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Writing a Business Plan

Writing a Business Plan. Developing a New or Franchised Business. The project will be divided into:. Part 1: The Written Document – 100 points Part 2: The Oral Presentation - 100 points Total Project Value: 200 Points. The Business Plan.

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Writing a Business Plan

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  1. Writing a Business Plan Developing a New or Franchised Business

  2. The project will be divided into: • Part 1: The Written Document – 100 points • Part 2: The Oral Presentation - 100 points • Total Project Value: 200 Points

  3. The Business Plan • A is a written document prepared to guide the development and operation of a new business. • A business plan is used as a planning tool in the creation of a new business. • The business plan is also used to explain the new business idea to potential investors. • The business plan should be written as a persuasive tool to convince potential investors of the possibility of success for the new business.

  4. Step 1: New Business Idea • Decide on a new or franchised business idea. • The business idea can be local, national, international, or internet based.

  5. DECA Competitive Events • Your project idea must fall into one of the following categories: • Entrepreneurship Written Project – 30 Pages maximum • International Business Plan – 30 Pages Maximum • Internet Marketing Business Plan – 30 Pages Maximum • Entrepreneurship Participating – Independent – 11 Pages Maximum • Entrepreneurship Participating – Franchising – 11 Pages Maximum

  6. Project Guidelines • Print and keep a copy of your project guidelines. • www.deca.org • Hold mouse over “HIGH SCHOOL” • Move mouse to “COMPETITIVE EVENTS” • Move mouse over to “COMPETITIVE EVENTS LISTING” and click. • Scroll down the page to “Business Management & Entrepreneurship” events. • Click on your event choice and a PDF document will appear. • Print this document, these are the guidelines for your project.

  7. International Business Ideas • International Projects: • Marketing Ozarks Tourism packages to Canadians • Selling American recycled and reconditioned cell phones in developing countries: Vietnam, Bangladesh, Nigeria, Republic of the Congo

  8. Franchising Business Ideas • Subway is the number one franchise in the United States, followed by McDonald’s and 7-Eleven. • Consider a less known, and less expensive, franchise opportunity.

  9. Procedures: • Research and decide on a business idea that you want to develop • Use the classroom computers for research and for writing your project. • Follow the guidelines for your project.

  10. The Skills You Will Develop • Communications • Analytical • Critical Thinking • Time Management • Basic steps in starting a business • The ability to self-evaluate • Understanding customer needs • Understanding basic economic concepts

  11. Title Page Entrepreneurship Participating Event Franchising Business Java’s Brewin’ Harrison High School DECA Chapter Harrison High School 925 Goblin Drive Harrison, Arkansas 72601 Joe Wilson February 6, 2005

  12. Table of Contents I. EXECUTIVE SUMMARY ………………………………………………………….....1 II. DESCRIPTION AND ANALYSIS OF THE BUSINESS SITUATION……... 2 A. Rationale and marketing research …………………….………………... 2 B. Introduction ……………………………………………………….…..………... 2 C. Self-analysis …………………………………………………….………………...3 D. Analysis of the business opportunity, customer and location ………………………..………………….………..4 E. Proposed organization …………………………..…………….…….………..4 III. PROPOSED MARKETING/PROMOTION PLAN ……………….….….……...6 A. Proposed product or service ………………………………..….…….……..6 B. Proposed pricing policy ……………….……………………………………… 6 C. Personal promotion …………………………………………………..…..…...6 D. Nonpersonal promotion ………………………………………………….…...7 E. Place ………………………………………………………………….…….…….... 7 IV. PROPOSED FINANCING PLAN ………………………………………………..... 8 A. Projected income/cash flow ………………………....…….……..….…... 8 B. Projected three-year plan …………………………..……..…………….... 9 C. Capital and repayment plan ……………………………….………..….... 9

  13. I. EXECUTIVE SUMMARY • One page description of the project • Do this page last I am proposing a loan of $75,000 for the startup of a Java’s Brewin’ coffee house franchise. Combined with my own $25,000 this adds up to an initial startup expense of $100,000. The coffee industry is booming. Americans drink three times as much coffee as they did twenty years ago. In addition, Americans are spending less time at home than years past. This means that people are eating more outside of the home. This is why I believe this Java’s Brewin’ is a great opportunity for me. Java’s Brewin’ will provide its customers with twelve different coffee blends everyday. A dozen varieties of muffins are available and baked fresh daily. I will hire two employees, one part time and one full time. I will be the manager and be at the store any time the business is open. I plan to pay the loan over a 10-year period at 6.5% interest. This would make my monthly payment $852 a month. With your loan this opportunity could become a reality for me.

