PART 1 The Contemporary Business Environment

BUSINESS NAME
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.

Note to students: Once you have inserted your answer, delete the question and the tip provided
here and leave just the heads so that your business plan will look more professional.
     

DESCRIPTION OF BUSINESS
What will your business do, location(s), product or services, Your “Niche”?
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, do some research online about
forms of business ownerships.
     

IDEAL CUSTOMER
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.
     

OUR ADVANTAGES
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?
     

ETHICAL ISSUES
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, do some online
research.
     
PART 1 The Contemporary Business Environment

SOCIAL RESPONSIBILITY
A business shows social responsibility by respecting all of its stakeholders. What steps will
you take to create a socially responsible business?
Hint: To help you consider the ethical issues that your business might face, do some online
research. 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.
     

GLOBAL ISSUES
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: To help you consider issues of global business, refer to online research. 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?
     
PART 2 The Business of Managing

MISSION STATEMENT
Provide a brief mission statement for your business
Hint: Refer to the discussion of mission statements from online resources. 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.
     

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: Refer to in-class discussion of goal setting and also refer to online resources. 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?
     

SWOT ANALYSIS
Perform a basic SWOT analysis for your business, listing its main strengths, weaknesses,
opportunities, threats and recommendations to correct all weaknesses & threats. Also do
the same for two of your direct competitors. Be sure to include addresses and websites
Hint: We explained above what factors you should consider in your basic SWOT analysis.
Look around at your world, talk to classmates, or talk to your instructor for other ideas in
performing your SWOT analysis.
Strengths      

Weaknesses      

Opportunities      

Threats      

Recommendations      

MANAGEMENT
Who will manage the business?
Hint: Refer to your textbook, classroom discussions and online resources of managers with in
a business environment. Think about how many levels of management as well as what kinds of
managers your business needs.
     

ORGANIZATION CHART
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.
PART 2 The Business of Managing

Hint: Most businesses start off 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? Refer to the
discussion of organizational structure in Chapter 6 for information to get you started.
     

FLOOR PLAN
Create a floor plan of the business. What does it look like when you walk through the
door?
Hint: When sketching your floor plan, consider where equipment, supplies, and furniture will
be located. Ask your instructor how they would like you to submit the floor plan for your
business. Also refer to online resources
     

RAW MATERIALS AND SUPPLIES

Explain what types of raw materials and supplies will you need to run your business. How
will you produce your good or service? What equipment do you need? What hours will you
operate?
Hint: Refer to classroom discussions, textbook assignments and online resources for
operations on information to get your business started.
     

QUALITY ASSURANCE
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 classroom discussions, textbook assignments, and online resources of quality
improvement and Total Quality Management for information to get you started.
     
PART 3 People in Organizations

CORPORATE CULTURE
What do you see as the “corporate culture” of your business? What types of employee
behaviors, such as organizational citizenship, will you expect?
Hint: Will your business demand a casual environment or a more professional environment?
Refer to classroom discussions, textbook assignments, and online resources on employee
behavior for information on organizational citizenship and other employee behaviors.
     

LEADERSHIP PHILOSOPHY
What is your philosophy on leadership? How will you manage your employees day-to-day?
Hint: Refer to classroom discussions, textbook assignments, and online resources on
leadership to help you formulate your thoughts.
     

JOB DESCRIPTIONS
Looking back at your organizational chart in Part 2, briefly create a job description for
each team member.
Hint: Refer to classroom discussions, textbook assignments, and online resources regarding
job descriptions. 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.)
     

JOB SPECIFICATIONS
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?
Insert Job Title #1:      
Insert Needed Skills/Credentials/Qualification for Job:      

Insert Job Title #2:      

Insert Needed Skills/Credentials/Qualification for Job:      

Insert Job Title #3:      

Insert Needed Skills/Credentials/Qualification for Job:      

TRAINING EMPLOYEES
What sort of training, if any, will your employees need once they are hired? How will you
provide this training?
Hint: Refer to classroom discussions, textbook assignments, and online resources of training
programs. Will you offer your employees on-the-job training? Off-the-job training? Vestibule
training?
PART 3 People in Organizations

     
PART 3 People in Organizations

COMPENSATION
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: Refer to classroom discussions, textbook assignments, and online resources for more
information on forms of compensation. 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.
     

INCENTIVES
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? Refer to classroom discussions, textbook
assignments, and online resources for more information on the types of incentives you may want
to consider.
     
PART 4 Principles of Marketing

TARGET MARKET
Describe your target market in terms of age, education level, income, and other
demographic variables.
Hint: Refer to classroom discussions, textbook assignments, and online resources for more
information on the aspects of target marketing and market segmentation that you may want to
consider. Be as detailed as possible about who you think your customers will be.
     

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?
     

PRODUCT DIFFERENTIATION
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?
     

PRICING
What pricing strategy will you choose for your product, and what are the reasons for this
strategy? (How many cups of coffee do you need to sell to pay the rent…?)
Hint: Refer to classroom discussions, textbook assignments, and online resources for more
information on pricing strategies and tactics (Skimming vs. Penetration). Since your business is
new, so is the product. Therefore, you probably want to choose between price skimming and
penetration pricing. Which will you choose, and why?
     

