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    Business Administration (BA) 101
                                                                                            School of Business Administration

                                       THE BUSINESS PLAN PROJECT

                   “If you don't know where you’re going, you’ll wind up somewhere else.”
                                   Yogi Berra, Distinguished Philosopher and Record Holder for most
                                    World Series Championships by Individual Player (10)

Expectations for The Business Plan Project

1. Preparation and submission of a Business Plan is a mandatory course requirement. Each student
   is to join and participate in a Business Team that will be responsible for a Business Plan. Each
   Team’s submission should be unique work product.

2. The Business Plan is a single document that will be submitted and graded in two phases. The
   “Strategic Concept Plan” is the First Phase and the “Final Plan” is the Second Phase. The “Final
   Plan” includes the “Strategic Concept Plan.”
3. The Plan should be organized to include all the requirements of and follow the order described for
   the Strategic Concept Plan submission and the Final Plan submission. A Grading Form will be
   attached to and returned with scoring, comments and feedback.
4. A Business Plan’s purpose is to obtain commitments for the resources necessary to start a new
   venture. Business Plans are frequently requested by financing providers, e.g., commercial banks,
   private equity investors and venture capitalists. Plan documents should be thoroughly vetted for
   logical and statistical consistency. Language and terminology should have its common usage.
   Completeness of scope and insight is preferred to excessive detail. Writing assistance is available
   from the PSU Writing Center, Cramer Hall 188F (www.writingcenter.pdx.edu).
5. The selected business opportunity will require defining (a) customer needs (What problem does
   the business’s product or service solve?); (b) the product or service being offered (How does
   product or service solve the problem?); and (c) the concept’s market and likelihood of financial
   success (Will enough customers buy the product or service to earn a worthwhile profit?).
6. Preparing the Business Plan will require considerable research and time outside of regular class
   meetings. The sources of information used should be cited according to generally accepted
   academic standards. The minimum number of cited sources is five (5). The course textbook is
   not an acceptable source. The preferred style guide is the Publication Manual of the American
   Psychological Association (5th ed.). (2001). Washington, DC: American Psychological
   Association. See www.apastyle.org/elecref.html.
7. The course materials include several acceptable examples, e.g., Pages 607-611 of Madura (2010)
   and Sample Plans in the Course Weblog. Other useful information is available from the Small
   Business Administration (www.sba.gov/starting_business/ planning/basic.html) and the PSU
   Library Course Page (www.lib.pdx.edu/instruction/courserelated/bus101.html). Students are
   encouraged to use the PSU Library (www.lib.pdx.edu) and the Business Librarian
INTRODUCTION TO BUSINESS (BA-101)                                                               THE BUSINESS PLAN PROJECT
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   8. Procrastination seldom produces superior results: Successful teams (a) assign tasks as soon as
      possible and (b) identify a member who will be responsible for coordinating both the team’s work
      and its “purpose.” Note: this member will not necessarily be the team’s “leader.” Leaders are
      often over-rated. What’s needed is “situational leadership.”
   9. Teams should organize and select a business opportunity during the course’s first “Team Time.”
      Tasks might be divided according to the experience or interests of team members and the Plan’s
      functional elements. Teams should develop a schedule of tasks and deadlines coupled with
      periodic meetings and frequent consultations. Maximize team performance by organizing
      member-produced work into an innovative and valuable outcome: The goal is to produce
      something that is more than the sum of its individual parts. The Course Instructor is available to
      assist Teams with all these matters.

   1. One copy for each submission. Submissions are due when the class period begins. Electronic
      submissions will not be accepted. Submissions should be stapled. Presentation covers or report
      folders are not necessary. Submission due dates are specified in the Course Syllabus. The
      submission will be returned with its grading form.
   2. Team Member Evaluations may be submitted after the Course’s final regularly scheduled
      meeting, but not later than the Final Examination date. Evaluations may be separately submitted
      in a confidential, sealed envelope if privacy concerns arise. Electronic submissions will be
      accepted only for Team Member Evaluations.

