How to Write a Business Plan
Whether you are a student or a potential business owner, having business plan writing skills is essential. Basically, a business plan is used to identify, describe, and analyze business opportunities. In addition, a business plan is useful when one is assessing a business that is already running. For instance, it may help examine the technical, financial, and economic viability of an enterprise. In light of this information, it is important to understand the key aspects covered in a business plan. The following are the main elements of a business plan.
What is the idea/product, where it’s to be located, why the product, and how to implement it?
MISSION AND VISION STATEMENT
Key success factors
Why the product or service specifically.
INDUSTRY ANALYSIS (optional depending on the product)
The bigger picture of the product/Idea Area… close case scenarios
Of the Idea/product
Business location/operational platform
Key functionality requirements
Manpower/ machine requirements.
Market size and prices
Projected start-up costs.
A sample of a Business Plan
Description of the Business
The Job Seeking Mobile App Company will engage in the business of helping graduates apply for jobs. Specifically, job-seeking graduates will be in a position to use the mobile application to upload or create their resumes, receive message alerts for opportunities that may arise, search for available openings, and connect with potential recruiters. Employers will also utilize the application to post job openings. The good with the application it will be installed on several devices such as cell phones and tablets. Individuals seeking jobs will find the process convenient, particularly due to the fact that most of them are busy with other activities making it hard to visit websites on computers.
The application will be friendly in the sense that it will be easy to apply for a job with just a few clicks. Additionally, it is created in such a way that one can be directed easily. As a matter of fact, with this app, job seekers will be a click away from their dream jobs. In sum, this improved power application has employed mind-blowing knowledge of artificial intelligence to lessen the burden of graduates looking for jobs. It is expected that the application will be a disruptive technology, where existing companies such as LinkedIn, Glassdoor, Monster, CareBuilder, and Snagajob will feel the impact.
With the expected increase in the number of graduates looking for jobs, this application is anticipated to hit the ground running. Also, with the competitive management team that has been selected, this Job Seeking Mobile App Company will provide premium quality services that will recover the invested money within the shortest time possible. Since most of the services of the company will be offered online, there will be no need for large office space. However, the company will lease a 5000 square feet office facility to accommodate the management, few staff members, and their vehicles. There will also be a kitchen and flower garden.
The business model of the company will be simple as hiring companies will pay a certain amount of money when they advertise their job openings. Also, charges will apply for video advertisements. Those seeking jobs will also be charged for services such as the creation of curriculum vitae; being shown how they rank among the other candidates who will have applied for the same job; being allowed to contact recruiters directly, and being allowed to see the people who viewed their profiles.
For the case of graduates looking for jobs, access to the mobile application will be through subscription. What this means is that an individual if purchases the app and enjoys some of the services enjoyed. As such, users of this application will not only be charged for features but also content. According to Stacy (2017), the subscription type of business model earns a lot of revenue and can assure business owners of long-term revenue flow. Additionally, subscription has been linked to strong customer loyalty. The monthly subscription of the proposed app will be $12 while the annual rate will be $60. Companies that have used subscription as a business model and offer quality services such as LinkedIn and CareerBuilder have continued to receive five-star ratings, which could sound good in as far as winning more customers is concerned.
The advertising model of monetization is likely to lead to a higher amount since it entails advocates for downloading applications. Stacy (2017) postulates that the higher the rate of mobile application downloads, the more the revenue. Employers will also be allowed to do in-application advertising, which is part of the business model. Revenue generated through adverts done in applications has been predicted to be 53.4 billion dollars in 2020. As such, the business model is expected to be a major source of revenue for the proposed business idea.
The mission of the company will be: “To make Job Seeking Mobile App to be the leading provider of recruitment services in the United States of America. Job Seeking Mobile App Company is also committed to ensuring that employers are matched with the most qualified talent for the positions they will be seeking to fill.”
The legal team which was consulted by the appointed managers and pioneers of this idea suggested that a company would be the best structure since it would allow for a possibility of IPO in case hard financial times are experienced. In the hierarchy of power, the CEO, who is also the founder, will be the head of the company. However, there will only be two levels of management. The next level will be comprised of managers from various departments such as human resources, IT, marketing, and Finance. The hierarchical structure of the company, which is provided in the figure below, will how the information will flow so that organizational goals can be achieved. In general, the company will have a differentiation organizational chart, which implies that it will be divided into different units assigned the responsibility of performing certain tasks. The diagram below shows the management structure of the company.
As observed in the above structure, the head of the company will be the Chief Executive Officer, Mr. Job Stone. The next level of management will be supervisory in nature as the departmental heads indicated will manage all the affairs of their respective units. Christopher Adams will be the head of the finance department, Ann Yokoyama will lead the marketing team, Allan Smith will head the human resource department, and Jane Montgomery will control the activities of IT. Individuals occupying management positions will consume around 100,000 dollars yearly, while the rest of the staff members will take home $ 67,000. All employees will be working on a full-time basis.
