This assignment is about writing a business plan.
The Business Plan is to include these sections as headings
1. Line of business(1mark)
? Name of company ?
? Domain name (that you have checked is available) ?
? The essential nature of the goods, services or other business model that ?will support an income stream (one sentence) ?
2. Setup and maintenance costs (3 marks)
? Find two domain name and website hosts and show why you have chosen one for your business (how it is better for your business than the other) ?
? You must make a sensible estimate of labour and any other costs. If you want to be an employee (do some of the work) then you must include a living wage for yourself. Your website must be updated regularly and customer complaints handled so this will involve labour regardless of your business model. You may also need to dispatch goods or negotiate supplies. You also need some accounting services for tax at the least. Make a guess at how many of these manpower needs you have and estimate the cost of staff. ?
? Your costs will include equipment so you can answer emails (or visits from the fraud squad if you do not intend to answer customer complaints) and this needs housing. You will not be penalised if you guess incorrectly how much rent you will need, but you must include all the important costs of setting up your business. ?
3. Marketing plan (6 marks) ?
? the nature of your intended customers – age? Income levels? Related interests? (any or all of these, but please be specific. You need to understand at least one large group that will want to do business with you so you can cater to them.)
? the way in which your business will compete – this should include details ?of two competitors and their weaknesses that you will exploit. You may not choose to compete on price unless you have a sensible reason why you can source goods cheaper than other businesses. The best forms of competition include a better understanding of the types of people you are selling to. Show how the customers will see value from doing business with you. ?
? The way you intend to attract customers to come and try your website – obviously not features of the website as these only relate once the customer has found you. Please do not make sweeping statements like “I will use social media. If you use a marketing channel say how that channel will be used to directly put your URL in the face of your customer. ?
? the way you will have them see value in staying and returning to the site often – this must relate to the customer you identified in the first point above – why would that person want to stay and return? ?
? the way you intend to convert visitors to paying customers. This is your value proposition. It should be obvious in your plan that you have a way of giving value that your competitors do not. ?
4. Revenue model (4 marks)
• how much income from what source (this allows you to see if the ?resources from section 3 will be available). ?
• a normal answer would indicate how much money will be made from ?each sale and how many sales will be made for the year. If you use a more complex revenue stream then you can just make an estimate that includes the number of transactions that will be needed to cover costs. ?
• Revenue models are covered in the lectures. They include profit from sales, subscription and business alliances (such as advertising revenue). If using advertising then your customer is really the advertiser and you must write your business plan in terms of those advertisers and your value proposition to them. ?
• There are no accounting prerequisites for this subject but you must have a NUMERICAL answer that tells your investor how much money will be made in a year if your sales go to plan. ?
5. Purpose of introducing e-commerce(4marks) ?
• the way that being on the internet improves the business or ?
• the essential difference between your online store and a physical store ?
• this must not be a simple repetition of the lecture notes, but choosing the ?relevant value from the advantages listed there ?
• No marks will be given if there is no difference between your online store ?and a competitor who does not use the internet. ?
A suggested approach for thinking through the Business Plan and some hints for possible decisions.
(see above for the format you must use, this part is only to help generate ideas)
This plan is a presentation to the Board of Management, financiers and senior management.
What features will give your organization a competitive advantage?
• Possibilities include:
• Developed a niche market ?
• A unique product, service or business alliance ?
• You have added skill in eg designing individual items for each customer ?
• Processes (particularly added value for the customer that does not involve cost, ?such as creating a community through provision of customer interaction, or ?providing value through information gathered from free sources) ?
• Individual contracts (so that suppliers or customers are locked in) ?
• Patents or trade marks ?
Description of business should include most of: ?
• Nature of business and product/service ?
• Unique features of product/service ?
• Revenue plan and expectations for growth of product/market (where do you ?expect the business to be in the future) The revenue plan should be a simple statement of where the money is coming from and how much you expect to make from each customer and how many customers you expect to have. Only a few of you have formal accounting qualifications so we expect an ordinary persons expression of costs in no particular format
• Suppliers and partnerships ?
• Management – Personnel, Background and Experience, Responsibilities ?
A good plan will be the result of thinking through the four “acts.” If you have answers to these for your business and made them clear in your plan then you probably have a workable plan:
• What is the nature of the customers you are aiming at (where might they find your advertising or web site?) ?
• Advertise where your customers look, eg in local paper, nightclub, sporting venue You should understand why a person from your expected customers would want to come to your site ?
• Methods of engendering trust and quality eg well designed letterheads, ?
• CRM – referrals, profiling (how will an established customer be treated ?differently?) ?
• How will the site reflect this market – what ‘look and feel’ do you intend to appeal ?to the customers? If your customers are teenagers they would want more fun ?elements than an elderly citizens home ?
• Why your product/service is better and what value will your customers see in the ?web site? What do you imagine a visitor would say to a friend of theirs about why your site should be visited ?
• Give value to newcomers instantly. Things like the latest gossip or news can be of value to your customers and cost you nothing. A simple thing is to allow customers to talk to each other. You can create a community that your customers will want to come to each day ?
• treat old customers personally – remember what they normally buy and offer it to them. Make sure a logged in customer gets to do common transactions easily. ?
• Anticipate what visitors will want to do and make that clear and up front. A customer should see something on your front page that tells them clearly they have come to the right place. Things like “company history” and such that visitors MIGHT look at should be in the background and the value your company offers should be up front. ?
• Make it clear how the customer will get value for money ?
• What processes do people have for decision making? ?
• Staff consultation – how do you assure customers they can communicate and get ?a response ?
• Specials, requirements matching needs, personalisation
• Full order instructions ?
• Ease of data input (screens and form construction) ?
• Payment method – cash, 30 day invoice, cards, cheques, subscription ?
• Fulfilment – how will any physical goods be delivered, how can electronic goods ?be protected (do not promise free delivery unless you have built it into your price structure. This is a business subject – we do not plan businesses that do not pay!!) ?