Objectives On successful completion of this assignment, students should be able to: · explain the importance of establishing a position in a chosen market · segment a target market
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On successful completion of this assignment, students should be able to:
· explain the importance of establishing a position in a chosen market
· segment a target market
· identify the elements of a marketing plan
· assess methods of using social media to develop a market presence
The Marketing Plan is critical to your business idea as it will lead to success or failure of your venture. A great idea is meaningless if you cannot find customers. Carefully drafted and logical financial projections will not be met unless you have customers to buy your product/service.
You will prepare the key components of your marketing plan, a vital part of your final business plan. Using the SCORE Business Plan Template pages 11 through 18. Prepare a document addressing market research, barriers to entry, threats and opportunities, product/service features and benefits, target customer, key competitors, positioning/niche, promotional budget, and pricing, You may include the worksheets found in the template.
Evaluation and Feedback
% of Final Grade
Identified how market research will be completed using both primary and secondary methods.
Analyzed the threats and opportunities in the market and the position the business would take.
Described the product/service features and its benefits.
Identified the target customer for this business.
Research and analyzed the key competitors.
Explain how the business will be marketed
Demonstrates good organization, including a strong introduction and conclusion.
Objectives On successful completion of this assignment, students should be able to: · explain the importance of establishing a position in a chosen market · segment a target market
Business Plan Template for a Startup Business A startup business plan serves several purposes. It can help convince investors or lenders to finance your business. It can persuade partners or key employees to join your company. Most importantly, it serves as a roadmap guiding the launch and growth of your new business. Writing a business plan is an opportunity to carefully think through every step of starting your company so you can prepare for success. This is your chance to discover any weaknesses in your business idea, identify opportunities you may not have considered, and plan how you will deal with challenges that are likely to arise. Be honest with yourself as you work through your business plan. Don’t gloss over potential problems; instead, figure out solutions. A good business plan is clear and concise. A person outside of your industry should be able to understand it. Avoid overusing industry jargon or terminology. Most of the time involved in writing your plan should be spent researching and thinking. Make sure to document your research, including the sources of any information you include. Avoid making unsubstantiated claims or sweeping statements. Investors, lenders and others reading your plan will want to see realistic projections and expect your assumptions to be supported with facts. This template includes instructions for each section of the business plan, followed by corresponding fillable worksheet/s. The last section in the instructions, “Refining Your Plan,” explains ways you may need to modify your plan for specific purposes, such as getting a bank loan, or for specific industries, such as retail. Proofread your completed plan (or have someone proofread it for you) to make sure it’s free of spelling and grammatical errors and that all figures are accurate. Business Plan [Insert Date] Company name Street address 1 Street address 2 City, state, ZIP Business phone Website URL Email address Confidentiality Agreement The undersigned reader acknowledges that any information provided by _________________________ in this business plan, other than information that is in the public domain, is confidential in nature, and that any disclosure or use of same by the reader may cause serious harm or damage to ________________________. Therefore, the undersigned agrees not to disclose it without express written permission from ________________________________. Upon request, the undersigned reader will immediately return this document to ___________________________. ___________________Signature ___________________Name (typed or printed) ___________________Date This is a business plan. It does not imply an offering of securities. Table of Contents Confidentiality Agreement 3 I. Instructions: Executive Summary 5 Executive Summary 6 II. Instructions: Company Description 7 Company Description Worksheet 9 III. Instructions: Products & Services 10 Product & Service Description Worksheet 11 IV. Instructions: Marketing Plan 13 1.Market research 13 2.Barriers to entry 13 3.Threats and opportunities 13 SWOT Analysis Worksheet 15 4.Product/service features and benefits 16 5.Target customer 16 6.Key competitors 16 Competitor Data Collection Plan 18 Competitive Analysis Worksheet 19 7.Positioning/Niche 20 8.How you will market your product/service 20 9.Promotional budget 21 Marketing Expenses Strategy Chart 22 10.Pricing 23 Pricing Strategy Worksheet 24 11.Location or proposed location 26 12.Distribution channels 26 Distribution Channel Assessment Worksheet 27 13.12-month sales forecast 28 V. Instructions: Operational Plan 29 1Production 29 14.Quality control 29 15.Location 29 16.Legal environment 29 17.Personnel 29 18.Inventory 31 19.Suppliers 31 20.Credit policies 31 VI. Instructions: Management & Organization 32 Management Worksheet 33 Organization Chart 34 VII. Instructions: Startup Expenses & Capitalization 37 VIII. Instructions: Financial Plan 38 IX. Instructions: Appendices 41 X. Instructions: Refining the Plan 42 Now That You’re (Almost) Finished . . . 44 I. Instructions: Executive Summary The Executive Summary is the most important part of your business plan. Often, it’s the only part that a prospective investor or lender reads before deciding whether or not to read the rest of your plan. It should convey your enthusiasm for your business idea and get readers excited about it, too. Write your Executive Summary LAST, after you have completed the rest of the business plan. That way, you’ll have thought through all the elements of your startup and be prepared to summarize them. The Executive Summary should briefly explain each of the below. An overview of your business idea (one or two sentences). A description of your product and/or service. What problems are you solving for your target customers? Your goals for the business. Where do you expect the business to be in one year, three years, five years? Your proposed target market. Who are your ideal customers? Your competition and what differentiates your business. Who are you up against, and what unique selling proposition will help you succeed? Your management team and their prior experience. What do they bring to the table that will give your business a competitive edge? Financial outlook for the business. If you’re using the business plan for financing purposes, explain exactly how much money you want, how you will use it, and how that will make your business more profitable. Limit your Executive Summary to one or two pages in total. After reading the Executive Summary, readers should have a basic understanding of your business, should be excited about its potential, and should be interested enough to read further. After you’ve completed your business plan, come back to this section to write your executive summary on the next page. Executive Summary (Write after you’ve completed the rest of the business plan.) II. Instructions: Company Description This section explains the basic elements of your business. Include each of the below: Company mission statement A mission statement is a brief explanation of your company’s reason for being. It can be as short as a marketing tagline (“MoreDough is an app that helps consumers manage their personal finances in a fun, convenient way”) or more involved: (“Doggie Tales is a dog daycare and grooming salon specializing in convenient services for urban pet lovers. Our mission is to provide service, safety and a family atmosphere, enabling busy dog owners to spend less time taking care of their dog’s basic needs and more time having fun with their pet.”) In