Business Plan Proposal
That is the research process that anyone establishing a business would undertake. The proposal template is on Moodle, this should be utilised and should be between 1000 and 1,200 words. The proposal focuses on these areas:
• Briefly outline the product/service you are offering
• Analyse the key current trends in this industry/sector
• Identify who are your key target market(s)
• Where is your business located? Why have you selected this area?
• Explain briefly the key benefits you are providing to your customers/clients?
• Provide a very concise justification for this proposed business idea
The proposal is designed to enable you to establish if a business concept has commercial potential and hence to prepare a successful business plan. If there is any concerns regarding the potential viability and/or the available of Market information this will be apparent from the feedback provided on moodle after the proposal is submitted.
For these three draft submissions you must use the full plan template all the time as a guide. Exact submission dates to be provided during term.
Draft Number 1
Draft Number 2
Draft Number 3
• Company Description
• Market Analysis
• Competitive Analysis • Marketing & Communications Strategy
• Staffing & Operations
• Financial Projections
• Year 1 Draft Set of Financials
Many of you will already have presented complex information to a range of audiences; even so, for some people even the thought of an oral presentation can be very daunting. For this academic year the presentation will be recorded and a link emailed to both supervisor and module leader.
Try to remain focussed on the purpose of your presentation: - i.e.
To:-
• Explain your product or service, including the Key elements of your product/service,
• Advantages of this product/service to customer & USP
• Explain the location of your business along with the days and opening times
• Outline the key trends within the industry and the market segments that you are targeting.
• Briefly outline primary research that you have conducted, justifying the extent of this business opportunity
• Provide a very brief analysis of the key competitors in the market and explain how you aim to differentiate your business.
• Outline your Marketing Communication strategy, highlighting key aspects.
• Outline the implication in terms of staffing your business as well as key operational requirements.
• Provide an overview of the Financial Projections of the business. Refer to Sources of Finance, Start Up costs, Cash Flow statement and the Income Statement.
Points to consider:
• Your audience: Normally your Supervisor and Second Marker (who would also be supervising other students)
• Your material: What information you intend to present i.e facts, figures
Note: Presentations will be 15 minutes in duration, with an additional 5 minutes to be allocated towards various questions/answers.
The key to successful presentations are really:
i) Preparation
ii) Planning
iii) Practice
There are many things that can have a major impact on a Business Plan including incorrect spelling, grammar or punctuation; the use of unprofessional language; numbers that do not total; numbers that are different in different parts of your plan and/or different from your financial model or poor organisation. Take the time to review the entire and completed plan prior to submission.
Support all assumptions with referenced sources: All the assumptions made should be supported by both secondary and/or primary research. Avoid the use of vague terms such as ‘lots’ ‘many’ – be more precise using terms such as ‘significant’ or ‘considerable’ or a ‘large increase in comparison to previous years’ and cite a quality, respected source to back up your statement.
Avoid the use of non-assertive language: vague, qualifying words such as -might-, -probably-, -maybe- and -perhaps- can have a subtly negative effect on the reader. Be positive.
More importantly, you need to clearly describe what your business is about. Avoid superlatives: the -trust me- school of thought does not work in business plans, nor does “I believe”. If your product/service is going to be the best in the market, thoroughly explain how and why. If your product/services is going to be “Low Priced” again clearly put forward a justification for this strategy and explain how you can achieve this.
Marking Scheme and Word Count for the Final Business Plan
Allocated Mark Weighting Approximate Word Count
1. Executive Summary 500
2. Company Description 10% 1,000
3. Market Analysis 15% 1,500
4. Competitive Analysis 10% 1,000
5. Marketing & Communications Strategy 20% 1,500-2,000
6. Staffing and Operations 20% 1,500-2,000
7. Financial Projections and Key Assumptions 15% 1,000-1,500
Appendices
Presentation and Overall Structure 5%
Referencing 5%
Please note: The word Counts are guidelines, it will depend often on the nature of the business.
Explanation of Each Section of the Final Business Plan
1. Executive Summary:
Many consider this a crucial part of the business plan because it is what investors usually will read first. It is the -teaser- through which you will need to convince an investor to spend more time on the plan itself. This section should always be written last so that each individual section being summarised has been thought through and analysed fully.
The executive summary should be approximately 300 - 400 words in length. It should be concise and clearly highlight what the new business venture is about, its key aspects and why this is an attractive opportunity for a potential investor. The executive summary should summarise each of the sections in the plan.
Financial projections should be summarised and highlighted. There is a format providing in the Business Plan template.
2. Company Description:
In this section, a thorough description of the company is given, including the short- and long-term goals of the company, a short mission statement and critical success factors. It should clearly explain all aspects of your business – products and/or services associated with it.
Discuss the following items as part of this section:
• Products/Service. Explain clearly what your product or service is and what it does such as:
-Location just a very brief mention (1 sentence) so that the reader can put your business in context. (location will be covered in a lot more detail in the People & Operations section)
-Key elements of your product/service.
-Advantages to customer
• Mission and Objectives
• Critical Success Factors (what are the 3 or 4 Critical Success Factors that must happen in order for the business to get started, that is in the next 6-12 months? such as: obtain a loan from the bank, find the correct location, hire the correct KEY employees, find the correct KEY suppliers, etc.)
• Unique selling points of the business
• SWOT Analysis. Analyse the strengths and weaknesses of the business and product or service, the opportunities that exist in the marketplace, and the threats to the viability of the project. This is best done in a matrix diagram.
3. Market Analysis
How well you know your market will be demonstrated in this section. You must show that you have done the market research to justify the projections made in your business plan. This section should demonstrate that there is a viable market and that you can beat the competition in the market for sales.
