Expert answer:Business Plan
Solved by verified expert:Your business plan will be for a business you are interested in starting and you should be prepared to do outside research on various factors affecting this business.Chapter 6 in your textbook gives you an overview of a business plan and reference the content section of the course for a Business Plan Format Guide of how your plan should look.Information for preparing each section of your business plan can be found within the assigned chapters of your text.Although you can begin exploring possibilities for a new business and doing research on these businesses, you will not be ready to actually begin writing your business plan until after you’ve read Chapter 6.Note also that Chapters 7 through 17 also include information needed to prepare a good business plan.It will be helpful if you read ahead while working on your business plan. You will have the attachment with the instruction….. here is what i had on my discussion board 2 fr business plan . you can use this to elaborate the business plan. A
business plan is a critical aspect that every person starting up a
business should undertake. In most of the situations, a business plan
can help you in securing finance, understand the direction of the
business you are wishing to start, and create strategies that are meant
for achieving your goals. Without a business plan, it is likely that
your business will fail future since you don’t have direction on where
your business is going, or you don’t understand how to start your
business that will pick up after the start. Many people will fail simply
because they don’t know their goals, or if their strategies are
working. Moreover, a business plan helps you to be very competitive in
the marketplace and expand your business in the future. Starting a small
business can be very challenging; however, it can be immensely
rewarding in different ways, for example, personal fulfillment
(Morgaine, 2017).Assuming
that I need to start a small business, I would consider starting an
online boutique. Definitely, every human wears clothes, which is needed
to cover their nakedness. It is likely that many manufacturers on the
same have sprung up and I have seen them succeed. As the population has
grown, so does the demand for clothes. It is important to ensure that
the demand for clothes has been met. In starting an online boutique can
be very critical step since many people will be able to demand on them. I
will ensure different designs for my clothes. One of the major reasons
to start an online store is that people cannot do without putting on
clothes. Clothing stores have experienced major developments over the
years, and this means mine will thrive too, provided I have a business
plan.Starting
an online boutique is not a herculean task. However, it is very
important to consider the right steps that can transform the business. I
can face some challenges in starting an online boutique but this does
not discourage me from start my own. For example, I may face challenges
like competition because many other similar boutiques have sprung up.
Since I don’t have any customer in starting the business, it will take
time for them to consider my services. However, I will ensure that my
products are of great quality and capture the attention of many
personalities. The other challenge is cash flow. Cash flow is very
important in running a business. Especially is what makes a business to
operate successfully. Provided that there is no cash flow in my
business, I will have a challenge in this area since I need to manage my
business and operate successfully. With when my business will pick, it
is likely that I will be able to lack cash flow. The final challenge can
be profitability. In starting a business, it is likely that I will not
make profits as possible, or in some cases, I will make a loss (Saleem,
2017).Despite the challenges I will experience, a business plan will give me an opportunity on how to plan for effective success.Work CitedMorgaine B. (2017).Your Guide to Opening a Crazy-Successful Online Boutique. Retrieved from: http://articles.bplans.com/the-complete-guide-to-starting-an-online-boutique/Saleem, M. A. (2017). The impact of socio-economic factors on small business success. Geografia-Malaysian Journal of Society and Space, 8(1).http://www.mytopbusinessideas.com/challenges-start…
instructions_for_business_plan.docx
business_plan_format.docx
financial_forecast_model.xls
chapter_6_notes.docx
chapter_7_notes.docx
Unformatted Attachment Preview
Your End of Term Project will be to prepare a Business Plan for yourself. Your business plan will be for a
business you are interested in starting and you should be prepared to do outside research on various
factors affecting this business. Chapter 6 in your textbook gives you an overview of a business plan and
reference the content section of the course for a Business Plan Format Guide of how your plan should
look. Information for preparing each section of your business plan can be found within the assigned
chapters of your text. Although you can begin exploring possibilities for a new business and doing
research on these businesses, you will not be ready to actually begin writing your business plan until
after you’ve read Chapter 6. Note also that Chapters 7 through 17 also include information needed to
prepare a good business plan. It will be helpful if you read ahead while working on your business plan.