general, it’s best to keep your mission statement to one or two sentences. Company philosophy and vision What values does your business live by? Honesty, integrity, fun, innovation and community are values that might be important to your business philosophy. Vision refers to the long-term outlook for your business. What do you ultimately want it to become? For instance, your vision for your doggie day-care center might be to become a national chain, franchise or to sell to a larger company. Company goals Specify your long- and short-term goals as well as any milestones or benchmarks you will use to measure your progress. For instance, if one of your goals is to open a second location, milestones might include reaching a specific sales volume or signing contracts with a certain number of clients in the new market. Target market You will cover this in-depth in the Marketing Plan section. Here, briefly explain who your target customers are. Industry Describe your industry and what makes your business competitive: Is the industry growing, mature or stable? What is the industry outlook long-term and short-term? How will your business take advantage of projected industry changes and trends? What might happen to your competitors and how will your business successfully compete? Legal structure Is your business a sole proprietorship, LLC, partnership or corporation? Why did you choose this particular form of business? If there is more than one owner, explain how ownership is divided. If you have investors, explain the percentage of shares they own. This information is important to investors and lenders. After reading the Company Description, the reader should have a basic understanding of your business’s mission and vision, goals, target market, competitive landscape and legal structure. Use the Company Description worksheet on the next page to help you complete this section. Company Description Worksheet Business Name Company Mission Statement Company Philosophy/ Values Company Vision Goals & Milestones 1. 2. 3. Target Market Industry/ Competitors 1. 2. 3. Legal Structure/ Ownership III. Instructions: Products & Services This section expands on the basic information about your products and services included in the Executive Summary and Company Description. Here are some items to consider: Your company’s products and/or services: What do you sell, and how is it manufactured or provided? Include details of relationships with suppliers, manufacturers and/or partners that are essential to delivering the product or service to customers. The problem the product or service solves: Every business needs to solve a problem that its customers face. Explain what the problem is and how your product or service solves it. What are its benefits, features and unique selling proposition? Yours won’t be the only solution (every business has competitors), but you need to explain why your solution is better than the others, targets a customer base your competitors are ignoring, or has some other characteristic that gives it a competitive edge. Any proprietary features that give you a competitive advantage: Do you have a patent on your product or a patent pending? Do you have exclusive agreements with suppliers or vendors to sell a product or service that none of your competitors sell? Do you have the license for a product, technology or service that’s in high demand and/or short supply? How you will price your product or service: Describe the pricing, fee, subscription or leasing structure of your product or service. How does your product or service fit into the competitive landscape in terms of pricing—are you on the low end, mid-range or high end? How will that pricing strategy help you attract customers? What is your projected profit margin? Include any product or service details, such as technical specifications, drawings, photos, patent documents and other support information, in the Appendices. After reading the Products & Services section, the reader should have a clear understanding of what your business does, what problem it solves for customers, and the unique selling proposition that makes it competitive. Use the Product and Service Description Worksheet on the next page to help you complete this section. Product & Service Description Worksheet Business Name Product/ Service Idea Special Benefits Unique Features Limits and Liabilities Production and Delivery Suppliers Intellectual Property Special Permits Product/ Service Description IV. Instructions: Marketing Plan This section provides details on your industry, the competitive landscape, your target market and how you will market your business to those customers. Market research There are two kinds of research: primary and secondary. Primary market research is information you gather yourself. This could include going online or driving around town to identify competitors; interviewing or surveying people who fit the profile of your target customers; or doing traffic counts at a retail location you’re considering. Secondary market research is information from sources such as trade organizations and journals, magazines and newspapers, Census data and demographic profiles. You can find this information online, at libraries, from chambers of commerce, from vendors who sell to your industry or from government agencies. This section of your plan should explain: The total size of your industry Trends in the industry – is it growing or shrinking? The total size of your target market, and what share is realistic for you to obtain Trends in the target market – is it growing or shrinking? How are customer needs or preferences changing? Barriers to entry What barriers to entry does your startup face, and how do you plan to overcome them? Barriers to entry might include: High startup costs High production costs High marketing costs Brand recognition challenges Finding qualified employees Need for specialized technology or patents Tariffs and quotas Unionization in your industry Threats and opportunities Once your business surmounts the barriers to entry you mentioned, what additional threats might it face? Explain how the following could affect your startup: Changes in government regulations Changes in technology Changes in the economy Changes in your industry Use the SWOT Analysis Worksheet on the next page to identify your company’s weaknesses and potential threats, as well as its strengths and the potential opportunities you plan to exploit. SWOT Analysis Worksheet Strengths Weaknesses Opportunities Threats Product/ Service Offering Brand/ Marketing Staff/HR Finance Operations/ Management Market Can any of your strengths help with improving your weaknesses or combating your threats? If so, please describe how below. Based on the information above, what are your immediate goals/next steps? Based on the information above, what are your long-term goals/next steps? Product/service features and benefits Describe all of your products or services, being sure to focus on the customer’s point of view. For each product or service: Describe the most important features. What is special about it? Describe the most important benefits. What does it do for the customer? In this section, explain any after-sale services you plan to provide, such as: Product delivery Warranty/guarantee Service contracts Ongoing support Training Refund policy Target customer Describe your target customer. (This is also known as the ideal customer or buyer persona.) You may have more than one target customer group. For instance, if you sell a product to consumers through distributors, such as retailers, you have at least two kinds of target customers: the distributors (businesses) and the end users (consumers). Identify your target customer groups, and create a demographic profile for each group that includes: For consumers: Age Gender Location Income Occupation Education level For businesses: Industry Location Size Stage in business (startup, growing, mature) Annual sales Key competitors One of the biggest mistakes you can make in a business plan is to claim you have “no competition.” Every business has competitors. Your plan must show that you’ve identified yours and understand how to differentiate your business. This section should: List key companies that compete with you (including names and locations), products that compete with yours and/or services that compete with yours. Do they compete across the board, or just for specific products, for