SHARK TANK BUSINESS PROJECT

Shark Tank Business Project

Task:  You and your partner(s) will create a new business idea concept that you will present to a “Shark” (an investor/venture capitalist).  You want this “Shark” to invest their money into your business.  This is the end product and you must keep this in mind as you go through the entire process. The following are elements you need to include in your business project:

I)    The Business Plan:  In order, to create a successful business, you need to have a plan to follow.  Develop a business plan that outlines what your business will do, your staffing needs (labor), your sales and marketing approach and how much start-up financing you will need (how much $$ to start everything). Once you have your business plan, you can follow it to create your successful business and use your business plan to interest investors in your company (The “Sharks”)

Business Plan resources: (just some places to start)

http://www.allbusiness.com/writing-small-business-plan/16689921-1.html

http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/writing-business-plan

http://www.ehow.com/list_7199584_tips-writing-business-plan.html

http://ezinearticles.com/?5-Tips-To-Writing-A-Good-Business-Plan&id=5507982

2)  Type of Business:  What type of business do you and your partner(s) plan to create?  Spend some time researching the different types of businesses to see the advantages and disadvantages of each.  Then, based on what you discover about the different business types (there are 3 main categories) decide what type of business you will create and explain the reasoning behind the decision.

3)  Market, Industry, and Competition Analysis:  When you start a business, you need to look at the market in which you are entering.  If there are already a lot of competitors in your market, it may be hard to start a new business in that market.  Also consider what makes your product/service stand out compared to others (what sets it apart from the rest?) so that people will demand your products or services.  Your task for this element is to analyze your industry (if you want to produce beer you are in the beer market, if you want to create a store that sells designer clothes you are in the retail market) and your competition.  What kind of competition exists in the market and what would you need to get your business started in this market?  Include this in your final product

4)  Financing:  How much money do you need to start this business venture?  After the initial money (which you hope to get from the “Shark”) to receive, how else are you going to finance your business?  Research all the different options you have to finance your new business and keep it sustained for the long-term.  Also, determine how profitable your business is going to be.  

http://www.myownbusiness.org/s8/index.html

http://www.ehow.com/how_107753_finance-business-idea.html

http://www.wikihow.com/Finance-Your-Business

http://www.investinternals.com/2011/06/things-to-know-before-starting-business.html

5)  Marketing, Advertising, and Product Distribution:  How will you get people to know your business exists, how will you market your product/service and advertise it to your target audience?  This could be part of your business plan but if it is not you MUST include some marketing and advertising strategies in this project.  Here are a couple of resources (you can research more) and some vocabulary words you need to know for this section.

http://www.foothilltech.org/rgeib/english/media_literacy/advertising_techniques.htm

http://www.businessknowhow.com/marketing/5marktech.htm

6)  Operation :How is your business going to be set up.  Will your business be set up in a specific location or will it be online (Ecommerce)? Questions such as who will be hired, how much will you pay them, what hours will you be open, who will manage your inventory/finances, how will people pay for products/services, etc.  (there are more) are ones to focus on to figure out how your day to day operations are going to work (your investors will want to know this to see if you are prepared).  Also, you need to be prepared for the unknown and operational “pitfalls” so that if something happens that hurts your business you have a plan to bounce back and recover (investors also want to know about this).

7)  YOUR BUSINESS PROPOSAL (the END product):  You and your partner(s) will be creating a business proposal.  In this proposal you will include all of the elements (#1-5) listed above.  You have a few options of how you can present your business proposal to the “Shark”:

·       Present your business proposal via Powerpoint

·       

 Your Final Business Proposal is due MARCH 17, 2017

- you will be evaluated based on self-evaluation, peer evaluation, and teacher/”Shark” evaluation.  Teacher evaluation will be based on:

a)  ability to collaborate (work together);  this includes in class and outside of class collaboration

b)  knowledge of the business world and business competition (based on what you have learned/researched)

c)  quality of presentation and business proposal (does it make the “Shark” want to invest in your business?).  Is it interesting, does it make the audience want to buy your product or want to know more about your business ideas and ventures?

