IB Business Management (BMT)
Business Plans (SL)
Busy day in the loans department
Joseph Maloney loans money (or not) to new proposed businesses. His role is to receive business plans and talk through these ideas with potential entrepreneurs.
Loans are granted on the basis of the quality of the business plan (in conjunction with the actual idea itself).
The success rate for loans depends on the following points
- The quality of the idea
- The history / experience / credentials of the applicant
- Does the business plan seem reasonable / convincing?
- How much loan capital is required?
- What is the rate of return of the business?
- Has market research been conducted?
- Does a market for the good / service exist?
- Current / forecasted economic conditions!
- Will the applicant pay back the bank?
- What is the overall risk level of the proposal?
- Future prospects (can it grow and scale)?
Business #1 Vanishing Panda
Name of Proposed Business: Vanishing Panda
The product / service:
Ethically-produced T-shirts featuring wildlife designs made using two inks—one permanent, one organic and biodegradable—that cause part of the image to vanish over time. Symbolizes endangered species disappearing from habitats.
Where will it be delivered?
Shanghai, China (with potential for global shipping)
Cost of product / service:
Retail price: $30 USD per shirt
Cost per unit: $8 USD
Projected growth:
Forecasted growth of 25% annually for the first 3 years, with potential partnerships with environmental NGOs and wildlife parks.
Competition & USP:
Competes with high-street ethical clothing brands (e.g., Patagonia, Everlane). USP: Interactive, meaningful design tied directly to sustainability and wildlife conservation. Strong emotional connection to cause.
Finance Section:
- Funding request: $150,000
- Sources: 60% bank loan, 40% personal capital
- Break-even point: 12,500 units
- Expected return for investors: 20% in 2 years
HR / Personnel Section:
- Founder + 2 designers + 1 marketing manager
- Paid $2,000–$3,000/month
- Production outsourced to ethical manufacturer in Vietnam
Marketing Section:
- Strong primary research: 500+ survey responses, 3 focus groups in Shanghai, 82% positive reception
- Secondary: Sustainable fashion industry projected to grow 10% per annum
- Promotion budget: $12,000/year (social media ads, influencer collabs)
- Delivery: Direct-to-consumer through Shopify; fulfillment via green delivery service
Business #2 Smash your subject
Name of Proposed Business: Smash Your Subject
The product / service:
Online tutoring for high school/university students. $15 per hour for group sessions (max 5 students). Includes AI-generated assignments, feedback bots, and a progress tracker.
Where will it be delivered?
USA (online-based)
Cost of product / service:
$15/hour (equivalent to $75/hour per session if full)
Projected growth:
Modest forecast of 10% quarterly client growth for first 18 months; user base expected to plateau after 150–200 regular students.
Competition & USP:
Competes with Chegg, Wyzant, and other platforms. USP: Integrated AI bots + human feedback combo. Referral program offers 10% discounts for word-of-mouth expansion.
Finance Section:
- Loan requested: $5,000 to build AI-integrated LMS (Learning Management System)
- Break-even point: 340 sessions (approx. 68 days of full classes)
- Forecasted ROI: 30% in year 1, dependent on retention
HR / Personnel Section:
- Solo founder/tutor initially
- Potential to outsource grading to AI freelancers in future
- Wage: Founder takes 70% of earnings, reinvests 30%
Marketing Section:
- Primary: Survey of 100 students; 75% said they’d switch for cheaper tutoring
- Secondary: US tutoring market growing at 7% annually
- Promotion: $500 launch budget (Instagram reels, peer-to-peer promotion, referral discounts)
Business #3 Quickly Clean
Name of Proposed Business: Quickly Clean
The product / service:
Residential and commercial cleaning services featuring staff with background checks and body cameras. Daily footage reviewable by customers for 24 hours.
Where will it be delivered?
Launch city: Chicago, USA
Cost of product / service:
$30/hour for residential, $40/hour for commercial clients
Projected growth:
Initial 20 clients/month → 200 clients/month by end of year 2. Franchising by year 3 planned.
Competition & USP:
Competes with local maid services and platforms like TaskRabbit. USP: Full transparency with bodycam footage, accountability, customer review interface.
Finance Section:
- Loan requested: $40,000
- Sources: Bank loan only
- Break-even point: 1,200,000 hours overestimated scale or data mistake)
- Forecasted ROI: 70% by year 3
HR / Personnel Section:
- 5 cleaners (initial), 1 tech officer
- Hourly pay: $15 for cleaners, $4,000/month for tech officer
Marketing Section:
- Promotion budget: $2,000/year (unrealistically low for scaling)
- Delivery: Company fleet of 2 vans (not yet purchased)
Business Plan Questions
- Read the 3 business plans carefully
- You will rate each business plan according to how attractive the proposal is both a) for the bank to lend to and b) as a business
- To rate the business plans you can create your own matrix to score each proposal from the two perspectives above
- You could be looking for (as a start) items such as,
- Are all sections you would expect covered?
- Are there any obvious errors?
- Does the business have a USP?
- Has market research been conducted?
- When will the bank recover their loan / will the bank recover it?
- How much risk (low / medium / high) is involved?
- Final task: you will choose one business to loan to (as a bank) and justify in detail why!