certain customers or in certain geographic areas? Also include indirect competitors. For instance, if you’re opening a restaurant that relies on consumers’ discretionary spending, then bars and nightclubs are indirect competitors. Use the Competitor Data Collection Plan on the next page to brainstorm ways you can collect information about competitors in each category. Competitor Data Collection Plan Price Benefits/Features Size/profitability Market strategy Once you’ve identified your major competitors, use the Competitive Analysis Worksheet on the next page to compare your business to theirs. Competitive Analysis Worksheet For each factor listed in the first column, assess whether you think it’s a strength or a weakness (S or W) for your business and for your competitors. Then rank how important each factor is to your target customer on a scale of 1 to 5 (1 = very important; 5 = not very important). Use this information to explain your competitive advantages and disadvantages. FACTOR Me Competitor A Competitor B Competitor C Importance to Customer Products Price Quality Selection Service Reliability Stability Expertise Company Reputation Location Appearance Sales Method Credit Policies Advertising Image Positioning/Niche Now that you’ve assessed your industry, product/service, customers and competition, you should have a clear understanding of your business’s niche (your unique segment of the market) as well as your positioning (how you want to present your company to customers). Explain these in a short paragraph. How you will market your product/service In this section, explain the marketing and advertising tactics you plan to use. Advertising may include: Online Print Radio Cable television Out-of-home Which media will you advertise in, why and how often? Marketing may include: Business website Social media marketing Email marketing Mobile marketing Search engine optimization Content marketing Print marketing materials (brochures, flyers, business cards) Public relations Trade shows Networking Word-of-mouth Referrals What image do you want to project for your business brand? What design elements will you use to market your business? (This includes your logo, signage and interior design.) Explain how they’ll support your brand. Promotional budget How much do you plan to spend on the marketing and advertising outreach above: Before startup (These numbers will go into your startup budget) On an ongoing basis (These numbers will go into your operating plan budget) Use the Marketing Expenses Strategy Chart on the next page to help figure out the cost of reaching different target markets. Marketing Expenses Strategy Chart Target Market 1 Target Market 2 Target Market 3 One-TimeExpenses Monthly or Annual Expenses Labor Costs Download the Annual Marketing Budget Template. Using the information you’ve gathered, create your annual marketing budget. Pricing You explained pricing briefly in the “Products & Services” section; now it’s time to go into more detail. How do you plan to set prices? Keep in mind that few small businesses can compete on price without hurting their profit margins. Instead of offering the lowest price, it’s better to go with an average price and compete on quality and service. Does your pricing strategy reflect your positioning? Compare your prices with your competitors’. Are they higher, lower or the same? Why? How important is price to your customers? It may not be a deciding factor. What will your customer service and credit policies be? Use the Pricing Strategy Worksheet on the next page to help with your pricing. Pricing Strategy Worksheet Business Name Which of the following pricing strategies will you employ? Circle one. Cost Plus The costs of making/obtaining your product or providing your service, plus enough to make a profit Value Based Based on your competitive advantage and brand (perceived value) Other: Provide an explanation of your pricing model selection. Include strategy info on your major product lines/service offerings. List industry/market practices and any considerations to be discussed with your mentor. Location or proposed location If you have a location picked out, explain why you believe this is a good location for your startup. If you haven’t chosen a location yet, explain what you’ll be looking for in a location and why, including: Convenient location for customers Adequate parking for employees and customers Proximity to public transportation or major roads Type of space (industrial, retail, etc.) Types of businesses nearby Focus on the location of your building, not the physical building itself. You’ll discuss that later, in the Operations section. Distribution channels What methods of distribution will you use to sell your products and/or services? These may include: Retail Direct sales Ecommerce Wholesale Inside sales force Outside sales representatives OEMs If you have any strategic partnerships or key distributor relationships that will be a factor in your success, explain them here. If you haven’t yet finalized your distribution channels, use the Distribution Channel Assessment Worksheet on the next page to assess the pros and cons of each distribution channel you are considering. Distribution Channel Assessment Worksheet Distribution Channel 1 Distribution Channel 2 Distribution Channel 3 Ease of Entry Geographic Proximity Costs Competitors’ Positions Management Experience Staffing Capabilities Marketing Needs 12-month sales forecast Download the Sales Forecast spreadsheet and use it to create a month-by-month sales projection. If you’ve already made some sales, you can use those as a basis for your projections. If, like most startups, you haven’t sold anything yet, you’ll need to create estimates based on your market research, your proposed marketing strategies and your industry data. Create two forecasts: a “best guess” scenario (what you really expect) and a “worst case” scenario (one you’re confident you can reach no matter what). Keep notes on the research and assumptions that go into developing these sales forecasts. Financing sources will want to know what you based the numbers on. After reading the Marketing Plan section, the reader should understand who your target customers are, how you plan to market to them, what sales and distribution channels you will use, and how you will position your product/service relative to the competition. A SCORE mentor can help you complete your Marketing Plan tailored for your business. Find a SCORE mentor. V. Instructions: Operational Plan This section explains the daily operation of your business, including its location, equipment, personnel and processes. Production How will you will produce your product or deliver your service? Describe your production methods, the equipment you’ll use and how much it will cost to produce what you sell. Quality control How will you maintain consistency? Describe the quality control procedures you’ll use. Location Where is your business located? You briefly touched on this in the Company Overview. In this section, expand on that information with details such as: The size of your location The type of building (retail, industrial, commercial, etc.) Zoning restrictions Accessibility for customers, employees, suppliers and transportation if necessary Costs including rent, maintenance, utilities, insurance and any buildout or remodeling costs Utilities Legal environment What type of legal environment will your business operate in? How are you prepared to handle legal requirements? Include details such as: Any licenses and/or permits that are needed and whether you’ve obtained them Any trademarks, copyrights or patents that you have or are in the process of applying for The insurance coverage your business requires and how much it costs Any environmental, health or workplace regulations affecting your business Any special regulations affecting your industry Bonding requirements, if applicable Personnel What type of personnel will your business need? Explain details such as: What types of employees? Are there any licensing or educational requirements? How many employees will you need? Will you ever hire freelancers or independent contractors? Include job descriptions. What is the pay structure (hourly, salaried, base plus commission, etc.)