The CEO of the company will perform tasks such as setting the goals and policies, negotiate with potential investors, approve purchasing of major equipment to be used in various departments, and attend to complaints of customers whose needs are not able to be satisfied by departmental heads. The chief executive officer will also be responsible for following the activities of departments to know whether they are on the right path in relation to goal attainment. The human resource manager will be expected to hire and fire employees, forecast labor demand, and also train new employees.
The finance manager will handle all transactions of the firm and solicit funds from investors. The marketing head will ensure that the services of the company reach consumers using all marketing, sales, and distribution methods. Finally, at the core of the company is the information technology department. The head of the department will ensure that the application is always functioning and updated to incorporate emerging features. All staff members will be expected to be educated, hardworking, and should also possess great interpersonal skills.
The target market will mostly entail graduates looking for jobs. It will be divided into three sections, which include geographic, psychographic, and demographic. It is important to note that segmenting the market allows a company to concentrate on each section as much as possible for maximum satisfaction of customers. The marketing manager conducted extensive research of the target market and found the following:
First, the market was classified according to psychographic factors. This is a method that is used to describe customers according to their characteristics, values, beliefs, attitude, lifestyle, and attitude. More often than not, these traits can be observed from market trends and how consumers behave over time. The groups targeted by Job Seeking Mobile App Company are graduate job seekers, whose lifestyle is characterized by the use of social network applications such as Facebook, Twitter, YouTube, and Instagram. What this means is that the targeted individuals are techno-savvy and their attitude towards technology is positive.
Geographic segmentation was also used to classify the target market. Most of the people who are targeted using the idea are residents of the United States of America. The company will only contemplate going global later on after the local strategy has worked. As such, the geographical location of targeted clients will be the US.
The third market segment which was established by the marketing department is demographic. Individuals targeted are job seekers, who are willing to pay for services as long as they increase their chances of being employed. Statistics show that thousands are graduating from colleges and universities in the United States of America. Most of them join the job hunting army, which is the primary target of the proposed business idea.
According to Statista, around 35% of Americans had graduated from college or university. However, not all these people had managed to carve a niche in the competitive labor market. In fact, only around 86% of those who graduate from universities end up securing jobs after college, which means that 16% are active job seekers then. According to Nova (2018), more than 40% of university graduates end up taking jobs that do not require the degree they studied. As such, 40% might be employed but they do not become satisfied until they get the job of their dream or at least one that requires the knowledge they acquired in college.
Since this idea is going to tap into this market, it is expected that many people will require the services of the proposed job-seeking mobile application. Statistics have also shown that the labor market in the United States of America is shrinking. The aging workforce is not being replaced at the same rate it is exiting the labor market. For this reason, employers are constantly looking for potential employees to no avail. Therefore, this job-seeking mobile application would tap into the opportunity and charge such companies for the service of matching them with suitable candidates.
Analysis of competition is very crucial since it enables a business to know its rivals, the service or products they offer, strategies used, as well as what can be done to gain a competitive advantage. The idea of introducing a job-seeking mobile application will be rivaled by several companies. The main ones, in this case, are CareerBuilder, LinkedIn, Monster, Reach, Snagajob, Reach, Switch, ZipRecruiter, and Glassdoor.
The mobile application offers services that allow a graduate who is looking for a job to search for available openings, companies, locations, as well as the industry in which a potential employer operates. It is not mandatory for a candidate to have an account with CareerBuilder in order to use the service as they can upload their documents from Dropbox or Google. Job seekers are allowed to view how they rank compared to other competitors. CareerBuilder is one of the most established job-seeking mobile applications in the United States of America.
Linked is another mobile application that allows a graduate to search for available openings. The application also enables one to connect with other professionals around the world, making it become very popular. What is more, the application suggests jobs which one would qualify based on their skills as indicated on profiles.
It is also a renowned job-seeking mobile application due to the range of services offered. Just like most applications, it allows one to upload or create a resume, which they can use when applying for a job. Additionally, individuals can access their information at whatever time they want.
It usually deals with jobs in the hospitality, customer service, and retail industries. Most of the jobs in this sector are paid on an hourly basis and the mobile application allows one to see the wages. Email alert services are also offered by this application.
Glassdoor is one of the companies which have diversified services as much as possible. Aside from showing available job opportunities, the application also indicates feedbacks from the current or former employees of a given company. As such, a candidate is able to see the experience, salaries, and benefits associated with a potential employer.
According to Stacy (2017), the market for mobile applications is anticipated to grow. The amount of money generated by players in the industry has continued to skyrocket, which makes it one of the most lucrative sectors. Most of the millennials are fond of using applications to look for jobs. Also, statistics show that even Baby Boomers and Generation Xers have adopted the culture of using mobile applications to search for jobs. In 2016, the percentage of baby boomers that used mobile applications to search for job opportunities was 57.2. In the same year, the percentages of Generation Xers and Millennials were 73 and 78 respectively (Stacy, 2017). The trend indicates that employers who fail to embrace the idea of using job-seeking mobile applications are likely to miss on candidates that could be highly qualified.
