Introduction to Business

Business Plan Project

Well Functioning Teams

Characteristics: Shared set of values and mutual respect for the perspectives and skills of each

tem member.

“group” vs “team”

Communication

How: face-to-face; virtual; email

When

What

Collaboration vs cooperative

Team Contract?

Agenda/Minutes/Assignments

Project Schedule

Part 3Business Description

Business Name

Organized Chaos

Knightflix

First impression of business

Trademarked?

Applicable Business Concepts

Target market?

Forms of business ownership

Other resources

Goals of your Business

Purpose of business. Why do you exist?

KISS! (elevator speech!)

Marketing?

Maslow’s Hierarchy of Needs:

Industry Analysis

What type of industry?

Size of industry nationally? Locally?

Growth trend nationally? Regionally? Locally?

Impact of the size and trends in industry might have on business

NAICS Codes

Census bureau website

Trade association websites?

Ownership of Business

Form of ownership implications of that type of ownership

Risks, rewards

Business concepts:

Continuity or liquidation of ownership?

Raising capital

Ease of start up

Investor liability

Taxation implications of ownership

Number of partners

Who is your ideal customer?

Describe in terms of:

Age

Income level

Education level

Male/female

Lifestyle

What can you offer of value to them?

B2B: what attributes would your prospective customers possess?

Business concepts

Our Competitive Advantage

Why buy from you instead of your competitor?

Uniqueness?

Not so obvious competitors

Business Concepts:

Competitive advantage

Monopolistic competition

Monopoly

Oligopoly

Perfect competition

Ethical Considerations

May or may not be necessary. However, for this assignment, must be addressed!

Principles that company will follow

List at least three that could be used as foundation for a code of ethics for your company.

Applicable Business Concepts

Affirmative action

Code of ethics

Consumer rights

Consumer safety

Employee safety

Environmental laws

Ethics audit

Social responsibility

How are you, as a company, a good citizen to all of your stakeholders: customers, suppliers, employees, shareholders and investors, community, environment, and the government?

Applicable business concepts: Accommodative stance

Defensive stance

Economic model of social responsibility

“green” and at what cost?

Obstructionist stance

Organizational stakeholders

Proactive stance

Social audit

Socioeconomic models of social responsibility

Global Issues

Need to consider the opportunities and threats posed to the global business environment

Will you, at some point, expand internationally?

Which countries? Why?

Challenges?

Advantages?

Will you use foreign suppliers?

Applicable Business Concepts

Section 4Management and Operations Plan

Mission statement Why do you exist

How are you different

Values of the company

Bishop Luer’s mission statement:

Bishop Luers High School is a Catholic educational community that instills in each student dignity, integrity, respect and responsibility. Nurtured by Catholic truths each student is able to face the challenges in his or her own life spiritually, academically, and socially while serving God and others in a global and changing society

Business concepts: Competitive advantage

Organizational goals

Strategic planning

Target market

Business Goals

Specific, attainable

Need three specific, measurable, realistic, short-term goals

Two long-term (longer than 5 years) goals

Needs to be based upon realistic research.

Alright to shoot for the “pie in the sky” (Kennedy), but also have your feet on the ground

Business Concepts:

Strategic planning; tactical planning; operational planning; contingency planning

SMART: specific, measurable, achievable, realistic, time-bound

SWOT ANALYSIS

Strengths

Weaknesses

Opportunities

Threats

Business Concepts:

Competitive analysis

External business environment

SWOT analysis

Plans

Management Plan: who do you need? What areas are you weak in? How many managers and levels of managers will you need?

Organizational Chart: provides structure to your organization. Who reports to whom? Departments and responsibilities? Different organizational teams?

Floor Plan:

How big? How will the equipment, people, supplies, furniture be placed?

What impression will this have on clients, customers, employees?

Operations Helps visualize and realize your operational planning details.

Manufacturing process; service process

When will you operate?

Business Concepts

Customer-driven production

Customization

Inventory

Layout planning

Lean production (Just in time delivery)

Operations processes

Process control: PERT and Gantt charts

Quality planning

standardization

What do we need?

What supplies do you need and the cost of those supplies?

Needs to be detailed and realistic

Quality Control How will you ensure a quality product or service to your customers?

What process will you use to ensure that quality? McDonalds

WalMart

Appleby’s

Who will take on the responsibility of quality control?

Business Concepts: Benchmarking

Inspections

International Standards Organization

Quality circles

Quality Control

Quality planning

Six sigma

Total Quality Management

Value Added Analysis

Technology Question

Will IT be necessary? Will it contribute to the operation of the business?

Hardware? Software?

Must include support services

Will it be used for marketing your business?

Outsource?

Intranet necessary? ISP provider?

Develop website? Who?

All costs MUST be included in financial plans

Technology (cont) Business concepts:

CAD

Database

Electronic conferencing

ERP

Extranet

Identity Theft

Intellectual property

ISP

Intranet

LAN

WAN

MIS

Management support systems

Transaction Procession

Section 5Human Resources

Company Culture: What type? Networked?

Fragmented?

Communal?

Mercenary?

Business Concepts: Committees

Corporate culture

“group think”

Informal groups

Integration/cooperation

Intrapreneurship

Managerial hierarchy

Teams

Leadership style Identify your leadership style and show how your style will help you

manage and lead your employees

Business concepts:

Authoritarian leadership

Democratic leadership

Formal leadership

Informal leadership

Laissez-faire leader

Management skills

Managerial decision making

Managerial roles

Transformational leadership

Transactional leadership

Job Descriptions List duties and responsibilities. Working conditions. Tools, materials,

equipment and information needed to perform.

What education, skills, and experience will be needed? (KSA)

Job title, job objective, list of duties, description of relationships and roles

In-house or outsourced?

