PROJECT PRINCIPLES OF MANAGEMENT
(for your own, new Business)
Hint: You should write this last. See instructions on the last page.
PART I – BUSINESS DESCRIPTION
What is the name of your business?
Hint: When you think of the name of your business, make sure that it captures the spirit of the business you’re creating.
DESCRIPTION OF BUSINESS
What will your business do?
Hint: Imagine that you are explaining your business to a family member or a friend. The business should be easy to explain. Keep your description here to about 30 words or less.
FORM OF BUSINESS OWNERSHIP
What form of business ownership (sole proprietorship, partnership, or corporation) will your business take? Why did you choose this form?
Hint: For more information on the types of business ownership, refer to the Intro to Business or Law class.
All businesses have to deal with ethical issues. One way to address these issues is to create a code of ethics. List three core (unchanging) principles that your business will follow.
Hint: To help you consider the ethical issues that your business might face, refer to Chapter about Ethics.
A business shows social responsibility by respecting all of its stakeholders. What steps will you take to create a socially responsible business?
Hint: What steps can you take to be a good citizen in the community? Consider also how you may need to be socially responsible toward your customers and, if applicable, investors, employees, and suppliers.
Do you think that you’ll sell your product in another country? If so, what countries would you choose, and why? What challenges will you face?
Hint: Consider how you will expand internationally (i.e. independent agent, licensing, etc.). Do you expect global competition for your product? What advantages will foreign competitors have?
PATRT II – MISSION STATEMENT
Provide a brief mission statement for your business
Hint: Be sure to include the name of your business, how you will stand out from your competition, and why a customer will buy from you.
PART III – SWOT ANALYSIS
1. Internal Environment
Hint: Describe the components of the internal environment: resources (human, physical, financial, knowledge/expertise, etc.) This description should be the rationale for the Strengths & Weaknesses.
2. External Environment
Hint: Describe/analyze (only) the components of the external environment that you consider will affect your marketing decision. These analyses should be the rationale for the Opportunities & Threats. Use the Internet sources as: census.gov; weather.com; sba.org; google maps; claritas360.claritas.com/mybestsegments; and any other website that helps you finding data about the trends, behavior, or possible changes of the following components of the environment:
· Customers/ Demographic environment
· Intermediaries (advertising agencies, marketing research companies, mass media, shipping companies, banks, etc.)
· Economic environment
· Technological environment
· Natural environment
· Political-legal environment
· Socio-cultural environment
· JT International Consulting is aimed at supporting small scale farmer.
· Low start-up cost.
· The company can expand internationally creating connection between all of South, Central and North America. WEAKNESSES
· Lack of training.
· Poor market research
· Good relationship with suppliers and agents. THREATS
· Weather disasters can affect trade compliance.
PART IV – BUSINESS GOALS
Consider the goals for your business. What are three of your business goals for the first year? What are two intermediate to long-term goals?
Hint: Be as specific and realistic as possible with the goals you set. For example, if you plan on selling a service, how many customers do you want by the end of the first year and how much do you want each customer to spend? If you plan on selling a good, how many do you hope to sell?
PART V – MANAGEMENT
Who will manage the business?
Hint: Think about how many levels of management as well as what kind of managers your business needs.
Show how the “team” fits together by creating a simple organizational chart for your business. Make sure that you organizational chart indicates who will work for each manager as well as each person’s job title.
Hint: Most businesses start quite small. However, as you create your organizational chart, consider what your business will look like in the future. What different tasks are involved in the business? Who will each person report to in the organizational structure?
PART VI – RESOURCES
RESOURCES: EQUIPMENT, FURNITURE, RAW MATERIALS AND SUPPLIES, TIME
Explain what types of raw materials and supplies you will need to run your business. How will you produce your good or service? What equipment do you need? What hours will you operate?
What steps will you take to ensure that the quality of the product or service stays at a high level? Who will be responsible for maintaining the quality of the product or service (or both)?
Hint: Refer to the discussion of quality improvement and Total Quality Management for information to get you started.
