BUSINESS PLAN

Prepare a business plan for the venture that you identified in assignments 1 and 2.

The aspects you should address are:

Business Overview: The business overview is a clear description of your business in practical terms. It is a summary of “who”, “what”, “where”, “when” and “why” of the business which gives the reader a clear understanding of how the business will function.

Product / Service: Describe and define what the business is going to offer the target market.

Market Analysis: The market analysis outlines what market the product / service will serve and why.

Competition: Defines competitors and describes the benefit of your service or product to the target market in comparison to your competitors.

Marketing Strategy: Identify the marketing objectives of the product or service including the specific elements of the marketing mix.

Business Structure and Management: Describe the ownership structure and management of your business.

Finances � financial statements / projections: A clear understanding on how the business will be financed to ensure its financial health.

Financial forecasts should include:

Basic assumptions & information
Sales mix forecast (monthly for year 1, quarterly years 2 & 3)
Cash flow forecast (monthly for year 1, quarterly years 2 & 3)
Income statement (years 1 & 2)
Statement of Financial Position (years 1 & 2)
Statement of Cash Flows (years 1 & 2)
Statement of Changes in Equity (years 1 & 2)
Personal expenses (monthly for year 1)
Cost-volume-profit analysis including assumptions (years 1 & 2)
Calculate the financial statement ratios e.g. calculate two ratios on each area – profitability, liquidity and financial (long-term) stability and analysis these forecasts. (years 1 & 2)
Sensitivity analysis – optimistic / most likely / pessimistic including analysis (year 1 only)
(The amount of cash you have available for the venture from personal assets, including assistance from friends and family is AUD$15,000. You may of course seek additional debt or equity funding from other sources.)

Action Plan: An outline of how you are going to achieve your business plans objectives.

Appendix: An appendix or second volume should be included with the submission of the business plan. This will hold all supporting documentation, which backs up the main report.

Rationale
This assessment task has been designed to provide you with the experience in preparing a new business plan by practical use of the techniques and models you have learnt in the subject. Specifically, this assignment assesses your ability to:

list and define the key characteristics and issues involved in starting and running a small business;
identify the sources of finance available to a small business;
describe the components of basic accounting reports and use accounting reports and tools such as budgeting and cost-volume-profit analysis for decision-making;
analyse and evaluate accounting reports using financial ratios and trend data that highlight the profitability, liquidity and solvency/gearing of a small business;
collate data from many sources and create information in the form of reports for a small business.