   Adjustments and Deductions to Awarded Grades
   1. Submissions received after their due date will be penalized at the rate of 5 points for each
      delinquent calendar day.
   2. Compliance with the “cited sources” requirement will be determined when the Final Plan is
      reviewed. One point will be deducted for each reference fewer than the required number.

             POINTS AWARDED                                           CRITERIA
                                     Contents, presentation, analysis and insights indicate thorough understanding
                                     of material and mastery of subject; Apparent that extraordinary work and
                                     effort was expended; Analysis and reasoning is fully developed and supported.
                    3 to 4           Includes all required elements; Conclusions and analysis are complete and
                  (Average)          accurate. Work indicates quality and effort that is more than acceptable.
                                     All required elements not included; Unsupported conclusions or insufficient
                   1 to 2
                                     analysis or research; Narrative not logical and consistent; Readily apparent
           (Needs Improvement)
                                     errors or inconsistencies; Content and presentation below expected standard.
       Free-Rider Adjustment. Every team member is expected to contribute in a substantial way to each team-based
              requirement and assignment. If during the term or based on the Team Member Evaluations, it is
              found that a team member has not contributed to their team’s work, that member's “Team
              Contribution” score will be adjusted accordingly. Any such adjustment could cause a student’s Team
              Contribution score to be negative.
INTRODUCTION TO BUSINESS (BA-101)                                                              THE BUSINESS PLAN PROJECT
                                                                                                                  PAGE 3

                                 THE BUSINESS PLAN PROJECT
                             STRATEGIC CONCEPT PLAN SUBMISSION

   Cover Page         Project Name and other identifying characteristics, if applicable
                      Team Name and Members
                      Class Identification and Section
   Length             Not to exceed 10 pages, single-spaced, 1-inch margins and 12-point font, not
                      including appendixes and exhibits (See “Final Business Plan” for additional
                      information about appendixes and exhibits).
   Standard           The Plan should be logically organized and fully describe the opportunity’s strategic
                      elements. It should persuade the reader to take the desired action. There should be
                      no spelling, typographical or grammatical errors.

   Overall Strategic Concept (5 Possible Points)
   Explain why the business opportunity is compelling. Why will prospective customers switch to,
   and stay loyal to, the product or service being offered? Outline key facts, conditions, competitor
   vulnerabilities, industry trends or other evidence that define the opportunity and assure its success.

   Critical Events Graphic (5 Points)
   A graphical representation of the scheduled timing and interrelationships of the major events
   necessary to initialize the business. A month-by-month timeline of activities might describe the
   timing of activities such as product development, market planning, sales programs, production and

   Organizational Issues (15 Points)
   1. Team Name, Product or Service Name and Mission Statement. Explain how the team name and
      product or service name relate to or will be identified with the product or service and the team’s
      membership. The Mission Statement defines the purpose for the business, team and product.
   2. Organizational Form. Identify the legal form selected for the business. Explain the benefits,
      disadvantages and reason for the selected organizational form. Discuss the selected form’s
      appropriateness from the perspectives of liability, taxation, capital needs and transferability of
      ownership interests.
   3. Functional Structure and Management Requirements. Identify the business’s basic functions,
      e.g., administration, marketing, finance, manufacturing, etc. Explain the duties and
      responsibilities of each function’s manager.
INTRODUCTION TO BUSINESS (BA-101)                                                             THE BUSINESS PLAN PROJECT
                                                                                                                PAGE 4

