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December 2013.

Business Plan Assignment Course: APS432

Introduction The term project is a full Business Plan and it is intended to give you "hands on" experience in developing a document that is absolutely essential if you ever get into business for yourself. Preparing a Business Plan is not a simple exercise, nor an easy "lab report". The preparation of a "professional" BP is a lot of work, something like a half-year Thesis. This work is to be done by you, personally, but, there is much help on the Internet, so please feel free to use any/all such assistance but make sure you give due credit by citing the sources you use. We can not overemphasise the value of good communication skills, oral in the classroom and written in the reports. Therefore, there will be some marks on the presentation itself. Now this does not mean that you should go all out and be fancy with pictures, unusual fonts, etc. - this means a nice clean presentation, bound using Cerlox or some other suitable process. Choice to Make You must decide early if you will pursue either a classic BP or an "app" BP. So once you made that decision then either go to CLASSIC or APP below. There are definitions of what each of these mean. But NOTE that you will need approval for either type of BP from your instructor as soon as possible and before you spend a whole lot of time and effort in something that will not be approved. Finally, don't think for a moment that one or the other will be easier to do because we will be demanding proof that you understand all the concepts, albeit, in the context of your own BP idea. What it is all about The term project involves the preparation of a full and complete Business Plan for a company you select as Your Venture. This requires you to work hard for the information you need. First, you must identify a new business idea, then, evaluate its potential, and develop a complete Business Plan to exploit the opportunity. The BP can be written on any number of ideas, including a brand new venture based on an innovation you make; a startup in an industry you well know (perhaps you worked there before); a new market or technology for an established company. Perhaps you will use the business idea you developed during the "Business Ideation" Assignment - but any other ideas you come up with and is acceptable to the instructor will be fine. Also, under certain circumstances and with instructor approval, you can write it on an intrapreneurial effort within an existing larger company; a take-over of an existing company in trouble which needs new ideas; or major change in direction for an established, but ailing firm. However, the idea must be sound and the opportunity nontrivial.

Some Ideas are NOT Acceptable for the Business Plan Many businesses are not suitable to have a BP written on and therefore not acceptable for this course, such as: professional services (law, accounting, medicine), house renovation, art related creative businesses, and personal services types (barber, masseur, cab driver, restaurant) etc. Furthermore, projects, which are typically not businesses, such as real estate projects and oil drilling projects for example, are also unacceptable. The idea, after all, is to teach you how to prepare a competent Business Plan so that you know how to do it when you will need it for real! Hence, you must do as good a job on this as you can. It is your sole responsibility to search out the new business opportunity. Some Advice A few comments about the term project are presented below (bears repeating from the Syllabus): 1. Do not put it off or delay starting it because you are busy at the moment, you will run out of time, for sure! It is a big job, so there is no time to delay! 2. Plan what you have to do, put some deadlines on the action items, and get on with it. 3. Consider what the subject business will be, choose the approach and get to work immediately. 4. Don't forget to include an Executive Summary (this is necessary, but, it should be no longer than to one page) for the project and is done as the very last thing, this is a key component! 5. Conclusions and Recommendations are important sections 6. The Financial section is often a real problem and the BP suffers greatly from this, so take the time required to do this well. 7. A letter of Transmittal (this means a cover letter) is also a requirement. The term project is a lot of work, at least 60 hours altogether, and includes work and research which you have to do in the business world. Get started early and keep at it. This advice is worth remembering because this is an unusually demanding course! Many students leave things to the last minute, what with all the other assignments etc. due, and then hastily prepare something for their term project. Worse yet, some expect that the professor will consider favourably some "problem" they have had with appointments, time constraints, computers problems (a favourite of late) etc. We do not accept any excuses whatsoever, the deadline means exactly that - you deliver on time (or before), no excuses so don't ask for "understanding"! Don't work hard and then get a 40% discount because you are late! CLASSIC These businesses are what your Dad/Mom started (if they did), that is any industry such as manufacturing, technical services such as auto repair shops, machine shops, refurbishing firms (transmissions, etc.), wholesale, import/export, trucking/logistics, chemical industries, electric motors and the like, pumps, motors, displays, and the list is

endless. This also includes services firms such as cleaning, tools rentals, guard services, financial advisers, insurance firms and agents, and the list is endless again. The overarching definition would be that it is in the tangible and "real" world where whatever you do there is a visible results in 3-D. But, whatever you choose, it is almost certain that the BP will have to involve most issues that are dealt with by any business, such as: market research; human resources; technology definition; financial data; pro-forma sales and expenses projections; product definition; product costing and profit objectives. Here, the Business Plan, on the average, will be about 20-25 pages long (cover page, table of contents, Appendices etc. do not count) typed, single-spaced. You will have to have all the sections of a BP as shown in the lecture notes. APP This type of BP will be substantially different from the Classic one and will have to be approached very differently too BUT the same issues must be taken into consideration. The types of acceptable projects under this class are all the mobile apps, software applications for PCs, tablets and other computing machinery, software embedded in some hardware such as an ASIC based board or machine, RFID based applications, WiFi, online payments, communications tools and many other such projects. In todays world the definition of a "software business" requires the understanding of a very dynamic market place. Product life cycles are measured in months rather than years, so continual change is very much a part of life in this domain. In order to expedite the generation of a business model Alexander Osterwalder and Yves Pigneur defined a methodology that we have interpreted in the following way: 1. Value Proposition a. Which Customer Problems are you helping to solve - Customer Pains b. Which Customer Needs are we satisfying c. What are the key features of the software that match your customer problem/needs d. What is your Hypothesis of how your product fits the market need Customer Segment a. Who are the most important customers? b. What is their archetype? c. What job do they want for us to get done for them? d. Who are the paying customers? e. Who are the users? Channel a. Through which channel customers want to be reached? Customer Relationships a. How are we going to get, keep and grow key customers? Revenue Streams


3. 4. 5.


7. 8.


a. How do we make money? b. Pricing strategies (eg: premium, subscription, download, advertising) Key Partners a. Who are the key partners and why? b. Who are the key suppliers? Key Activities a. Software development critical path Key Resources a. Financial b. Physical c. Intellectual Property d. Human resources Cost Structure a. What are the most important costs inherent to our business model? b. Fixed costs c. Variable costs d. Size of the opportunity/market

Conclusions As you see from above, both types of BPs will cover essentially the same topics but the content will be quite different. Good luck with either approach, but do a good job whichever you choose!