE THESE.
  • *** Depending on the nature of the entrepreneurial venture you are working with, you may need to slightly tinkering or adjustthe templates/worksheets to suit YOUR SPECIFIC PURPOSE. Feel free to discuss this with me so it makes your job easier.

THEBUSINESS PLAN

Outline

Again, there are many different ways or formats to create a Business Plan. I think that this particular format keeps it simple, yet effective. If you find a format you prefer, please let me know.

Title Page

  • Business Plan for [Company Name] or [Product Name]
  • Prepared by:
  • Date

Section 1: Executive Summary

  • Acts as the introduction to your plan.
  • Even though it comes first in the plan, it is actually completed LAST…after all the other sections are done…. Seriously…. I’m not kidding.
  • As the name implies, this section merely summarizes each of the other sections of your business plan.
  • Your Executive Summary will be helpful in giving yourself and other constituents (e.g., employees, advisors, etc.) an overview of your plan.
  • It could be the only part that is read by some people.
  • Done on its own page… maybe two pages at the most.
  • Often opens with a mission statement that encourages the reader to read on and learn more.
  • Includes:
  • What the business will do, what good or service you will sell or provide.
  • Where the business will be located, the date you plan to start.
  • What makes your good or service unique and appealing.
  • The market you will serve and your customer profile.
  • Your advantage over the competition.
  • The ownership format (sole proprietorship, partnership, corportation).
  • Your start-up costs, your projected sales, and your projected profit.

Section 2: Business Description

  • Background Information
  • Organization and Management
  • Products offered (goods and/or services)
  • Regulations and Insurance

Section 3: Marketing Plan

  • Customers
  • Costs and Prices
  • Competition
  • Advertising and Promotion

Section 4: Operations

  • Describes the overall process that runs the business
  • Location
  • Assets –Equipment, machinery, etc.

Section 5: Finance

  • Summary–where the business is and where it wants to go.
  • Start-up costs
  • 3-5 year cash flow projection
  • Financial statements

Section 6: Appendix

  1. Includes relevant market research, surveys, sample products, demos, maps, etc.

THE BUSINESS PLAN

Template/Worksheet 1 - Before we get Started

Name:

Well, by now you have had a lot of time and different activities to try and determine something for a business venture for your business plan. However, having said this, finding a topic for the venture or business plan is still not an easy thing to do. Complete this worksheet and let’s see if we can find a business idea or if you already have a business idea, maybe we can fine tune it or find different areas of business.

  1. What are your hobbiesand/or what do you like to do in your spare time? List as many things as possible, even if they don’t seem relevant at the moment.
  1. What are you doing when you aretrulyhappy? List as many things as possible, again, even if it doesn’t seem relevant at this point.
  1. If you could do a job or work in a certain line of work for the rest of your life and NOT be paid for it, what would that be?
  1. Do you have a mentor or someone that you really respect and admire their life/career? What do they do for a living?

  1. Complete this question if you do NOT have an idea for your business plan:

Go back to questions 1-3. Following the theme from these questions, rewrite what it is that you like to do. Now, even if it seems silly, brainstorm ways that you could incorporate this into a business. If you have to, “Google it”. For example, if you like sewing, Google something like “turning sewing into a business”.

  1. Complete this question if you ALREADY HAVE a SOLID idea for your business plan

Based upon your ideas above, can you think of additional ways to improve the concepts of your existingbusiness idea? For example, maybe your business centres around the operation of a bicycle store. Maybe you have listed above that you like to work with the elderly… so maybe once a week, a product that you offer is a two-hour bicycle ride/tour through different sections of town, with senior citizens that finishes off with a social event at the end of the ride.

THE BUSINESS PLAN

Template/Worksheet 2–Executive Summary

Name: Venture:

The executive summary is usually written last as it is a summary of the business plan highlights. So, with that, we will actually come back and do this template/worksheet later.

Briefly describe (point form is fine for now) the following:

  1. What will the business do? What product (good and/or service) will you provide?
  1. Where will the business be located? When do you plan to start?
  1. What makes your good or service unique and appealing?
  1. Where would be the area that you would serve?
  1. Who would your main customers be? (target market(s)).
  1. What is your advantage over the competition?
  1. Would your business be a sole proprietorship, partnership, or corporation?
  1. Your start-up costs, your projected sales, and your projected profit.

THE BUSINESS PLAN

Template/Worksheet 3–Business Description

Name: Venture:

Let’s take some time to really think about how we want this business to look.

Background Information

  1. What is the current stage of the business? If it is not open, when do you see it opening?
  1. What industry is this business in?

Organization and Management

  1. Who is on the management/ownership team? What is/are their roles? What is their background/experience?
  1. What are the strengths and weaknesses of these people?
  1. What is the legal structure of the business? Will it be operated as a sole proprietorship, a partnership or a corporation?
  1. Any other info such as future hires, mentors, etc.

Good/Service Line

  1. What goods and/or services will you sell?
  1. What are the benefits that your product provides to the consumer?
  1. Do you see yourself adding more goods and/or services later once the business gets going?
  1. What types of inventory will you need?
  1. Are there any seasonality or product life cycle issues?

THE BUSINESS PLAN

Template/Worksheet 4–Marketing Plan

Name: Venture:

Use this section to describe your customers, your position within the market, your competitors, the company’s competititve advantage (aka USP – Unique Selling Proposition), and the plans for how the business will reach its target market.