General Help Articles/Resources to Read on Business Practices

http://drtanase.com/2011/06/06/a-lesson-from-the-shark-tank-on-abc/

http://www.entrepreneur.com/article/203710

SAMPLE DOCUMENTS + REQUIRED WORKSHEETS

SAMPLE BUSINESS PLAN #1

SAMPLE BUSINESS PLAN #2

SAMPLE BUSINESS PRESENTATION #1

SAMPLE BUSINESS PRESENTATION #2

BUSINESS FINAL PROJECTIONS WORKSHEET

TOTAL PROJECT COSTS WORKSHEETS

Written Business Plan Requirements

1. Cover Page

The cover page of your business plan should include important contact information about the business.

2. Executive Summary

Your executive summary is a snapshot of your business plan as a whole and touches on your company profile and goals. Read these tips about what to include.

3. Company Description

Your company description provides information on what you do, what differentiates your business from others, and the markets your business serves. 

4. Market Research

Before launching your business, it is essential for you to research your business industry, market and competitors.

5. Product/Service Line

What do you sell? How does it benefit your customers? What is the product lifecycle? Get tips on how to tell the story about your product or service.

6. Marketing & Sales

How do you plan to market your business? What is your sales strategy? Read more about how to include this information in your plan.

7. Financial Projections

Since you need funding, providing financial projections to back up your request is critical. Find out what information you need to include in your financial projections for your small business.

*** DO NOT USE THE 4 FINANCIAL PAGES ON THE SBA.GOV WEBSITE ***

                  Use the 2 Financial Worksheets linked to my webpage:

1.    Total Project Costs Worksheet

2.    Business Financial Projections Worksheet

8. Appendix

An appendix is required for your final project.  It is a useful place to include pertinent supporting documents such as property listings, equipment and inventory purchases as well as resumes, permits and leases.

Final Project – Business Plan

The Business Plan

What are the key elements of a business plan? From market analysis to your company financials, this guide walks you through the essential components of your plan, including how to develop a funding request.

1. Cover Page

Your cover page should include the name of your company, its address, telephone number, and list of the principals or majors stockholders (if applicable).

2. Executive Summary

The executive summary is often considered the most important section of a business plan. This section briefly tells your reader where your company is, where you want to take it, and why your business idea will be successful. If you are seeking financing, the executive summary is also your first opportunity to grab a potential investor’s interest.

The executive summary should highlight the strengths of your overall plan and therefore be the last section you write. However, it usually appears first in your business plan document.

What to Include in Your Executive Summary

Below are several key points that your executive summary should include based on the stage of your business.

If You Are an Established Business, be sure to include the following information:

• The Mission Statement – This explains what your business is all about. It should be between several sentences and a paragraph.
• Company Information – Include a short statement that covers when your business was formed, the names of the founders and their roles, your number of employees, and your business location(s).
• Growth Highlights – Include examples of company growth, such as financial or market highlights (for example, “XYZ Firm increased profit margins and market share year-over-year since its foundation). Graphs and charts can be helpful in this section.
• Your Products/Services -- Briefly describe the products or services you provide.
• Financial Information – If you are seeking financing, include any information about your current bank and investors.
• Summarize future plans – Explain where you would like to take your business.

With the exception of the mission statement, all of the information in the executive summary should be covered in a concise fashion and kept to one page. The executive summary is the first part of your business plan many people will see, so each word should count.

If You Are a Startup or New Business:

Since you are just starting a business, you won't have as much information as an established company. Instead, focus on your experience and background as well as the decisions that led you to start this particular enterprise.

Demonstrate that you have done thorough market analysis. Include information about a need or gap in your target market, and how your particular solutions can fill it. Convince the reader that you can succeed in your target market, then address your future plans.