   Market Feasibility and Viability (20 Points)
   1. Product/Process Identification. Describe the product or service to be produced and sold.
      Discuss its application, emphasizing any unique features that will create or add significant
      value. Describe its current state of development and when it will be tested and ready to be
      introduced. The description should not only include the product or service’s physical attributes,
      but also its intangible or likely-to-be-perceived features.
   2.   Product Differentiation Strategy. Describe (a) how the product or service will be substantively
        different from present and likely future competitors, e.g., innovative features, cost or timing
        advantage, and (b) why this difference or differences will be important and valuable to
        prospective customers. Highlight differences between product or service and likely competitors
        in terms of pricing, quality, value or features. Will the product or service give to prospective
        customers a faster, better or cheaper solution to the problem identified as the business’s core
        purpose? Discuss whether these differences will be sufficient to obtain a competitive advantage
        that can be sustained through increasing market share. Consider making a table that shows a
        direct feature-by-feature, side-by-side comparison of your product or service with its
        competitors. This table’s last column might answer the question, “The difference between our
        product and its competitors that makes it better is _________.” Consider also including a
        “Perceptual Map” showing the product or service’s market position relative to its competitors.
   3. Market Identification and Segmentation Analysis Strategy. Identify the product or service’s
      group or set of potential customers. Describe the common needs and characteristics of these
      customers. Discuss how these customers are segmented in terms of (a) geographic variables,
      e.g., region, climate, urban or rural, etc., (b) demographic variables, e.g., age, gender, family
      size and life-cycle, income, occupation, education, social class, etc., (c) psychographic
      variables, e.g., activities, interests, opinions, values, attitudes, etc., and (d) behavioristic
      variables, e.g., brand loyalty, occasions (holidays or events), user status (potential, first-time or
      regular), etc.,
   4. Distribution Channel Strategy. Discuss how product or service will be made available to
      customers. Discuss how prospective customers might learn about and decide to buy the
      business’s product or service. Are they impulse-purchasers or are purchasing decisions made
      only after detailed analysis? Describe (a) number and type of distribution channels that might
      be used and (b) costs and benefits of other methods. Discuss any risks of “channel conflict.”
      Every element of customer/product interaction should be analyzed in the business’s distribution
      strategy; e.g., information, purchase, payment, delivery, assembly, supplies, repairs, upgrades
      and disposal.

   International Element (5 Possible Points)
   Discuss Plan’s international element or features. If international sales are involved, describe
   arrangements for sales, distribution, shipping, insurance, credit and collections. Discuss techniques
   for adapting to international and cultural diversity of local markets.
INTRODUCTION TO BUSINESS (BA-101)                                                               THE BUSINESS PLAN PROJECT
                                                                                                                  PAGE 5

                                       THE BUSINESS PLAN PROJECT
                                         FINAL PLAN SUBMISSION

   Cover Page         Project Name and other identifying characteristics, if applicable
                      Team Name and Members
                      Class Identification and Section
   Length             Not to exceed 20 pages, single-spaced, 1-inch margins and 12-point font, excluding
                      appendixes and exhibits.

                      NOTE:         The length requirement includes insertion of the Concept Plan submission
                                    into the Final Plan. The order of the Final Plan and the insertions to be
                                    made from the Concept Plan is described below.

   Appendixes Information that is pertinent but so extensive and detailed that it may detract
   and Exhibits from the presentation’s effectiveness should be included in an Appendix or attached
                as an Exhibit. Examples of necessary information that could be in an Appendix or
                attached as an Exhibit might include product specifications or photographs,
                references, suppliers of critical components, site pictures and plans, technical
                analyses, reports from consultants or technical experts, regulatory approvals, licenses
                or notices, etc.

   Key Strategic Concept (5 Possible Points)
   Insert Overall Strategic Concept from Strategic Concept Plan submission.

   Expand Strategic Concept Plan’s discussion of “what” constitutes the strategic concept into “why”
   it is compelling and “how” it will accomplish its operational and financial objectives. Describe how
   the business’s product or service will fundamentally change the way potential customers now do
   something. How will the product or service change the way people live or work?

   Executive Summary (5 Possible Points)
   Provide a brief but comprehensive summary of all aspects of the business opportunity, why it exists
   and how it will be exploited. Essential element will be describing why team can execute plan and
   deal with every challenge. Operational details should include how the product or service will gain
   market entry and sustain its competitive advantage. The Executive Summary is a concise synthesis
   of the business’s opportunity and methods and the team’s capability to execute it.

