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CLASSES / ASSIGNMENTS

Business Entrepreneurship (Period 2)

Instructor
Mr. William Bissic
Department
Business

Files

Course Description

The goal of the Business Entrepreneurship course is to aid our student artists in defining their personal goals, understand marketing and self-promotion, and nurture financially literate entrepreneurs. This course uses project-based learning to explore the intersections between art and business. The Business Entrepreneurship course will provide, through projects and class discussions, a foundation in the principles of economics and entrepreneurship.

Upcoming Assignments See all

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See all posted assignments for this class.

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Business Plan Revision

Please go over you business plan. Check it against what is being asked of you in the attached outline. Make sure to be as detailed as possible. Add a Title Page and Table of Contents.
 
FINAL IS DUE BY 12/15/17!
 
See attached document.

Financial Plan (example)

6. Financial Plan

Java Culture will capitalize on the strong demand for high-quality gourmet coffee. The owners have provided the company with sufficient start-up capital. With successful management aimed at establishing and growing a loyal customer base, the company will see its net worth doubling in two years. Java Culture will maintain a healthy 65% gross margin, which combined with reasonable operating expenses, will provide enough cash to finance further growth.

6.1 Break-even Analysis

With average monthly fixed costs of $20,300 in FY2001 and an average margin of 65%, Java Culture's break-even sales volume is around $31,300 per month. As shown further, the company is expected to generate such sales volume from the outstart.

6.2 Projected Profit and Loss

Annual projected sales of $584,000 in FY2001 translate into $254.00 of sales per square foot, which is in line with the industry averages for this size of coffee bar. Overall, as the company gets established in the local market, its net profitability increases from 17.06% in FY2001 to 17.63% in FY2003. The table below outlines the projected Profit and Loss Statement for FY2001-2003.

 
PRO FORMA PROFIT AND LOSS
  YEAR 1 YEAR 2 YEAR 3
Sales $584,000 $642,400 $706,640
Direct Cost of Sales $204,400 $224,840 $247,324
Other $0 $0 $0

Market Analysis Summary (example)

3. Market Analysis Summary

U.S. coffee consumption has shown steady growth, with gourmet coffee having the strongest growth. Coffee drinkers in the Pacific Northwest are among the most demanding ones. They favor well-brewed gourmet coffee drinks and demand great service. Eugene, OR, with its liberal and outgoing populace and long rainy winter, has traditionally been a great place for coffee establishments. Java Culture will strive to build a loyal customer base by offering a great tasting coffee in a  relaxing environment of its coffee bar located close to the bustling University of Oregon campus.

3.1 Market Segmentation

Java Culture will focus its marketing activities on reaching the University students and faculty, people working in offices located close to the coffee bar and on sophisticated teenagers. Our market research shows that these are the customer groups that are most likely to buy gourmet coffee products. Since gourmet coffee consumption is universal across different income categories and mostly depends on the level of higher education, proximity to the University of Oregon campus will provide access to the targeted customer audience.

 

3.2 Target Market Segment Strategy

Java Culture will cater to people who want to get their daily cup of great-tasting coffee in a relaxing atmosphere. Such customers vary in age, although our location close to the University campus means that most of our clientele will be college students and faculty. Our market research shows that these are discerning customers that gravitate towards better tasting coffee. Furthermore, a lot of college students consider coffee bars to be a convenient studying or meeting location, where they can read or meet with peers without the necessity to pay cover charges. For us, this will provide a unique possibility for building a loyal client base.

3.3 Market Needs

General trend toward quality among U.S. consumers definitely plays an important role in the recent growth in gourmet coffee. Additionally, such factors as desire for small indulgencies, for something more exotic and unique, provide a good selling opportunity for coffee bars.