RESOURCES: EMPLOYEES (see the attached document “staffing” in order to create job descriptions and specifications; cut and paste here the tables)
Looking back at your organizational chart in Part 2, briefly create a job description for each team member.
Hint: A job description lists the duties and responsibilities of a job; its working conditions; and the tools, materials, equipment and information used to perform it. Imagine your business on a typical day. Who is working and what are each person’s responsibilities? (Note that if your business is very large, you should ask your instructor how many positions he or she would like you to create job descriptions for.)
Next, create a job specification for each job, listing the skills and other credentials and qualifications needed to perform the job effectively.
Hint: As you write your job specifications, consider what you would write if you were making an ad for the position. What would the new employee need to bring to the job in order to qualify for the position?
What sort of training, if any, will your employees need once they are hired? How will you provide this training?
Hint: Will you offer your employees on-the-job training? Off-the-job training? Vestibule training?
A major factor in retaining skill workers is a company’s compensation system—the total package of rewards that it offers employees in return for their labor. Part of this compensation system includes wages/salaries. What wages or salaries will you offer for each job? Why did you decide on that pay rate?
Hint: You may also want to check out sites like www.salary.com, which includes a salary wizard you can use to determine how much people with different job titles are making in your area and across the United States.
Incentive programs are special programs designed to motivate high performance. What incentives will you use to motivate your workforce?
Hint: Be creative and look beyond a simple answer such as giving pay increases. Ask yourself, who are my employees and what is important to them?
What kind of IT resources will your business require?
Hint: Think about the employees in their business and what they will need in order to do their jobs. What computer hardware and software will they need? Will your business need a network and an Internet connection? What type of network?
How will you use information technology to keep track of your customers and potential customers?
Hint: Many businesses—even small businesses—use databases to keep track of their customers. Will your business require a database? What about other information systems
PATRT VII – MARKETING
Briefly describe your ideal customer. What are they like in terms of age, income level, and so on?
Hint: You don’t have to give too much detail in this part of the plan; you’ll provide more details about customers and marketing in later parts of the plan.
Describe your target market in terms of age, education level, income, and other demographic variables.
Hint: Be as detailed as possible about who you think your customers will be.
Why will customers choose to buy from your business, instead of your competition?
Hint: In this section, describe what will be unique about your business. For example, is the product special, will customer service be exceptional, or will you offer the product at a lower price?
PRODUCT FEATURES AND BENEFITS
Describe the features and benefits of your product or service.
Hint: A product is a bundle of attributes—features and benefits. What features does your product have—what does it look like and what does it do? How will your product benefit the buyer?
How will you make your product stand out in the crowd?
Hint: There are many ways to stand out in the crowd, such as a unique product, outstanding service, or a great location. What makes your “great idea” special? Does it fill an unmet need in the marketplace? How will you differentiate your product to make sure that it succeeds?
What pricing strategy will you choose for your product, and what are the reasons for this strategy?
Hint: Since your business is new, so is the product. Therefore, you probably want to choose between price skimming and penetration pricing, or maybe a price based on competition. Which will you choose and why?
PLACE (DISTRIBUTION) ISSUES
Where will customers find your product or service? What issues of the distribution mix should you consider?
Hint: What distribution strategy will you choose? Intensive, selective, exclusive? Why? If you sell the product directly to the consumers, what types of retail stores will sell your product? If your product will be sold to another business, which channel of distribution will you use? If you offer a service ambience, minimizing waiting time, parking, scheduling are distribution issues you should explain.
What promotion mix will you choose for your new product/business. Why?
Hint: Marketers use any combination of advertising, sales promotions, public relations, personal selling, direct marketing, internet marketing. You may use a specific communication media, vehicle, to carry your message to potential customers. When you build the promotion mix keep in mind the cost, and the budget you will allocate for this. You should research for prices of advertising, website design, domain, search engine optimization (SEO), Facebook or any social media cost, business cards, brochures, uniforms, corporate gifts, billboards, etc. (4imprint.com; vistaprint.com; valpak.com; groupon.com; global.nielsen.com; yelp.com; etc.)