Remember, your Executive Summary will be the last thing you write. So the first section of the business plan that you will tackle is the Company Description section.

3. Company Description

This section of your business plan provides a high-level review of the different elements of your business. This is akin to an extended elevator pitch and can help readers and potential investors quickly understand the goal of your business and its unique proposition.

What to Include in Your Company Description

• Describe the nature of your business and list the marketplace needs that you are trying to satisfy.
• Explain how your products and services meet these needs.
• List the specific consumers, organizations or businesses that your company serves or will serve.
• Explain the competitive advantages that you believe will make your business a success such as your location, expert personnel, efficient operations, or ability to bring value to your customers.

4. Market Research

In this section, you should illustrate your industry and market knowledge as well as any of your research findings and conclusions. This section is usually presented after the company description.

What to Include in Your Market Analysis

Industry Description and Outlook – Describe your industry, including its current size and historic growth rate as well as other trends and characteristics (e.g., life cycle stage, projected growth rate). Next, list the major customer groups within your industry.

Information About Your Target Market – Narrow your target market to a manageable size. Many businesses make the mistake of trying to appeal to too many target markets. Research and include the following information about your market:

Distinguishing characteristics – What are the critical needs of your potential customers? Are those needs being met?  What are the demographics of the group and where are they located? Are there any seasonal or cyclical purchasing trends that may impact your business?

Size of the primary target market – In addition to the size of your market, what data can you include about the annual purchases your market makes in your industry? What is the forecasted market growth for this group? For more information, see our market research guide for tips and free government resources that can help you build a market profile.

How much market share can you gain? – What is the market share percentage and number of customers you expect to obtain in a defined geographic area? Explain the logic behind your calculation.

Pricing and gross margin targets – Define your pricing structure, gross margin levels, and any discount that you plan to use.

When you include information about any of the market tests or research studies you have completed, be sure to focus only on the results of these tests. Any other details should be included in the appendix.

Competitive Analysis – Your competitive analysis should identify your competition by product line or service and market segment. Assess the following characteristics of the competitive landscape:

• Market share
• Strengths and weaknesses
• How important is your target market to your competitors?
• Are there any barriers that may hinder you as you enter the market?
• What is your window of opportunity to enter the market?
• Are there any indirect or secondary competitors who may impact your success?
• What barriers to market are there (e.g., changing technology, high investment cost, lack of quality personnel)?

Regulatory Restrictions – Include any customer or governmental regulatory requirements affecting your business, and how you’ll comply. Also, cite any operational or cost impact the compliance process will have on your business

5. Product/Service Line

This section of your business plan is where you describe your service or product, emphasizing the benefits to potential and current customers. Focus on why your particular product will fill a need for your target customers.

What to Include in Your Service or Product Line Section

A Description of Your Product / Service

Include information about the specific benefits of your product or service – from your customers' perspective. You should also talk about your product or service's ability to meet consumer needs, any advantages your product has over that of the competition, and the current development stage your product is in (e.g., idea, prototype).

Details About Your Product’s Life Cycle

Be sure to include information about where your product or service is in its life cycle, as well as any factors that may influence its cycle in the future.

Intellectual Property

If you have any existing, pending, or any anticipated copyright or patent filings, list them here. Also disclose whether any key aspects of a product may be classified as trade secrets. Last, include any information pertaining to existing legal agreements, such as nondisclosure or non-compete agreements.

Research and Development (R&D) Activities

Outline any R&D activities that you are involved in or are planning. What results of future R&D activities do you expect? Be sure to analyze the R&D efforts of not only your own business, but also of others in your industry.

6. Marketing & Sales

Marketing is the process of creating customers, and customers are the lifeblood of your business. In this section, the first thing you want to do is define your marketing strategy. There is no single way to approach a marketing strategy; your strategy should be part of an ongoing business-evaluation process and unique to your company. However, there are common steps you can follow which will help you think through the direction and tactics you would like to use to drive sales and sustain customer loyalty.

