Assessment Details
Assessment Task
You are required to produce a costed business plan for a new business launch. The plan can, within reason, be based upon any area of business activity. The business plan must contain the following key elements:
1. A summary of the business idea, an analysis of the risks that the business will face and the source(s) of initial funding for the business.
2. An outline and discussion of the key fixed and variable costs.
- A budgeted profit forecast for the first year of operation.
- A budgeted cash flow for the first year of operation.
- Calculation of the breakeven point and margin of safety.
- Key performance indicators (KPIs) to monitor progress towards business goals.
- Recommendations based on the results of your analysis above.
It is important that you do some research before identifying and quantifying sales and cost volumes; this could be based upon internet based research or your own knowledge of a particular business sector. It is likely that you might have to make some assumptions with regard to some of the revenue and cost items and these should be clearly explained in your plan.
Assessment criteria
Refer to the marking criteria table for detail.
- Clear and succinct summary of the business idea.
- Outline and discussion of the main fixed and variable costs.
- A clearly presented and reasoned profit forecast and cash flow.
- A clearly presented breakeven point and margin of safety calculation.
- Clearly presented Key performance measures.
- Clearly presented recommendations.
- Presentation including spelling and grammar; clarity and layout of the report.
Elements of this assessment will gain credit towards CMI level 5 award.
Presentation (6):
You should set your answer out in the format of a business plan incorporating: a title page and contents page; a clear signposting introduction that identifies the order in which the questions above are to be answered; the use of sub-headings; a conclusion; and a reference list (a bibliography is not required). Note you may use appendices judiciously and these (and the reference list) need not be counted in your word count.
Please ensure you adhere to the Harvard standard of referencing and citation. If you require any help with this, please either contact or look at the sources on the library webpages.
The word count is 1 800.
Summary of the business idea (1):
Your objective here is to ensure that the reader is clear as to: what industry the business plan sits in and the nature of the business idea/start up. You can also identify the nature of the competition and the key success factors needed in the industry. The style should be succinct and crisp.
Outline and discussion of fixed and variable costs (2):
You should firstly identify and then quantify the main costs that your business idea will incur. You should try to ensure these are as accurate and realistic as possible, e.g., by referring to cost sources etc. If you are making assumptions regarding the costs, these will need to be clearly stated. You should divide this section into fixed and variable costs. The section should conclude with a discussion on the costs identified: which ones are the highest? How volatile are they, etc.
Profit and cash forecast (3 and 4):
These should be clearly outlined in tabular format. You might find it easier to construct both tables in excel and then cut and paste them into your report. You must annotate the forecast to indicate any assumptions made including the source(s) of finance for your business.
Breakeven Point and Margin of Safety (5):
Both calculations should be clearly set out with annotations to show the origin of the component items. This section should conclude with some considered comments on each calculation. Is the breakeven point high or low? What risks are faced by the business as a result of the calculations? Is the margin of safety high or low etc.?
Key Performance Indicators (6):
Performance indicators should be specific to the business. You should explain why you have chosen each KPI and how it could be measured.
MARKING CRITERIA
| A1 – A2 | A3 – A4 | B1 – B3 | C1 – C3 | D1 – D3 | F1 | F2 – F3 | |
| Clear and succinct summary of the business idea | Highly developed understanding of the business. Answers will have excellent clarity and succinctness. | A well-developed understanding of the business. Answers will have very good clarity and succinctness. | Thorough understanding of the main aspects of the business. Answers will have sound clarity and succinctness. | Satisfactory understanding of the main aspects of the business. Answers will have satisfactory clarity and succinctness. | Adequate understanding of the main aspects of the business. Answers will have adequate clarity and succinctness. | Limited understanding of the main aspects of the business. Answer may have limited clarity and succinctness. | Substantial errors in summarising the business. Answer may lack clarity and succinctness. |
| Outline and discussion of the main fixed and variable costs | Outstanding outline of costs. Highly robust and extensive discussion. | Very good outline of costs. Robust and extensive discussion. | Sound outlining of costs. Extensive discussion. | Satisfactory outlining of costs. Satisfactory discussion. | Adequate outlining of costs. Some relevant discussion. | Very limited outlining of costs. Limited discussion. | Substantial errors in outlining costs. Answer lacks discussion. |
| A clearly presented and reasoned profit forecast and cash flow | Outstanding presentation with near flawless calculations and layout. Excellent justifications of items. | Very good presentation and calculations/layout. Very good justifications of items. | Sound presentation with accurate calculations and clear layout. Good justifications of items. | Satisfactory presentation with sound calculations and layout. Satisfactory justifications of items. | Adequate presentation with only a few flawed calculations; adequate layout. Adequate justifications of items. | Limited presentation with some flawed calculations and layout. Limited justifications of items. | Unclear presentation with flawed calculations and layout. Very limited justifications of items. |
| A clearly presented breakeven point and margin of safety calculation. | Outstanding presentation and calculations/ layout. Comprehensive commentary. | Very good presentation and calculations/ layout. Good and near comprehensive commentary. | Sound presentation and calculations/ layout. Sound but not comprehensive commentary. | Satisfactory presentation and calculations/ layout. Satisfactory commentary. | Adequate presentation and calculations/ layout. Adequate commentary. | Weak presentation with some flawed calculations and layout. Limited commentary. | Unclear presentation with flawed calculations and layout. Very limited commentary. |
| Clearly presented key performance measures | Outstanding presentation and selection of measures | Very good selection of measures with good justification | Sound choice of measures with justification | Good choice of measures with discussion | Satisfactory choice of measures with discussion | Weak choice of measures with limited discussion | Unclear presentation and choice of measures. Very limited commentary |
| Clearly presented recommendations | Outstanding recommendations | Very good, well-articulated recommendation | Appropriate recommendations | Satisfactory discussion | Some useful discussion | Weak or unclear recommendations | Very limited or no recommendations |
| Presentation including spelling and grammar; clarity and layout of the report. | Exemplary organisation, structure and presentation of all work; lucid communication in all contexts; Exemplary referencing. Spelling and grammar approach a perfect standard. | Excellent organisation, structure and presentation of work; lucid communication in most contexts; comprehensive referencing. Spelling and grammar very sound. | Appropriate organisation, structure and presentation of work; clear communication; accurate and consistent referencing. Sound spelling and grammar. | Satisfactory organisation, structure and presentation of work; communication mostly appropriate to context; largely accurate and consistent referencing. Satisfactory spelling and grammar. | Organisation, presentation and structure, communication, and referencing of work adequate in most contexts, but with some mistakes / irrelevancies. Adequate spelling and grammar. | Elements of poor organisation, presentation and structure, communication and referencing. There may be weak spelling and grammar. | Work is disorganised, poorly presented and structured, with poor / inappropriate communication and substantial errors in referencing. There may be very weak spelling and grammar. |
