Week 1 is test week. The tests are to set a baseline in order for you to see if you are improving as the weeks go by. Tests need to be measurable and repeatable, for example the run test is best done on a track or flat route that you can repeat in a few weeks time.
The run and bike tests in the plan are Lactate Threshold Heart Rate tests and will also allow you to set your heart rate zones if you plan to train to heart rate. Detailed instructions are in the plan.
If you have a power meter on your bike you should do an FTP test to set your zones and that test is probably best done on a turbo, but can be done on the road – just remember there are more variables outside, such as the weather, traffic and terrain which may impact on your results (a long, steady climb is ideal)
If you don’t train with equipment and just go by feel that’s fine too – you can simply find a route and time how long it takes you to complete it – re test on the same route in a few weeks to see if you are any faster.