PART 1 Business Environment

BUSINESS PLAN COMPONENTS

PRACTICAL ASSIGNMENT

APRIL 2024

APPLICATION : PROJECT GROUP WORK

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PART 1 Business Environment

PART 1: BUSINESS ENVIRONMENT

PART 2 : BUSINESS OF MANAGEMENT

PART 3 : PEOPLE IN ORGANIZATION

PART 4: PRINCIPAL OF MARKETING

PART 5 : MANAGING INFORMATION

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PART 1 Business Environment

BUSINESS NAME
What is the name of your business?
Hint: When you think of the name of your business, make sure that it captures the spirit of the
business you’re creating.

Note: Once you have inserted your answer, delete the question and the tip provided here and
leave just the heads so that your business plan will look more professional.

DESCRIPTION OF BUSINESS
What will your business do?
Hint: Imagine that you are explaining your business to a family member or a friend. The
business should be easy to explain. Keep your description here to about 30 words or less.

FORM OF BUSINESS OWNERSHIP

What form of business ownership (sole proprietorship, partnership, or corporation) will
your business take? Why did you choose this form?
Hint:

IDEAL CUSTOMER
Briefly describe your ideal customer. What are they like in terms of age, income level, and
so on?
Hint: you’ll provide more details about customers and marketing.

OUR ADVANTAGES
Why will customers choose to buy from your business, instead of your competition?
Hint: In this section, describe what will be unique about your business. For example, is the
product special, will customer service be exceptional, or will you offer the product at a lower
price?

ETHICAL ISSUES
All businesses have to deal with ethical issues. One way to address these issues is to create a
code of ethics. List three core (unchanging) principles that your business will follow.
Hint: Honest, responsible, respect

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PART 1 Business Environment

SOCIAL RESPONSIBILITY
A business shows social responsibility by respecting all of its stakeholders. What steps will
you take to create a socially responsible business?
Hint: What steps can you take to be a good citizen in the community? Consider also how you
may need to be socially responsible toward your customers and, if applicable, investors,
employees, and suppliers.

GLOBAL ISSUES
Do you think that you’ll sell your product in another country? If so, what countries would
you choose, and why? What challenges will you face?
Hint: Consider how you will expand internationally (i.e. independent agent, licensing, etc.).
Do you expect global competition for your product? What advantages will foreign competitors
have?

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PART 2 The Business of Managing

MISSION STATEMENT
Provide a brief mission statement for your business
Hint: how you will stand out from your competition, and why a customer will buy from you.

BUSINESS GOALS
Consider the goals for your business. What are three of your business goals for the first
year? What are two intermediate to long-term goals?
Hint: Be as specific and realistic as possible with the goals you set. For example, if you plan on
selling a service, how many customers do you want by the end of the first year and how much do
you want each customer to spend? If you plan on selling a good, how many do you hope to sell?

SWOT ANALYSIS
Perform a basic SWOT analysis for your business, listing its main strengths, weaknesses,
opportunities, and threats.
Hint: We explained above what factors you should consider in your basic SWOT analysis. Look
around at your world, talk to your partners, ideas in performing your SWOT analysis.
Strengths

Weaknesses

Opportunities

Threats

MANAGEMENT
Who will manage the business?
Hint: Think about how many levels of management as well as what kinds of managers your
business needs.

ORGANIZATION CHART
Show how the “team” fits together by creating a simple organizational chart for your
business. Make sure that you organizational chart indicates who will work for each
manager as well as each person’s job title.
Hint: Most businesses start off quite small. However, as you create your organizational chart,
consider what your business will look like in the future. What different tasks are involved in the
business? Who will each person report to in the organizational structure?

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PART 2 The Business of Managing

FLOOR PLAN
Create a floor plan of the business. What does it look like when you walk through the
door?
Hint: When sketching your floor plan, consider where equipment, supplies, and furniture will
be located.

RAW MATERIALS AND SUPPLIES

Explain what types of raw materials and supplies will you need to run your business. How
will you produce your good or service? What equipment do you need? What hours will you
operate?
.

