Develop a business plan
GuidelinesFor Developing a Business Plan
General Guidelines
Business plans are business communications rather than an academic paper. The purpose of such communications is to provide the basis for business
decisions. The reward here is for being concise and precise. This is not the place to show all that you have learned in your MBA program. Use what
you have learned to choose the most critical information to include. The more clearly the business plan can be written, the more effective they will
be.
Business plans are used to acquire capital and to guide the operation. For these reasons, keys to a successful plan are in substantiating the
viability of the venture. A business plan includes a clear statement of the nature of a business venture, the business opportunity, the steps to be
taken to capitalize on the opportunity, and the financial requirements. Research in this option is primarily in quantifying the opportunity and the
competitive situation. When used to acquire capital, the business plan must create a clear, coherent, persuasive argument on behalf of the business.
When used to guide the operation, the plan must also be clear and coherent as it provides specific guidance for the business.
The Business Plan format provides an opportunity for students to develop an actual, workable business plan for a new business or existing company.
Guidelines for the Project
A business plan is not a thesis and therefore does not involve a thesis-type literature review. However, a business plan does require research. At a
minimum, marketing research is needed in order to quantify the opportunity which will include determining the total demand, the unmet demand, how
competitors are or could satisfy this demand, how your offering is to be distinctive in this market, and your reasonable sales projections at your
proposed selling prices.
Marketing research for an existing product in a new market involves an analysis of demographics and customer profiles in markets where the product is
currently being sold successfully, and the comparison of such demographics and customer profiles to those of the proposed new market. The proposal
should cite the specific sources from which such data are obtainable.
One of the most common problems with students’ business plans is the lack of connection between the market demand and the financial statements. There
often is little or no foundation for the projected revenue figures cited, including initial sales and sales growth. Make sure this connection is
crystal clear since failure to accomplish this task will result in a project that is unsatisfactory.
Content and Organization of the Business Plan Project
Title Page
The title page is not numbered.
Table of Contents
This table is also numbered with lower case Roman numerals.
Executive Summary
The purpose of an Executive Summary is to write a brief description of your plan that allows the reader to gain the essence of the entire plan in less
than two pages. It is intended to give a busy executive the key information and lead the reader to the sections that will answer the executive’s
primary questions. It is not an introduction to the plan, as you may have written in typical papers. This Executive Summary, although positioned
first in the project, should actually be written last. In this way you know what you are summarizing. Writing it earlier will cause it to tend
towards a traditional introduction.
This section begins the Arabic numbering of pages, beginning with “1.”
The Business Plan Project
The Business Plan must include the following topics. Various Business Plans organize this information in different orders but this content must be
included. Chose an outline that most effectively builds the argument that this project is viable and has an acceptable risk.
Introduction
Purpose of the plan (attract investors, diversification, etc.)
Introduction to market opportunity
The Company
Market
Industry Overview
The history of the industry
Size of the Industry
Industry Evolution
The trend-Where the industry is expected to be in 5 or 10 years
The key players in the industry
Barriers to entering the market
Competition strengths and weaknesses
Product and Industry Life Cycles
How does the position in the Product Life Cycle affect this business plan?
How does the position in the Industry Life Cycle affect this business plan?
Target market
What is the unsatisfied need that creates the business opportunity?
Major characteristics of the target market (what does the customer look like?)
What is the demand of this target market?
What are total sales to this market in geographic area?
What are total sales expected in 5 years? In 10 years?
What percentage of this demand does this business expect to capture?
Product or Service Research and Development
Environmental scan
Significant factors in the macro environment
Nature of the competition
Clear statement of the opportunities and threats
Company Description (proposed new organization)
Type of Business and Legal Structure, e.g., LLC, sole proprietorship
Mission and Objectives
Distinctive Core Competencies
Management and Ownership
Board of directors and Rationale for Members
Management staff structure
Key managers
Future Additions to the Current Management Team
Marketing Activities
Overall Marketing Strategy
Specific marketing mix
Strengths and weaknesses in ability to satisfy target market needs
Products and Services
Detailed Product/Service Description
Product Life Cycle
Copyrights, Patents, and Intellectual Property Rights
Research and Development Activities
Risk Management
Loss Control
Retention of Personnel
Insurance
Operations
Production and Service Delivery Procedures
Supply Chain
Financial Analysis
Funds required and their uses
Current funding requirements
Funding requirements over the next three years
Use of funds
Conclusions and Recommendations
Conclude whether or not it is a viable business venture ( or a viable business/strategic path for the client company
Explain why the student should or should not pursue the business venture at this time (or why or why not the client business should pursue the
path under investigation)
References
This section continues with the Arabic numbering of pages. Only sources of information that have actually been cited in the project are included here.
Appendices
The appendices continued with the Arabic numbering of pages from the previous section. The actual titling of the appendices receives letter
designations, rather than numbers. Therefore, you would have Appendix A, Appendix B, not Appendix 1, or Appendix 2.
This section includes information that is too detailed to be included in its entirety in the body of the project. This would include raw data, sample
questionnaires, and detailed computations. This section would also include information that is referred to but is not essential to the project, such
as relevant policies, laws, forms, pamphlets, sample letters sent to organizations and subjects, or subject consent forms.
