Business Plan Project Workbook - Weebly
Business Plan Project Workbook
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Chapter 1: Management Team Plan
Chapter Summary
One of the keys to a successful business is having a strong management team. The team members must have the character traits and skill sets necessary to accomplish the firm’s goals. The management team plan outlines the key executives’ duties. It provides details about each person’s education, qualifications, work experience, and personal financial information. The plan includes a description of the key advisors. Key advisors guide executives in business planning and decision making. The plan also describes the qualifications, roles, and products or services that outside service providers offer the business.
Key Terms
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|traits |The qualities and characteristics that people possess |
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|skill sets |The abilities and expertise that a person has developed through practice and experience |
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|development grants |Low-interest government loans that encourage economic development in a certain area |
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|executives |Employees who are in charge of planning, executing, and controlling the major business functions |
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|financial statements |Reports that state the sources and uses of money |
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|advisory board |A group of people who guide the management team |
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|publicly held company |A company that sells stock to raise funds |
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|service providers |Companies or individuals that provide products and services on an ongoing basis |
Chapter 2: Company Description
Chapter Summary
The company description of the business plan should state the business concept and the focus that the firm will take. The description explains the reasons for starting, purchasing, or expanding a business. It also describes the entrepreneurial opportunity that exists. Developing a company description will help a business set priorities. It will help the company decide on goals that are achievable. The company description helps answer the key question, “What business am I in?” To answer this question, a company must consider the market it wants to target, the products and services it plans to offer, and what makes it different from other businesses.
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|target market | |
|A specific group of customers whom a business wishes to reach | |
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|entrepreneurial opportunity | |
|Key factors that will help make a company succeed | |
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|development milestones | |
|Big events that achieve goals outlined by management | |
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|stakeholders | |
|People who have, or may have, an interest in a company | |
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|unique selling proposition (USP) | |
|The characteristics of a company that make it unique | |
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|business concept | |
|The ideas that define a business | |
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|key collaborators | |
|People who will provide a company with funding, licensing, franchise, partnership, or joint venture | |
|arrangements, etc. | |
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Chapter 3: Product and Service Plan
Chapter Summary
The product and service plan defines the core products and services that the company will offer, and describes how they will be produced. The plan explains to stakeholders how the company’s products and services will meet potential customer needs. Review of the products and services currently being offered in the marketplace helps a company define how its features and benefits will be unique. It is important to clearly communicate the unique selling proposition of a company’s products or services to the target market.
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|features | |
|The characteristics of a product | |
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|benefits | |
|Desirable outcomes resulting from the use of a good or service. | |
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|tangible benefits | |
|Benefits that are easily seen or recognizable | |
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|intangible benefits | |
|Benefits that are not easily seen or recognizable | |
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|value proposition | |
|What customers value or believe is important | |
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|subcontractor | |
|A person or firm hired to perform a job function | |
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Chapter 4: Vision and Mission Statements
Chapter Summary
The vision statement and the mission statement communicate the firm’s beliefs and goals. The vision statement is a declaration that states the scope and purpose of the company. The mission statement is a declaration that expresses the specific aspirations of a company. Both serve as a powerful guide for future decisions and actions. In addition, these statements serve as one of the primary vehicles for communicating to stakeholders. These statements should focus on customer needs and not on a particular product or service.
Key Terms
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|vision statement |A declaration of the scope and purpose of a company |
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|mission statement |A declaration of the specific aspirations of a company |
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|guiding principles |The primary direction and core values by which a company functions |
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|external environment |Circumstances that are outside the company’s control |
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|organizational culture |The shared values, beliefs, and behaviors of the company |
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|behavioral norms |The rules of conduct of a group |
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|competitive advantage |A condition that enables a company to operate more efficiently than other companies |
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|innovate |To introduce a new idea |
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|quantum improvements |Sudden and dramatic changes for the better |
Chapter 5: Industry Overview
Chapter Summary
The industry overview familiarizes stakeholders with the economic and industry sector in which the business will operate. It includes research on economic trends that will impact the company. It also lists direct and indirect competitors. The industry overview explains the life cycle of the products or services. It also examines any uncontrollable external factors that affect the business. In addition, the industry overview should explain any barriers to entering the industry.
