Unit Title: Business Plan for Enterprise Start-up

Unit Reference Number: J/504/4410

Guided Learning Hours: 100
Level: Level 4
Number of Credits: 12
Unit purpose and aim(s):
This unit aims to give learners a sound understanding of:
the introduction of a business plan, for the benefit of interested parties
how to plan the resource requirements of a business
the financial information required for a business plan
market research activities, marketing strategies, customer care and quality policies
the implementation of a business plan, including risk assessment and legal
compliance

Learning Outcome 1
The learner will: Understand how to prepare the introductory part of a business plan to outline
the business idea for potential lenders, investors and other interested parties.

Assessment Criteria
The learner can:

Indicative Content

1.1 Identify and explain the

content that would be
expected in the
introduction of a business
plan.

1.1.1 Identify and explain the information that a potential

lender, investor or other interested party would expect to see
relating to the business idea in the introductory section of the
business plan:
The type of business proposed and trading status.
The range of services to be offered (primary and
secondary).
The personal parameters of the proposer(s) that may
influence the way the business is started, e.g. fulltime, part-time, hobby, lifestyle factors, family or other
constraints, etc.
The geographical location and/or operating area of the
business.
A brief summary of anticipated customers, the target
market and their distribution.
A statement of viability - why the proposer(s) believe it
will succeed.
1.1.2 Identify and explain the information that the lender or
investor would expect to see about the proposer(s) of the
business idea:
A brief background/personal history, summary C.V. of
the proposer(s) and key team members.
Personal skills, expertise and experience relevant to
the business of the proposer(s) and key team
members, with a SWOT analysis, and identification of
any personal development needs.
Personal influences, ambitions and long-term
objectives of the proposer(s).
Why the proposer(s) want to go into business.

Learning Outcome 2
The learner will: Understand the process of planning the resource requirements of the
business including both physical and staff resources.
Assessment Criteria
The learner can:

Indicative Content

2.1 Identify and explain the

physical resource
requirements of the
business and their
projected costs.

2.1.1 Identify and explain the various physical requirements

needed for the business and quantify them, e.g.
A list of any equipment, materials already available or
owned by the proposer(s).
Details of any intellectual property rights owned or
applied for.
Premises requirements (size, shape, special features,
location) and any modifications required, plus details of
annual costs of rent or lease, and any other costs such
as public taxes.
Plant & equipment, ICT and communications
equipment, office furniture etc plus options for
acquiring those (lease or buy etc.)
Stock or raw material.
Transport requirements / availability vehicles for sales
activities or product distribution.
Security requirements alarms, use of external security
services.
2.1.2 Identify and explain the need to distinguish between
resources that are essential for the start-up, and those
resources which would be useful to have but could be acquired
later, or which could be hired in when needed in the short-term.

2.2 Identify and explain the

staff resource
requirements of the
business and their
projected costs.

2.2.1 Explain the use of a skills gap analysis to identify the

short-term and longer-term needs of the business.
2.2.2. Explain how to identify the staffing requirements of the
business in terms of skills and numbers of staff required a) at
the start-up stage, and b) within the first year of operation.
2.2.3 Identify and describe options for recruiting staff to meet
the requirements including the use of combinations of core
(permanent) and peripheral (part-time, seasonal or agency)
staff.

Learning Outcome 3
The learner will: Understand the financial information required for a business plan to meet the
decision-making needs of potential investors, lenders or other interested
parties.

Assessment Criteria

Indicative Content

The learner can:

3.1 Identify and explain the
financial information that is
required in a business
plan.

3.1.1 Identify and explain the key financial documents that a

potential lender or investor would expect to see in the
business plan:
A budgetary plan and cash-flow forecast for the first
year of operation.
An explanation of the assumptions under-pinning the
budgetary plan.
A profit forecast for years 1 and 2.
A break-even analysis showing how long it will take to
reach profitable trading levels or what revenues or
sales volumes of products will be required to break
even.
Personal survival budgets for each of the proposers
showing the levels of drawings or salaries they need
to take from the business in the early stages.
A summary of the proposed financial monitoring
processes that the business intends to use.

3.2 Explain the process of

preparing a budgetary plan
and cash-flow forecast, the
range of detailed
information required within
that, and the assumptions
on which the data is
based.

3.2.1 Explain the various sources of revenue that might be

listed under the Income section, and the various cost items
that might be listed under the Expenditure section of the
budgetary plan.

3.3 Identify and describe

the options for funding the
proposed business
venture.

3.3.1 Identify and describe potential options for funding a new

business venture and their respective advantages and
disadvantages e.g. from friends & family, a bank loan, angel
investor, grants, hire-purchase, leasing.

3.2.2 Describe how the assumptions of costs within the

budgetary plan would be justified, e.g. in terms of frequency of
payments, changing sales revenues, constant overhead costs,
variable production costs linked to sales or production, and the
impact of any credit given to customers or received from
suppliers.

3.3.2 Describe and explain the proposed funding structure of

the new venture and where the funding will come from.
A summary of the value of capital and resources
available from the proposers.
A summary of additional financial requirements for the
business, the phasing of that investment, where the
funds might come from, and the proposers preferred
means of financing those requirements.

Learning Outcome 4
The learner will: Understand the market research required prior to developing a business
plan, and the preparation of marketing strategies, customer care and quality
policies for the business proposal.

Assessment Criteria
The learner can:

Indicative Content

4.1 Identity and explain the

market research activities
that would be carried out
when producing a
business plan.

