Small Business Planning - Assignment Example

Assessment Activity 1 1. Using the business plan categories and topics listed previously, create an outline of a plan for your business summary Market overview Market Strategy Customer profile Competition Product strategy Marketing and Advertising Sales Channels Operations and Support Management team Revenue projections Risks and mitigations Capital Requirements Conclusions 2. List five sections of a business plan that are most important to you and your intended business. Give reasons for your selection. i. Capital requirements: this section will be most important because it will determine whether the business owner is able to raise enough capital to start the business ii. Risks and mitigations: this section will enable the business owner determine risks that may be encountered during operations of the business so that the success of the business is also affected. iii. Revenue projections: this section will enable the business owner determine the revenues that can be obtained during the business operations iv. Operations and Support: this section will determine activities that the business will be involved in so that its goals and objectives are achieved. v. Market strategy: this section will enable the business know the method of entry into the market and how consumers can be made to buy its products and services. Assessment activity 2 Explain why it is essential for a start-up business to write a business plan There are many purposes of writing a business plan, for instance i. It acts as a map for the future by determining the activities you need to focus on so that the business is successful ii. To support growth and funding. Most financiers need a business plan in addition to other documents so that the feasibility of funding the business can be determined. iii. A business plan communicates the course of action. It enables a company determine the opportunities that exist in future so that actions are focused on those opportunities. iv. Enables management of cash flow. A business plan ensures funding requirements are managed in advance v. Supporting strategic exit. A business plan highlights the opportunity for investors who can take over the business when the company stops operating. Assessment Activity 3 1. Having a well documented business goals and objectives is strongly recommended for any business. Why is this so? It guides the employees on the actions to be taken so that efforts are targeted towards achieving those goals. It is also method of ensuring the business does not engage in activities that are not relevant for its success. 2. Explain in your own words the difference between a business goal and a business objective. A business goal is what the business needs to achieve while a business objective is the action that will be taken to enable the achievement of such a goal. 3. Give an example of a business goal and explain how it and the steps to be taken toward achieving (objectives) can be measured according to SMART criteria. An example of a business goal can be to improve the quantity of sales within a month. Using the SMART criteria, the above goal will be achieved as follows: Specific: the people who will be involved are customer service agents and their action will be focused on accomplishing customers’ needs that need products and services of the company Measurable: the progress towards attaining the goal will be measured by an increase in number of customers who come to the stores and an increase in sales within a particular period. Attainable: the goal will be attained by include improving quality of products to be sold as well as promotion of the product and customer service. Realistic: The goal is achievable because when promotion is improved and customer service is also improved, more customers will be attracted to the products and services of the company, thus improving the quantity of sales. Timeline: the goals will be achievable within a month because customer awareness will improve and product design will also improve thus acting as a motivating factor to make purchases in the company Assessment activity 5 1. List three potential sources of finance for your company Personal contribution Contribution from friends Loans from banks and other financial institutions 2. External capital can be helpful to ensure the profitability and liquidity of a business. Explain why. External capital is important because it ensures the business is able to conduct its activities by using the capital so that it improves its profit and also able to pay back the funds borrowed. In addition, it enables the business have a bête value of its funds and capital, thus improving its net worth. Assessment activity 6 1. Explain the difference between marketing and promotional plan Marketing are activities such as market research, product development, conducting market analysis so that competitiveness of a product or service is enhanced. Promotion involves activities such as advertising and selling directly to customers so that sales are generated. 2. Why is it important to have marketing and promotional plans that align to the business plan? Marketing and promotional strategies that are aligned to the business plan ensure activities are focused on achieving goals and objectives set out in the business plan. As a result, it is possible to achieve the objectives and also attain goals because marketing and promotion will enhance contact with customers and also improve the image of the company. 3. Give an example of one promotional and one marketing strategy that you might use in your small business. Ensure that for each you state the activity, timeframe, budget, how it aligns to your business strategy and the expected result. Promotion strategy of stalls at exhibitions Marketing strategy of special offers such as discounts and two for one Marketing/Promotion Strategy Time frame Budget How it aligns to business strategy Expected result Marketing strategy of special offers such as discounts and two for one Two months $3000 Makes consumers develop likeness for the product and increase chances of buying the product thus improving sales Increased purchases of the product Promotion strategy of stalls at exhibitions Two months $2000 Creates awareness about the product, benefits of using the product and involvement of the company in provision of the product Increase in sales of the product Assessment Activity 7 1. Explain why operational plan is important for a small business It determines the actual activities that will be carried out and the resources that will be required to carry out the operations. It determines the strategies to be followed in carrying out particular tasks and the sequence in which actions will be performed during a particular activity so that the goals of the business are achieved. 