The purpose of this section is to explain what is/has been happening in your industry and which key target markets you have chosen to focus on. As well as examining secondary research such as industry reports, trade journals and newspaper articles, it is expected that you will conduct your own market research to establish the viability of your product/service.
There are three main sub-sections in this section, full details of which are to be found in the Business Plan Template itself (which has been handed out to students in class and is available on Moodle.
3.1 Research Methods Overview
3.2 Industry Overview
3.3 Target Market
The sources for information in any market are numerous and will often depend on the industry that your business lies within. The following are just a few suggestions: Mintel reports (accessed directly via Moodle), Bord Bia reports, Failte Ireland reports, CSO reports, ERSI reports, Vintners Association reports.
The library staff can be a great source of help in this regard.
For most businesses, one will have to read a number of reports in order to fully understand the market for your product/service.
4. Competitive Analysis
Within this section you will need to be able to identify and assess each of your major competitors. You need to discuss their strengths & weaknesses and you need to use primary & secondary research to support your findings. The weaknesses of your competitors may be your company’s strength/USP.
There are two main sub-sections in this section:
4.1 Key Competitors
Conduct an analysis of your competitors in the market:
• What are the key competing products and services?
• Profile the key players (company size, turnover, profitability etc) and their market share. This can be completed using a table.
• Describe advantages and disadvantages of the competitors’ offerings
• Assess any possible threat of Substitute goods or services
4.2 Competitive Advantage
Bearing in mind the preceding section conduct a brief assessment of the unique resources and competences that will allow for this business to obtain and maintain a lasting competitive advantage over its rivals.
You will recall from your Strategic Management module that core competencies represent those ‘activities and processes through which resources are deployed such as to achieve competitive advantages in ways which others cannot imitate or obtain’
To secure investment for a new business venture it is essential that an entrepreneur has a very clear picture as to their sources of lasting Competitive Advantage.
Examples of Sources of Competitive Advantage:
• Ability to offer and sustain excellent service or product quality
• Creative staff and an ability to consistently innovate their product, service or process
• Creating a culture of continuous improvement
• Access to a unique supplier
• New technologies or systems
5. Marketing and Communications Strategy
This section sets out your strategies for reaching your target market, arousing their interest in your product or service, and actually delivering the product or service to them in sales.
There are five main sub-sections in this section. Full details of which are to be found in the Business Plan Template itself.
5.1 Marketing Strategy
5.2 Pricing
5.3 Sales Forecast
5.4 Revenue Model and Sales Strategy
5.5 Communications Strategy
• Describe briefly your overall marketing strategy. Specifically describe and justify each marketing communication method(s) used for each target market. Some items you need to think about are:
• What are the levels of your product/service? Examine the Core, actual and augmented levels of a product/service
• How will you position your product/service/what will be the brand image you strive for your product/service?
• Identify the pricing strategy that your business will adopt for your key target market(s). For instance, cost plus or premium pricing. Justify your choice. It is recommended to include a table to compare your target market prices along with those of your major competitors.
• Discuss your sales forecast, which will provide the basis for the sales and cash flow figures in your financial projections. These must be based on realistic assessments.
• How are you going to generate revenue and sell the produc/service? Are you going to sell direct to the customer or else perhaps you will be using third parties such as a retailer or distributor? If hiring sales staff you may need to think about how will you incentivise your sales staff or third parties?
• Marketing Communications Strategy. What key promotional tools will you adopt? e.g advertising, public relations, flyers, social media marketing etc. What forms of Social Media Marketing will you utilise? What do you want to achieve from you Social Media Marketing strategy?
• You need to fully cost each Marketing Communication method and you should have a summary table at the end of this section
6. Staffing and Operations
This section is where you will outline key aspects in terms of Staffing and Operations for the new business venture. Within this section you will outline the intended structure of the company in terms of management, the number of employees, and the physical operational requirements to produce or supply the product or service.
There are three main sub-sections in this section. Full details of which are to be found in the Business Plan Template itself. Please note that these vary greatly from business to business; please adapt to suit your particular business
6.1 Organisational Chart
6.2 Staffing
6.3 Operations
Staffing and Operation is a key section within any business plan, students should be as creative as possible as to how they can manage these key aspects, bearing in mind that that cash flow is usually extremely tight for most start-ups. Nevertheless students would be mindful also of the need to deliver a quality product/service for their customers. The conduct of Primary research on your competitors may assist in establishing the necessary staffing and operational requirements within this section, along with relevant secondary sources.
7. Financial Projections and Key Assumptions
This key part of the Business Plan involves providing an in-depth explanation of the future financial performance of your business, based on your research. This section is about discussing your financials, you do not have to cut and paste the excel spreadsheet here.
The financial projections:
• Should be a reflection of how your business is performing and as such it must be consistent with the body of the plan. Key figures will already have been explained within each of the preceding sections e.g planning and operations, it will not be necessary to explain the figures again.
• Will help demonstrate whether your strategy is financially feasible and whether it allows you to reach your goals and objectives
• Is a key indicator of the amount of outside financing necessary to support the execution of your strategy
• Will aim to answer the following questions: How will the company perform financially? - Profit and Loss Projections? What will the company's cash position be throughout the three years? - Cash Flow Projections, When will any loans or other investors be reimbursed?
• Should include a list of significant assumptions used in any individual section
• Be minful that the amount of start up capital is limited to €500k.
There are five main sub-sections in this section. Full details of which are to be found in the Business Plan Template itself:
7.1 Sources of Funding
7.2 Start-up Costs
7.3 Loan Repayment/Dividends:
7.4 Cash Flow
7.5 Income Statement (Profit & Loss)
Appendices
Cash Flow
Students will need to attach a monthly Cash Flow prediction for the first three ears of the company’s operations.
Income Statement
Students will need to attach an Income Statement for the first three years of the company’s operations.