MEco2 Business Plan

8/8/2019 MEco2 Business Plan

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Instructor: Queenie Fernandes

MANAGERIAL ECONOMICS II

ASSIGNMENT: BUSINESS PLAN

SUBMISSION DATE: Saturday 29th November 2008

Typewritten Submissions: Typed, single-spaced, 11pt Times/Arial font

Plans must address the creation of a new business anywhere in india [a democratic, market

economy with full liberalization and privatization] and not the expansion of an existingbusiness. Limit your plan to only what is asked below.

Total Page Count – 5 pages. There is no need for a title page

As you progress through the plan cover the following:

⇒ Describe the market problem/opportunity

⇒ Describe your product or service and how it will meet this opportunity

⇒ Describe how your firm will generate revenues and profits

⇒ How large is your target market and your competition?

⇒ Why is your product/service better than anything else in the market?

You will be graded on the following:

⇒ There is a market - a group of buyers willing and able to pay - for your product or

service.

⇒ The product or service fits well with the industry and geographic market you describe.

⇒ Your product or service will be marketed and sold successfully to generate revenues

that will, in time, cover costs and provide an attractive return to investors.

⇒ Your firm has an advantage over competitors.

⇒ The new business is both viable and sustainable.

⇒ There is a convincing plan for meeting any operational challenges.

⇒ You have anticipated most probable contingencies.

⇒ The plan works as both a planning tool and a selling tool, ie., that the plan is at once

thorough and convincing to investors.

Use the following guidelines:

1. Executive Summary

2. General Company Description

3. Products and Services

4. Marketing Plan

5. Operational Plan

6. Financial Plan

1. Executive Summary (Half page)

Write this section last. Include everything that you would cover in a five-minute interview.

Explain the fundamentals of the proposed business: What will your product be? Who will

your customers be? Who are the owners? What do you think the future holds for your

business and your industry? Make it enthusiastic, professional, complete, and concise.

2. General Company Description (Half page)

What business will you be in? What will you do?

Mission Statement: Many companies have a brief mission statement, usually in 30 words or

fewer, explaining their reason for being and their guiding principles.

Company Goals and Objectives: Goals are destinations—where you want your business tobe. Objectives are progress markers along the way to goal achievement. For example, a goal

might be to have a healthy, successful company that is a leader in customer service and that

has a loyal customer following. Objectives might be annual sales targets and some specific




measures of customer satisfaction.

Legal form of ownership: Sole proprietor, Partnership, Pvt. Limited? Why have you selected

this form?

3. Products and Services

Describe briefly your products or services. What factors will give you competitive

advantages or disadvantages? Examples include level of quality or unique or proprietary

features.4. Operational Plan

Explain the daily operation of the business, its location, equipment, people, processes, and

surrounding environment.

5. Financial Plan – you only need to do the profit & loss

Owners will often have to draw on personal assets to finance the business, and these

statements will show what is available. Bankers and investors usually want this information

as well. The financial plan consists of a profit and loss projection, a projected balance sheet,

and a break-even calculation. Together they constitute a reasonable estimate of your

company's financial future. More important, the process of thinking through the financial

plan will improve your insight into the inner financial workings of your company.

Profit and Loss Projection

Many business owners think of the profit and loss projection as the center-piece of their plan.

This is where you put it all together in numbers and get an idea of what it will take to make a

profit and be successful.

Your sales projections will come from a sales forecast in which you forecast sales, cost of

goods sold, expenses, and profit month-by-month for one year.

Profit projections should be accompanied by a narrative explaining the major assumptions

used to estimate company income and expenses.

A profit and loss statement, also known as a P&L, or income statement, gives ameasurement of the activity of a business over some period of time, including a month,

quarter, or a year.

The P&L is important, because it tells the profitability of a business. The profit and loss

statement's main items are revenue, expenses, and profit (or loss).

The basic format (template) is:

REVENUE

- cost of goods sold

= GROSS PROFIT- operating expenses

= OPERATING INCOME

+/- other income or expenses

= EARNINGS BEFORE TAXES

- income taxes

= NET EARNINGS

DEFINITIONS:

REVENUE is compensation received for your product or services.

COST OF GOODS SOLD are the variable expenses related to the sale of your product.

OPERATING EXPENSES are fixed expenses, such as rent, and utilities.

aOPERATING INCOME is profit after operating income.

EARNINGS BEFORE TAXES is income including other income and expenses, but




before taxes.

INCOME TAXES are federal, state, and local taxes.

NET EARNINGS is the profit earned by the business, and it includes all expenses,

including taxes.

Follow the table and explanations given in your text book as well.

Documents

MEco2 Business Plan