Business Plan Proposal: Business Idea Description

QUESTION

BUAD 293                                      ENTREPRENEURSHIP                  Winter 2018

BUSINESS PLAN PROPOSAL – TEAM ASSIGNMENT

Check Moodle for Due Date

You must hand in an outline of your business idea early in the semester.  This initial outline should describe your product/service idea, how you arrived at the idea, and what you feel the market potential is for this proposed venture.

Preparation

Begin by reading Chapters 1-3 of your textbook Small Business: An Entrepreneur’s Plan.

When developing your business idea, keep the following requirements in mind:

• The idea must be a business startup, not a buyout or existing business. If you are seriously planning to buy an existing business, or if you are involved in an existing business, you should discuss this with your instructor.  You may do a business plan for an existing business only with approval of your instructor and permission from the business.
• If the business idea is seasonal, you need to find another complementary business to support the months your business is not in operation (how will you support yourself when the business is not operating?). Also, the business can not be a hobby, but rather must show a reasonable expectation of being profitable.
• You may do a business plan for a franchise, but the franchise rights must be available for the geographic region you want to operate your business in. Otherwise, the franchisor will not cooperate in providing information.  Check with your instructor for advice regarding pursuing a franchise.
• The idea must not have been used for project credit in any other class. If you wish to build upon a previous project, or use the same idea concurrently in another class, you must obtain the permission of your instructor.
• The business idea must be both legal and ethical. Don’t waste your time on an idea that is likely to be turned down.  If in doubt, consult with your instructor in advance of submitting your proposal.
• You are to work in a group on this project and try to look for team members with strengths in areas where you may be weaker, and who share an interest in the business idea or industry. You are not permitted to work on your own on this project.

Instructions

1. You are going to have to choose one business idea and prepare a Business Plan Proposal for approval by your instructor. Keep in mind that you may not be able to justify the viability of your idea as a business venture until you have completed the entire business plan.  Your grade will not reflect whether or not the business is forecast to make a substantial profit.  Rather, it will evaluate the analysis presented on the feasibility of your idea once your plan is completed and assess whether the forecasts prepared were realistic.
2. Complete the following Business Planning exercises that are provided at the end of this assignment. Make sure to include these completed exercises (need to be TYPED) with your Business Plan Proposal as you are graded on them.

• Exercise #1: Opportunity Selection
• Exercise #2: Focusing on Your Business Idea
• Exercise #3: Description of Your Business
• Exercise #4: Identifying Information Needs

3. You are now ready to prepare your Business Plan Proposal worth 10% of your final grade. The proposal should be a 4-6 page summary of your business idea.  It should be typed, double-spaced and have a cover page identifying the team members who will be working on the project.  This document should address the following points:
4. Description of your business idea (Refer to Business Planning Exercise 2 & 3)
5. Discussion of why your business will be successful and the strengths of your business idea (for example, does it satisfy a market gap, does it fulfill a new market trend, is it an innovation on a previous successful idea, are you confident it will have enough sustainability through its position in the product  life cycle, what is its competitive advantage)?
6. Identification of some of the challenges and risks of your proposed business idea and how your team will overcome these weaknesses?
7. Description of the team and ability/competence of the team members proposing this business. What will your roles be in the company, what are your skills, experience and education, who else will be supporting your management team? You need to make sure your idea fits with the skills and expertise of your management team.
8. Projection of your estimated start-up costs and the realistic identification of where these resources will be obtained. The sources of financial capital will fall into three categories:
9. Funds provided by the founders in the form of Equity (secret investors or silent partners are not permitted)
10. Funds provided from lenders (banks and other lenders) in the form of Debt (the Bank of Mom & Dad is not permitted)

• During the Business Plan Presentation you may seek Venture Capital by pitching your business idea to the Judges. You must also tell them how much of your business equity (as a percentage) that you are prepared to give them in exchange for their investment. Remember that there is no guarantee that they will invest any amount in your business.

Remember: The objective of this proposal is to stimulate the interest of the reader to the extent that they will want to review the full business plan.

Make sure to include the TYPED Business Planning Exercises in your Proposal.  Your instructor will return your proposal as quickly as possible, stating whether your idea has been approved.  If you have questions about the proposal or the possibility that the idea may not be approved, you should discuss it with your instructor prior to the proposal due date.

BUSINESS PLANNING EXERCISES – NEEDS TO BE TYPED

BUSINESS PLANNING EXERCISE #1

Opportunity Selection

With your partners, work your way through steps 1-5 of the opportunity selection process in Chapter 3 of your text (pp. 73-78). This is the pre-work for this assignment and does not have to be submitted.