? How do you plan to find qualified employees and contractors? What type of training is needed and how will you train employees? Download the Job Analysis Worksheet and use it to help you answer the questions above. Inventory If your business requires inventory, explain: What kind of inventory will you keep on hand (raw materials, supplies, finished products)? What will be the average value of inventory (in other words, how much are you investing in inventory)? What rate of inventory turnover do you expect? How does this compare to industry averages? Will you need more inventory than normal during certain seasons? (For instance, a retailer might need additional inventory for the holiday shopping season.) What is your lead time for ordering inventory? Suppliers List your key suppliers, including: Names, addresses, websites Type and amount of inventory furnished Their credit and delivery policies History and reliability Do you expect any supply shortages or short-term delivery problems? If so, how will you handle them? Do you have more than one supplier for critical items (as a backup)? Do you expect the cost of supplies to hold steady or fluctuate? If the latter, how will you deal with changing costs? What are your suppliers’ payment terms? Credit policies If you plan to sell to customers on credit, explain: Whether this is typical in your industry (do customers expect it)? What your credit policies will be. How much credit will you extend? What are the criteria for extending credit? How will you check new customers’ creditworthiness? What credit terms will you offer? Detail how much it will cost you to offer credit, and show that you’ve built these costs into your pricing structure. How will you handle slow-paying customers? Explain your policies, such as when you will follow up on late payments, and when you will get an attorney or collections agency involved. After reading the Operational Plan section, the reader should understand how your business will operate on a day-to-day basis. VI. Instructions: Management & Organization This section should give readers an understanding of the people behind your business, their roles and responsibilities, and their prior experience. If you’re using your business plan to get financing, know that investors and lenders carefully assess whether you have a qualified management team. Biographies Include brief biographies of the owner/s and key employees. Include resumes in the Appendix. Here, summarize your experience and those of your key employees in a few paragraphs per person. Focus on the prior experience and skills that have prepared your team to succeed in this business. If anyone has previous experience starting and growing a business, explain this in detail. Gaps Explain how you plan to fill in any gaps in management and/or experience. For instance, if you lack financial know-how, will you hire a CFO or retain an accountant? If you don’t have sales skills, will you hire an in-house sales manager or use outside sales reps? Advisors List the members of your professional/advisory support team, including: Attorney Accountant Board of directors Advisory board Insurance agent Consultants Banker Mentors and other advisors If they have experience or specializations that will increase your chances of success, explain. For instance, does your mentor have experience launching and growing a similar business? Organization Chart Develop and include an organization chart. This should include both roles that you’ve already filled and roles you plan to fill in the future. After reading the Management & Organization section, the reader should feel confident that you have a qualified team leading your business. Use the Management Worksheet and Organization Chart on the next two pages to highlight your management team. Management Worksheet Bio/s Gaps in Management or Experience Advisors Organization Chart VII. Instructions: Startup Expenses & Capitalization In this section, detail the expenses involved in opening for business and how much capital you’ll need. (Do not include ongoing expenses after your business opens; those are listed in the Financial Plan.) Estimating startup expenses as accurately as possible helps you gather enough startup capital. Start-Up Expenses Download and complete the Start-Up Expenses template. In working on this Business Plan, you should already have gathered most, if not all, of the information you need. In the body of this section, be sure to explain all of the assumptions behind the figures. How did you come up with these expenses? If you’ve secured or expect to secure loans, explain the source/s, amount/s and terms. If you’ve secured or expect to secure investors, explain how much each investor will contribute and what percentage of ownership each receives in return. Be sure to include extra capital for unexpected expenses. Opening a new business almost always ends up costing more than expected, and you need to be prepared. List this figure in the Start-Up Expenses template under “Reserve for Contingencies.” How much should you set aside for contingencies? You can talk to other business owners in your industry to get a ballpark figure. If you can’t come up with a figure this way, a good rule of thumb is to set aside 20% to 25% of your total startup costs for contingencies. Opening Day Balance Sheet Download and complete the Opening Day Balance Sheet. Use it to detail the expected state of your business finances on opening day. As with the Start-Up Expenses sheet, be sure to explain the assumptions behind the figures. Personal Financial Statement If you are using the business plan to seek financing, include personal financial statements for each owner and each major stockholder. The personal financial statements should detail each person’s assets and liabilities outside of the business and their personal net worth. Investors and/or lenders typically expect business owners to use personal assets to finance a startup, and they’ll want to see how much capital you have available from your personal finances. After reading the Startup Expenses & Capitalization section, the reader should know how much money is needed to start the business and how well capitalized you are. VIII. Instructions: Financial Plan Your financial plan is perhaps the most important element of your business plan. Lenders and investors will review it in detail. Developing your financial plan helps you set financial goals for your startup and assess its financing needs. Include the following: 12-month profit & loss projection Also known as an income statement or P&L, the 12-month profit and loss projection is the centerpiece of your business plan. Download the 12-Month Profit and Loss Projection and fill in your projected sales, cost of goods sold and gross profit. (Refer to the Sales Forecast you created in Section IV). Then list your expenses, net profit before taxes, estimated taxes and net operating income. Be sure to explain the assumptions behind the numbers in your P&L. Keep detailed notes about how you came up with these figures; you may need this information to answer questions from potential financing sources. Optional: 3-year profit & loss projection A three-year profit and loss projection is not essential to a business plan. However, you may want to create one if you expect your business’s financials to change substantially after the first year, or if investors or lenders require it. Download the 3-Year Profit and Loss Projection template, and use it to create your projection. Cash flow projection The cash flow statement tracks how much cash your business has on hand at any given time. Once your business is up and running, you’ll want to keep close tabs on your cash flow statement. For now, however, you’re creating a cash flow projection. Think of the cash flow projection as a forecast for your business checking account. It details when you need to spend money on things such as inventory, rent and payroll, and when you expect to receive payments from customers and clients. For example, you may make a sale, have to buy inventory to fulfill the sale, and not collect payment from the customer for 30, 60 or 90 days. The cash flow projection takes these factors into account, helping you budget for upcoming expenses so your business doesn’t run out of money. Download the 12-Month Cash Flow Statement and use it to create your projections. Optional: 3-year cash flow statement Depending on your needs and the purpose of your business plan, you may also want to include a 3-year cash flow statement. If so, download the 3-Year Cash Flow Statement and use it to create your projections. This