3.1 Basic Elements of Business Plan
Entrepreneurship
Marketing
Lesson Plan
Performance Objective
Upon completion of this lesson, the student will explain the need for a well-written business plan.
Specific Objectives
• Students will list and describe the basic elements of a business plan
• Students will describe how to create a business plan
Terms
•
•
•
•
•
•
•
Business Plan – A proposal that describes the new business to potential investors
Sole Proprietorship – One person owning the business
Partnership – Two or more people owning the business
Corporation – Business is a separate, legal entity
S Corporation – Same as a corporation, but income is taxes through shareholders
Marketing Plan – Explains how you plan on selling and promoting your product or service
Executive summary – Usually a one to two page review of the report
Time
This lesson should take three to five days to complete.
Preparation
TEKS Correlations
This lesson, as published, correlates to the following TEKS. Any changes/alterations to the activities may result
in the elimination of any or all of the TEKS listed.
130.344 (c) Knowledge and skills.
(3) The student identifies the importance of a well-written business plan. The student is expected to:
(A) categorize a business plan and the need for a well-orchestrated business plan;
(B) research business plan outlines, resources, and templates using web search engines;
(C) explain a marketing plan, including price competition, non-price competition, market
analysis, competition, marketing research, market segmentation, demographics, and
sales forecasting;
(D) identify a legal plan, including the appropriate form for legal organization, including sole
proprietorship, partnership, corporation, and S corporation;
(E) describe a leadership team;
(F) develop a financial plan;
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1
(G) explain the idea of a harvest plan, including selling the business, going public, releasing cash
flow, using private equity, and liquidating the business; and
(H) create and present a well-orchestrated business plan and critically explain the contents.
Interdisciplinary Correlations
English
110.42(b) Knowledge and skills.
(6) Reading/word identification/vocabulary development. The student uses a variety of strategies to
read unfamiliar words and to build vocabulary. The student is expected to:
(A) expand vocabulary through wide reading, listening, and discussing; and
(B) rely on context to determine meanings of words and phrases such as figurative
language, idioms, multiple meaning words, and technical vocabulary.
(7) Reading/comprehension. The student comprehends selections using a variety of strategies. The
student is expected to:
(F) identify main ideas and their supporting details;
(G) summarize texts; and
(J) read silently with comprehension for a sustained period of time.
Occupational Correlation (O*Net – www.onetonline.org/)
Job Title: General and Operations Manager
O*Net Number: 11.1021.00
Reported Job Titles: Operations Manager, General Manager (GM), Director of Operations, Plant Manager,
Store Manager, Facilities Manager, Plant Superintendent, Vice President of Operations, Warehouse Manager,
Chief Operating Officer (COO)
Tasks
•
•
•
•
•
•
•
•
•
•
Oversee activities directly related to making products or providing services.
Direct and coordinate activities of businesses or departments concerned with the production, pricing,
sales, or distribution of products.
Review financial statements, sales and activity reports, and other performance data to measure
productivity and goal achievement and to determine areas needing cost reduction and program
improvement.
Manage staff, preparing work schedules and assigning specific duties.
Direct and coordinate organization's financial and budget activities to fund operations, maximize
investments, and increase efficiency.
Establish and implement departmental policies, goals, objectives, and procedures, conferring with
board members, organization officials, and staff members as necessary.
Determine staffing requirements, and interview, hire and train new employees, or oversee those
personnel processes.
Plan and direct activities such as sales promotions, coordinating with other department heads as
required.
Determine goods and services to be sold, and set prices and credit terms, based on forecasts of
customer demand.
Locate, select, and procure merchandise for resale, representing management in purchase
negotiations.
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2
Soft Skills: Monitoring, Coordination, Social Perceptiveness, Active Learning, Judgment, and Decision Making
Accommodations for Learning Differences
It is important that lessons accommodate the needs of every learner. These lessons may be modified to
accommodate your students with learning differences by referring to the files found on the Special
Populations page of this website (cte.unt.edu).
Preparation
• Review and familiarize yourself with the terminology, website links, and review elements of a
business plan.
• Have materials and websites ready to go prior to the start of the lesson.