Business concepts:

Human resource management

Human resource planning

Job analysis

Job description

Workflow analysis

Job specifications

Specifications to identify the minimum qualifications necessary to successfully complete a job.

Needs to be developed for every position.

Business Concepts

Job specification

Training

How to train new employees

How to provide for further professional development for current employees

How to train employees in the policies, routines, and culture of the company?

Who will develop? In house or out-sourced or combination?

Business Concepts

E-learning

Employee training

Management development

Orientation

Training needs assessment

Compensation The total package that is offered employees in return for their labor.

Wages/salaries? Benefits?

Business Concepts:

Cafeteria benefits

Commissions

Employee benefits

Flexible benefits

Hourly wage

Job evaluation

Management by objective

Performance appraisal

Performance standards

salary

Incentives Special programs designed to motivate high performance

INCENTIVES MATTER!!!

What is important to your employees? What can you do to motivate them?

Business concepts:

Bonuses

Company-wide incentives

Flextime

Individual incentives

Merit pay

Pay for performance

Pay-for-knowledge

Profit-sharing

Section 6Marketing Plan

Target Market: Can’t be all things to all people at all times.

Characteristics of target market and its size. Who, where, size, variables

Market penetration goal?

Business Concepts: Demographic variables

Differentiated/niche

Behavioristic

Customer relationship management

Market segmentation

Positioning

Psychographic variables

Target marketing

undifferentiated

Product features and benefits

What are customer’s perceived features and benefits from your product/service?

How important are these features/benefits to the customer?

Business concepts:

Commodity products

Consumer products

Differentiation

Shopping products

Specialty products

Unsought products

Competitive Analysis andProduct Differentiation

What is your competitive advantage?

What do you offer that your competitors don’t offer?

What do your competitors do well that you don’t?

What is important to your customers?

Business Concepts:

Competitive advantage

Product features

Product benefits

Product/service differentiation

Target market

Pricing

Choices: Higher than market

Near market

Lower than market

Reasons for pricing strategy?

Break-even analysis

Business concepts: Break even analysis

Bundle/package pricing

Commodity product

Competition based pricing

Pricing (cont) Business (cont)

Cost oriented pricing

Discounts

Everyday low pricing

Loss leader

Penetration pricing

Price lining

Price skimming

Pricing strategies

Product life cycle

Psychological pricing

Random discounting

Special event pricing

Specialty product

Target price

Distribution

Getting the product to the customer Primary distribution channel

Secondary distribution channel

Business concepts Agents/brokers

Automatic vending

Convenience stores

Customer relationship management

Direct marketing

Distribution mix

Discount store

Exclusive distribution

Distribution (cont) Business Concepts (cont)

Exclusive distribution

Intensive distribution

Marketing mix

Non-store retailing

Online retailing

Retailer

Scrambled merchandise

Selective distribution

Specialty store

Supply chain

Telemarketing

Warehouse club

Wholesaler

Virtual retailing

Promotion

Advertising? Why?

Any other methods of promotion? (Coke in movies)

Business Concepts

Advertising

Branding

Direct mail

Integrated marketing communication

Marketing communications mix

Outdoor advertising

Personal selling

Promotion (cont)

Business Concepts (cont)

Point of sale

Positioning

Promotion mix

Public relations

Publicity

Sales promotion

Trade shows

Section 7Financial Plan

Money going out the door………

Major reason small businesses fail: lack of sufficient funds due to insufficient research and planning. Poor business skills.

How much will it cost to start the business and run it for one year?

Rent

Salaries

Utilities

Supplies/equipment

Advertising

Insurance

Other

Financial Planning

Business Concepts

Employee benefits

Fixed costs

Liability

Insurance

Variable costs

RevenueMoney coming in the door………

Where will your revenues come from?

Must be realistic, not over optimistic. Project for one year with projections for several years.

Business Concepts:

Bundle pricing

Net profit

Revenue

Pricing strategies

Financing

How much start up will come from:

Bank loans

Investors

Savings

How much interest expense? What return on investment will your investors want?

Business concepts:

Bonds

Capital

Capital structure

collateral

Financing (cont) Business concepts (cont)

Commercial banks

Financial Institutions

Creditor

Debt financing

Debtor

Dividends

Equity financing

IPO

Leasing

Prime interest rate

Retained earnings

stock

Income Statement andBalance Sheet

Balance sheet shows relationship between the assets and the liabilities of the company and the owners’ equity.

Income statement shows the relationship of the costs of doing business, the revenue realized from the business and the net profit.

Business Concepts

Accounts payable

Assets

Cash flow statement

Cost of goods sold

Current assets

Current liabilities

Financial statements (cont)

Business Concepts (cont) Fixed asset

Gross profit

Interest expense

Intangible assets

Liabilities

Long-term liabilities

Notes payable

Owner’s equity

Pre-paid expenses

Profit and loss statement

Sales revenue

Taxes payable

Section 8Executive Summary

Must be placed at the beginning of the business plan.

Developed AFTER everything else has been completed.

Brief-overview of company; rationale for starting it; why it will be a success

Cover: Name of business

Where it will be located

Mission

Product or service

Who are the customers

What will differentiate it

Who are the owners? What is their experience?

Overview of future prospects

Executive Summary (cont)

Business concepts:

Competitive advantage

Forms of business ownership

Marketing concepts

Mission statement

Target market

Due Dates

Form teams by September 8

Business Plan drafts for sec 1-3 due Friday, October 16.

Business Description

Management and operations plan

Human Resources Plan

Complete Business Plan draft and executive summary due November 16.

Final Business Plans and Executive Summary due December 7. We will then present them in class. Have a Power Point presentation ready.