Stacy (2017) also found that around 80.28 percent of cleaning and building job seekers had used mobile applications. In the construction industry, the percentage was 79.79. For finance and legal jobs, 57.13 and 57.46 job seekers had used mobile applications. Bother engineering and architecture had more than 40 percent rate of job-seeking mobile application usage. Research has shown that job search using mobile applications has been having an upward trend and will continue to grow. In 2015, the amount of revenue generated by the mobile application industry was 41.1 billion dollars. The projections for 2016 and 2020 were 50.9 and 189 billion dollars. As more and more people continue to buy smartphones, the upward trend will continue. As such, it is worth venturing into the industry in order to reap part of the share.
Customer Acquisition Strategy
It is only through customer acquisition that the proposed business idea will actualize. For this reason, this is a very important part. Customers will be acquired through advertising and public relations.
Once the target markets are identified, based on psychographic, demographic, and geographic segmentation, the advertising will be used. Extensive research will be carried out on niche markets using questionnaires, surveys, and focused groups. The advertising process will entail the use of personalized marketing, virtual reality videos, testimonies, and the internet of things.
In this day and age, it is essential to conduct research on the tastes and preferences of consumers before marketing so that an advertisement can be tailored to suit their exact needs. The marketing department will be very active in as far as personalizing of adverts is concerned. There will be a dashboard aimed at keeping individual information based on their behaviors. Online surveys will be created and then sent to various market segments so that awareness about the products and services offered can be made. The marketing team will search for emails of potential customers and send customized content with offers such as discounts. In the modern world, most customers like customized advertisement content, which has made companies collaborate with Google to gather information related to consumer taste and preferences.
Internet of Things (IoT)
Simply put, the internet of things refers to the connection that exists between human beings, animals, physical objects, devices, and the internet. It allows the collection of data and the conveyance of information. If objects are connected to electronic devices, it becomes easier for human beings to control them even without touching them physically. By connecting our services to the internet of things, it will be possible to inform customers when a subscription is due.
Use of Videos
Most companies are using 360 virtual reality videos to do marketing in the contemporary world, where technology has become integrated into the activities of human beings. Research has indicated that the use of video clips when advertising has the potential to significantly boost the bottom line. Video adverts enable potential customers to experience the service prior to buying it.
Testimonies, or what is referred to as storytelling, have helped to market the products and services of a company. It is important to note that most people are becoming bored due to advertisements which pop up in an annoying manner. Instead of clicking, people are skipping them. It would therefore be important to pick a customer who has successfully used the services of a company and tell their story. The story narrated needs to be very persuasive, which implies that the use of rhetorical appeals would help.
A public relations officer will be hired to aid in this form of advertising. Seminars and other forms of workshops will be organized with aim of targeting specific niche markets. Also, the public relations officer will attend public meetings.
Direct sales are very appropriate since they will enable the market team to contact a potential customer without having to go through an intermediary. Mail orders, as well as online newsletters, will be employed. Additionally, it will be important to use email subscriptions. Direct sales of the proposed business idea will enable the company to receive feedback directly from customers and act according to their wishes.
Virtual Service Distribution
In this distribution strategy, the marketing team will use email and phones by utilizing software found on cloud computing. Most companies prefer this distribution strategy since it saves on costs associated with door to door market. Being an online service, the proposed business idea will make use of virtual service distribution.
Sources and Uses of Funds
Cash to be paid worksheet
Sources of cash worksheet
Sales = volume of sales at Break-Even Point b. Fixed Costs = administrative expense, depreciation, interest c. Variable Costs = cost of goods and selling expenses d. Estimated Revenues = income (from sales of goods/services)
S (Sales at B-E Point) = the unknown b. FC (Fixed Costs) = $25,000 c. VC (Variable Costs) = $45,000 d. R (Estimated Revenues) = $90,000
Using the formula, the computation would appear as follows: S (at B-E Point) = $25,000 + [($45,000/$90,000) x S] S = $25,000 + (1/2 x S) S – 1/2 S = $25,000
S = $50,000 (B-E Point in terms of $ of revenue exactly offset by total costs)
Nova, A. (2018). Why your first job out of college really, really matters. CNBC. Retrieved from: https://www.cnbc.com/2018/06/25/why-your-first-job-out-of-college-really-really-matters.html
National Center for Educational Statistics. (2018). Employment rates of college graduates. Retrieved from: https://nces.ed.gov/fastfacts/display.asp?id=561
Stacy. (2017). Current Trends And Future Prospects Of The Mobile App Market. Retrieved from: https://www.smashingmagazine.com/2017/02/current-trends-future-prospects-mobile-app-market/