4.1.1 Describe and explain the range of market research

activities that would be carried out when planning a new
business venture, e.g.:
Evaluating the market size and whether it is growing,
static, or shrinking; and assessing what potential
market share could be realistically achieved.
Identifying the customer expectations from the product
or service, and the Unique Selling Points (USPs) that
will meet them.
Identifying the barriers to market entry and any other
anticipated problems.
Evaluating the competitors: who they are and what they
are offering, their likely response to a new entrant into
the market, the comparative price and quality of their
goods or services, and the level of loyalty they
command from their customers.
Identifying any seasonal factors that affect the market.

4.2 Identify and explain the

expected content of the
marketing strategy section
of the business plan.

4.2.1 Explain and describe the development of strategies for

market penetration, e.g. competitive pricing, selling on quality
and value for money, targeting niche markets or opening up
new markets, using loss-leaders, buying market share by
acquiring competitors etc.
4.2.2 Explain the use of the four Ps in developing a marketing
mix for a new product (Product, Place, Price and Promotion) or
with the additional three Ps (People, Process and Physical) for
a marketing mix for a new service.

4.3 Explain the customer

care policies and quality
standards information that
would be expected within
the business plan.

4.3.1 Explain how customer care policies and quality standards

can improve customer retention and assist with the building of
strong long-term relationships with customers, including:
by ensuring customer satisfaction and enhancing
the reputation of the business;
by reducing complaints and the costs of faults,
returned goods, warranty claims;
by improving customer retention and reducing the
sales costs of replacing lost customers;
by providing staff with clear guidelines about what
is expected of them when dealing with customers.
4.3.2 Explain how quality standards can be developed e.g. by
defining them in terms of specific and measurable targets for
each element of customer engagement - pre-transactional,
transactional, and post-transactional.

Learning Outcome 5

The learner will: Understand the process of planning the implementation of the business plan,
the use of risk assessments, and the importance of ensuring legal
compliance.

Assessment Criteria
The learner can:

Indicative Content

5.1 Identify the key or

critical stages in
implementing a business
plan and display them on a
Gantt chart.

5.1.1 Identify and explain each activity that needs to be

completed prior to the start of a new business - e.g. the
market research, business plan development, arranging
finance, finding and negotiating premises, organising
suppliers, sales and marketing activities etc.
5.1.2 Identify the timescale for each activity (start and
completion times) and the activities that are dependent on
other preceding activities; and plot them all on a Gantt chart.
5.1.3 Identify which of the activities on the Gantt chart could
be crucial to the commencement of business on the planned
target date.

5.2 Explain the process of

carrying out a risk analysis
on the critical stages of
implementation and
producing contingency
plans or actions to mitigate
the risks.

5.2.1 Explain how each of the critical stages can be analysed

in terms of:
The probability or likelihood of the risk that it will go
wrong (Low / Medium / High).
The impact of it going wrong on the planned start, the
operation, or the profitability of the proposed business.
The critical stages that show medium to high
probability of going wrong and medium to high impact
if they do go wrong these are the critical risks that
need to be addressed.
5.2.2 Explain how critical risks can be:
Mitigated by the use of planning and preventive action
to avoid them occurring or to reduce the impact of
their occurrence.
Managed in the event of them happening by the use
of contingency plans that can resolve problems or
offer alternative actions.

5.3 Identify and explain the

trading status options for
operating the proposed
business.

5.3.1 Explain the Trading Status options open to a proposed

business in order to identify the option that offers the most
appropriate means of operating the business, including:
Sole Trader
Partnership
Limited Partnership
Limited Company
Private Limited Company (plc)
Not for profit organisation e.g. Company Limited by
Guarantee, Community Interest Company, Charitable
Association.
(Local variations will apply and learners should be aware of
the Trading Status in their own country.)

5.4 Identify and explain the

legal and insurance
requirements that a new
business venture might
have to comply with.

5.4.1 Identify and explain the main legislation and regulations

that a new business will need to comply with, for example:
Health & Safety at Work
Fire Regulations
Employment Acts contracts of employment,
dismissal, sickness benefits, statutory holiday
entitlement, EU working hours directive
Anti-discrimination legislation
Anti-Competition Law / Fair Trading /
Misrepresentation of goods or services
Business registration requirements and annual returns
Company taxation and PAYE taxation for employees
(Local variations will apply and learners should be aware of
the main legislation and regulations in their own country.)
5.4.2 Identify and explain the examples of sector-based
legislation and regulations that a new business will need to
comply with, e.g.:
Environment Health regulations food preparation,
hygiene and storage.
Transport and slaughtering of animals.
Transport sector exhaust emissions.
(Local variations will apply and learners should be aware of
the main legislation and regulations in their own country.)
5.4.3 Identify and explain the insurance requirements of a
prospective new business, e.g.:
Public Liability
Employers Liability
Product Liability
Professional Indemnity
Business premises (structure and contents)
Stock and goods in transit
(Local variations will apply and learners should be aware of
the main legislation and regulations in their own country.)

Assessment:
Assessment of this unit will be based on a case study (or business scenario) and will involve
a three hour examination.
Recommended Reading:
-

rd

Burns, P., Entrepreneurship and Small Business, 3 ed. (2011), Palgrave Macmillan,
Basingstoke (Core Text)
Butler, D., Enterprise Planning and Development, (2006), Elsevier, Oxford
ABE Study Manual, Business Start-up and Entrepreneurship, (2013)