ASSIGNMENTSEPTEMBER 2017 SEMESTER SUBJECT CODE : MSB726 SUBJECT TITLE : SMALL BUSINESS MANAGMENT LEVEL : MASTER'S DEGREE STUDENT’S NAME : Seinab Bashir Mohamud Elmi MATRIC NO. : M60101170064 PROGRAMME : MBA ACADEMIC FACILITATOR : ABDIWAHAB A. ELMI LEARNING CENTRE : MOGADISHU UNIVERSITY INSTRUCTIONS TO STUDENTS 1) This assignment consists of FOUR (5) Questions. Answer ALL of them. 2) Plagiarism in all forms is forbidden. Students who submit plagiarised assignment will be penalised. 3) References MUST be included and taken from reliables sources. Please use the APA Referencing Style and cite your work appropriately. 4) This assignment carries a 60% weightage toward final grade. 5) The submission date for this assignment is BEFORE or ON _______ 2017. Please submit your assignment answer via _______________. THERE ARE 2 PAGE OF QUESTIONS, EXCLUDING THIS PAGE. DECLARATION BY STUDENT I certify that this assignment is my own work and is in my own words. All sources have been acknowledged and the content has not been previously submitted for assessment to Asia e University or elsewhere. I also confirm that I have kept a copy of this assignment. Signed: _____________________________ INSTRUCTION: Answer ALL the question given. Answer 1 Market research involves gathering of information about particular market followed by analysis of that information, so. A. What is a market research is all about? And why it is essential? Market research is the process of assessing the viability of a new good or service through research conducted directly with the consumer which allows a company to discover the target market and record opinions and other input from consumers regarding interest in the product. Market research may be conducted by the company itself or by a third-party company that specializes in the market research field. Test subjects are usually compensated with product samples and/or paid a small stipend for their time. The purpose of market research is to examine the market associated with a particular good or service to determine how the audience will receive it. This can include information gathering for the purpose of market segmentation and product differentiation, which can be used to tailor advertising efforts or determine which features are seen as a priority to the consumer (Investopedia). Types of Market Research While there are a number of market research tools you can use, there are really only two types of market research data: 1) Primary. Primary data is first-hand information you gather yourself, or with the help of a market research firm. You control it. 2) Secondary. Secondary data is pre-existing public information, such as the data shared in magazines and newspapers, government or industry reports. You can analyze the data in new ways, but the information is available to a large number of people (encyclopedia). The Importance Of Market Research There is no doubt about the importance of market research. To prove this statement, let’s view why you should research markets. Market research is important for your business because it provides you with the following opportunities: 1) Increased Sales. Through researching your market you gain valuable information that helps you identify how successful your product/service is likely to be, what the best price you can set for the product/service, and which customers are interested in purchasing and consuming the product/service. Having investigated this information helps you increase sales. 2) Better Customer Management. The importance of market research is that you can use tools of marketing campaigns (questionnaires, meetings, discussions, messaging) to reach a wide audience of customers, reduce the timeframe within which your product/service ASSIGNMENT _ MSB726_Small Business Management 2017 Page 1 4. the research design must be developed. “To test the proposition that sales are positively affected by the sales promotion schemes undertaken this winter. Such objectives may be stated in qualitative or quantitative terms and expressed as research questions. 2011). survey or interview). The clear-cut statement of problem may not be possible at the very outset of research process because often only the symptoms of the problems are apparent at that stage. after some explanatory research. What are the systematic processes involved in carrying out a market research? According to the (Chand) the various stages or steps in the marketing research process are discussed below: 1. and achieve higher customer satisfaction. Statement of Research Objectives: After identifying and defining the problem with or without explanatory research. the sampling. Planning the Sample: Sampling involves procedures that use a small number of items or parts of the ‘population’ (total items) to make conclusion regarding the ‘population’.. Then. As due to market researching your sales tends to an increase and your customer management gets better. statement or hypothesis. Planning the Research Design or Designing the Research Study: After defining the research problem and deciding the objectives. Identification and Defining the Problem: The market research process begins with the identification “of a problem faced by the company. A research design is a master plan specifying the procedure for collecting and analysing the needed information. the researcher should also determine the type of sources of information needed. A. a hypothesis is a statement that can be refuted or supported by empirical finding. reaches the customers. clear definition of the problem is of crucial importance in marketing research because such research is a costly process involving time. The objectives of the study are included in the research design to ensure that data collected are relevant to the objectives. the data collection method (e.” 3. 