ADMN3430 – New Venture Planning & Design
1st Assignment
Introduction
A business plan has two essential purposes:
First, it is a planning document. An entrepreneur (or team of entrepreneurs) writes a business plan as a means of articulating their plans, ideas, and assumptions in black and white. Writing down your project plan allows you to share it with others, and forces you to address certain issues that might be rolling around in the back of your head.
Second, a business plan is a marketing document. A business plan is not a marketing document in the sense that it is a sales brochure. Rather, it is a marketing document in the sense that it is a document that entrepreneurs will show to others (bankers, venture capitalists, private investors) as means of convincing them that the business idea has been through careful, thorough and objective analysis, the risks have been identified, and the potential rewards quantified.
A business plan is normally the first - if the reader doesn’t like what he/she sees, the only – contact between entrepreneurs trying to build a business and potential suppliers of finance. The care, quality, and thoroughness that goes into the preparation of the business plan will usually be a good indication of the quality of the entrepreneurial team.
As a marketing document, a business plan should be written with the reader in mind. Its purpose is to explain, in short sentences and simple words, the many, varied and complex factors that will determine whether the entrepreneurial team have what it takes. Assume that your reader is intelligent – but not a specialist in your area. The reader doesn’t much care about your pet project or fancy technology. The reader is looking to make a financial investment, and is completely indifferent as to whether you are promoting a new software program or a chain of donut shops. The reader’s interest can be boiled down to five things:
1. Who are you?
2. Why should I care?
3. How much do you want?
4. Why should I give it to you?
5. What’s in it for me?
A typical business plan might be 30 – 45 pages in length, with an additional dozen pages of financial data: spread sheets showing your capital requirements, projected cash flows, pro-forma balance sheets, income statements, calculation of breakeven, and return on investment calculations. Appendices might include your resumes, supporting documents, relevant correspondence, etc. A business plan usually represents many weeks work by three or four people. In the real world, venture capitalists will bin about 50% of all the plans they see, within the first hour. One quick thumb-through, then into the file marked “rubbish”. So make your business plan a good one.
Assignment 1 – Instructions
This is a group assignment Form a team of three people. Individual submissions will receive a grade of 0.
2. Write the first three sections of your business plan:
Description of the Venture
Description of the Product
Identification of the Market
3. The Assignment is due Feb 2nd at 11.59 p.m.
4. The Assignment is worth 10% of your final grade.
5. Late Assignments will be heavily penalized.
Assignment Specifications
Binding - The assignment must be submitted online via BB. No printing/binding is needed.
Cover page - ensure that the name of the business is prominently, and attractively, displayed.
- ensure that your first and last names are on the cover.
- ensure that your student numbers are on the cover.
- ensure that your e-mail addresses are on the front cover.
Table of - your submission must have a Table of Contents.
Contents - your assignment must be clearly paginated, for the reader’s convenience.
Style - spelling, grammar and punctuation must be perfect.
- spelling and grammar errors will be penalized.
- layout must be attractive to the reader’s eye.
- text must be double spaced.
- printing must be single-sided
- smaller than size 12 font is not acceptable.
- citations or quotes must be properly referenced.
Tables & - tables and charts must be clearly titled, centered and clearly legible.
Charts - tables and graphs must be in the body of the plan, not buried in an appendix.
- tables and graphs must NOT contain data that is not explicitly commented upon by you.
Syntax Don’t use a lot of jargon. If you confuse or intimidate the reader, he/she will bin your plan and you won’t get the money you are seeking. Remember also that people won’t buy your product because it’s newer technology, they will buy it because it allows them to do something faster, more cheaply or more conveniently. Keep your sentences short and your words simple. Pretension and affectation will not impress an experienced financier.
Contents
How you organize and present your material is up to you, subject to the specifications listed above. There is neither a maximum nor minimum length requirement. However, I imagine that you can satisfy the requirements within 4-6 pages of text, more or less. (Read the previous sentence carefully. There is no minimum or maximum number of pages.)
Below, I have made a non-prescriptive, non-exhaustive, list of the types of questions that the reader might want to have answered in the first parts of a business plan.
Introduction to the Entrepreneurial Team
Who are you?
What’s your background and experience?
What makes each of you interesting or special?
How do the team’s background, skills or experience complement each other?
Why are you thinking of establishing a business?
What evidence is there that you might be a successful entrepreneur?
Description of the Venture:
What kind of business are you proposing to establish?
Who do you know that can provide advice, assistance, or contacts in that industry?
Where will you be located?
Why there?
Description of the Product or Service:
What will your product or service do?
What benefits will it deliver to purchasers?