is a much simpler document than the 12-month cash flow statement, but can still be useful in making plans. Projected balance sheet A balance sheet subtracts the company’s liabilities from its assets to arrive at the owner’s equity. You already created an opening day balance sheet in Section 1. Now, download the Balance Sheet (Projected), and create a projected balance sheet showing the estimated financial condition of your business at the end of its first year. The major difference between the two is that the projected balance sheet includes any owner’s equity resulting from the business’s first year in operation. Lenders and investors may want to see this projection. Break-even calculation The break-even analysis projects the sales volume you need in order to cover your costs. In other words, when will the business break even? Download the Break-Even Analysis template and, using your profit and loss projections, enter your expected fixed and variable costs. Adjust the categories to reflect your own business. You can even create a couple of different break-even analyses for different scenarios. For example, your payroll costs will vary depending on whether you hire full-time employees or use independent contractors. Creating different break-even analyses can help you determine the best option. Use of capital If you’re using the business plan to seek financing from lenders or investors, provide a breakdown of how you will the capital and what results you expect. For example, perhaps you will use the money to buy new equipment and expect that to double your production capacity. After reading the Financial Plan section, the reader should understand the assumptions behind your financial projections and be able to judge whether these projections are realistic. A SCORE mentor can help you complete your Financial Plan tailored for your business. Find a SCORE mentor. IX. Instructions: Appendices Don’t slow your readers down by cluttering your business plan with supporting documents, such as contracts or licenses. Instead, put these documents in the Appendices, and refer to them in the body of the plan so readers can find them if needed. Below are some elements many business owners include in their Appendices. Agreements (Leases, contracts, purchase orders, letters of intent, etc.) Intellectual property (trademarks, licenses, patents, etc.) Resumes of owners/key employees Advertising/marketing materials Public relations/publicity Blueprints/plans List of equipment Market research studies List of assets that can be used as collateral You can also include any other materials that will give readers a fuller picture of your business or support the projections and assumptions you make in your plan. For instance, you might want to include photos of your proposed location, illustrations or photos of a product you are patenting, or charts showing the projected growth of your market. After reviewing the Appendices, the reader should feel satisfied that the assumptions throughout the plan are backed up by documentation and evidence. X. Instructions: Refining the Plan Modify your business plan for your specific needs, audience and industry. Here are some guidelines to help: For Raising Capital from Bankers Bankers want to know that you’ll be able to repay the loan. If the business plan is for bankers or other lenders, include: How much money you’re seeking How you’ll use the money How that will make your business stronger Requested repayment terms (number of years to repay) Any collateral you have and a list of all existing liens against your collateral For Raising Capital from Investors Investors are looking for dramatic growth, and they expect to share in the rewards. If the business plan is for investors, include: Investment amount you need short-term Investment amount you’ll need in two to five years How you’ll use the money and how that will help your business grow Estimated return on investment Exit strategy for investors (buyback, sale or IPO) Percentage of ownership you will give investors Milestones or conditions you will accept Financial reporting you will provide to investors How involved investors will be on the board or in management For a Manufacturing Business Explain the operations involved in manufacturing your product/s. What equipment is needed? What are the production/capacity limits of the equipment? What are the production/capacity limits of the proposed physical plant? Is specialized labor needed? What raw materials do you need for manufacturing? Are there any special requirements for storing these? What quality control procedures will you use? How will you manage inventory levels? What is your supply chain? Explain any new products you’re developing, or products you plan to begin developing after startup. For a Service Business Explain your prices and the methods used to set them. What systems and processes will you use for ensuring consistent delivery of services? What quality control procedures will you use? How will you measure employee productivity? Will you subcontract any work to other businesses? If so, what percentage of work will be subcontracted? Will you make a profit on subcontracting? Explain your credit, payment and collections policies and procedures. How will you maintain your client base and get long-term contracts? Explain any new services you’re developing or services you plan to add after startup. For a Retail Business List specific brands you plan to carry that will give you a competitive advantage. How will you manage inventory? What inventory management software will you use? What forms of payment will you accept? What payment processing service will you use? What point-of-sale software and hardware will you use? Explain your markup policies. Your prices should be profitable, competitive and in line with your brand. Initial inventory level: Find the industry average annual inventory turnover rate (available in the RMA book). Multiply your initial inventory investment by the average turnover rate. The result should be at least equal to your projected first year’s cost of goods sold. If not, you may need to budget more for startup inventory. What are your customer service policies? How will you handle returns and exchanges? Will your retail store also have an ecommerce site, or is one planned for the future? For an Ecommerce Business Will you sell a physical product, a service, a digital product (such as eBooks) or some combination of these? If you’re selling physical products, how will you brand and package them? Will you sell on your own website, online marketplaces (such as Amazon) or both? What technology providers and platforms will you use to run your ecommerce site? Web hosting service Web design service Shopping cart provider Payment processing service Fulfillment & shipping services Email marketing services Can the solutions you’ve chosen quickly scale up or down as needed? Where will you get your products? Will you manufacture them in-house, buy them from manufacturers or use drop shippers? How will you handle returns and exchanges? What are your customer service policies? How will you provide customer service? Will you use any proprietary technology of your own and if so, what advantages does that give you? For a Software or SaaS business What is your pricing structure? Will you use a free trial, “freemium” or paid business model? If you offer free services or a free trial option, how will you upsell customers to a payment model? What percentage of customers are expected to become paying customers? Have you tested your software? Are any “early adopters” already using the product? How will you encourage long-term contracts in order to create recurring revenues? How will you manage rapidly changing markets, technologies and costs? How will you keep your company competitive? Will you use in-house developers or outsource this function? How will you provide customer support? How will you retain key personnel? Are you using any proprietary or exclusive software that will give you a competitive edge? How will you protect your intellectual property? What additional products or updates to current products are you planning after launch? Now That You’re (Almost) Finished . . . Remember to go back, and complete the Executive Summary. After you’ve filled out all the worksheets and executive summary, print them out and you have a business plan. Work with a SCORE mentor to review and refine your plan.