References
• Greene, C. L. (2008). Entrepreneurship ideas in action (4th ed). Mason, OH: Southwestern Cengage.
• Local newspapers
• Business planning websites
Instructional Aids
• “Basic Elements of a Business Plan” Digital Presentation
• Franchise Assignment # 1
• Franchise Rubric
• Compare the Competition Assignment #2
• Compare the Competition Rubric
• Business Ownership Assignment #3
• Business Ownership Rubric
• Basic Elements of a Business Plan Assignment Sheet
• Business Formations – Advantages/Disadvantages
• DECA Images (www.deca.org)
• Internet
Materials Needed
• Construction paper
• Scissors
• Glue
• Poster board
Equipment Needed
• Computers (for students to complete projects)
• Projector (for digital presentation)
Copyright © Texas Education Agency, 2013. All rights reserved.
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Introduction
Learner Preparation
• Ask students to make a list of things they think should be included in a business plan.
o Why is it important to include very extensive information in the business plan?
•
Explain how more complete business plans will receive more attention from banks and other
financial institutions.
•
Ask students to list a business in their community that they think does a good job. Ask them to list the
reasons for their choices. Then give each group a business category (examples: restaurant, hotel,
clothing store, car dealership, airline, etc.), and ask the group to list the advantages that would set
their business apart from the competition. Students should list characteristics that would cause
consumers to select their business over the competition.
•
List sole proprietorship, partnership, and corporation on the board. Give students a table that has the
three forms of business listed. The definition for each type of business ownership should be included in
column 2, advantages for the type of ownership should be listed in column 3, and disadvantages of the
type of ownership should be listed in column 4.
Lesson Introduction
• Break the students into groups of two. Ask students to list a business in their community that they
think does a good job. Ask them to list the reasons for their choices. Then give each group a business
category (examples: restaurant, hotel, clothing store, car dealership, airline, etc.), and ask the group to
list the advantages that would set their business apart from the competition. Students should list
characteristics that would cause consumers to select their business over the competition.
• Ask students to visit a business where they like to shop. Write introductory elements, main body, and
the appendix on the board. Then ask students to give examples of information for a business plan for
the business they visited, which would be included in each section of the business plan.
• The business plan must include information about prospective customers. Ask students to select a city
for their proposed business. Then have students use the Internet to learn more about the
demographics for the city they selected. The U.S. Census Bureau and the specific city’s chamber of
commerce are good websites to find information.
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4
Outline
Outline
Instructor Notes
Introduction
A.
A business plan is a proposal
that describes the new business to
potential investors.
1. Detailed Description – Describe
what the business is, what it will
sell, etc.
List the five parts of the business
plan on the board.
MI
II.
a)
b)
c)
d)
Partnership
Sole Proprietorship
Corporation
S Corporation
2. Skills and Experience –
Describe the experience and talents
of those who are starting the
business.
3. Financial Plan – Detail the
finances of the business. How much
you will be charging, expected
revenue, and expenses and cash
flow for business.
4. Organization – This should
explain how the organization is
setup. Explain who is in charge, and
then explain how the duties are
divided among any other
employees.
5. Marketing plan – This section
explains how you plan on selling and
promoting your product or service.
Where will it be sold? To whom?
How will you reach them?
The business plan provides the
one opportunity to get the
attention of financial institutions
and venture capitalists who
might invest money in the
business plan. The business plan
is important because it provides
the roadmap for the business. It
lays out in detail the type of
business that will be started,
what the product or service is
that will be sold, how the
product will be marketed, and
how the business will be
financed.
A self-analysis is a good way to
start to determine what skills
and expertise an individual who
is starting the business has. How
are those skills and experience
beneficial to this particular
business, and how will they
make the business successful?
The financial plan should detail
everything money-related for
the business. How much will
startup equipment and buildings
cost? How much are supplies?
How much will be charged for
the goods or services? How long
before you expect to make a
profit? A balance sheet, income
statement, and information
about cash flow should be
included in this section of the
business plan.
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5
III.
IV.
Ownership/Legal Structure
A.
The legal structure of the business will
fall into one of four categories and
should be explained in the business
plan.