Because the business plan is the main objective of this course and it is worth 40% of your course grade,
Graded Discussion #2 will be connected to your business plan. In this discussion, you will present your
idea for a business to fellow classmates and they will give you feedback on your plan. You will also have
the opportunity to give fellow students feedback on their plans. Discussion #2 will get you off to a good
start in developing an excellent business plan.
There is a good online source where you can read sample business plans at www.bplans.com. This site
might give you some ideas.
Don’t let the business plan overwhelm you. You cannot put this project off until the last week of class
because it takes lots of research, writing, and bringing all the parts together so your business is feasible.
Unless you have experience in global business and international trade transactions, please don’t
attempt to write a business plan that has multiple locations globally.
If you have questions about your business plan or need help, please post your question in our Business
Plan Discussion Forum online. I will answer all questions related to business plans there.
Your business plan will be graded in two parts. The first part will be your rough draft and I will give you
feedback on your draft so you can improve your business plan. Your rough draft submission will earn up
to 100 points. Your rough draft should contain all business plan parts or state the reason why one or
more parts are missing. You will upload your rough draft to the Assignments folder on or before the due
date. Late draft submissions will be penalized 20 points and late final submissions will be penalized 60
points.
Your final business plan will earn up to 300 points. It will reflect the feedback given to you in your rough
draft and be graded for professionalism, content, and accuracy. If you have any questions or concerns
regarding your business plan, please post them online in our Business Plan Discussion Forum.
Business Plan Rubric:
Draft – 90 – 100 points; Final – 270 – 300 points (90% – 100%): All sections of the business plan are
presented thoroughly and effectively. Each section will have in-depth analysis and application of course
and text concepts. Each section will be written clearly and professionally with no grammatical errors.
Draft – 80 – 89 points; Final 240– 269 points (80% – 89%): All sections of the business plan have been
attempted and some sections may be lacking depth of analysis or application of course and text
concepts. Each section is written clearly and professionally with few grammatical errors.
Draft – 60 – 79 points; Final 180 – 239 points (60% – 79%): Some sections of the business plan are were
not attempted and some sections may be lacking depth of analysis or application of course and text
concepts. Grammatical errors are evident.
Draft – 0 – 59 points; 0 – 179 points (0% – 59%): The business plan is incomplete and does not meet the
above criteria.
Note: Turnitin.com is used to determine originality. Business Plan submissions with an Originality
Report higher than 60% may NOT earn more than one-half credit. Plans with 80% or higher will earn NO
points. It is up to the instructor whether re-submission is allowed.
Business Plan Format
Hey Class,
Below is a good outline for your plan. Regarding business plan examples you may find in the
text, I am not concerned about the sub-headings under each major category since every business
plan has different needs depending on the type of business. However, I do want you to address
each major section. So, your submission format should look something like this:
Cover Page
Table of Contents
Executive Summary
Industry, Customers, Competitors
Company Description
Marketing Plan
Operations Plan
Development Plan
Growth Plan
Management Team
Financial Plan
Chapter 6 will give you a good idea of what to consider for each section. For each major section
you should have 1 to 2 pages explaining your plan, hence your plan would be anywhere from 11
to 21 pages. Ideally to get full credit for the rough draft, I would be looking for you to attempt
each of the sections. I do realize that a draft is a work-in-progress, so what I want to see is the
direction you are taking each section with your draft.
The financial section typically causes the most anxiety so here are some comments that may
help. Knowing your market and how many people you will serve in that market sometimes is an
educated guess, but without it you will not be able to calculate revenue. It is a demanding step to
translate your plan into the financial statements and I do not want you to stress over it. If you
can provide me with some basic information that shows me you can forecast into the future and
construct/demonstrate that you understand what a basic income statement and balance sheet will
look like for your business, I will be good with that. I assure you I will be fair when it comes to
grading the financials because it is difficult. Also, if you look in the “content section” under
course materials you will find an Excel file that will forecast your financial
statements. Depending on how comfortable you feel working in Excel models, you may find this
to be a benefit to you as you work on your drafts and final plans. You are not required to use this
model. You can change anything in the yellow cells for your assumptions and the model will
calculate the rest.