  14. II. DESCRIPTION AND ANALYSIS OF THE BUSINESS SITUATION A. Rationale and marketing research (Tell me WHY this business is a good idea. What research do you have that supports this good business idea?) One of the reasons I would like to open a coffee house is that it has always been my dream. When I was a young child, sipping coffee, thinking about what to do with my life it occurred to me than Americans drink three times as much coffee as they did twenty years ago. I am passionate about gourmet coffees and espresso drinks. Coffee is one of the fastest growing areas in the beverage market. In addition to that Americans are spending less and less time at home.Drinks and foods are often eaten outside of the home. This is why a coffee and bakery franchise will do so well.

  15. The proposed business is a Java’s Brewin’ franchise. Java’s Brewin’ is a gourmet coffee and muffin establishment based on the east coast. Java’s Brewin’ has over 20 varieties of gourmet coffees from chocolate raspberry to gingerbread. A selection of twelve of these varieties is available everyday. Each store is equipped with a Swiss made Java Espresso machine to ensure the best quality espresso and espresso drinks. Considering that Americans drink three times as much coffee as they did twenty years ago, this is a profitable business that will only continue to grow. No coffee house is complete without quality-baked goods. This is why Java’s Brewin’ has over thirty varieties of huge gourmet muffins. Blueberry, Georgia peach, and carrot cake are a few examples of the twelve daily choices. Sugar free muffins are also offered for the more health conscience customers. B. Introduction (describe the type of business, give a brief description of the product/service offered)

  16. C. Self-analysis (discuss your education and aptitude and your actual personal experience or training in the proposed field) I have a substantial amount of work experience that would be of great value to me in this business franchise. I have worked over a year at a local business called Neighbors Mill. During my time there one of my many jobs was barrista. I learned how to make flavored coffees, espresso drinks, and frozen coffees. I have also helped the bakers with the breads and muffins. During my time at Neighbors Mill, I learned to be a versatile employee. I have served as a cook, dishwasher, barrista, server, cashier, and bread delivery person. I have also learned how a food business is run, and how to deal with disgruntled customers.

  17. D. Analysis of the business opportunity, customers, and location ( Discuss the geographic, demographic and economic situation of the trading area and the customers. Also discuss the proposed business location.) The Java’s Brewin’ franchise is a great opportunity for me. The customers would be the residents of Harrison Arkansas, which is located in the South Central region of the United States. The mean income of Harrison city residents is $43,546. The location is 1309 Liberty Plaza F, which is located near the Federal Express Freight local headquarters. The location is ideal for FedEx employees to purchase Java’s Brewin’ products on their way to and from work.

  18. E. Proposed Organization (Discuss the type of ownership, steps in forming the business, planned personnel, and needed management skills I will be the owner and sole proprietor of the franchise. The steps to starting this business would start with gathering information from the franchiser. Next step would be to find a location for the business. After the location is found contact the franchise and get the rights to open the store. The next step is to get loans for the location and franchise expenses. The next project will be to sign the lease and pay the rent and take care of any renovations that need to be taken care of. The next step to starting the business is hiring employees. Finally, advertise like crazy and open the store. The planned personnel is myself as manager and full time worker as well as one additional full time employee, and one part time employee. I will be a good manager, because I posses the qualities necessary to be a good leader. I am cool under pressure, have creative ideas, good personal skills, good problem solving skills, and a cooperative spirit.

  19. III. PROPOSED MARKETING/PROMOTION PLAN A. Proposed product or service (Give details of the product/service, suppliers, or manufacturing plans) Java’s Brewin’ is a coffee shop first and foremost. It also sells muffins and bagels as well. It has over 20 different varieties of coffee, and 12 of these varieties are available daily. In addition to coffees, espresso drinks are also served. Each store is equipped with a Swiss made Java machine. Java’s Brewin’ also has 30 different varieties of gourmet muffins. Twelve of these are available everyday. They also have sugar free muffins for the more health conscience customers.

  20. B. Proposed pricing policy (Discuss costs, markups, relationship to competitors) All pricing would be subject to the pricing of the franchise. The prices are competitive with similar franchises and local businesses in the area.

  21. C. Personal promotion (Discuss non-media sales plan, staffing, and merchandising appeal.) I will promote my business by word of mouth. I would call all my friends and family about the opening of my business “Java’s Brewin’.” I would also round up a group of friends and hang fliers around town to announce the opening of the business.

  22. D. Nonpersonal promotion (Discuss the media you will use to promote your business, create a promotion plan) I would place advertisements in the local newspapers, and on billboards. There would be radio advertising as well. All advertisements will have the Java’s Brewin’ logo and the location of the restaurant. The billboards will be placed strategically in high traffic flow areas to increase the probability that a potential customer will take notice of the ad.