2. Create an outline of headings and where required subheadings, for an operational plan suitable for your small business. Explain the rationale for each selection. The following operations will be carried out in a soft drinks retailing business Main operations Second level operations Third level operations Procurement Transport Making Orders Mode of payment Storage Stock taking Removal and storage of stock of products Security Customer service Packaging products Product display Handling customer complaints Communication Communication with suppliers Making orders for more stock of the products Communication among staff Communication with customers Informing customers about available products Promotion Advertising Public relations Use of posters Human resource Training Recruitment Remuneration Logistics Licensing Tax payments Payment of rent or lease Insurance Procurement will ensure products are ordered and modes of transport to the stores of the company are determined while mode of payment is also clearly determined. Security is an activity which will ensure the premises are protected from intruders during non operational hours. Customer service will ensure the right strategy is followed in providing services to customers. Communication will ensure employees of the company are able to get in touch with each other as well as customers and suppliers. Promotion will ensure consumer awareness is created so that products and services of the company can be highly demanded. Human resource activities will ensure training and recruitment of employees is doe and those who work for the company are paid while logistics will involve activities that ensure the company complies with legal procedures. Assessment Activity 8 1. Explain what staffing levels and staffing mixes are Staffing levels are the number of employees required in a particular department for it to work effectively. Staff mix is a combination of employees who perform different tasks in a particular department. 2. Complete the table below stating the advantages and disadvantages of each type of employment arrangement Employment type Advantages Disadvantages Suitable for your business (Y/N) plus explanation Full-time Employees are available to provide services for long time The business incurs more cost for longer working hours Y: it ensures the employee provides services throughout business hours Part-time Low cost is incurred in remuneration Employee cannot develop a culture of being loyal to the business N: the business requires an employee who learns the functioning of the company and focuses exclusively on its activities. Causal The business is able to get competent employees Possibility of losing competent employees who work on casual basis N: The business requires an employee who can apply the experience to work mainly for my business Permanent The business is able to forecast on payments in time Cases of absenteeism can affect the activities of the business Y: the business requires an employee who dedicates service to it. Contractors/ Consultants They provide quality services They do not stay long to continue serving the business Y: there services maybe required when technical issues arise Apprentices It ensures the employee learns about the tasks to be performed on job The business may incur training cost Y: the employee can be trained and retained by the business Assessment Activity 9 1. Using a specialist company, although seemingly costly, can potentially save a small business a lot of money. Explain why When a business uses a specialist company to achieve a particular objective, the business is able to get advice on how to perform a particular task in a specialized way. This results into an avoidance of losses that would have been incurred if the services of the specialist are not sought. 2. List three specialist services you might need to use in the course of setting up and operating your small business. i. Auditing services ii. Transportation services iii. Repair and maintenance services iv. Consultation services v. Insurance services vi. Financial advisory services Assessment Activity 10 1. Describe the benefits of keeping stakeholders informed of your business’ health i. Enables them have an idea about the performance of their investments into the business ii. Enables them gauge whether they should invest more funds into the business iii. Enables the company maintain a positive relationship with stakeholders 2. List the likely stakeholders of your business Employees Customers Shareholders Government Regulatory bodies The general public Consultants Assessment Activity 11 1. Define the concept of risk for a small business These are conditions that can prevent the employees of the business to perform their tasks in the business 2. Plotting your business risks on a matrix is widely recommended. What are the benefits of doing this? Choose five potential risks for your business and plot them on the matrix shown below Likelihood High Medium High Critical Medium Low: Accounting errors Medium: Low amount of funds High: Fire Low Low: inadequate stock Low Medium: lack of training of employees Low Medium High Impact Summary The booklet shows that during the formation of a business, it is important to create a business plan. The function of business plan is to give direction on the activities that a business should focus on. It also acts as a factor that can contribute to getting financial assistance from financiers. The booklet shows that chances of success of a business increases when a business plan is created through elaborating the aspects of the business that should be focused on. In addition, the article states that identification of methods and means of production and operation of the plan is important in ensuring the activities of the business are in conformity to business goals and objectives. It suggests a number of production operations such as plant and equipment, supply and distribution, customer relationship management, workplace health and safety regulation and risk management. The booklet also explains strategies that can be used to understand market trends and consumers. It achieves this by suggesting the use of surveys, observations and competence analysis as methods that can enable a business individual to understand market trends. The article also explains terms of employment that can be selected by a new business to recruit new employees. For instance it explains terms of employment such as fulltime employment, part time employment, contract employment, permanent employment and apprenticeship. In addition, it tastes the significance of setting business goals and objectives and elaborates methods in which business goals should be approached. Various marketing strategies and promotion strategies are suggested. These strategies are recommended to be used by small businesses to improve competitiveness of their products and services. The article also suggests that it is important to state the sources of finance for a starting business. It also suggests that a business can uses sources of finance such as contributions from family and friends, venture capitals, leasing of premises and loans from banks and other lending institutions. The booklet also suggests methods that can be used to observe workers health and safety by explaining the WHS Act. It also suggests the responsibilities that employees should take to ensure safety is observed at work. Furthermore, the booklet suggests that specialist services are of great significance to a business and any business must seek the services of specialist organizations in order to carry out its duties professionally. This is achieved by suggesting specialist services such as government agencies, specialist consultants, online agencies and business brokers. The article also explains a number of risks that a starting business is likely to experience such as financial risk, reputation risk, equipment risk, security risk, operational risk and legal risks. It suggests the strategy of using a risk matrix to understand the risks that can have impacts on the business so that they are addressed first. Read More