How and what will you communicate to your target? What is the message? What is your IMC? What combination of promotion tools will you use?
PATRT VIII – FINANCIAL ISUUES
COST OF DOING BUSINESS
What are the costs of doing business? Equipment, supplies, salaries, rent, utilities, and insurance are just some of these expenses. Estimate what it will cost to do business for one year.
Hint: Insert the costs associated with doing business in the following table. The list below provides some hints as to where you can get this information. Note that these are just estimates—just try your best to include accurate costs for the expenses you think will be a part of doing business.
Hints for each expense in the table below:
· Rent: Refer to the floor plan. How many square feet is your place of business? What is the “going rate” per square foot for office space in your community? A real estate agent or a local SBA representative (www.sba.gov) can also be helpful in answering this question.
· Salaries: Refer to the organizational chart. How much will each employee earn? How many hours will each employee be needed on a weekly basis? Once you’ve determined the weekly cost, then expand it to a monthly and a yearly cost.
· Supplies: Refer to the floor plan. How much will all of the computers, equipment, and furniture cost? What kinds of general office supplies will you need? Most prices for this information can be found on an office supply website such as www.staples.com.
· Advertising and Other Promotions: Refer to your marketing section. You have described how you wish to reach your customer—now you need to decide how much it will cost. If you are using television, contact the sales department at a local station. If you are using newspaper, contact their advertising department. Salespeople are usually happy to answer your questions. You can also find information on prices at www.vistaprint.com or www.4imprint.com
· Utilities: These amounts will vary, depending on your business and what utilities you will pay. If your business looks like an office, then this cost may be similar to what a homeowner pays. However, if your business involves making a product, then the costs will be significant.
· Insurance: This value will be affected by the nature of the business. More equipment will usually mean higher insurance costs.
Expenses Expected Monthly Cost Expected Yearly Cost
Rent or mortgage
Salaries and Wages
Equipment, and Furniture (computers, software, copy machine, desks, chairs, etc.), other things needed to open the business – bought one time – fixed assets
Inventory – only if you buy products and resale them
Supplies, raw materials, things needed to run the business – bought and used monthly.
Advertising and Other Promotions
Utilities: Heat, Electricity, etc.
Telephone and Internet
Accounting services – if you don’t have an accountant on the payroll
Legal services – if you don’t have a lawyer on the payroll
How much will you charge for your product? How many products do you believe that you can sell in one year (or how many customers do you think your business can attract)? Multiply the price that you will charge by the number of products that you hope to sell or the amount you hope each customer will spend. This will give you an estimate of your revenues for one year.
Hint: You will use the amounts you calculate in the costs and revenues questions in this part of the plan in the accounting statements in the next part, so be as realistic as you can.
FINANCIAL STATEMENTS – BUDGETED
Create (in this specific order) the income statement, the statement of owner’s equity, the cash budget and the balance sheet, for the first year for your business
Hint: These documents will include projected numbers. You must use the excel template provided in a separate attachment and make any necessary changes/adjustments based on your type of business.
How much money will you need to get your business started?
Hint: Refer back to the part where you analyzed the costs involved in running your business. Approximately how much will you need to get your business started?
How will you finance your business? For example, will you seek out a bank loan? Borrow from friends? Sell stocks or bonds initially or as your business grows?
Now, create an executive summary for your business plan. The executive summary should be brief—no more than one-two pages long—and should cover the following points:
· The name of your business
· Where your business will be located
· The mission of your business
· The product or service you are selling
· Who your ideal customers are
· How your product or business will stand out in the crowd
· Who the owners of the business are and what experience they have
· An overview of the future prospects for your business and industry
Hint: At this point, you’ve already answered all of these questions, so what you need to do here is put the ideas together into a “snapshot” format. The executive summary is really a sales pitch—it’s the investor’s first impression of your idea. Therefore, as with all parts of the plan, write in a clear and professional way.
Once you have written the executive summary, CUT and PASTE it, so that it falls at the beginning of your business plan, as the very first element.