Key Terms
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|industry |A group of companies providing similar, complementary, or substitute products and services |
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|economic sector |The broad area of the economy in which a firm operates |
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|industry sector |A classification of companies within a particular economic sector |
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|product life cycle |The stages that products and services go through: introduction, growth, maturity, and decline |
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|barriers to entry |Factors that make it difficult for new competitors to enter an industry or market |
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|competitive set |A group of companies that meets the same customer needs |
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|direct competitor |A company that sells a product or service that is the same as, or similar to, that sold by another |
| |company |
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|indirect competitor |A business that offers substitutes that meet the same basic need met by products or services sold by |
| |another business |
Chapter 6: Market Analysis
Chapter Summary
The market analysis section of the business plan presents research findings about target markets. It includes a target market profile that explains the traits of the company’s potential customers. The target market profile helps stakeholders understand who potential customers are, where they live, what their needs are, and what will likely motivate them to purchase a product. The analysis provides potential investors with a realistic forecast of the growth potential for the market in which the firm will operate.
Key Terms
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|market penetration strategy |A group of companies providing similar, complementary, or substitute products and services |
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|customer profile |A complete picture of a venture’s prospective customers |
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|market segmentation |The process of grouping a market into smaller subgroups defined by specific characteristics |
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|age cohorts |Groups of consumers born during a specific time period |
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|household |A group of people living together in one housing unit, such as a house or apartment |
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|family life cycle |The stages a family goes through that reflect changing characteristics, such as age and whether |
| |children are living at home |
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|market research |The collection and analysis of information aimed at understanding the behavior of consumers in a |
| |certain market |
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|secondary data |Information already collected by someone else |
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|primary data |Information obtained for the first time and to be used for a specific study |
Chapter 7: Competitive Analysis
Chapter Summary
The competitive analysis section of the business plan describes the direct and indirect competitors in the same market as your planned business. By analyzing your competitors’ strengths and weaknesses you can determine your business’s competitive advantage.
Key Terms
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|value proposition |What is valued most by customers |
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|perceptual map |A graph showing how customers perceive competing products or services |
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|sustainable competitive advantage |A company’s maintainable advantage over its competitors |
Chapter 8: Marketing Plan
Chapter Summary
The marketing plan explains how a company plans to market, promote, and sell its products or services. The primary elements of the marketing plan are often called the marketing mix, or the four Ps of marketing. The four Ps are product, place (distribution), price, and promotion. An integrated marketing plan uses these four elements in a complementary way. Each piece must fit together to form a clear picture. This part of the business plan explains how the four Ps communicate the desired message to the target market.
Key Terms
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|total product experience |The features and benefits that a customer is seeking in a product or service |
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|primary features |The basic elements of a product or service |
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|auxiliary dimensions |The unique features that set a product apart from the competition |
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|channel intermediaries |People or companies that specialize in certain aspects of distribution |
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|integrated marketing campaign |A series of promotional strategies that work together to achieve specific marketing objectives|
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|cost-based pricing |Pricing based on the cost of the product or service plus the cost of doing business plus the |
| |projected profit margin |
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|demand-based pricing |Pricing based on what the customer is willing to pay |
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|competition-based pricing |Pricing based on what competitors charge |
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|flexible-price policy |A pricing policy in which customers pay different prices for the same type or amount of |
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|one-price policy |A pricing policy in which all customers are charged the same price for goods and services |
Chapter 9: Operational Plan
Chapter Summary
The operational plan describes how a company will manage its business on a day-to-day basis. It outlines where the business will be located. It explains what equipment and facilities will be required to run it. The plan explains the production process and defines what method of production is best suited to the product design. It also explains how the products will be stored, distributed, ordered, and serviced. The plan explains the utilization of labor and how the business will organize various job functions. Finally, the operational plan must address any issues regarding safety, health, and government regulations.
