Michael Kelly is twenty nine years old and is a graduate with an engineering degree. He has been working in the area of Research and Development in a large transnational company since graduation. He has a desire to work for himself and feels that the time is right to form his own business in his home town producing electronic parts for domestic appliances. He has asked you to help him in writing his business plan. (A) Explain the importance of a Business Plan. (B) Draft a Business Plan for Michael Kelly's venture under five main headings. State relevant assumptions where necessary.

Leaving Cert Business Starting a Business/Business Planning: Michael Kelly is twenty nine yea

Michael Kelly is twenty nine years old and is a graduate with an engineering degree - Leaving Cert Business - Question 6 - 2002

Question 6

Michael Kelly is twenty nine years old and is a graduate with an engineering degree. He has been working in the area of Research and Development in a large transnati... show full transcript

Worked Solution & Example Answer:Michael Kelly is twenty nine years old and is a graduate with an engineering degree - Leaving Cert Business - Question 6 - 2002

Step 1

Explain the importance of a Business Plan

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Answer

A business plan is a crucial document that lays out the framework for a company's direction and goals.

Strategic Planning: It provides a roadmap for the enterprise, outlining both short-term and long-term objectives and the strategies to achieve them.
Funding: Financial institutions require a detailed business plan before granting loans or investments. It outlines how the funds will be used and the repayment strategy, instilling confidence in investors.
Performance Measurement: The business plan establishes benchmarks against which the performance of the enterprise can be measured. This allows for adjustments as needed based on actual performance versus projections.
Risk Management: It helps identify potential risks and provides strategies to mitigate them, reinforcing the sustainability of the business.
Communication Tool: A business plan serves as a communication tool, detailing the business idea to stakeholders, partners, and employees, ensuring that everyone is aligned with the company's vision.

Step 2

Draft a Business Plan for Michael Kelly’s venture under five main headings

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Answer

1. Introduction

Michael Kelly's venture will focus on producing electronic parts for domestic appliances. The introduction will include the business name, contact information, and a brief description of the enterprise.

2. Summary

The summary outlines the essential components of the business. It emphasizes the goals, unique selling points of the products, and the potential market. The focus will be on the competitive advantages offered by Michael Kelly's expertise in engineering and market knowledge.

3. The Main Body of the Plan

a) Description of the Enterprise

Detail the company's background, objectives, and operational strategies.

b) Key Personnel

Outline Michael Kelly's qualifications and experience while emphasizing his unique skills gained through his work in Research and Development.

c) Market Analysis

Conduct a detailed analysis of the market, identifying potential customers and competitors. Assess market trends and future projections.

d) Marketing Strategies

Define the marketing approach, including product positioning, pricing strategies, and promotional activities. Outline channels of distribution and methods of customer engagement.

e) Financial Projections

Provide realistic financial forecasts, including projected profits and cash flow for the first few years, ensuring that assumptions are clearly stated.