   Critical Events and Milestones Graphic (5 Possible Points)
   Insert Critical Events Graphic from Strategic Concept Plan Submission and add information
   described below.
INTRODUCTION TO BUSINESS (BA-101)                                                            THE BUSINESS PLAN PROJECT
                                                                                                               PAGE 6

   A schedule identifying the milestones essential to the business’s operational success and the timing
   of these events is required. Examples might include (a) production start-up, (b) first order receipt,
   (c) first sale delivery and (d) first cash- or accounts-receivable payment. Additional graphical aids
   could include (a) personnel needs as production and sales volume increases and (b) impacts on
   activities of schedule acceleration or slippage.

   Insert Organizational Issues Section from Strategic Concept Plan Submission

   Business Management Plan (25 Possible Points)
   1. Managerial Structure. Describe how each function will be managed and the knowledge,
      experience and skills needed by each function’s manager. An organization chart might be
      appended to show the business’s managerial structure, span-of-control and reporting
   2. Corporate Governance: Policies and Monitoring. Will decision-making be centralized or
      decentralized? How will the organization separate policy-making decisions from managerial,
      daily operating decisions? How will any “agency problems” be addressed? Who will be
      responsible for monitoring the organization’s strategic and operational results? How will that be
   3.    Key Advisers and Supportive Services. Will the business contract with any third-party
        professionals for legal, financial and other operational advice? Identify and describe the roles of
        any attorneys, accountants and consultants who might be engaged or used in some manner.
        How will the business obtain useful, unbiased advice for evaluating its strategic and tactical
   4. Societal Responsibility. Discuss possible roles and activities the business might take or promote
      that will contribute to the community’s “greater good.” How will these roles or activities make
      a significant, positive contribution? How will the business sustain its commitment to this
   5. Production, Manufacturing or Operations. How will the business perform its core functions?
      Describe the facilities and improvements that will be needed. Describe the business’s
      manufacturing or production processes, emphasizing the “make-or-buy” decision in terms of
      production, cost and capability issues. Describe the business’s approach to quality control,
      production monitoring and inventory management. Discuss customer interactions and cash
      flows, e.g., how does the customer purchase the product or service; how will it be delivered;
      how are installation, warranty and service issues handled, etc.?

   Insert Market Feasibility and Viability Section from Strategic Concept Plan Submission

   Marketing Implementation Plan (15 Possible Points)
   1. Sales Tactics. Describe the methods that will be used, e.g., internal sales force, sales
      representatives, direct-mail, distributors or third-party sales organizations, to make sales and
      distribute the product or service. Discuss methods or other incentives likely to increase sales
      volume, effectiveness and customer loyalty.
INTRODUCTION TO BUSINESS (BA-101)                                                          THE BUSINESS PLAN PROJECT
                                                                                                             PAGE 7

   2. Service and Warranty Policies. Describe all warranties that will be offered. Distinguish
      between any “Express Warranties,” e.g., time- and use-specific limitations, exclusions from or
      conditions to coverage and actions and whether defective products will be repaired or replaced:
      and “Value-proposition Warranties,” e.g., actions that might be taken to fulfill buyer’s
      expectations of product’s value and to protect seller’s reputation. Will the business provide
      after-sale service or use independent contractors? Have any funds been budgeted for warranty
      service calls, parts and labor. Discuss the importance of after-sale service and warranties to
      potential customers. Compare competitor’s warranty and service policies with business’s
   3. Ongoing Market Evaluation. Discuss program and methods for ongoing evaluation of target
      market. Explain how strategic information will be (A) obtained to assess changing customer
      tastes and preferences and (B) used for product-improvement and new-product programs,
      product pricing and service and future production capacity needs.