Customers

  1. Who are your customers? Describe using demographics such as age, marital status, income levels, education levels, etc etc.)
  1. Estimate how many of these customers are there in your target area?
  1. What is your “customer service strategy”? How will you treat your customers?

Costs and Prices

  1. How much will you charge for your goods and/or services?
  1. How did you calculate this/these prices? (take into consideration labour, rent, and other expenses).
  1. What are your competitors charging for same/similar products?

Competition

  1. Who are your major competitors?
  1. What are your competitive advantages/USP (Unique Selling Proposition) over them?
  1. What is their competitive advantages/USP (Unique Selling Proposition) over you?

Advertising and Promotion

  1. How will you advertise and promote your product? Include the types of advertising that you will use – for example: direct mail, radio, publicity on media, newspaper, sales promotions of some sort, etc, etc.
  1. Describe how you could use the media to generate attention for your business. What media will you use and how will you go about it?
  1. What kinds of marketing material will you use? Consider brochures, business cards, posters, etc.
  1. Will you have a website? How will it be used to market your business?
  1. What other forms of marketing would/could you use? Consider tradeshows, cold calling, etc.
  1. What will this advertising and promotion cost?

THE BUSINESS PLAN

Template/Worksheet 5–Operations

Name: Venture:

The operations plan describes the overall process that runs the business.

Location

  1. Where will the business be located? Ie: town or city; in your home, a workshop, retail space, other.
  1. Why have you chosen this location?
  1. What would your rent be for this location?
  1. Are there any advantages/disadvantages to this location with respect to traffic?
  1. Will you need insurance for this location?
  1. What will the hours of operation be for this business?
  1. What types of renovations/changes will need to be made to this location to get your business running? What will this cost?

Employees

  1. Will you need to hire employees?
  1. What exactly will be their roles?
  1. How will you train them?
  1. Are there any legal considerations you need to think about when you have employees?

(hint: employer number, wsib)

  1. What labour costs will you have?
  1. How will you monitor them?

Suppliers/Resources

  1. Who would your suppliers be? Consider fixed assets like equipment, consumables such as gas, paint, gloves, sugar, or whatever your business would use. Can you get these used?
  1. Will there be places to store/hold your equipment, your inventory, etc.?
  1. Will you need certain technologies? Where will you get these from?
  1. Do you have any specific purchasing policies?
  1. What types of things will you need right away? What kinds of things can you buy later, once you are a bit established?
  1. What would your rent be for this location?

Regulations/Permits/Licences

  1. Are there any regulations that you need to follow for your type of business?
  1. Are there any permits and/or licences that you must obtain to operate your business in your given municipality? Examples of this are renovator’s permits, health permits, cartage licences, etc. How much will these cost?
  1. Will you need to get insurance? What types? What will this cost?

THE BUSINESS PLAN

Template/Worksheet 6–Finance

Name: Venture:

Projected Weekly Sales Revenue - Based on your prices and sales estimates, calculate your projected weekly sales revenue. For example, if you sell cedar lawn chairs for $75 each and expect to sell 2 a day, your daily sales are $75/chair x 2 chairs/day = $150/day. If you operate 5 days a week, your weekly sales are $150/day x 5 days/week = $750/week.

Sample sales projection table:

Item / Price per Item / X / Number
of Sales per Day / = / Daily Sales Revenue / X / Days of Operation per Week / = / Weekly Sales Revenue
Example:
Cedar Chair / $75 per chair / 2 chairs sold per day / $150 / 5 days / $750

Enter your projections below.

Item / Price per Item / X / Number
of Sales per Day / = / Daily Sales Revenue / X / Days of Operation per Week / = / Weekly Sales Revenue

Start-up Budget

Please list in detail the budget you will require to start your business and operate it for the first 30 days. It’s a good idea to research these costs to make sure your figures are as accurate as possible.

The start-up budget you calculate below will also be required to be entered in the Summer Company online application system.

For example, if you plan to advertise in the local paper, find out the rates, as they vary depending on the size of the ad and the frequency it appears in the paper. Check with all your suppliers to see how much things like equipment, materials, insurance, etc, will really cost.

Consider all expenses such as licenses, business registration, bank charges, insurance, equipment, advertising, inventory, office supplies, inventory, and others. The Summer Company program award will cover up to $1,500 of necessary start-up costs with certain restrictions (see below, at right). Also include items in your start-up budget you plan to pay for with your own money. The ministry start-up award must be spent within the first 30 days of business operation. Any unspent amount will be deducted from the final award.

Item / Cost
Total Start-Up Budget / $
/

Limits on Summer Company start-up money expenditures

  • Equipment - maximum $600
  • Cell phone - maximum $100 (part of your equipment allocation)
  • Vehicle fuel – maximum $100
  • Summer Company start-up money cannot be used for a participant’s personal draw (i.e. to pay yourself)

Note: Your business will have two types of expenses:

  1. One-time expenses are those costs that you incur only once when setting up your business.
  1. Operating expenses are ongoing costs that you will have to pay periodically such as inventory, office supplies, telephone, advertising, etc.

Cash Flow Statement

A sample cash flow is provided below. Often, banks and other lenders would like to see this for a 12 month period.