1. Sole Proprietorship – One
person owning the business
2. Partnership – Two or more
people owning the business
3. Corporation – Business is a
separate legal entity. This
method has the least liability
for the owner’s personal
assets.
4. S Corporation – Setup same
as corporations, but for
taxing purposes, the income
of the corporation is passed
through to the individual
shareholders. So, it is the
shareholders who pay taxes
on the corporation’s income
(instead of the corporation).
Marketing
A.
Products/Services
1.
Describe in detail
B.
Market
1. Demographics
2. Geographics
3. Psychographics
4. Product Benefits
C.
Marketing
D.
Competition
1.
Who/What/
Where
E.
Location
1. Where will your business be
located and why did you choose
that location?
F. Competition is the struggle
between customers for
customers.
G.
Some companies choose to compete
focusing on sale prices; this is called
price competition.
H.
Non-price competition business
focuses on factors other than price to
attract customers (such as quality,
services, location, financing, or
reputation).
A sole proprietorship is a
business of one person. That
person owns and runs the
business.
A partnership has two or more
people running the business.
Corporations are set up through
filing legal paperwork with the
state. It is a separate, legal
entity.
An S corporation has the same
advantages and protections. It
only differs in taxation.
The next step is to fully describe
who the customers of the
product are. This needs to be
very specific so you can reach
your target customer. By using
market segmentation to
describe the targeted customer,
the odds of reaching those
customers increase.
Demographics is segmenting the
market by statistics such as age,
race, gender, education, marital
status, etc. Psychographics is
segmenting the market by
interests or hobbies, such as
gourmet cooking, or sports.
Geographics segment the
market by location; product
benefits are segmented by
certain features or products that
the customer is seeking.
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V.
VI.
VII.
VIII.
Financial Management
A.
Identification of Risks
1.
Human
2.
Natural
3.
Economic
4.
Financial
Statements
B.
Income statement
1.
Balance sheet
2.
Cash flow
Risk Management
A.
Business Risks are the possibility
of business loss or failure. There
are three types of business risks:
1.
economic,
2.
natural, and
3.
human.
B.
Economic Risks occur from
changes in the overall business
conditions. These risks include the
following.
1. Type or amount of
competition
2. Product obsolescence
3. Government regulation
4. Operations
Operations
A.
Management on a day-to-day
basis
B.
Necessary equipment
C.
Personnel needed for
success
Executive Summary
A.
Summarize Goals and Objectives
for the Business
B.
Emphasize Your Commitment to
the Success of the Business
Every business venture has risks.
The goal is to minimize risks.
Risks are discussed more fully in
the next slide and they fall into
three categories.
Pro forma financial statements
should be conservative when
predicting profits and aggressive
when looking at business
expenditures. These statements
include the income statement,
which shows the business’s
profit, which is revenue minus
their expenses. The balance
sheet shows the business’s
assets and liabilities. What is left
over is the owner’s equity. The
cash flow shows how much cash
is coming into the business via
revenue and what is being paid
out via expenses.
In this section, the day-to-day
operations are described. Who
will manage the business? What
equipment and supplies will be
needed? What will their day-today duties be?
Multiple Intelligences Guide
Existentialist
Interpersonal
Intrapersonal
Kinesthetic/
Bodily
Logical/
Mathematical
Musical/Rhythmic
Naturalist
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7
Verbal/Linguistic
Visual/Spatial
Application
Guided Practice
Using the digital presentation, the teacher will explain the format for a solid business plan. The teacher will
share an example of a winning DECA business plan with the class for greater understanding of the necessary
content.
Ask students to develop a five-question survey that will help them determine if their business idea should be
pursued. Students will give their survey to 50 students, total the responses, and make decisions based upon
the results of the survey.
Give students names of well-known business franchises. Then ask students to write several sentences to
describe their image of the franchises. Explain how franchises are one form of business that have name
recognition and plenty of assistance for startup. The franchisor wants franchisees to be successful; therefore,
they will provide the necessary tools for success. However, this special assistance does not always result in
success.