3.3 Competition and Buying Patterns

Competition

According to the 1997 Oregon Food service Statistics (NAICS 72), Eugene had 45 established snack & non-alcoholic beverage bars (NAICS 722213) with total sales of $14.2 million. Among other establishments that offer coffee drinks to their customers are most of Eugene's limited- and full-service restaurants. Java Culture's direct competitors will be other coffee bars located near the University of Oregon campus. These include Starbucks, Cafe Roma, The UO Bookstore, and other Food service establishments that offer coffee. Starbucks will definitely be one of the major competitors because of its strong financial position and established marketing and operational practices. However, despite of Starbuck's entrenched market position, many customers favor smaller, independent establishments that offer cozy atmosphere and good coffee at affordable prices. Cafe Roma is a good example of such competition. We estimate that Starbucks holds approximately 35% market share in that neighborhood, Cafe Roma appeals to 25% of customers, The UO Bookstore caters to another 10%, with the remaining market share split among other establishments. Java Culture will position itself as a unique coffee bar that not only offers the best tasting coffee and pastries but also provides home-like, cozy and comfortable environment, which established corporate establishments lack. We will cater to customers' bodies and minds, which will help us grow our market share in this competitive market.

Buying Patterns

The major reason for the customers to return to a specific coffee bar is a great tasting coffee, quick service and pleasant atmosphere. Although, as stated before, coffee consumption is uniform across different income segments, Java Culture will price its product offerings competitively. We strongly believe that selling coffee with a great service in a nice setting will help us build a strong base of loyal clientele.

Execution (sample)

4. Execution

The Dark Roast Java coffeehouse uses a strategy of total quality—in product and service. Our promise is in our location, the products we sell, the people we attract and the atmosphere we create.

Strategic Assumptions:

  • People want a better-tasting coffee drink
  • Coffee drinkers want a more inviting coffeehouse environment
  • Coffee drinks are considered an affordable luxury
  • The coffeehouse industry is largely unaffected by the economy and world events
  • Dark Roast Java offers several unique advantages over all other coffeehouses

4.1 Competitive Edge

Our competitive edge, compared to the other coffeehouses in the greater Pleasantville area includes the following:

  • A significantly higher quality, better tasting coffee product.
  • Our current location can arguably be considered the best in the market—in the heart of the downtown shopping, dining, entertainment and cultural district in Pleasantville and adjacent to the historic Egyptian Theatre.
  • An ambiance superior to all other coffeehouses in the area with upscale "Cote d'Azur" look. It features stained glass decorations, art glasswork, Mediterranean Riviera style furnishings and outdoor dining.
  • The only coffeehouse downtown to provide regular weekend evening entertainment.
  • A wider variety of popular drinks than our competitors, including flavored coffee drinks, tea, chai, cocoa, juice and Italian sodas. We have several drink options for people who don't drink coffee: tea, cocoa, juice and smoothies.
  • Our Internet website will include sales of whole coffee beans, tea, chocolates, gift items and gift baskets.

4.2 Marketing Strategy

Other coffeehouses rely almost entirely on word-of-mouth marketing to generate business. We will engage in an ongoing aggressive marketing program that will help us establish profitability quickly and set the stage for continual growth.

Our strategy will be to position Dark Roast Java as the "Lexus" of coffeehouses, offering a high quality product and superb service in a superior environment.

4.3 Sales Strategy

Our sales strategy includes:

    • Staff salaries that are 10% above the industry average in order to attract the best people

    • Hiring for attitude so that we always have a friendly, enthusiastic staff to make customers feel welcome and appreciated; constant staff training to assure the best quality possible

    • State-of-the-art sales/inventory system to (A) reduce customer waiting time, and (B) create efficient product ordering

    • Create a mobile kiosk to take Dark Roast Java into the community at special events, farmer's markets, art shows, etc.