Develop a matrix grid (Step 6 and Action Step 22, pp. 88) in the space below. Make sure to use a rating system to evaluate the opportunities.

Based on the matrix analysis you have performed, what are your top three opportunities? Which one business idea are you going to pursue and why?

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BUSINESS PLANNING EXERCISE #2

Focusing on Your Business Idea

Many people begin their businesses too hastily.  They open their doors without having a firm grip on what products or services they will offer or without determining why their business will be unique.

Instructions:  Think carefully about your answers to the following questions as they relate to your new venture idea.  Remember, well thought out answers will help you develop your final business plan.

1. What is your industry? What are the trends and characteristics of this industry?
2. What are the features of your product or service (what does it do)?
3. What are the benefits of your product or service (what will this product or service provide for your customers, what is in it for the customer)?
4. What is your market gap (what need in the market place will your business fill)?
5. Who will your target customers be?
6. What is your competitive advantage (what will make your business better than your competition)?

BUSINESS PLANNING EXERCISE #3

Description of Your Business

Developing a well-written, concise, and complete description of your business is one of the first tasks that you must complete before you can develop a business plan.  Describing your business idea will help you clarify your thinking. Think of yourself riding up 50 floors in an express elevator. You have 30 seconds to explain to the occupants what your business is all about.

Instructions:  Draft a brief description of your proposed business. Make sure to define your market, describe your focus, promote your management team and differentiate yourself from the competition.  Think of your audience as a potential source of investment capital.  Limit your description to 50 words maximum.  (Hint:  Have a look at Develop Your Pitch on page 58 of your text)

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BUSINESS PLANNING EXERCISE #4

Identifying Information Needs

Identify the sources of information you need to complete your plan, where you are going to obtain the data, a time frame to realistically achieve these goals, and which team member is responsible for securing this information. Be as detailed and specific as possible.

Information Needed	Information Source	Target Completion Date. Team Member Responsibility.

 

ANSWER

Business Plan Proposal

Business Idea Description

Our intention is to create a physical and mental health fitness facility, Ace Spa. The center will be composed of a state of the art gymnasium, swimming pool, dance class, yoga class, beauty center (including a salon, barbershop, facials parlor, waxing parlor, and massage parlors), Kohler baths, and a sauna. This business, in the service industry, shall be a partnership business owned by the members of this group. Our target customers shall be both men and women, of any age, as services provided shall be spelled out and directed according to the needs of each customer. There shall be a swimming pool for adults and another for children. Gym and yoga instructors shall be readily available to offer specialized assistance to every client, according to the needs and specifications of desired results for each of the customers. We shall also offer private trainers to be hired by clients who desire to have private classes and workout sessions at home. Ace Spa shall also offer complementary services, such as free dance classes for any customer subscribing for gym sessions for a period of 12 months or more, and give its customers gift tokens, branded sweatpants, and other forms of training gear.

Business’ Details and Competitiveness

We came up with this business idea after observing the evident rise in obesity, and the alarming rate of lifestyle diseases cases in local hospitals. Change in the community’s lifestyle, consumption of fast foods, and formal employment have all contributed to poor physical health. Our business’ mission shall be to offer facilities that shall improve the lifestyle of people by improving their physical and mental fitness and health. We seek to provide high-quality gym services for clients and specialized beauty services for both men and women. Competition in this business is plenty. However, Ace Spa shall edge its competitors by being more appealing to customers as a result of its quality of service, at an affordable price. Moreover, our Spa will be all-inclusive, having many services offered at one location. Many existing Spas only offer one or a few services, maybe only a gym and a swimming pool. Or a beauty center and a barber shop. This will ensure the provision of efficient service to customers while saving their time.

Massage parlors and a sauna will offer much-desired relaxation for people with stressful work schedules and tiresome jobs. Customers can book sessions based on their available time and work schedules. This flexibility will ensure that customers can perform their jobs without the worry of missing Spa sessions. It shall also provide an edge over our competitors, most of whom work under already set schedules. We also intend to set up a nursery for babies, at our Spa facility. This will be done to enable nursing mothers to receive our services. Most mothers find it difficult to leave their homes and go to spas because they are inconvenienced by their babies. The nursery shall have caretakers to nurse babies while the mothers are in the spa. With all these facilities tailored to suit the needs of customers, Ace Spa shall be the dream destination of every individual in the society.