An overall marketing strategy should include four different strategies:

• A market penetration strategy.

• A growth strategy. This strategy for building your business might include: an internal strategy such as how to increase your human resources, an acquisition strategy such as buying another business, a franchise strategy for branching out, a horizontal strategy where you would provide the same type of products to different users, or a vertical strategy where you would continue providing the same products but would offer them at different levels of the distribution chain.

• Channels of distribution strategy. Choices for distribution channels could include original equipment manufacturers (OEMs), an internal sales force, distributors, or retailers.

• Communication strategy. How are you going to reach your customers? Usually a combination of the following tactics works the best: promotions, advertising, public relations, personal selling, and printed materials such as brochures, catalogs, flyers, etc.

After you have developed a comprehensive marketing strategy, you can then define your sales strategy. This covers how you plan to actually sell your product.

Your overall sales strategy should include two primary elements:

• A sales force strategy. If you are going to have a sales force, do you plan to use internal or independent representatives? How many salespeople will you recruit for your sales force? What type of recruitment strategies will you use? How will you train your sales force? What about compensation for your sales force?

• Your sales activities. When you are defining your sales strategy, it is important that you break it down into activities. For instance, you need to identify your prospects. Once you have made a list of your prospects, you need to prioritize the contacts, selecting the leads with the highest potential to buy first. Next, identify the number of sales calls you will make over a certain period of time. From there, you need to determine the average number of sales calls you will need to make per sale, the average dollar size per sale, and the average dollar size per vendor.

7. Financial Projections

***DISREGARD THE 4 FINANCIAL PAGES ON THE SBA.GOV WEBSITE ***

You ONLY need to complete the 2 Financial Worksheets linked to my webpage including: 

1.    Total Project Costs Worksheet

2.    Business Financial Projections Worksheet

This section is one of the most important sections of the business plan.  You must base your facts and figures on historical and/or industry information in order for your projections to be accurate.

The questions loan officers will ask are:

1. Can you repay the loan?
2. Are you a good risk?
3. What do you have for collateral

Since you are a start-up or new business, it is understood that your financial history is somewhat limited.  In such a case, it becomes even more important that you research the industry and use those industry figures as a base for your projections.  BE CONSERVATIVE.

The key is to obtain realistic estimates for expenses, equipment, sales, etc. so that your projections are as accurate as possible.  You must be able to prove that you will be able to repay your loan and turn a profit within a reasonable amount of time.

This section should be clearly written so anyone (from the loan officer to a potential investor) can fully understand how your figures were derived.

• You will be expected to provide two years of historical financial data; business income tax returns; as well as interim income statement and balance sheet (less than 2 months old).
• New or start-up business owners would need to obtain copies of their personal income tax returns for the past three years and do a personal net worth statement.
• Create projected income, cash flow, and balance sheets for a two year time frame.  The figures should reflect any historical or industry data, trends, or expected innovation.
• A list of assumptions should accompany your financial statements to clarify your data and answer any questions that may arise.
• Since you are seeking a loan, a summary of how you plan to use the funds should accompany your financial statements.

8. Appendix

This section should include documents that ‘back up’ your case and support the assumptions made by the business plan.  Each document should be cross-referenced to the narrative portion of your plan.

Pertinent supporting documents include:

• Historical financial information: income, cash flow, and balance sheets.
• All patents, permits, licenses, or certificates.
• Real estate appraisals.
• Market or industry statistics and magazine/newspaper articles that support your claims.
• Marketing materials including your business card, brochures, or advertisements.
• Product line brochure or pictures of products/services.
• Lease agreement or estimates.
• Letters if reference or letters of intent to do business.
• List of key suppliers and any letters of intent to extend credit.
• Estimates on equipment and machinery.
• Insurance estimates.