   Insert International Element from Strategic Concept Plan Submission

   Financial Plan (25 Possible Points)
   1. Capital Budgeting Needs. Present in tabular form the amounts and timing of funds to acquire
      the capital equipment and to pay start-up and other pre-development expenses necessary for the
      business to begin operating. Identify and include (a) a reasonable contingency for unforeseeable
      occurrences, (b) funds available to the business’s founders for their personal living expenses
      until financial stability is achieved and (c) an amount of working capital necessary to make up
      any cash flow deficiencies until the business achieves break-even operations.
   2. Operational Cash Flows. Project the business’s sources and uses of cash flows for its first three
      years of operation. Model this projection according to the first three stages of the Product Life
      Cycle: Introduction, Growth and Maturity. Project working capital requirements (difference
      between cash inflows and cash needs) for relevant periods. Identify and discuss in detail the
      assumptions that support the projection, e.g., sales volumes, unit prices, growth rates, fixed and
      variable costs, inventory replenishments and debt repayment. Do not include taxes or interest.
   3. Aggregate Funding Needs. Compute total financing requirements for all capital and operational
      needs until financial stability (break-even point) is achieved.
   4. Contingencies and Cash Flow Sensitivities. Discuss possible changes in critical assumptions of
      the financing strategy and the impacts of these changes on cash flows. Examples of changed
      assumptions might include lower-than-forecast sales or customers buying on terms instead of
      paying cash.
   5. Financial Controls and Management Practices. Describe the business’s financial reporting and
      performance measurement systems. Discuss monitoring techniques to be used for assessing
      budget compliance and internal strategy analysis. Will there be an “early-warning system” that
      alerts the business’s managers and owners to possible problems? How will the business use this
      information? How will the business know (a) it is operating efficiently, i.e., producing and
      delivering its product or service without wasting any financial or human resources and (b) it is
INTRODUCTION TO BUSINESS (BA-101)                                                             THE BUSINESS PLAN PROJECT
                                                                                                                PAGE 8

        performing effectively, i.e., delivering its strategic purpose consistent with the business’s
        mission statement and shareholder expectations.

   Financing Sources and Form (10 Possible Points)
   1. Capital Structure. Describe likely capital structure, e.g., debt versus equity. Describe sources of
      each and anticipated costs, repayment terms and covenants or conditions.
   2. Long-Term Financial Strategy. Discuss long-term (after three years) financial objectives. Will
      or could business be sold, retained by current ownership or franchised? Does future financial
      planning include an Initial Public Offering (IPO)?

   Critical Risks, Problems and Assumptions (5 Possible Points)
   Describe the risks and consequences of adverse events from the perspectives of the business’s
   industry, its operations, personnel, market positioning, timing and financing. Discuss credibility of
   assumptions concerning sales projections and customer orders. Identify and rank assumptions and
   problems in terms of likely adverse impacts. Discuss plans for minimizing impact of unfavorable
   developments. Discuss the business’s “Plan B,” i.e., how could the business’s investors and
   creditors be repaid if it fails?

   Organization, Clarity and Quality of Presentation (5 Possible Points)
   A presentation that is not logically organized and clearly written cannot be fairly evaluated. The
   expected level of quality is no spelling, grammatical or typographical errors. Two “flaws” to avoid
   are (1) an inconsistent “voice” or writing style and (2) conflicts within elements of the plan. Even
   though the plan will have been produced by several people, it should not sound that way. It should
   flow evenly from one section to the next; readers should “hear” only a “team voice.” Also, nothing
   is worse than having something in one section conflict with something in another. Avoid these
   problems with some sharp-eyed editing done well before the submission due date.

   Preparation of the Plan requires independent research. The sources of information used in the Plan
   should be cited according to generally accepted academic standards. The minimum number of cited
   sources is five (5). The course textbook is not an acceptable source. Points will be deducted for
   each reference less than the required minimum.
   Compliance with this requirement will be determined when the Final Plan is reviewed. The
   preferred style guide is the Publication Manual of the American Psychological Association (5th
   Ed.). (2001). Washington, DC: American Psychological Association. See
   Students are encouraged to use the PSU Writing Center, Cramer Hall 188F
   (www.writingcenter.pdx.edu). Students are also encouraged to use the PSU library
   (www.lib.pdx.edu), the Business Librarian (www.lib.pdx.edu/resources/pathfinders/buslib.html)
   and this Course’s Library Page (www.lib.pdx.edu/instruction/courserelated/bus101.html).

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