Let me know if you have any questions.
John
ASSUMPTIONS
Account Receivables/Sales
Inventories/Sales
Accts. Payable/Sales
Accruals/Sales
Minimum cash
Sales first year
Annual sales growth rate
Variable cost of goods to sales
Variable operating expenses to sales
Tax rate
Owner’s equity investment in the firm
Line of credit/long-term debt interest rates
Maximum Line of Credit
Mortgage interest rate
Mortgage principal
20 yrs
Maximum debt ratio
Minimum current ratio
Depreciation life/cost of building
15 yrs
Depreciation life/cost equipment
5 yrs
$
$
$
$
$
$
$
15%
Assets and spontaneous
20%
liabilities relationships to sales
10%
5%
Sales assumptions
10,000
Set Min Cash
200,000
35%
35%
35%
35%
35%
25%
20%
Cost and expense relationships to sales
30%
100,000
12%
30,000
Terms of financing
10%
45,000
65%
Loan covenants
1.75
90,000
40,000 $ 10,000 $ 10,000 $ 10,000 $ 10,000
INCOME STATEMENT
Years
Sales
Cost of goods sold
Variable costs
Fixed costs
Gross Profit
Operating expenses:
Variable expenses
Fixed expenses
Depreciation
Building
Equipment
Operating Profit
Interest
Earnings before tax
Tax
Earnings after tax
BALANCE SHEET
Assets
Cash
Accounts receivable
Inventories
Total current assets
Equipment
Accumulated depreciation
Building
Accumulated depreciation
Total fixed assets
Total Assets
Debt and equity
Accounts Payable
Accruals
Line of credit
Current liabilities
Mortgage
Other L-T debt
Total debt
Equity
Common stock
Retained earnings
Total equity
Total debt and equity
1
2
3
4
5
$ 200,000 $ 270,000 $ 364,500 $ 492,075 $ 664,301
(50,000)
(67,500)
(91,125) (123,019)
(166,075)
(60,000)
(60,000)
(75,000)
(80,000)
(100,000)
$ 90,000 $ 142,500 $ 198,375 $ 289,056 $ 398,226
(40,000)
(45,000)
Current Ratio
Debt Ratio
(72,900)
(55,000)
(98,415)
(70,000)
(132,860)
(70,000)
(6,000)
(6,000)
(6,000)
(6,000)
(6,000)
(8,000)
(10,000)
(12,000)
(14,000)
(16,000)
$ (9,000) $ 27,500 $ 52,475 $ 100,641 $ 173,366
(9,312)
(8,000)
(5,379)
(4,240)
(4,135)
(18,312)
19,500
47,096
96,401
169,230
0
(357)
(14,129)
(28,920)
(50,769)
$ (18,312) $ 19,144 $ 32,967 $ 67,481 $ 118,461
$
$ 10,000
40,500
54,000
$ 104,500
$ 50,000
(18,000)
90,000
(12,000)
$ 110,000
$ 214,500
$ 10,000
54,675
72,900
$ 137,575
$ 60,000
(30,000)
90,000
(18,000)
$ 102,000
$ 239,575
$ 52,219
73,811
98,415
$ 224,445
$ 70,000
(44,000)
90,000
(24,000)
$ 92,000
$ 316,445
$ 147,084
99,645
132,860
$ 379,590
$ 80,000
(60,000)
90,000
(30,000)
$ 80,000
$ 459,590
$ 27,000
13,500
19,218
$ 59,718
43,350
10,600
$ 113,668