Independent Practice
• Franchise Assignment
Ask students to research a popular franchise, and then write a report that explains the history of the franchise,
the success of the franchise, and the steps required to operate the franchise. This assignment will be
evaluated using the assigned rubric.
• Compare the Competition Assignment
Ask students to compare two businesses that sell similar merchandise. The businesses should be compared for
prices, product selection, customer service, community involvement, promotion, quality, reliability, public
image, and financial success. Students will use a table to compare the businesses and decide which business
has the better track record for current and future success. Students must explain the rationale for their
selected business. This assignment will be evaluated using the assigned rubric.
• Business Ownership Assignment
Split the class into four groups. Each group will be assigned one form of business ownership (sole
proprietorship, partnership, corporation, franchise). Each group has the responsibility of teaching the class
about their form of business ownership. The oral presentation must include, but is not limited to, form of
ownership and legal structure, decision makers for the business, taxes for the form of business ownership,
advantages and disadvantages for the form of business ownership, and examples of businesses for each form
of ownership. This assignment will be evaluated using the assigned rubric.
Summary
Review
Q: Why does a business need a written business plan?
A: The business plan is needed to receive financing, and it serves as a guide for operating the business.
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8
Q: Why is the Executive Summary for the business plan so important?
A: The executive summary is a short restatement of the report. Many financial experts will judge the business
plan by the executive summary and may not even read more of the report if the executive summary is not
well written.
Q: Why should you include supporting documents in your business plan?
A: Supporting documents give more information and provide backup for statements made in the body of the
report.
Evaluation
Informal Assessment
• Instructor will observe students during Independent Practice.
• Instructor will assist students as needed.
Formal Assessment
Use the assigned rubrics to evaluate the three Independent Practice Assignments.
Enrichment
Extension
• Students will write an executive summary for a business that they wish to propose. The executive
summary frequently determines whether the business will receive a loan.
• Students will design a poster that lists the steps for writing a business plan. The poster will serve as a
guide for the class when students prepare their business plans.
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3.1 Basic Elements of Business Plan
Entrepreneurship
Marketing
Business Formations – Advantages/Disadvantages
Business
Formation
Sole
Proprietorship
Example of
Formation
Advantage
Disadvantage
Partnership
Corporation
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10
3.1 Basic Elements of Business Plan
Entrepreneurship
Marketing
Independent Practice Assignments
#1 Franchise Assignment
Research a popular franchise, and then write a report that explains the history of the franchise, the success of
the franchise, and the steps required to operate the franchise. This assignment will be evaluated using a
rubric.
#2 Compare the Competition
Compare two businesses that sell similar merchandise. The businesses should be compared for prices, product
selection, customer service, community involvement, promotion, quality, reliability, public image, and
financial success. Use a table to compare the businesses, and decide which business has the better track
record for current and future success. You must explain the rationale for your selected business. This
assignment will be evaluated using a rubric.
#3 Business Ownership Assignment
The class will be split into four groups. Each group will be assigned one form of business ownership (sole
proprietorship, partnership, corporation, or franchise). Your group has the responsibility of teaching the class
about your selected form of business ownership. The oral presentation must include, but is not limited to,
form of ownership and legal structure, decision makers for the business, taxes for the form of business
ownership, advantages and disadvantages for the form of business ownership, and examples of businesses for
each form of ownership. This assignment will be evaluated using a rubric.
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11
3.1 Basic Elements of Business Plan
Entrepreneurship
Marketing
Assignment #1
Franchise Assignment Rubric
CATEGORY
Organization
Amount of
Information
Quality of
Information
Sources
Mechanics
20
Information is very
organized with wellconstructed
paragraphs and
subheadings.
All topics are
addressed and all
questions answered
with at least two
sentences about
each.
Information clearly
relates to the main
topic. It includes
several supporting
details and/or
examples.
All sources
(information and
graphics) are
accurately
documented in the
desired format.
No grammatical,
spelling or
punctuation errors.
15
Information is
organized with wellconstructed
paragraphs.
All topics are
addressed and most
questions answered
with at least two
sentences about
each.
Information clearly
relates to the main
topic. It provides one
to two supporting
details and/or
examples.