PLACE (DISTRIBUTION) ISSUES

Where will customers find your product or service? (That is, what issues of the distribution
mix should you consider?)
Hint: If your business will sell its product directly to 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? Refer to classroom discussions, textbook assignments, and online resources for
more information on aspects of distribution you may want to consider.
     
PART 4 Principles of Marketing

ADVERTISING
How will you advertise to your target market? Why have you chosen these forms of
advertisement?
Hint: Marketers use several different advertising media—specific communication devices for
carrying a seller’s message to potential customers—each having its advantages and drawbacks.
Refer to classroom discussions, textbook assignments, and online resources forthe types of
advertising media you may wish to consider here.
     

PROMOTIONS
What other methods of promotion will you use, and why?
Hint: There’s more to promotion than simple advertising. Other methods include personal
selling, sales promotions, and publicity and public relations. Refer to classroom discussions,
textbook assignments, and online resources for promotion and ideas on how to promote your
product that go beyond just advertising.

     
PART 5 Managing Information

IT RESOURCES
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? Refer to classroom discussions, textbook
assignments, and online resources on IT resources that you may want to consider.

     

CUSTOMER SERVICES
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? Refer
to classroom discussions, textbook assignments, and online resources for more information on
these topics.

     

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
PART 5 Managing Information

you are using newspaper, contact their advertising department. Salespeople are usually
happy to answer your questions.

• 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. An SBA representative can be a good resource.

• Insurance: This value will be affected by the nature of the business. More equipment
will usually mean higher insurance costs. Again, contact an SBA representative for
feedback.

Expected
Expenses Expected Yearly Cost
Monthly Cost

Rent            

Salaries and Wages            

Supplies:            

Technological,
Equipment, and
Furniture (computers,
software, copy
machine, desks, chairs,
etc.), other

Advertising and Other            

Promotions

Utilities: Heat,            

Electricity, etc.

Telephone and            

Internet

Insurance            

Other (specify)            

Other (specify)            

PART 5 Managing Information
PART 5 Managing Information

EXPECTED REVENUE
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.
     

INCOME STATEMENT AND BALANCE SHEET

Create a balance sheet and an income statement (profit-and-loss statement) for your
business.
Note that you will have two options for creating these reports. The first option is to use the
Microsoft Word versions that are found within this Business Plan Student template (shown
below).

The second option is to use the specific Microsoft Excel templates created for each statement.
You’ll find these templates in the file called Business Plan Part 5 Spreadsheets, which is
available from your instructor or on the book’s companion website at www.prenhall.com/ebert.
These Excel files are handy because they already have the worksheet calculations preset—all
you have to do is “plug in” the numbers and the calculations will be performed automatically
for you. If you make adjustments to the different values in the Excel worksheets, you’ll
automatically see how changes to expenses, for example, can improve the “bottom line.”

Note that the Excel templates also include helpful hints as to where you can get the information
you need to complete the balance sheet and income statement.
 12-Month Income Statement (Profit & Loss Statement)
Jul Aug Sept Oct Nov Dec Jan Feb Marc Apri Ma
June YEARLY
y . . . . . . . h l y

Revenue (Sales)
Category 1
Category 2
Total Revenue (Sales)

Cost of Goods Sold

Category 1
Category 2
Total Cost of Goods
Sold

Gross Profit

Expenses
Rent Expense
Salary/Wage Expenses
Supplies Expense
Advertising Expense
Utilities Expense
Telephone/Internet
Expense
Insurance Expense
Interest from Loans (if
applicable)
Other Expenses
(specify)
Total Expenses

Net Profit
 Balance Sheet

Assets

Current Assets
Cash in Bank      
Cash Value of Inventory      
Prepaid Expenses (insurance)      
Total Current Assets      

Fixed Assets
Machinery & Equipment      
Furniture & Fixtures      
Real Estate / Buildings      
Total Fixed Assets      

Total Assets      

Liabilities & Net Worth

Current Liabilities
Accounts Payable      
Taxes Payable      
Notes Payable (due within 12 months)      
Total Current Liabilities      

Long-Term Liabilities
Bank Loans Payable (greater than 12 months)      
Less: Short-Term Portion      
Total Long-Term Liabilities      

Total Liabilities      

Owners' Equity (Net Worth)      

Total Liabilities & Net Worth      

 Executive Summary

STARTUP COSTS
How much money will you need to get your business started?
Hint: Refer back to Part 5 of the plan, where you analyzed the costs involved in running your
business. Approximately how much will you need to get your business started?
     

FINANCING
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?
Hint: Refer to classroom discussions, textbook assignments, and online resources for
information on securities such as stocks and bonds, Financial Risk and Risk Management and
for more information on sources of short-term and long-term funds.
     

EXECUTIVE SUMMARY
Now, create an executive summary for your business plan. The executive summary should
be brief—no more than 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, copy and paste it so that it falls at the
beginning of your business plan, as the very first element.