$ 36,450
18,225
8,701
$ 63,376
42,399
0
$ 105,776
$ 49,208
24,604
0
$ 73,811
41,354
0
$ 115,165
$
$ 100,000 $ 100,000
(18,312)
832
$ 81,688 $ 100,832
$ 196,000 $ 214,500
$ 100,000
33,799
$ 133,799
$ 239,575
$ 100,000
101,280
$ 201,280
$ 316,445
$ 100,000
219,741
$ 319,741
$ 459,590
Balance 3
Balance 4
Balance 5
$
$
$
$
10,000
30,000
40,000
80,000
40,000
(8,000)
90,000
(6,000)
116,000
196,000
$
20,000
10,000
15,718
$ 45,718
44,214
24,380
$ 114,312
Balance 1
Added financing needs
(54,000)
(45,000)
$
1.75
0.58
Balance 2
$
1.75
0.53
$
2.17
0.44
$
3.04
0.36
66,430
33,215
0
$ 99,645
40,203
0
$ 139,849
$
3.81
0.30
CASH FLOW STATEMENT
Cash Flow from Operating Activities:
Net Income
Adjustments to Reconcile
Depreciation
Decrease (increase) in A/R
Decrease (increase) in Inventory
Increase in Accounts Payable
Decrease in Accruals
Net Cash from Operating Activities
Purchase of fixed assets
Financial proceeds (payments)
Increase (decrease) line of credit
Increase (decrease) mortgage
Increase (decrease) add. L-t debt
Increase (decrease) common stock
Total financial proceeds (payments)
Net change in cash & mkt. sec.
$ (18,312) $ 19,144
14,000
(30,000)
(40,000)
20,000
10,000
$ (44,312) $
$ 32,967
16,000
(10,500)
(14,000)
7,000
3,500
21,144 $
$ 67,481
18,000
(14,175)
(18,900)
9,450
4,725
32,067 $
$ 118,461
20,000
22,000
(19,136)
(25,834)
(25,515)
(34,445)
12,758
17,223
6,379
8,611
61,966 $ 106,016
$ (130,000) $ (10,000) $ (10,000) $ (10,000) $ (10,000)
$
15,718
44,214
24,380
100,000
$ 184,312
$ 10,000
Mortgage Repayment Schedule
$
3,500 $ (10,517) $ (8,701) $
(864)
(951)
(1,046)
(13,780)
(10,600)
0
$ (11,144) $ (22,067) $ (9,747) $
$
$
(0) $ 42,219 $
Year
Interest
Principal
$
Principal
No. of years
Interest rate
Solve for annual payment
$
$
45,000
20
10.0%
(5,286)
1
2
3
4
5
$
(4,500) $
(4,421)
(4,335)
(4,240)
(4,135)
(786)
(864)
(951)
(1,046)
(1,150)
(1,150)
0
(1,150)
94,866
Balance
45,000
44,214
43,350
42,399
41,354
40,203
Clear LOC
Clear Other LTD
Balance 5
Balance All Prds
Account Receivables
Inventories
Depreciation(Bldg)
Depreciation(Equip)
Accts. Payable
Accruals
Sales growth
Variable cost of goods
Variable operating exp.
Line of credit interest
Mortgage interest
Maximum debt ratio
Tax rate
Annual equipment purchases
Sales
Cost of goods
Fixed
Variable
Gross profit
Opersting expenses
Fixed
Variable
Depreciation
EBIT
Interest
EBT
Tax
EAT
Net profit margin
Balance Sheet
Cash
Accounts receivable
Inventories
Total current assets
Equipment
Acc. Dep.