    • Sell coffee, gift baskets and glass artwork on our website

    • Establish coffee service at local businesses

    • Sell gift cards, frequency cards, pre-paid cards, and offer discounts to key groups

    • Create an ongoing sampling program

    • Conduct a consistent, aggressive marketing program

    • Be an active member of the community; be visible at charitable functions

  • Solicit customer feedback to constantly improve and streamline our operation

Company and Management Summary (Example)

Management Summary

Java Culture is majority-owned by Arthur Garfield and James Polk. Mr. Garfield holds a Bachelor's Degree in Business Administration from the University of ZYX. He's worked for several years as an independent business consultant. Previously, he owned the ABC Travel Agency, which he profitably sold four years ago. Mr. Garfield has extensive business contacts in Oregon that he will leverage to help his new venture succeed. Mr. Polk has a Bachelor's Degree in Psychology from the XYZ State University. For the last five years he has worked as a manager of DEF Ristorante, a successful Italian restaurant in Portland, OR. Under Mr. Polk's management, the restaurant has consistently increased sales while maintaining a lower than average level of operating expenses.

However, because of the investors' other commitments they will not be involved into the daily management decisions at Java Culture. A professional manager ($35,000/yr) will be hired who will oversee all the coffee bar operations. Two full-time baristas ($25,000/yr each) will be in charge of coffee preparation. Four more part-time employees will be hired to fulfill the staffing needs. In the second and third year of operation one more part-time employee will be hired to handle the increased sales volume.

6.1 Management Team

A full-time manager will be hired to oversee the daily operations at Java Culture. The candidate (who's name is withheld due to his current employment commitment) has had three years of managerial experience in the definitely industry in Oregon. This person's responsibilities will include managing the staff, ordering inventory, dealing with suppliers, developing a marketing strategy and perform other daily managerial duties. We believe that our candidate has the right experience for this role. A profit-sharing arrangement for the manager may be considered based on the first year operational results.

6.2 Management Team Gaps

Despite the owners' and manager's experience in the definitely industry, the company will retain the consulting services of ABC Espresso Services, the consultants who have helped to develop the business idea for Java Culture. This company has over twenty years of experience in the retail coffee industry and has successfully opened dozens of coffee bars across the U.S. Consultants will be primarily used for market research, customer satisfaction surveys and to provide additional input into the evaluation of the new business opportunities.

6.3 Personnel Plan

The table below outlines the personnel needs of Java Culture coffee bar.

 
PERSONNEL PLAN
  YEAR 1 YEAR 2 YEAR 3
Manager $35,000 $37,800 $40,824
Baristas $50,000 $54,000 $58,320
Employees $39,600 $52,000 $56,000
TOTAL PEOPLE 7 8 8
Total Payroll $124,600 $143,800 $155,144

Sample Executive Summary

Introduction

Blue Mountain Cycle Rentals will offer road and mountain bike rentals in a strategic location directly adjacent to an entrance to the George Washington National Forest. Our primary strategy is to develop Blue Mountain Cycle Rentals as the most convenient and cost-effective rental alternative for the thousands of visitors who flock to the area each year.

Once underway we will expand our scope and take advantage of high-margin new equipment sales and leverage our existing labor force to sell and service those products. Within three years we intend to create the area's premier destination for cycling enthusiasts.

Company and Management

Blue Mountain Cycle Rentals will be located at 321 Mountain Drive, a location providing extremely high visibility as well as direct entry and exit from a primary national park access road. The owner of the company, Marty Cycle, has over twenty years experience in the bicycle business, having served as a product manager for ACME Cycles as well as the general manager of Epic Cycling.

Because of his extensive industry contacts, initial equipment inventory will be purchased at significant discounts from OEM suppliers as well by sourcing excess inventory from shops around the country.

Due to the somewhat seasonal nature of the business, part-time employees will be hired to handle spikes in demand. Those employees will be attracted through competitive wages as well as discounts products and services.

Market Opportunities

460,000 people visited the George Washington National Forest during the last twelve months. While the outdoor tourism industry as a whole is flat, the park expects its number of visitors to grow over the next few years.