All sources
(information and
graphics) are
accurately
documented, but a
few are not in the
desired format.
Almost no
grammatical,
spelling, or
punctuation errors.
10
Information is
organized, but
paragraphs are not
well-constructed.
The information
appears to be
disorganized.
All topics are
addressed, and most
questions answered
with one sentence
about each.
One or more topics
were not addressed.
Information clearly
relates to the main
topic. No details
and/or examples are
given.
Information has little
or nothing to do with
the main topic.
All sources
(information and
graphics) are
accurately
documented, but
many are not in the
desired format.
Some sources are not
accurately
documented.
A few grammatical,
spelling, or
punctuation errors.
Many grammatical,
spelling, or
punctuation errors.
Total Score ________
Maximum 100 Points
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12
5 or less
3.1 Basic Elements of Business Plan
Entrepreneurship
Marketing
Assignment #2
Compare the Competition Rubric
CATEGORY
Organization
Amount of
Information
Quality of
Information
Sources
Table Showing
Comparisons
20
Information is very
organized with wellconstructed
paragraphs and
subheadings.
All topics are
addressed and all
questions answered
with at least two
sentences about
each.
Information clearly
relates to the main
topic. It includes
several supporting
details and/or
examples.
All sources
(information and
graphics) are
accurately
documented in the
desired format.
Comparisons clearly
indicated in the
completed table.
15
Information is
organized with wellconstructed
paragraphs.
All topics are
addressed and most
questions answered
with at least two
sentences about
each.
Information clearly
relates to the main
topic. It provides one
to two supporting
details and/or
examples.
All sources
(information and
graphics) are
accurately
documented, but a
few are not in the
desired format.
Table contains good
information not easy
to compare by
looking at the table.
10
Information is
organized, but
paragraphs are not
well-constructed.
The information
appears to be
disorganized.
All topics are
addressed, and most
questions answered
with one sentence
about each.
One or more topics
were not addressed.
Information clearly
relates to the main
topic. No details
and/or examples are
given.
Information has little
or nothing to do with
the main topic.
All sources
(information and
graphics) are
accurately
documented, but
many are not in the
desired format.
Some sources are not
accurately
documented.
Table needs more
information for
comparison.
Incomplete
information for
comparison.
Total Score ________
Maximum 100 Points
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13
5 or less
3.1 Basic Elements of Business Plan
Entrepreneurship
Marketing
Assignment #3
Business Ownership Assignment Rubric
CATEGORY
Comprehension
Content
Collaboration with
Peers
Enthusiasm
Preparedness
20
15
10
5 or less
Student is able to
accurately answer
almost all questions
posed by classmates
about the topic.
Student is able to
accurately answer
most questions posed
by classmates about
the topic.
Student is able to
accurately answer a
few questions posed
by classmates about
the topic.
Student is unable to
accurately answer
questions posed by
classmates about the
topic.
Shows a full
understanding of the
topic.
Shows a good
understanding of the
topic.
Shows a good
understanding of
parts of the topic.
Does not seem to
understand the topic
very well.
Often listens to,
shares with, and
supports the efforts
of others in the
group, but
sometimes, is not
considered a good
team member.
Facial expressions and Facial expressions and Facial expressions and
body language
body language
body language are
generate a strong
sometimes generate a used to try to
interest and
strong interest and
generate enthusiasm,
enthusiasm about the enthusiasm about the but seem somewhat
topic in others.
topic in others.
faked.
Student seems pretty
The student is
Student is completely prepared, but student
somewhat prepared,
prepared and has
might have needed a
but it is clear that
obviously rehearsed.
couple more
rehearsal was lacking.
rehearsals.
Almost always listens
to, shares with, and
supports the efforts
of others in the
group. Tries to keep
people working well
together.
Usually listens to,
shares with, and
supports the efforts
of others in the
group. Does not cause
"waves" in the group.
Total Score ________
Maximum 100 Points
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14
Rarely listens to,
shares with, and
supports the efforts
of others in the
group. Oftentimes,
not considered a
good team member.
Very little use of facial
expressions or body
language. Did not
generate much
interest in topic being
presented.
Student does not
seem at all prepared
to present.