Objectives On successful completion of this assignment, students should be able to: · explain the importance of establishing a position in a chosen market · segment a target market
23 Business Report Name 2018121344 BUSI 4046/4053 Final Business Plan Professor University Location Part 1A – Business ideas planning Business description Queen’s wedding is a well known company focusing on managing and designing wedding ceremonies located in Vancouver, Canada. The special thing regarding our company is that it is not only offering venue, menu planning, decoration, and entertainment and catering but also designing the special wedding dresses for bride and groom according to theme of their wedding and also doing alternations. Services provided by Queen’s wedding This company is going to provide multifarious services in the Canada. The purpose of starting our company is to compete with the largest competitors in the Wedding planners industry not only in Canada but also worldwide. The following services are offered by Queen’s wedding: Menu planning Venue planning Catering Decoration Photography Arranging transportation Designing and arranging wedding dresses, jewelry and makeup as well. Vision statement Our vision statement to make the best professional wedding planner company in order to first choice of couples. Mission Statement Our mission statement is to make the wedding day special for couples by providing them trusted and unique services at low cost. Target market Our target market will be the engaged, young couples who want to spend extravagantly on their wedding day to make it special. Their desire is to have planned and professionally carried out wedding. They can be from different class from Canada and from other countries also. Another situation happens when couples want to have a destination wedding. It will also target families and friends of bride and groom to offer them high quality wedding services. Benefits of getting services from Queen’s wedding Our Company will provide various services at an affordable cost. It will provide standard wedding planner services at local, state, national and international level. Our customer is our god so when they are contracting wedding planning with us we will ensure that we are providing unique and personal wedding to our clients that assist them in achieving their dreams about their wedding day. Our weddings will be completely customized to reflect the personality of beautiful couples. Our designers are customizing dresses of bride and groom according to the theme of their wedding. . Also, the company is offering alternations services like if the outfit available does not fit the couple, the couples are at liberty to ask the team to offer new outfits, which will be provided at a higher cost, but funds will be given back once they return them to the organization. Stakeholders The stakeholders are bride and groom and their families. Others are wedding guests, decorators, photographers, musicians, suppliers, employees, catering and clothing planners. Organizational structure Initially, this business is founded by two people who will use legal partnership forms. This form is easy to establish and maintain and all founders can contribute to business decisions. After the expansion of the business, they hire honest, qualified and hard- working people to occupy the following positions: Chief Executive officer – Recruiting and training managers, communicating and implementing vision and mission, evaluating the overall growth of the company. Wedding planning consultant – Organizing all wedding events like catering, decoration and so on. Hiring vendors and handling any arising issues on the wedding day. HR Manager – Responsible for administrative tasks such as arranging meeting with stakeholders, maintaining office supplies and training of employees. Marketing Executive – Identifies new partners and business opportunities to increase sales of the company. Also responsible for handling business research. Accountant – Preparing financial reports, income statement and balance sheet, performing cash management and administering payrolls. Client Service Executive – Welcomes guests and clients, ensuring customer receive higher satisfaction, receiving mails for the company. Concept Statement The concept statement of the organization is taking advantage of new couples to give them an enhanced wedding experience, allowing them to enjoy their wedding ceremonies by offering them unique and special wedding moment. The concept statement will allow stakeholders to dedicate themselves to their activities, leading to business success. This will be an essential strategy to meet the goals of the organization. Part 1B Concept Statement The wedding planner industry is increasing at an alarming rate day by day. So, starting business of wedding planner, event planner, bridal store and so on is highly profitable. The services offering by our company are fair, flexible and friendly. This company allows customers to feel considered by the organization, thus allowing them to refer their friends to the organization, which helps it to generate more revenue. Furthermore, the services offered at cost-effective prices allowing the customers to get the best, thus increasing the company brand and reputation. It is offering high quality, reliability and eco- friendly services, thus enhancing customer experiences in the organization. Furthermore, in case of any dispute regarding the products rendered by the firm, customers will be free to communicate with the organization’s customer care, thus allowing the problems to be solved on time. This will be essential to the organization as it will ensure that all conflicts have been solved on time to get higher customer satisfaction. (Broekhuizen et al, 2018) When customers hold marriage celebrations, they always intend to get the best services and value for their money. The organization will meet the market’s demands by offering customizable products and services at different prices allowing the customers to get the best experience for their special day. Furthermore, the management and the marketing teams will keep evaluating services offering to the customers. It will be expensive to start the business as many things are required to make the wedding ceremony exciting. Due to the rapid growth and changing of wedding industry, the business will be required to purchase components regularly increasing the expenses of the organization. The business will need to get funds from creditors such as banks to keep it running effectively. Furthermore, new trends are emerging in the market, and the organization needs to blend the need to achieve customer satisfaction. The financial strategy will be essential to achieve customer satisfaction and meet customer demands. The financial needs of the business will include paying rent, acquiring insurance of the business, paying the workers, maintaining the workers of the organization, and purchasing new components of the organization to meet the demands of the customers. This is an essential strategy for the business to meet the customers’ needs and the organization’s demands. Before implementing any strategy, the management must evaluate it and monitor its impacts on the organization. If the risks of the strategy to be adopted by the business are high, the business will