  • The economic outlook indicates fewer VA, WV, NC, and MD cycling enthusiasts will travel outside the region
  • The park has added a camping and lodging facilities that should attract an increased number of visitors
  • The park has opened up additional areas for trail exploration and construction, ensuring a greater number of single-track options and therefore a greater number of visitors

The market potential inherent in those visitors is substantial. According to third-party research data, approximately 30% of all cyclists would prefer to rent rather than transport their own bicycles, especially those who are visiting the area for reasons other than cycling.

Competitive Advantages

The cycling shops located in Harrisonburg, VA, are direct and established competitor. Our two primary competitive advantages will be location and lower costs.

Our location is also a key disadvantage where non-park rentals are concerned. We will overcome that issue by establishing a satellite location in Harrisonburg for enthusiasts who wish to rent bicycles to use in town or on other local trails.

We will also use online tools to better engage customers, allowing them to reserve and pay online as well as create individual profiles regarding sizes, preferences, and special needs.

Financial Projections

Blue Mountain Cycle Rentals expects to earn a modest profit by year two based on projected sales. Our projections are based on the following key assumptions:

  • Initial growth will be moderate as we establish awareness in the market
  • Initial equipment purchases will stay in service for an average of three to four years; after two years we will begin investing in "new" equipment to replace damaged or obsolete equipment
  • Marketing costs will not exceed 14% of sales
  • Residual profits will be reinvested in expanding the product and service line

We project first-year revenue of $720,000 and a 10% growth rate for the next two years. Direct cost of sales is projected to average 60% of gross sales, including 50% for the purchase of equipment and 10% for the purchase of ancillary items. Net income is projected to reach $105,000 in year three as sales increase and operations become more efficient.

B.O.Y. Folder (Google Drive)

Let's get organized!

・・・

Create a Business of You Folder. Title it "CompanyName.BOY." The folder should include the following documents:

1. Company Info (Name, members, roles, social media, email address)

2. Target Market & Questionnaire

3. Cost

4. Mission Statement, Vision Statement, & Elevator Pitch

5. S.W.O.T. Analysis

6. Market Analysis

7. Sales Forecast

8. Business Plan

9. YouTube/Instagram Video

 

SHARE THE FOLDER WITH MR. BISSIC! wbissic@thesae.k12.ca.us

Important Deadlines

Market Research - Past Due

Vision Statement - Past Due

Sales Forecast - Nov. 9th

Product Prototype - Nov. 17th

Business Plan - Nov. 30th

Website & Flyers - Dec. 8th

YouTube/IG Commercial - Dec. 15th

Vocab Quiz #2 - Friday 11/3

Vocab quiz this Friday 11/3. Study the following words: demographics, elevator pitch, ideation, net income, prototype, and S.WO.T. Analysis.
・・・
I WILL sprinkle in old vocabulary into this quiz as well. You should review the following words as well: bootstrapping, brand, budgeting, cost, entrepreneur, marketing, mission statement, startup, and value.

Sales Forecasting (with template)

What is Sales Forecasting?
  • A sales forecast is a projection of the expected customer demand for the products or services at a specific company, over a specified period of time.
  • Essential tool used for business planning, marketing, and general decision making.
  • Sales forecasting can help you achieve business goals.
  • Sales forecasting can help drive sales revenue, improve efficiency, increase customer retention and reduce costs.
See attached Sales Forecasting excel spreadsheet

Business Plan Outline

Create a new Google doc entitled "Company Name.Business Plan"
 
Copy and paste the text (below) into your new Google Doc.
 

Business Plan

  1. Executive summary

Write this last. It’s just a page or two that highlights the points you’ve made elsewhere in your business plan.

It’s also the doorway to your plan—after looking over your executive summary, your target reader is either going to throw your business plan away or keep reading, so you’d better get it just right.