  23. E. Place (Discuss the channel of distribution from manufacturer to consumer) The business will be located at 1309 Liberty Plaza F. It is located less than ½ mile from Fed Ex Freight, which is the biggest employer in the area. This is a great location, because it is convenient for Fed-Ex employees to purchase the products on their way to or from work.

  24. IV. PROPOSED FINANCING PLAN A. Projected income/cash flow statement Java’s Brewin' First Year Income Statement Gross Sales Revenue $ 182,000 Cost of Goods Sold $ 30,000 Gross Profit $ 152,000 Expenses: Rent $ 14,000 Royalty Fee $ 9,000 Utilities $ 3,600 Loan Repayment $ 10,225 Advertising $ 6,000 Accounting Fees $ 1,000 Insurance $ 1,500 Wages $ 30,000 Taxes $ 13,500 Miscellaneous $ 2,500 Total Expenses$ 91,325 Net Income$ 60,675

  25. B. Projected three-year plan (Describe planned growth.) My three-year plan for growth estimates a 5% increase in annual sales each year. I think this is a conservative estimate and that my actual growth will be somewhat more than 5%. Based on my estimate of growth, by the end of the second year my net income should be approximately $64,000. At the end of year three my net income should be over $67,000. This is a substantial income and should provide a comfortable living while the business continues to grow.

  26. C. Capital and repayment plan (Discuss earnings and how you will repay loan and discuss startup expenses) The capital needed to start the business is $100,000. I am requesting a loan of $75,000 that I will combine with my personal assets of $25,000. The loan will be repaid over a ten-year period. The proposed interest rate is 6.5%. The monthly payment will be $852. Start-Up Expenses Initial franchise fee $ 25,000.00 Equipment and fixtures $ 25,000.00 Inventory $ 8,000.00 Lease Deposit/Rent $ 1,200.00 Lease hold & Improvement $ 32,400.00 Grand Opening Advertisement $ 1,900.00 Insurance, Licensing & utilities deposit $ 2,000.00 Additional Funds (3 Months) $ 4,500.00 Total $ 100,000.00

  27. The Power Point Presentation • The following is a power point presentation used at State DECA Competition last year.

  28. T.J. Seidl Andrew Stretton TnAPowersports

  29. Introduction • Opening a used power sports dealership • Sell, repair, service, and customize all vehicles • Offer gear and apparel • Offer aftermarket accessories

  30. Self-Analysis • We both are avid motorcycle enthusiasts • Had much experience servicing power sport vehicles • We have owned multiple types of power sport vehicles already

  31. Trading Area Analysis • Harrison currently has four retailers of new power sport vehicles • No dealers specialize in used models • Plan on arranging an agreement to buy the used trade-in models they receive • Currently motorcycles are more popular than ever, 34% increase in sales since 1998

  32. Our Goal • We would love to make sure no one in Harrison is stuck doing this:

  33. Market Segment Analysis • Target age group is 16-60 • Average income level of Harrison, AR is $33,948 • Population is 13,000 • Area is full of scenic routes

  34. Analysis of Potential Location • Old Legendary Sportsman building • Located on the highly popular Highway 7 South • Not a power sport dealership on this side of town • Building offers lots of empty space for what we need

  35. Proposed Organization • We would take equal ownership in the business, serving as the shop’s main mechanics during business hours • Hire one secretary and one salesman, both full time • We plan on being open from 10-6 Tuesday through Saturday, being closed Sunday and Monday

  36. Proposed Product/Service • Selling all types of used power sport vehicles • Selling after-market performance parts • Selling apparel and riding gear • Full service, repair, and customization of all vehicles

  37. Proposed Marketing Strategies • Heavily market the business during the first few months of operation • Large outdoor billboard • Plenty of radio and television ads

  38. Projected Income • Gross Sales Revenue $444,400 • Cost of goods Sold $200,000 • Gross Profit $244,000 • Total Expenses $132,200 • Net Income $112,200

  39. Proposed Plan to meet Capital Needs • $100,000 total start-up money • Each of us has $20,000 to donate • Asking for a $60,000 loan • Payable in 5 years with 8% interest

  40. Bibliography • Bike World, www.webbikeworld.com • Farese, Lois and Kimbrell, Grady. Marketing Essentials, Second Edition, Glencoe/McGraw-Hill, 1997. • Harrison Chamber of Commerce. www.harrison.dina.org • Rue, Leslie W. and Byars, Lloyd L. Business Management: Real World Applications & Connections; Glencoe/McGraw-Hill, 2001. • The 100 Best Small Towns in America, published by Prentice Hall, 2002. • United States Department of the Census. www.census.gov

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