QUALITY ASSURANCE
What steps will you take to ensure that the quality of the product or service stays at a high
level? Who will be responsible for maintaining the quality of the product or service (or
both)?

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PART 3 People in Organizations

CORPORATE CULTURE
What do you see as the “corporate culture” of your business? What types of employee
behaviors, such as organizational citizenship, will you expect?
Hint: Will your business demand a casual environment or a more professional environment?
employee behaviors.

LEADERSHIP PHILOSOPHY
What is your philosophy on leadership? How will you manage your employees day-to-day?
Hint:

JOB DESCRIPTIONS
Looking back at your organizational chart, briefly create a job description for each team
member.
Hint: a job description lists the duties and responsibilities of a job; its working conditions; and
the tools, materials, equipment and information used to perform it. Imagine your business on a
typical day. Who is working and what each person’s responsibilities are.

JOB SPECIFICATIONS
Next, create a job specification for each job, listing the skills and other credentials and
qualifications needed to perform the job effectively.
Hint: As you write your job specifications, consider what you would write if you were making
an ad for the position. What would the new employee need to bring to the job in order to qualify
for the position?
Insert Job Title #1:
Insert Needed Skills/Credentials/Qualification for Job:

Insert Job Title #2:

Insert Needed Skills/Credentials/Qualification for Job:

Insert Job Title #3:

Insert Needed Skills/Credentials/Qualification for Job:

TRAINING EMPLOYEES
What sort of training, if any, will your employees need once they are hired? How will you
provide this training?
Hint: Will you offer your employees on-the-job training? Off-the-job training? Vestibule
training?

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PART 3 People in Organizations

COMPENSATION
A major factor in retaining skill workers is a company’s compensation system—the total
package of rewards that it offers employees in return for their labor. Part of this
compensation system includes wages/salaries. What wages or salaries will you offer for
each job? Why did you decide on that pay rate?
Hint:

INCENTIVES
Incentive programs are special programs designed to motivate high performance. What
incentives will you use to motivate your workforce?
Hint: Be creative and look beyond a simple answer such as giving pay increases. Ask yourself,
who are my employees and what is important to them?

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PART 4 Principles of Marketing

TARGET MARKET
Describe your target market in terms of age, education level, income, and other
demographic variables.
Hint: Refer to the aspects of target marketing and market segmentation that you may want to
consider. Be as detailed as possible about who you think your customers will be.

PRODUCT FEATURES AND BENEFITS

Describe the features and benefits of your product or service.
Hint: a product is a bundle of attributes—features and benefits. What features does your
product have—what does it look like and what does it do? How will your product benefit the
buyer?

PRODUCT DIFFERENTIATION
How will you make your product stand out in the crowd?
Hint: There are many ways to stand out in the crowd, such as a unique product, outstanding
service, or a great location. What makes your “great idea” special? Does it fill an unmet need in
the marketplace? How will you differentiate your product to make sure that it succeeds?

PRICING
What pricing strategy will you choose for your product, and what are the reasons for this
strategy?
Hint: pricing strategies and tactics. Since your business is new, so is the product. Therefore,
you probably want to choose between price skimming and penetration pricing. Which will you
choose, and why?

PLACE (DISTRIBUTION) ISSUES

Where will customers find your product or service? (That is, what issues of the distribution
mix should you consider?)
Hint: If your business will sell its product directly to consumers, what types of retail stores will
sell your product? If your product will be sold to another business, which channel of distribution
will you use?

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PART 4 Principles of Marketing

ADVERTISING
How will you advertise to your target market? Why have you chosen these forms of
advertisement?
Hint: Marketers use several different advertising media—specific communication devices for
carrying a seller’s message to potential customers—each having its advantages and drawbacks.

PROMOTIONS
What other methods of promotion will you use, and why?
Hint: There’s more to promotion than simple advertising. Other methods include personal
selling, sales promotions, and publicity and public relations. Think of ideas on how to promote
your product that go beyond just advertising.

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PART 5 Managing Information

IT RESOURCES
What kind of IT resources will your business require?
Hint: Think about the employees in their business and what they will need in order to do their
jobs. What computer hardware and software will they need? Will your business need a network
and an Internet connection? What type of network?