Summarize the problem you are solving for customers, your solution, the target market, the founding team, and financial forecast highlights. Keep things as brief as possible and entice your audience to learn more about your company.

 

  1. Opportunity

Describe the problem that you solve for your customers and the solution that you are selling.

It is always a good idea to think in terms of customer needs and customer benefits as you define your product offerings, rather than thinking of your side of the equation (how much the product or service costs, and how you deliver it to the customer).

Sometimes this part of the plan will include tables that provide more details, such as a bill of materials or detailed price lists, but more often than not this section just describes what you are selling and how your products and services fill a need for your customers.

 

  1. Market analysis summary

You need to know your target market—the types of customers you are looking for—and how it’s changing.

Use this section to discuss your customers’ needs, where your customers are, how to reach them and how to deliver your product to them.

You’ll also need to know who your competitors are and how you stack up against them—why are you sure there’s room for you in this market?

 

  1. Execution

Use this section to outline your marketing plan, your sales plan, and the other logistics involved in actually running your business.

You’ll want to cover the technology you plan on using, your business location and other facilities, special equipment you might need, and your roadmap for getting your business up and running. Finally, you’ll want to outline the key metrics you’ll be tracking to make sure your business is headed in the right direction.

 

  1. Company and management summary

This section is an overview of who you are.

It should describe the organization of your business, and the key members of the management team, but it should also ground the reader with the nuts and bolts: when your company was founded, who is/are the owner(s), what state your company is registered in and where you do business, and when/if your company was incorporated.

Be sure to include summaries of your managers’ backgrounds and experience—these should act like brief resumes—and describe their functions with the company. Full-length resumes should be appended to the plan.

 

  1. Financial plan

At the very least this section should include your projected profit and loss and cash flow tables, and a brief description of the assumptions you’re making with your projections.

You may also want to include your balance sheet, your sales forecast, business ratios, and a break-even analysis.

Finally, if you are raising money or taking out loans, you should highlight the money you need to launch the business

Vision Statements - Examples and Ideas

Best Examples of a Vision Statement

When looking for the best examples of vision statements, consider these statements made by some of the world's most innovative and successful companies:

Apple Computer

"We believe that we are on the face of the earth to make great products and that's not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don't settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we're wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well."- Tim Cook, CEO of Apple Computer (Quoted on CNN Money.com).

PepsiCo

"Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company. At PepsiCo, we're committed to achieving business and financial success while leaving a positive imprint on society – delivering what we call Performance with Purpose." (Quoted from PepsiCo.)

Amazon

"Our vision is to be earth's most customer centric company; to build a place where people can come to find and discover anything they might want to buy online." (Quoted from Amazon.com) 

Microsoft

"Microsoft is a technology company whose mission is to empower every person and every organization on the planet to achieve more. We strive to create local opportunity, growth, and impact in every country around the world. Our strategy is to build best-in-class platforms and productivity services for an intelligent cloud and an intelligent edge infused with artificial intelligence (“AI”)." - (Quoted from Microsoft Annual Report 2017)

Vision Statement Ideas

Now that you've seen some inspiring examples of vision statements from real companies, hopefully you're starting to get ideas for your own vision statement. Let's see if we can get some more ideas bubbling.

Vision statements don't have to be as grand as those above. Small local companies might simply aspire to have the friendliest customer service in town or offer the freshest, locally grown produce. Often your vision can be summed up in one or two sentences.

  • To help people stay fit and healthy. 
  • To have our product in every home in the United States. 
  • To help people enjoy life, by offering an affordable solution to health care.
  •  To provide delicious, seasonal food and a fun atmosphere that will bring customers back again and again.
  • As we move towards our goal of being a world-class university, we will support research on a global scale. Locally, our campus will service the research needs of the learning community, granting access to many informational resources. 
  • The XYZ Company will inspire its employees to be the best they can be.  We will engage in sustainable practices and anticipate the needs of our customers. We will maximize return to the stockholders while still maintaining quality in our products. 
  • Our vision is to bring our students into the 21st century through innovation and modern technology. Learning will be enhanced with computer software and educational games that will allow students to proceed at their own rate according to their ability.

