TMA Topic overview: Business Plan / Part B
One vehicle for acquiring an understanding of the entrepreneurial process is through the preparation of a start-up business plan. The focus of this TMA is to select a business idea and create a part of a business plan. Writing a business plan requires you to ask tough questions about the nature of the business.
- What are the benefits of your product or service?
- What is the target market and how will you penetrate it?
- What are the financial implications of the plan?
The Written Plan: In this TMA you will be preparing a part of a business plan containing the components explained below. The body of the written partial business plan should be no more than 6 pages. (a detailed guideline is provided at the end of your TMA).
Identify the target market for the product/service by Discussing who the customers for the product(s) or service(s) are or will be.
Show who and where the major purchasers for the product or service are in each market segment. Include national regions and foreign countries, as appropriate.
Indicate whether customers are easily reached and receptive, how customers buy (wholesale, through manufacturers' representatives, etc.).
Indicate how fast you believe your product or service will be accepted in the market.
Show for 3 years the size of the current total market and the share you will have, by market segment, and / or region, and / or country, for the product or service you will offer, in units, dollars, and potential profitability.
Estimate the potential annual growth for at least 3 years of the total market for your product(s) or service(s) for each major customer group, region, or country, as appropriate.
Discuss the major factors affecting market growth (e.g., industry trends, socioeconomic trends, government policy, environmental impacts, and population shifts) and review previous trends in the market. Any differences between past and projected annual growth rates need to be explained.
Make a realistic assessment of the strengths and weaknesses of competitors. Assess the substitute and / or alternative products and services and list the companies that supply them, both domestic and foreign, as appropriate.
Compare competing and substitute products or services on the basis of market share, quality, price, performance, delivery, timing, service, warranties, and other pertinent features.
Indicate any knowledge of competitors' actions that could lead you to new or improved products and an advantageous position. For example, discuss whether competitors are simply sluggish or nonresponsive or are asleep at the switch.
Identify the strengths and weaknesses of the competing companies and determine each competitor's market share, sales, distribution methods, and production capabilities.
Review the financial position, resources, costs, and profitability of the competition and their profit trends.
Indicate who are the service, pricing, performance, cost, and quality leaders. Give the reasons why any companies have entered or dropped out of the market in recent years.
list the three or four key competitors and why in your opinion customers buy from them or sometimes leave them.
From what you know about the competitors' operations, explain why you think they are vulnerable and you can capture a share of their business. What makes you think it will be easy or difficult to compete with them.