WOLAITA SODO UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

Individual Assignment (40%)

Entrepreneurship and Small Business

Management
(MGMT 3101)

Deadline ____________
Instructions:

F Prepare a business plan based on the business idea that interests you.
F Read the following introduction to prepare your business plan.
F Check your progress while you are writing up the plan based on the checklists annexed.
F Evaluation of the plan is also based on the checklist provided.
F Submission can be either in soft or hard copies as per your preference.
F For soft copy submission use - wondeurgessa@gmail.com
F For hard copy submission please submit to office of the department of management,
CBE, WSU.

Preparation Basics of Business Plans

1. Introduction

A business plan is a written description of your business's future that describes what you plan to
do and how you plan to do it. Business plans can help perform a number of tasks for those who
write and read them. They're used by investment-seeking entrepreneurs to convey their vision to
potential investors. They may also be used by firms that are trying to attract key employees,
prospect for new business, deal with suppliers or simply to understand how to manage their
companies better.

So what's included in a business plan, and how do you put one together? Simply stated, a
business plan conveys your business goals, the strategies you'll use to meet them, potential
problems that may confront your business and ways to solve them, the organizational structure of
your business (including titles and responsibilities), and finally, the amount of capital required to
finance your venture and keep it going until it breaks even.

A good business plan follows generally accepted guidelines for both form and content. There
are three primary parts to a business plan:

 The first is the business concept, where you discuss the industry, your business
structure, your particular product or service, and how you plan to make your business a
success.
 The second is the marketplace section, in which you describe and analyze potential
customers: who and where they are, what makes them buy and so on. Here, you also
describe the competition and how you'll position yourself to beat it.
 Finally, the financial section contains your income and cash flow statement, balance
sheet and other financial ratios, such as break-even analyses. This part may require help
from your accountant and a good spreadsheet software program.

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Breaking these three major sections down even further, a business plan consists of eight key
components:
1. Executive summary
2. Business description/Company Analysis
3. Customer analysis
4. Competitive analysis
5. Market strategies
6. Operations plan
7. Management and development plan
8. Financial factors/Budget
2. Consideration of the format of business plan
F A business plan should also have a cover, title page and table of contents.
F A typical business plan runs 15 to 20 pages, but there's room for wide variation from that
norm. Much will depend on the nature of your business. The purpose of your plan also
determines its length.
3. Business Plan Preparation and Evaluation Checklists
1. Business plan title
 It should include the name of the business and the name of the founders.
2. Acknowledgements page
3. Table of contents
4. Executive summary (1–2 pages)
 The summary of the entire plan for busy business men and investors.
5. Business overview (2–3 pages)
 Description of products and services to be offered. If it is a complex product,
provide a detailed description of the functions.
 Provide a prototype, a scenario, a picture, a diagram, or a mock-up of your product
or service. Briefly discuss the prototype. It is often a good idea to illustrate your
concept early if the product or service is complex or very unique.
 Describe how the product or service solves an important problem or presents an
opportunity to fill an important market niche. Be sure to explain why the product or
service is not just a good idea, but a sustainable source of revenue that can
eventually generate a profit.
 Discuss how product is competitive compared with existing product or service
offerings.
 Will you differentiate your product on price, quality, service, or all the three?
 What is the growth potential of the market?

6. Industry, economic, and regulatory analysis (2–3 pages)

 Describe the current and potential competitors (substitute products).
 How will the competition react to market entry?
 What are the barriers to entry in the marketplace?
 Are there any governmental or regulatory issues that should be considered?
 Economic issues?

7. Marketing strategy (1–3 pages)

 Exactly how will you price your product?

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  What customer segments are you trying to reach?
 How will versions be matched to customer segments?
 How will you go about promoting your product?
 What techniques will be used to acquire customers?
 How will you answer inquiries about the product specifications, features, and
functions?
 How will you retain and lock-in customers?
 How will you interact and distribute your product to your customers?
8. Operations strategy (1–3 pages)
 Who and where will design the product or service?
 Where will the product be made, who will make it and how will it be made?
 What are the detailed variables and fixed costs for producing the product?
 Are their important issues related to the supply of components and materials?
 How will order fulfillment take place?
 Are there important issues related to the fulfillment of orders?
 How will you provide customer service and support including tech support?
9. Human resource strategy (1–3 pages)
 What kind of employees do we need to run the business?
 Where will we recruit them from?
 What kind of compensation incentives will be offered in terms of salary, stock
options, and benefits?
 How will employees be trained and developed?
 How will employees be evaluated?
10. Financials and forecasts (1–3 pages)
 Present a simple pro forma sources (cash inflows) and uses of funds (cash
outflows) for 3 years after launching.
 The sources of funds include starting cash, incoming cash from sales,
investor funds, loans, and personal funds.
 The uses of funds include payroll or salaries, rent, materials, supplies,
land, office space, equipment, warehouse costs, transportation costs,
maintenance, marketing, and other overhead.
 Include ending cash balance for each year. Can also include net present
value and internal rate of return calculations.
 Present a simple pro forma income statement for 3 years after launching. Be
sure to discuss assumptions for sales, expenses, and growth.
 Income should include total sales, less production costs or cost of goods
sold, and net or gross margin.
 Include operating expenses that have been somewhat aggregated and total
expenses.
 Bottom line should list net profit or loss.
 Start-up and development costs needed before launch (see above). How will
they be funded?
 What are the capital or funds requirements over the next 3 years?
 What type of accounting system will be utilized? Will it be ready by launch
date?

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  Risk assessment: How will you handle extraordinary events (such as changes
in demand, turnover, economic conditions, disasters, and employee loss)?
How will the risk factors affect the bottom line?
11. Stage of development and the implementation plan (1–2 pages)
 What resources have already been committed?
 What stage of development are you in?
 What needs to be done before launch?
 When and how will the system be implemented (show timeline here)?
12. Angel and venture capital funding (1–2 pages)
 How much funding is needed?
 What are you offering in return for funds?
 When can your investors expect a return on their investment?
 What are your projections for the investors’ return on investment?
13. Business plan summary (1 page)
14. Appendices (1–5 pages)
 Short bios or resumes for principals.
 Critical financial, operational, marketing, or financial details.

GOOD LUCK