Identify competitor or substitute products or services and outline the advantages that your product has over these competitors.
Your task for this assignment is to write a business plan for a start-up firm. Your word limit (3000 words + appendices) is less than for most business plans and therefore the following guidelines have been written to provide more specific guidance for your work. Please note that you can find useful information on the various parts of a business plan in both of the books recommended for this course (Barringer and Ireland, 2012 or 2016, and Stokes and Wilson, 2010 or 2017) and from many other sources. Please ensure that your business plan is written in a formal and concise style and ensure that the proposals and projections you make are realistic.
Please use the following headings (some guidelines have been provided for a suggested length of each section, although your group can decide to deviate from these and long as you stay within the overall word limit).
i) Cover Page / Table of Contents
ii) Executive Summary (200 words) – this provides an overall summary of the main points of your report; you should complete this towards the end, once you have put together the main body of your work.
iii) Idea and Company Description (300 words)
In this section you need to provide an introduction to your planned product or service. Try to put across the excitement and potential of the business idea. Some questions you should answer are:-
What benefits will your product or service bring? What problem does it solve?
Why would somebody buy / use it? What value does it add to the customer?
What would it compete with?
As this is a start-up firm you will obviously not include a detailed company history but you should include a brief explanation of how your firm has come together.
iv) Industry and Market analysis (800 words)
Within this section you should describe the industry your business will enter, including its size and projections for growth. You need to highlight key environmental and business trends within the industry, including the significance of economic, social, technological and political/regulatory factors. You also need to explain why it is a good time to consider entering this industry.
You need to break the industry down into segments and highlight which segment your firm will participate in. Try to describe a typical buyer – for example, male or female, age profile, income profile, social / ethnic factors, social class, their ‘typical’ lifestyle and any other relevant information. Include in this section details of any initial market research that you have done.
Give some details of what you consider to be the potential size of the market and, in addition, outline if the market is scalable. You also need to provide an analysis of your firm’s main competitors. Please also highlight any risks that will need to be monitored.
v) Marketing plan (500 words)
You need to describe how your business will market and sell its product. You will need to make clear how your firm will position itself in the market and how it will differentiate itself from competitors. As you will be explaining your product adequately in other sections of your plan, concentrate on your firms approach to price, promotion and distribution. The decisions which you outline here need to correspond with what you describe in other sections and your positioning of the product and points of distribution.
vi) Company structure / management team (200 words)
This section should be fairly short, provide a concise explanation of the skills of the various team members and how they will divide up the various tasks within the business.
vii) Product / Service Development and Operations Plan (700 words)
Describe in detail what your product or service is and what is different / innovative about it. Identify competitor or substitute products or services and outline the advantages that your product has over these competitors.
Describe what is involved in making / providing your product or service. Describe how this will be done – will your team do it yourself, will you need help, what skills, knowledge, materials, equipment etc will you need? Describe what you will need in terms of accommodation and technology, outlining whether you already have access to these or you will need to acquire them. Will you need to invest money up front to enable you to produce you product / service and, if so, how much?
Outline what challenges and difficulties you can foresee as you develop your product. In addition, are there any legal requirements that you need to be aware of eg health and safety.
viii) Financial projections (300 words)
For this section you need to make some projections about the financial development of your firm. You need to outline any assumptions that you have made in putting together these projections. It is very important that you are realistic in the projections that you make. In order to do this try to answer the following questions:-
How many products / services do you expect to sell? (Try to predict sales over a 3 year period and explain the evidence you are using to support your predictions). Explain how much do you expect to be able to charge for your product or service and how this compares with competitors and substitutes. Explain whether you intend to apply any discounts? Outline what costs will you incur, including fixed and direct costs (itemise these as accurately as you can).
For this section you will need to provide and explain your ‘Projected Financial Statements’, (referred to as Pro forma financial statements in the Barringer and Ireland textbook). Please include the following projected for 3 years:-
- Profit and Loss Statement (referred to as ‘Pro forma Income Statement’ by Barringer and Ireland)
- Cash Flow Statement
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