Building
Acc. Dep
Total fixed assets
Total Assets
Liabilities
Accounts Payable
Accruals
Line of credit
Current liabilities
Mortgage
Other L-T debt
Total debt
Equity
Common stock
Outside investor
Retained earnings
15.00%
20.00%
15 Years
5 Years
10.00%
5.00%
35.00%
25.00%
20.00%
12.00%
10.00%
60.00%
30%
10,000
200,000
270,000
10,000
364,500
10,000
492,075
10,000
664,301
60,000
50,000
90,000
60,000
67,500
142,500
75,000
91,125
198,375
80,000
123,019
289,056
100,000
166,075
398,226
45,000
40,000
14,000
-9,000
9,312
-18,312
0
-18,312
-9.20%
45,000
54,000
16,000
27,500
8,000
19,500
357
19,144
7.10%
55,000
72,900
18,000
52,475
5,379
47,096
14,129
32,967
9.00%
70,000
98,415
20,000
100,641
4,240
96,401
28,920
67,481
13.70%
70,000
132,860
22,000
173,366
4,135
169,230
50,769
118,461
17.80%
10,000
30,000
40,000
80,000
40,000
-8,000
90,000
-6,000
116,000
196,000
10,000
40,500
54,000
104,500
50,000
-18,000
90,000
-12,000
110,000
214,500
10,000
54,675
72,900
137,575
60,000
-30,000
90,000
-18,000
102,000
239,575
52,219
73,811
98,415
224,445
70,000
-44,000
90,000
-24,000
92,000
316,445
147,084
99,645
132,860
379,589
80,000
-60,000
90,000
-30,000
80,000
459,589
20,000
10,000
15,714
45,714
44,214
24,383
114,312
27,000
13,500
19,211
59,711
43,350
10,606
113,668
36,450
18,225
8,701
63,376
42,399
0
105,776
49,208
24,604
0
73,811
41,354
0
115,165
66,430
33,215
0
99,645
40,203
0
139,849
70,000
30,000
-18,312
70,000
30,000
832
70,000
30,000
33,799
70,000
30,000
101,280
70,000
30,000
219,741
Total equity
Total debt and equity
81,688
196,000
100,832
214,500
Added financing needs
Current Ratio
Debt Ratio
0
1.75
0.58
0
1.75
0.53
Year
Principal
No. of years
Interest rate
Payment
CASHFLOW STATEMENT
DIRECT METHOD
Cash inflows received from customers
Net sales
Less change in acct. rec
Cash inflows from customers
Cash paid to suppliers
Cost of goods sold
Plus change in inventory
Less change in accounts payable
Cash paid to suppliers
Other operating cash outflows
Operating expenses
Less change in accrued expenses
Other operating cash outflows
Cash tax payments
Provision for taxes
Cash flows from operations
Purchase of fixed assets
Financial proceeds (payments)
Interest payments
Increase (decrease) line of credit
Increase (decrease) mortgage
Increase (decrease) add. financing
Total financial proceeds (payments)
Net change in cash & mkt. sec.
INDIRECT METHOD
Cash Flow from Operating Activities:
Net Income
Adjustments to Reconcile
Depreciation
Decrease (increase) in A?R
Decrease (increase) in Inventory
Increase in Accounts Payable
Decrease in Accruals
Net Cash from Operating Activities
45,000
20
0.1
-5,286
1
2
3
4
5
133,799
239,575
201,280
316,445
319,741
459,590
0
0
0
2.17
3.04
3.81
0.44
0.36
0.3
Interest
Principal
Balance
45,000
4,500
786
44,214
4,421
864
43,350
4,335
951
42,399
4,240
1,046
41,354
4,135
1,150
40,203
270,000
-10,500
259,500
364,500
-14,175
350,325
492,075
-19,136
472,939
664,301
-25,834
638,467
127,500
14,000
-7,000
134,500
166,125
18,900
-9,450
175,575
203,019
25,515
-12,758
215,776
266,075
34,445
-17,223
283,298
99,000
-3,500
95,500
127,900
-4,725
123,175
168,415
-6,379
162,036
202,860
-8,611
194,249
357
29,143
14,129
37,446
28,920
66,206
50,769
110,151
-10,000
-10,000
-10,000
-10,000
-8,000
3,497
-864
-13,777
-19,143
0
-5,379
-10,510
-951
-10,606
-27,446
0
-4,240
-8,701
-1,046
0
-13,987
42,219
-4,135
0
-1,150
0
-5,286
94,866
19,144
32,967
67,481
118,461
16,000
-10,500
-14,000
7,000
3,500
21,144
18,000
-14,175
-18,900
9,450
4,725
32,067
20,000
-19,136
-25,515
12,758
6,379
61,966
22,000
-25,834
-34,445
17,223
8,611
106,016
Purchase of fixed assets
-10,000
-10,000
-10,000
-10,000
Financial proceeds (payments)
Increase (decrease) line of credit
Increase (decrease) mortgage
Increase (decrease) add. financing
Total financial proceeds (payments)
Net change in cash & mkt. sec.