have to stop using the strategy. If a strategy has a limited number of risks, the business is likely to adopt using the strategy, thus leading to business development. These strategies are likely to do the business to success positively. Part 1C – First Screen Analysis Introduction The proposed name for the business is Queen’s wedding. The business will be founded by Mr Marcus Watts and Susan Gillmor. The business will not only be entitled to offering wedding planning but also designing outfits for bride and groom to make their wedding day beautiful. This company is located in Vancouver, Canada. The engaged couples who want to have memorable wedding day and their families are the target customers of this company. The management of the business has set it to be launched three months after all preparations have been achieved. Part 1: Product Feasibility Product/service desirability The business will achieve product and service desirability by hiring experts in the wedding industry. They will be responsible for conducting extensive research about wedding celebrations to get the best products and services for hosting wedding events. Furthermore, the business will hire customer supporters with effective communication skills to offer advice and listen to customer needs to present them to the organization. This will allow the organization to improve its products and services and gain market share. (Braga et al., 2022) Product/service demand. The rapid population growth has led to new relationships resulting from increasing demand in the wedding industry. To cope with the wedding demands, the organization will create a detailed budget to purchase more wedding equipment and amenities to support multiple wedding events. This strategy will allow the company to host five wedding events simultaneously, thus meeting the demands of the wedding industry. Part 2: Industry/Market Feasibility Industry attractiveness Assessment tool Assessment Low potential Moderate potential High potential Competition Many Few None Age of the industry Old Middle young Industry growth rate Little to no growth Moderate Strong Average net income of the industry low Medium High Industry concentration Concentrated Not concentrated nor fragmented Fragmented Stages for the life cycle of the industry Maturity phase Growing phase Emergence phase Importance of industrial products and services. “Ambivalent” “Would like to have” “Must have.” Extents of both environmental and business trends in favor of the industry Low Medium High Number of new exciting products and services to the emerging industry. Low Medium High 10 Long-term business perspective weak Neutral Strong Target market attractiveness In this industry, my target customers are couples. Our company is doing their best to help in them in achieving their wedding goals. Target market attractiveness assessment tool Assessment Low potential Moderate potential High potential Competitors Many Few None Market growth rate Little Slow Rapid Average net income for the target company Low Medium High Methods used for generating revenue Not clear Not very clear Clear Ability to create entry barriers to competitors Unable May or might not be able to create Can create Degree of customer satisfaction Satisfied Neither satisfied nor not satisfied Not satisfied Ability to employ low-cost guerilla and buzz market techniques low Moderate High Excitement of new products/ services to the market Low Medium High Market timeliness Market timeliness Assessment Below is the target market assessment. Assessment Low potential Moderate potential High potential Customer buying mood Customers are not in their buying mood Customers are in a moderate purchasing mood Customers are in an aggressive buying mood. Market Momentum Losing momentum Slowly gaining momentum Highly gained momentum New firm for a new geographical location Low Moderate High Business and environmental trends are moving in favor of the business Low Moderate High Planned entrance of large firms to the market. Large firms are entering the market Moderate large firms entering the market No large firms are entering the market. Conclusion The attractiveness of the industry: The attractiveness of the industry is moderate as the company is quite young in the wedding planning industry. Engaged couples and their families are showing more interest in it. We provide them wonderful wedding experience. Even this, our attractiveness is that customers who want to have destination wedding and theme wedding. The attractiveness of the target market: The target market attractiveness has high potential as customers are not happy with services being provided by the existing companies. There is ability to make low-cost marketing and generating more income as there are few competitors. Timeliness of the market: Buying mood of the customers is moderate and market is sharply gaining momentum. So, introducing more services and locations has become need of hour. Industrial Feasibility: Feasible because there is market stability, and with effective strategies and management practices that will the business to grow. Suggestion towards improving market feasibility: Market feasibility can be achieved through effective research on how to increase the revenue of the company. Using different marketing techniques to increase buying power of the target customers. Part 3: Organizational Feasibility. Management process. Management process assessment tool Assessment Low potential Moderate potential High potential Passion for the business Low Moderate High Experience in the industry None moderate High Entrepreneurship experience None Moderate High Social and professional networks Weak moderate Strong Creativity among teams Weak moderate High Expertise in cash flow management None Moderate High College graduates No education Some college graduates All are college graduates Sufficiency of the resources Resource sufficiency focuses on non-financial resources in various categories of the organization. Resource efficiency is essential to facilitate the proposed activities’ availability for the business. Resource sufficiency assessment tool Resource rating Resource sufficiency 1 2 3 4 5 Space of the office 1 2 3 4 5 Manufacturing space, lab space, or space for launching a new business. 1 2 3 4 5 Contracting manufacturers 1 2 3 4 5 Management employees 1 2 3 4 5 Organizational support personnel 1 2 3 4 5 Essential equipment required to operate the business. 