Phase 1 entails the market research that must be completed early in the planning process, to ensure that the nature and price of the product or service are determined correctly.
Phase 2 entails the planning and execution of a marketing campaign.
- Place, time and promotion are the three key words. Firstly, the marketing campaigns must take place at the right time at the right place. For instance, it is pointless to display the product at a venue when there are no people. Furthermore, the campaigns must catch the attention of the potential clients (promotion).
- Advertisements have a very important role to play in this phase. Advertisements must draw attention, be interesting and compel the viewer to take action.
- The choice of media is also important. The media that are probably used most frequently are posters, newspapers, radio and television.
7. Budget for the year
The budget is the most important part of the business plan. All the planning, mentioned above, can only be realised if the necessary finances are available. The budget that shows whether this is possible or not.
The income statement done in Activity 1.2 is an important part of the budget, but must be augmented by a balance sheet and cash flow statement. In this module we shall only look at the income statement.
8. Projection for the following year (in this case 2005)
A business always looks ahead of the present year and attempts to make an informed estimate of what should be attained in the next year or two.
The income statement format can be used for this purpose. All possible factors are taken into consideration and then it is decided whether the sales ought to increase, (e.g. by 10%), whether there will be new costs that will reduce the profit, (e.g. if it is expected that additional marketing needs to be done, etc.).
ASSIGNMENT:
Follow the example given in the preceding section and turn your business idea into a business plan. Use the captions on the next page to write a business plan.
M y B usiness Plan
Period______ to ________
1. Vision:
2. Mission:
3. Organogram:
4. The market:
4.1 Potential clients (based on research)
4.2 Competitors (based on research)
5. Goals (Remember: Specifically for the period indicated in the heading.)
6. Steps in pursuing the goals (Remember to set out your marketing strategy here.)
7. Budget (for the period indicated in the heading)
Data:
- Selling price
- Number of units that will be sold
- Product cost per unit
- Expected operational costs (Remember to make sufficient provision for the market)
Calculations:
- Sales
- Cost of product
- Gross profit as first indicator (sales less cost of product)
- Operational costs
- Operational profit
8. Projection (for the period following the period indicated in the heading)
- Sales
- Cost of product
- Gross profit as first indicator
(sales less cost of product)
- Operational costs
- Operational profit
Assessment
| Learning Outcomes (LOs) |
| LO 4 |
| Business, Consumer and Financial Knowledge and Skills The learner is able to apply, in a responsible manner, a range of business, consumer and financial skills. |
| Assessment Standards(ASs) |
| We know this if the learner: |
| 4.1 generates, through SWOT analysis, possible business ideas to meet the need for manufactured goods or services; |
| 4.2 develops a business plan (including a budget) for a manufacturing, service or tourism concern based on the best business opportunity from the ideas generated; |
| 4.3 engages in the business activity planned and discusses the reasons for choosing a particular form of ownership; |
| 4.4 conducts a marketing campaign to promote a product and discusses the self-selected advertising media; |
| 4.5 researches the role of small, medium and micro enterprises in wealth and job processes. |