CUSTOMER SERVICES
How will you use information technology to keep track of your customers and potential
customers?

Hint: Many businesses—even small businesses—use databases to keep track of their customers.
Will your business require a database? What about other information systems?

COST OF DOING BUSINESS

What are the costs of doing business? Equipment, supplies, salaries, rent, utilities, and
insurance are just some of these expenses. Estimate what it will cost to do business for one
year.
Hint: Insert the costs associated with doing business in the following table. The list below
provides some hints as to where you can get this information. Note that these are just estimates—
just try your best to include accurate costs for the expenses you think will be a part of doing
business.

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PART 5 Managing Information

Expected
Expenses Expected Yearly Cost
Monthly Cost

Rent

Salaries and Wages

Supplies:
Technological,
Equipment, and
Furniture (computers,
software, copy
machine, desks, chairs,
etc.), other

Advertising and Other

Promotions

Utilities: Heat,
Electricity, etc.

Telephone and
Internet

Insurance

Other (specify)

Other (specify)

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PART 5 Managing Information

EXPECTED REVENUE
How much will you charge for your product? How many products do you believe that you
can sell in one year (or how many customers do you think your business can attract)?
Multiply the price that you will charge by the number of products that you hope to sell or
the amount you hope each customer will spend. This will give you an estimate of your
revenues for one year.
Hint: You will use the amounts you calculate in the costs and revenues questions in this part of
the plan in the accounting statements in the next part, so be as realistic as you can.

INCOME STATEMENT AND BALANCE SHEET

Create a balance sheet and an income statement (profit-and-loss statement) for your
business.

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 12-Month Income Statement (Profit & Loss Statement)

June July Aug. Sept. Oct. Nov. Dec. Jan. Feb. March April May YEARLY

Revenue (Sales)
Category 1
Category 2
Total Revenue (Sales)

Cost of Goods Sold

Category 1
Category 2
Total Cost of Goods
Sold

Gross Profit

Expenses
Rent Expense
Salary/Wage Expenses
Supplies Expense
Advertising Expense
Utilities Expense
Telephone/Internet
Expense
Insurance Expense
Interest from Loans (if
applicable)
Other Expenses
(specify)
Total Expenses

Net Profit

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 Balance Sheet

Assets

Current Assets
Cash in Bank
Cash Value of Inventory
Prepaid Expenses (insurance)
Total Current Assets

Fixed Assets
Machinery & Equipment
Furniture & Fixtures
Real Estate / Buildings
Total Fixed Assets

Total Assets

Liabilities & Net Worth

Current Liabilities
Accounts Payable
Taxes Payable
Notes Payable (due within 12 months)
Total Current Liabilities

Long-Term Liabilities
Bank Loans Payable (greater than 12 months)
Less: Short-Term Portion
Total Long-Term Liabilities

Total Liabilities

Owners' Equity (Net Worth)

Total Liabilities & Net Worth

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PART 6 Financial Issues

STARTUP COSTS
How much money will you need to get your business started?
Hint: you analyzed the costs involved in running your business. Approximately how much will
you need to get your business started?

FINANCING
How will you finance your business? For example, will you seek out a bank loan? Borrow
from friends? Sell stocks or bonds initially or as your business grows?
Hint:

EXECUTIVE SUMMARY
Now, create an executive summary for your business plan. The executive summary should
be brief—no more than two pages long—and should cover the following points:
 The name of your business
 Where your business will be located
 The mission of your business
 The product or service you are selling
 Who your ideal customers are
 How your product or business will stand out in the crowd
 Who the owners of the business are and what experience they have
 An overview of the future prospects for your business and industry

Hint: At this point, you’ve already answered all of these questions, so what you need to do
here is put the ideas together into a “snapshot” format. The executive summary is really a
sales pitch—it’s the investor’s first impression of your idea. Therefore, as with all parts of the
plan, write in a clear and professional way.

Once you have written the executive summary, copy and paste it so that it falls at the
beginning of your business plan, as the very first element.

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