In each of these examples, the vision statement helps the organization simply define its goals, creating something to work towards in the future. 

To further help you, we've broken down the vision statements for two potential businesses. 

Online Retailer: “We intend to provide our customers with the best online shopping experience from beginning to end, with a smart, searchable website, easy-to-follow instructions, clear and secure payment methods, and fast, quality delivery.”

From this statement, you can clearly tell that this company is an online retailer. You can also tell they have put a lot of thought into their goals. They don't simply say that they want to be “the best” online shopping site – they give a list of ways in which they intend to do that. This is a quality vision statement because it outlines the specific future they intend to create for themselves, but it doesn't give specific steps on how they will do it (better saved for a mission statement).

Hair Salon: “Our salon will change the way you think about a haircut. Full service comfort, friendly staff, a relaxing atmosphere, and the best prices in town give you an experience that will leave you glowing both inside and out.”

Again, it's clear from this vision statement what type of business is behind it. It also gives a good, clear list of goals, without being too specific or wordy. It paints an overall picture of a pleasant, successful business that the company hopes to become. Since the vision statement isn't just a vision of your future – it's also a vision you're presenting to your customers about who you are – it's important that it do just that.

Read more at http://examples.yourdictionary.com/best-examples-of-a-vision-statement.html#YgACQyCtyWgFgTyx.99

Market Analysis

  • Your market research will include:
    • Economics
      • What is the total size of your market?
        • Be specific! If you are selling purses, what does the purse market look like? How many people in your target audience live in your target areas? How many of them are likely to buy purses? How many purses are sold on an annual basis in the areas that you are considering conducting business operations in?
      •  What are the trends in your market?
        • For example, if you are selling purses, go online and find trends in purse sales. Are sales up or down? Why?
      •  Growth Potential
        • This will include your market size, possibilities of expanding the market, etc.
      •  What are the barriers to entry into your market?
        • What might stop you from launching your business? Is there another company planning to launch their product into “your” target market?
      •  How do you overcome the barriers?
      •  What changes could affect your company in the future?
        • The economy? Market trends? New products?
  • Product
    • Features and Benefits
      • Describe the most important features of your product? What is this special about it? Why would someone want to buy it?
      • Describe the benefits of your product? What will your product do for your customers?
  • Customers
    •  Who are your potential customers?
    • Be specific. If you are targeting high school students in your local area go online. Tell the investors how many high schools there are. Tell them how many students there are. Show them that you have a lot of potential customers.
    • Do your potential customers have any specific tastes or interests? Be as specific as possible. For example, if you are selling “funky” purses, your target market might be high school girls who enjoy expressing their style and being on the cutting edge of fashion.
    •  Identify for the investors some existing customers—people that you will have spoken to and talked about your product or service already. It will be important to not only get feedback early on from prospective customers (if they like the idea of what you will be selling) but also to get some people “signed-up” as actual customers in advance of the investor panel event. You are far more likely to get funding if you can demonstrate that you are essentially already having success with selling your product or service.
  •  Competition
    • Who are your competitors?
      • Be specific. List out some. What do they do? You want to show the investors that you know that you have competition, that you know what makes them successful, and most importantly how you are different, and how you will succeed even with those competitors. Identify your unique competitive advantages!.
      • If you don’t have direct competitors, list your indirect competitors. For example, maybe your purses are super unique, no one has made purses quite like you before. You don’t have anyone selling exactly what you do, but there are other places that sell purses.
    •  What are your competitive advantages?
      • Why would someone buy your product over your competitors? What makes you different, better, more attractive to customers. Keep in mind though, a lower retail price is not always better, nor is it the way everyone makes up their mind to buy-so find ways to differentiate your product or service on more than just price!