1. Establishing a Business

2. Steps in Establishing a Business
6. Operate Business
5. Acquire Funds
4. Create a Business Plan
3. Identifying Resources
2. Research
1. Conceptualization

3. RESEARCH
Primary research refers to collecting data that does not exist.
Secondary research refers to collecting data that already exist.

5. Establishing a Business
For a business to be successful there must be enough people who want to buy your product or service. You also need to ensure your product or service is accessible to the people who may want to buy it. It has to be available in the right places in the right quantities and presented in a way that will be attractive to your customer. The people you are aiming your product at are your “target market” or “market segment”.

6. RESEARCH QUESTIONS
1. Why would you choose this product/service? 2. How would describe most people who buy this product/service? 3. Where would you look to find this product/service? 4. What would you expect to pay for this product/service? 5. How often would you buy this product?

7. Is your business idea workable?
Hi I am Bill

8. Feasibility Study
It is research done to ascertain the viability/feasibility of a business idea or any other venture. It assesses the business idea in terms of its operational costs, expected revenue flows, level of competition etc.

9. Types of Feasibility Study
Technical Feasibility
Is the product or service that you propose to offer technically viable?
Market
Feasibility
Can the product or service be sold in sufficient volume at a sustainable price?
Is there a market for what you are proposing to offer?
Commercial
Feasibility
Is your product or service commercially viable?
Can you sell your product or service in sufficient volume to generate a profit?
What are the major risks you will have to accept if you go ahead with your business?
How do you propose to lessen the risks?
Overall Risk

10. After the Feasibility Study
If the feasibility study shows that your business in workable, only then the Business Plan should be prepared.

11. Group Activity
Generate your research questions

12. THE BUSINESS PLAN

13. Planning
Planning is defined as a “decision making process by which an organizations decides what is wants to achieve, how it intends to achieve it and in what manner”. G.A. Cole.

14. Why is planning for the operation of your business important?
Hi I am Bill

15. Importance of Planning
provides a guideline for direction
forces managers to look ahead and anticipate possible changes
helps avoid mistakes and waste
helps set a the standard for control purposes

16. Levels of Planning
Short-term plan – for day-to-day activities; may be for each day, week or month (Operational level)
Medium-term – these E.g. whether to use sales promotion for a product (Tactical)are set at a department level and may cover a period of over 1 year.
Long-term – major decisions and long range plans for the organization. Decisions include: introducing a new product, purchase other companies and expansion. This requires analysis and research

18. The FIVE parts of Business Plan
2. The Operational/Production Plan
1. Executive Summary
3. The Marketing Plan
4. The Financial Plan
5. The Organization and Management Plan

19. The Operational/Production Plan
Type of Production includes Primary, Secondary and Tertiary. Go to page 124 in your text for more information.
Levels of production – subsistence, domestic, surplus or export
Quality Control - maintaining standards in manufactured products.

20. The Marketing Strategy
Pricing Strategy
- Pricing at a Premium – Set price above competitors
- Pricing for Market Penetration – set low prices to attract
customers
Bundle Pricing - selling multiple products at a reasonable cost

21. The Financial Plan
Sources of Capital Personal Savings or Past Earnings Funds from Partners or other investors Loans from Bank or other financial institutions Government grants Credit transactions

22. The Financial Plan
Collateral refers to money or property that is pledged as security (or guarantee) for repayment of a loan.

23. Question
If you borrow $ from your friend, give one example of a collateral you would use as security.

25. Secondary research gathers information that was already prepared.
TRUE
FALSE

26. Strategic plans are created after the tactical plans have been created.
TRUE
FALSE

27. The feasibility study is an analysis of whether the business ideas can be a success.
TRUE
FALSE

28. Details on branding will be found in the production plan.
TRUE
FALSE

29. The business plan does not guarantee the success of the business.
TRUE
FALSE

30. What is collateral?
Collateral is money or property that is pledged as security (or a guarantee) for repayment of a loan.

31. Examples of Collateral

32. General Procedures for conducting a business
Decide on the type of business (Sole trader, Partnership, Cooperative, Public or Private Limited Company
Register with the Office of the Registrar of Companies
Provide necessary documentation along with a fee to the Registrar
Register with the General Consumption Tax Office
Register with the National Insurance Scheme

33. Reasons for registering a business:
Getting Loans or finding investors, Protect your assets
Professionalism, Contribute to economic development

34. QUESTION
Carla graduated from high school and realized that she did not want to depend on another person to per her wages. She decided to grow hens that would lay eggs. She made this decision when she realized that the local shop was always running out of eggs and could not meet the demand. She visited a neighbouring community and observed how another entrepreneur operated a similar business. Carla made careful plans and borrowed money from her parents. She found a carpenter who built the henhouse and she purchased all the necessary raw material. When she bought the baby her baby chickens, she stayed up late for many nights to ensure that no harm came to them. She waited patiently for many weeks before the hens matured and started laying eggs. With the profits that she made, Carla could repay her loan and expand her operations.

35. QUESTION Refer to Carla’s story
Carla decides that she wants to share the responsibilities with another person who would also contribute capital. What would be the most suitable business type for Carla?
Carla needs to borrow more money but her parents cannot lend her money. Explain what is collateral’ and how it would help Carla.
Why must Carla register her business?

36. Creating a Visual Business Plan