Are there competitive product offerings?
Who is the competition?
What’s wrong with what’s already out there?
How weak or strong is your competition?
What does the product look like? (Provide diagrams, pictures or schemes if necessary or helpful.)
Identification of the Market:
Who do you think will buy your product (provide segmentation info by age, gender, income, etc.)?
Why might they buy it (what are their needs, why are they not being met, what are their motivations)?
Where is market located (Toronto, Ontario, Eastern Canada, Canada, North America, international?)
What is the size of the market by number of purchasers (provide empirical data to support)?
What is the size of the market by $$ value (provide empirical data to support)?
What are market trends (growing or declining)?
ADMN3430 – New Venture Creation and Design
Assignment 1 - Marking Template
Company Name: _________________________________
Name Student #
Team
Members:
A. Introduction to the Entrepreneurial Team / 25
No/ Poor or Mediocre/ Adequate “Good”* Perfectly
Not Covered Inadequate Superficial Job - But Discussion Clear
Effort Effort Errors / Gaps
Does the team do an effective job of
presenting themselves as accomplished, 0 1 2 3 4 5 6 7 8 9
with the characteristics to be successful?
Does the team do an effective job of
communicating the skills, attributes, 0 1 2 3 4 5 6 7 8 9
experiences and talents that each
member contributes to the team?
Has the team explained what motivates 0 1 2 3 4 5 6 7
them to start their own business, and this
business in particular?
B. Description of the Product and Competitor Analysis / 25
No/ Poor or Mediocre/ Adequate “Good”* Perfectly
Not Covered Inadequate Superficial Job - But Discussion Clear
Effort Effort Errors / Gaps
Are you (the marker) comfortable that you
understand the team’s description of the 0 1 2 3 4 5 6 7
venture’s proposed good or service.
Are you (the marker) comfortable that you
understand why the target market will buy the 0 1 2 3 4 5 6 7 8 9
product (i.e. has the team explained the “value
package” of functions, features and benefits?)
Is it clear whether there are competitive
product offerings (older, less sophis- 0 1 2 3 4 5 6 7 8 9
ticated, poorer quality, or less refined)?
* The venture teams have been given a fairly detailed specification, and instructions as to what to include. Merely covering a topic (doing what is asked) is not, in itself, “excellent” work. You (the marker) should be looking for unusual clarity, specificity, and the use of imagination in the plan when awarding “As” and “A+”. If you have any doubts, reservations or are not 100% confident as to what the venture team envisions, do not award full marks. 7 marks out of 9 is 78%, a solid B+ grade.
C. Identification of the Market / 30
No/ Poor or Mediocre/ Adequate “Good”* Perfectly
Not Covered Inadequate Superficial Job - But Discussion Clear
Effort Effort Errors / Gaps
Do you (the marker) understand to whom the
venture will be selling its products? (Quality 0 1 2 3 4 5 6
of the discussion of target market, including
segmentation analysis)
Does the plan make clear why the people or
firms will buy the product? (Perhaps including 0 1 2 3 4 5 6
a “visualization” of a “typical consumer)
Is there a discussion/attempt to quantify market 0 1 2 3 4 5 6
size by the number of potential purchasers?**
Is there a discussion/attempt to quantify the market 0 1 2 3 4 5 6
size by $$ value of revenue or expenditure?**
Is there a discussion/attempt to quantify market 0 1 2 3 4 5 6
growth or decline?**
* As on the previous page, he venture teams have been given a fairly detailed specification, and instructions as to what to include. merely covering a topic (doing what is asked) is not, in itself, “excellent” work. You (the marker) should be looking for unusual clarity, specificity, and the use of imagination in the plan when awarding “As” and “A+” grades.
** The plan does not need to contain hard numbers. However, the plan must discuss the approaches the team used (sources, models, estimates, extrapolations) to attempt to quantify this information, and it must address the limits of the team’s knowledge.
D. Visual Presentation / 10
The business plan provides the investor’s first impression of the entrepreneurial tram. If the investor doesn’t like what s/he sees, it will be the last impression. The venture team should try to impress the reader with professional presentation: a general feeling or organization and tidiness, attractive and imaginative layout and design, slick images including (where appropriate) attractive, well laid-out charts, graphs, or diagrams. Provide an evaluation of the plan’s visual presentation.
E. Over All Impression / 10
When compared to the other assignments that
you read, and relative to your expectations of 3 4 5 6 7 8 9 10
3rd and 4th year students in UTSC’s BBA
program, provide an over-all assessment.
Marks Summary
Previous Page __________ /50 Total ______________ / 100