Key Terms
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|infrastructure |The basic facilities and equipment required to operate a business |
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|prototype |A working model of a product, store, or service concept |
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|field test |A small-scale test of a product or service with actual consumers to assess its marketability |
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|inbound logistics |The procedures for obtaining the supplies needed to operate a service or produce a product |
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|outbound logistics |The procedures for storing a product and transporting it to the customer |
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|supply chain management |Managing both inbound and outbound logistics |
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Chapter 10: Organizational Plan
Chapter Summary
The organizational plan describes how the operations of a business will function. It defines the human resources required and the responsibilities of each position. The organizational plan also addresses issues regarding compliance with local, state, and federal government laws; regulations; and reporting requirements.
Key Terms
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|human capital |The collective skills, talents, and knowledge of a business’s employees |
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|sole proprietorship |A business that is owned and operated by one person |
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|general partnership |A business in which every partner is involved in the management of the firm and is responsible for |
| |the liabilities of the firm |
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|limited partnership |A business in which some owners do not manage the operations of the business and their liability is |
| |limited to what they invested in the company |
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|C corporation |A business that pays taxes on earnings and whose shareholders also pay taxes on dividends paid to |
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|Subchapter S corporation |A corporation that is taxed like a partnership; income is passed through to the shareholders, whose |
| |tax returns report the corporation’s income or loss |
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|limited liability |A business in which the owners, who are called “members,” have tax benefits and limited liability; it|
|company |is dissolved when a member dies or files for bankruptcy |
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|financial risk |The potential loss of money, property, or sales |
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|legal risk |The possibility that a business owner and a company can be sued |
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|premium |An agreed upon amount that a business will pay to receive a designated amount of coverage from an |
| |insurance company |
Chapter 11: Financial Plan
Chapter Summary
The financial plan is a set of documents that projects the future profitability of a company. The plan explains how much money is required to start or expand a business. It describes how the money will be used and what effect the money will have on the future profitability of the company. Creditors and investors will be particularly interested in these financial projections to determine whether the company will be a good investment.
Key Terms
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|capital |The money used to acquire buildings, equipment, tools, and other goods needed to start a business |
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|pro forma |Provided in advance; used in the term pro forma financial statements, which are based on predictions of |
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|working capital |The money required for a business’s daily operations |
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|growth capital |The money required to increase a business’s profits |
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|equity capital |The money required for long-term needs, such as starting or expanding a company |
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|variable expenses |Cash outlays for things that a business controls or for things that are affected by sales figures |
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|fixed expenses |Cash outlays that need to be paid even if a business does not make any sales |
Chapter 12: Growth Plan
Chapter Summary
Every company needs to grow in order to stay competitive—even a successful one. If not planned properly, growth can severely handicap a company and even make it fail. While establishing a new, successful company is challenging, keeping the company viable and successful can be just as hard. Because of this, investors and creditors need to see a comprehensive plan of how an entrepreneur intends to expand the company once it becomes established.
Key Terms
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|market penetration |A growth strategy that involves selling more of a product or service to the same market |
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|rebate |An amount of money given back to the customer after the sale of a product |
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|product development |A growth strategy that involves developing new products for a company’s existing market |
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|market development |A growth strategy that involves selling existing products to new markets |
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|diversification |A growth strategy that involves selling new products to new markets |
Chapter 13: Contingency Plan
Chapter Summary
Up to this point, your business plan is a story of success. However, experienced entrepreneurs know that unforeseen events occur. A business’s success will often depend on its ability to respond to changing market conditions. Therefore, it is important to identify any internal and external risk factors. Considering and planning for these risk factors in advance will foster more confidence in your business plan from investors.
Key Terms
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|financial risk |The potential loss of money, property, or sales |
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|time-loss risk |The potential loss of revenue due to timing issues |
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|market risk |Risk associated with the external marketing environment |
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|political risk |Risk associated with the actions of government |
Chapter 14: Executive Summary
Chapter Summary
The executive summary is a brief description of the business concept. It explains the goals of the company and how these goals will be achieved. The summary explains the financial resources needed, where the company intends to obtain them, and how it will repay the money. The summary should entice the reader to become interested in the company and want to learn more.
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