1 2 3 4 5 Obtaining intellectual information 1 2 3 4 5 Supporting state government for business launch 1 2 3 4 5 Ability to form business partners Business Ratings (Strong, neutral or weak) Strong Proximity towards similar firms Strong Supplier Proximity Neutral Customer proximity Neutral Proximity towards university research. Conclusion Management process: The management process has high potential because management team is extremely passionate regarding the business idea. All are college graduates and highly creative. Even this, they have relevant experience Resource sufficiency: Resource sufficiency of the business is high. It has all the required resources like space, employees, suppliers, cash and equipments to start a business. Organizations feasibility: Feasible. (Buchinger et al, 2017) Suggestions to improve organization feasibility: Organizational Feasibility can be improved by conducting research to identify new trends in the market and adopting towards using them. Part 4: Financial Feasibility Financial Feasibility focuses on analyzing finances required for cash start-ups for proposed business ventures, thus allowing successful business execution. (Affandi et al, 2019) Total cash needed for the business. Capital investment Amount Business property 550,000.00 Fixtures and furniture 8,550.00 Computing equipment 1,500.00 Other equipment 37,320.00 Motor vehicles 120,000 717,370 Operation expenses Amount Accounting and professional services 3,000.00 Promotional and advertisements 9,700.00 Deposit utilities 4,520.00 Permits and licenses 3,700.00 Organizational insurance 1,300.00 Payments Wages and salaries 17,000.00 Taxes Business Travels 3,000.00 Signs 1000.00 Supplies and tools 53,730.00 Inventory 110,300 Cash Expenses 1 208,553 Expenses 2 Total cash needed to start 921,923 Comparison of the financial performance of the proposed venture to similar firms Comparing financial performance with other companies is an essential strategy for a company to determine if it is spending more, thus allowing it to control its operations effectively. Below are tables illustrating annual sales between other companies: Year 1 annual sales estimation How the annual sales were computed Year 1 estimated sales. Year 1 sales were $318,427. As a new business, this was average for the business. Year 2 estimated sales. Year 2 sales were $336,210. This was average, but the organization would do better than this. Net income: Year 1 annual sales estimation How the annual sales were computed Year 1 estimated sales. Year 1 net income was 425,398, which was average on the business forecast. Year 2 estimated sales. Year 2 net income was $472,563, which was average and a slight improvement for the business. Overall financial attractiveness. Assessment Low potential Moderate potential High potential Rapid growth in sales in the first one to three years. Not Likely Moderately Very likely High recurring sources of revenue for the organization Low Moderate High Forecasting income and expenses weak Moderate High Generating funds within two years of financial growth Not Likely Moderately Very likely Availability of exit opportunities Likely unavailable Can be available Very likely to be available Conclusion Cash needed for start-up; $921,923 Financial performance of similar businesses: $8251,370 Financial Feasibility: Feasible Suggestions to improve financial Feasibility: financial Feasibility can be improved by focusing on effective research procedures to familiarize with the environment. Overall Feasibility: summary and conclusion Universal Feasibility Improving Feasibility Market/product feasibility Feasible Marketing across social media platforms to create awareness about the business. Market/Industry feasibility Feasible Targeting specific segments with more engaged couples. Business feasibility Feasible Provide training to more employees. Financial Feasibility Feasible Looking for more investors to invest their money in this business. Overall assessment Feasible The wedding business is excellent and well managed; it is likely to have a higher success rate. Conclusion A wedding business can be feasible as the founders must source the start-up capital and obtain proper business licensing. For the business to perform well, the management team must formulate effective strategies, such as choosing the right location and the tools required for running the business. The business can market by using various channels, including social media platforms, thus helping the business to flourish. Part 1D – Competitor Data collection plan Direct competitors are The Knot, Modlines, Weddingforward Indirect Competitors are Pinterest, Instragram and event planners FACTOR Queen’s wedding The Knot Modlines Wedding forward Importance to Customer Brand popularity Moderate High low Moderate W (3) Price Affordable Expensive expensive affordable S (1) Quality high High Moderate high S (1) Providing coupons and discounts More discounts More discounts Low discounts none S (4) Free returns and exchanges yes No yes no S (3) Website security and privacy no No yes yes W (4) Positive environment practices N0 Yes no yes W (2) Loyalty programs Yes No yes yes S (2) Company Reputation moderate High high Moderate W (1) Overall score 4.0 4.3 4.1 4.0 S (1) Reliability high High moderate moderate S (1) Sales Method Open to any Open to any Open to any Open to any S (5) Price Price Company provides services at affordable prices compared to its competitors. Benefits Benefits/Features As comparison to its rivalries, company offers more discounts, free exchange and refund policy and loyalty programs. Profit Size/profitability Our company is earning high profits as we are offering high quality of services to meet customer expectations. Market strategy Market strategy Our company is doing great because we are getting feedbacks from customers in order to do better. Five forces model Competitive force Threat to industry profitability low Threat to industry profitability Medium Threat to industry profitability High Threat of substitutes Low Medium High Threat of entrants Low Medium High Rivalry among existing firms Weak Moderate Strong Bargaining power of suppliers Weak Moderate Strong Bargaining power of buyers Weak Moderate Strong Core strategy Business Mission Offer excellent wedding products and services at reasonable prices. Bases of Differentiation The business will help its customers in wedding planning and provide them with core advice regarding wedding activities. Target market The business targets engaged couples who want to have their memorable wedding without taking any stress. Product/market scope Wedding equipment and wedding services. Resource Core competency Key Assets Strategic planning Quality control Standardization Brand recognition Intellectual property Physical property Finances Financials Revenue streams Transactional based revenue Service revenue Cost structure Sales commissions Labor costs Manufacturing costs Cost of raw materials Financing/funding Debt capital Retained earnings Equity capital Operations Product (or service) Production Wedding equipment Wedding Advice Wedding products and goods. Channels Direct distribution channels Internet Indirect channels involving intermediaries Key partners Local vendors Photographers Caterers Decorators Priest References Affandi, R., Siregar, M. R., Sari, D. I., Savira, N., Wulantiya, S., & Habib, A. (2019). Financial Feasibility Analysis of Voerseri Business (Packaging Bird Feed from Kersen/Singapore Cherry). JASc (Journal of Agribusiness Sciences), 2(2), 42-46. Braga, A. E., & Costa, A. L. C. (2022). Feasibility Analysis of a Product-Service System in the State University of Pará. In Handbook of Best Practices in Sustainable Development at University Level (pp. 233-247). Springer, Cham. Buchinger, J., Ince, D., Perch, L., & Hatvan, B. (2017) Barbados Sustainable Energy Industry Market Assessment Report. Broekhuizen, T. L., Bakker, T., & Postma, T. J. (2018). Implementing new business models: What challenges lie ahead? Business Horizons, 61(4), 555-566. 24 Best Wedding Planner Stores Compared | In-Depth Review 2022. (n.d.). Knoji. Retrieved from https://knoji.com/rankings/weddingplanning/brands/
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