3,497
-864
-13,777
-11,144
0
-10,510
-951
-10,606
-22,067
0
-8,701
-1,046
0
-9,747
42,219
0
-1,150
0
-1,150
94,866
Chapter 6 : The Business Plan: Visualizing the Dream
CHAPTER 6: THE BUSINESS PLAN: VISUALIZING THE DREAM
CHAPTER OUTLINE
Spotlight: Maternova
(http://www.maternova.net)
1) An Overview of the Business Plan
LO1: Explain the purpose and objectives of business plans.
a) The Purpose of a Business Plan
i) Business Plan – a document that outlines the basic concept underlying a business
and describes how that concept will be realized. Consider personal aspirations
before beginning
ii) Three key elements that should be in every business plan
(1) A logical statement of a problem and its solution
(2) A significant amount of cold, hard, evidence
(3) Candor about the risks, gaps, and other assumptions that might be proved
wrong.
iii) A business plan, if done well, is a tool to be used by company insiders for
direction and to aid in the development of relationship with outsiders who could
help the company achieve its goals.
2) Will Writing a Plan Make a Difference?
LO2: Give the rationale for writing (or not writing) a business plan.
i) Business plan is NOT the business
ii) Entrepreneur must find the right balance between planning and becoming
operational
iii) Business plans offer no guarantee of success
iv) Business plans are models that help focus on important issues and activities for
the new venture and prepare for the future
v) Business plans matter to outsiders, especially important in getting financing
vi) Enhances the venture’s credibility, effective selling tool with prospective
customers and suppliers as well as investors
b) What Form Will the Business Plan Take?
i) The Short Plan – A short form of a business plan that presents only the most
important issues and projections for the business
ii) The Comprehensive Plan – A full business plan that provides an in-depth analysis
of the critical factors that will determine a firm’s success or failure, along with all
the underlying assumptions
3) Preparing a Business Plan: The Content and Format
LO3: Describe the preferred content and format for a business plan.
i) You may have knowledge of a business that could be used as an example in this
section or you could choose a business plan available online to use as you work
through this section. The business plan example in Appendix A could also be used
for this purpose.
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a
license distributed with a certain product or service or otherwise on a password-protected website for classroom use.
6-1
Chapter 6 : The Business Plan: Visualizing the Dream
ii) The business plan should give thorough consideration to the following basic
factors (see Exhibit 6-2)
(1) The opportunity
(2) The critical resources
(3) The entrepreneurial team
(4) The financing structure
(5) The context (or external factors)
b) Cover Page
i) The cover page should contain the following information:
(1) Company name, address, phone number, fax number and website
(2) Tagline and company logo
(3) Name of contact person (preferable the president) with mailing address, phone
number, fax number, and e-mail address
(4) Date on which the business plan was prepared
(5) If the plan is being given to investors, a disclaimer that the plan is being
provided on a confidential basis to qualified investors only and it not to be
reproduced without permission
(6) Number of the copy (to help keep track of how many copies have been given
out).
ii) Table of Contents
iii) Executive Summary (a section of the business plan that conveys a clear and
concise overall picture of the proposed venture)
iv) Synopsis (may be used rather than an Executive Summary)
v) Narrative (may be used rather than an Executive Summary)
vi) Company description
vii) Industry, Target Customer, and Competitor Analysis
viii) Product/Service Plan (A section of the business plan that describes the
product to be provided and explains its merits)
ix) Marketing Plan (A section of the business plan that describes the user benefits of
the product or service and the type of market that exists)
x) Operations and Development Plan (A section of the business plan that offers
information on how a product will be produced or a service provided, including
descriptions of the new firm’s facilities labor, raw materials, and processing
requirements)
xi) Management Team (A section of the business plan that describes a new firm’s
organizational structure and the backgrounds of its key payers)
xii) Critical Risks (A sec …
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