The Case: Propose Your Own Business

For this assignment, you are to write a proposal that seeks a loan to start a student-created business in your city.

Imagine that in the hope of fostering the entrepreneurial spirit of students, a dozen prosperous alumni have persuaded your school to set aside space in a building near the center of your campus to provide rent-free space for several student-created businesses. Calling themselves the Delphi Group, these alumni will also make interest-free loans to the students who set up these businesses. The only stipulation is that repayment begin no later than one year after the students receive the money.

Because the Delphi Group expects a large number of requests for the space and the loans, its members have decided to establish a competition in which interested students submit proposals describing the businesses they would like to start. After reading these proposals, the Delphi Group will select the four that seem most likely to succeed.

You are to write a formal proposal to submit in this competition. To assure that you have an appropriate business to propose, you will need to submit a brief description of it for your instructor's review and approval.

Proposed Content

The Delphi Group has specified that the proposals should be between fourteen and twenty double-spaced pages (not counting front matter or appendixes). Proposals are to include the following chapters. Note that this organization is simply a variation on the superstructure for proposals that is described in Chapter 19.

Introduction Briefly explain that you are responding to the Delphi Group's request for proposals and name the kind of business you would like to start. Tell how much money you want to borrow. Forecast the contents of the rest of your proposal. This chapter should not exceed one page.

Market Analysis Provide persuasive evidence that a market exists for the business you are proposing. Who will purchase your products or services? What are the important characteristics of these people from the point of view of your proposed business?

Also, discuss any competition that exists and explain your reasons for thinking that you can compete effectively against it. If there isn't any competition, tell whether a similar business has been tried in your community but has failed. Explain what makes you think your business is more likely to succeed.

This chapter should be as long as is required to persuade your readers that a substantial market exists for the business you are proposing.

Proposed Business Because the Delphi Group will be extremely interested in the soundness of your business plan, this chapter should be the longest in your proposal. Cover the following topics:

• Products or services. Tell specifically and in detail what your business will sell. Relate these products or services directly to your market analysis.

• Business site. Describe the physical layout of your business and its décor in a way that persuades that they will make your business efficient and appealing to its target market. Identify the equipment and furniture you will need to purchase. Include a floor plan that shows the overall dimensions of the area you will use and the arrangement of items within that area.

• Marketing plan. Tell how you will attract customers. Include both your plans for attracting attention to your business as it first opens and the on-going marketing plan you will follow thereafter.

• Staffing and management. Indicate how many people you will hire and what their duties will be. If your employees will need to have any special qualifications, name them. Be sure that you have someone to perform each of the functions required to run a business even if you don't assign one person to each function. For example, even if you don't plan to hire a full-time accountant, tell how your accounting will be done. Your staff may be as small as two people (yourself and one other person), provided that the two of you can perform all the required activities and provide coverage for all the hours that the business will be open.

Also, describe your business's management structure, keeping the structure as simple as possible.

Schedule Provide a prose overview and a Gantt chart of the major events in the development of your business. Begin with the approval of your proposal and continue to the point where your business is fully established and you can start making payments on your loan. Include such events as outfitting and decorating your business location, lining up suppliers, hiring employees, preparing your marketing materials, and opening for the first day of business. Indicate the duration of each event.

This chapter should not exceed three pages, including the Gantt chart.

Qualifications Explain your qualifications to run the business you propose. If you would need to gain additional knowledge, tell what it is and describe how you will get it (for instance, by taking a certain course). This chapter should not exceed one page.

Budget Explain the projected expenses and income for your business. When discussing initial expenses, list major categories (such as furniture, equipment, initial supplies); you do not need to identify each separate item. You may provide rough estimates of costs as long as you have a basis for believing your estimates to be reasonable.

When discussing operating expenses, consider only the cost of replenishing supplies and paying salaries. Assume that utilities, janitorial services, and other miscellaneous operating needs will be provided for free by your school; do not include them in your budget.

When discussing projected income, state your assumptions about how much business you will do, what your profit margin will be, and so on. Here, too, rough estimates are acceptable, provided that you have a basis for believing them to be reasonable.

Remember that your business may build slowly and that consequently it may be months before your income can cover operating expenses completely. If this is the case, your loan request should include the money you need to operate during this period.

Present your financial plans in a way that will persuade the Delphi Group that you can begin repaying the loan one year after receiving it.

Your budget chapter should not exceed three pages, including prose and tables. If you feel that additional details about your budget would be persuasive, include them in an appendix (which does not count as part of the fourteen to twenty pages required for the body of the report.)

Conclusion Briefly summarize your proposal and bring it to an appropriate end. This chapter should not exceed one page.

Format

The Delphi Group has specified that all proposals should use the format described in the style guide distributed by your instructor.