3) Business Growth. energy and money. The same research objective could be stated as. the research objective. the researcher must take a formal statement of research objectives. It represents a framework for the research plan of action. At this stage. investigate current and future needs and expectations of the customers. and the timing and possible costs of research. 2. methodology. your company gains an opportunity for further business growth and development (mymanagementguide. “To find out the extent to which sales promotion schemes affected the sales volume” is a research objective expressed as a statement.g. On the other hand. Important questions in this regard are— who ASSIGNMENT _ MSB726_Small Business Management 2017 Page 2 . For example. Formulating Conclusion. Editing involves inspecting the data-collection forms for omission. Data processing begins with the editing of data and its coding. What are the key components of effective? According to the (K. collected from the original base through empirical research by means of various tools.e. these have to be converted into a format that will suggest answers to the initially identified and defined problem. but instead. 6. etc. In its simplest form analysis may involve determination of consistent patterns and summarising of appropriate details. and consistency in classification.e. It also helps the market research team familiarize itself with the project and its ASSIGNMENT _ MSB726_Small Business Management 2017 Page 3 . Data can be primary. Data Collection: The collection of data relates to the gathering of facts to be used in solving the problem. legibility. government publications. i. Data can be secondary..is to be sampled as a rightly representative lot? Which is the target ‘population’? What should be the sample size—how large or how small? How to select the various units to make up the sample? 5. i. If computer analysis is being used. beginning the market research by talking with key stakeholders is a perfect starting point. responses need to be classified into meaningful categories. Hence. collected from concerned reports. 7. The research report should clearly and effectively communicate the research findings and need not include complicated statement about the technical aspect of the study and research methods. It helps all groups buy into ownership of the process and support the market research. 2012)Here are five key components to any quality market research feasibility study: Stakeholder In-Depth Interviews (IDIs) – RMS has found through past studies.Often the management is not interested in details of research design and statistical analysis. methods of market research are essentially methods of data collection. Before tabulation. books. especially written articles. The rules for categorizing. company publications. This coding process facilitates the manual or computer tabulation. Analysis of data represents the application of logic to the understanding of data collected about the subject. the data can be key punched and verified. B. Preparing and Presenting the Report: The final stage in the marketing research process is that of interpreting the information and drawing conclusion for use in managerial decision. recording and transferring the data to ‘data storage media’ are called codes. Data Processing and Analysis: Once data have been collected. magazines and other periodicals... in the concrete findings of the research. consumer expenditures. The demand model will estimate/predict the likelihood and habits of end-users for the new business you are testing. what ten tips to be more effective? According to (Gregory. which isn’t available on the website. any good market research firm will be objective in their analysis and provide its client with a “go” or “no go” recommendation. The executive summary also serves as a nice and short snapshot of findings. The demand estimates use predictive modeling to offer a rough figure based on the combination of known factors and assumptions. Finally. Quantitative Survey – This is the portion of the market research project where primary data is collected among end-users. By analyzing competitors. I take ten tips of them ASSIGNMENT _ MSB726_Small Business Management 2017 Page 4 . Demographic Assessment and Trend Analysis– We’ve discussed the importance of demographic assessments in a site selection process before on our blog – click here to read Vance’s post. it also helps our clients understand service or product gaps in which they can market themselves in. This is a mutually beneficial first step for both parties. RMS also uses secondary research to find existing industry trends and ancillary data that is worth noting. goals in a qualitative and open-discussion format. This involves secondary research and analyzing the market. Competitive Assessment – The competitive assessment takes a look at like-competitors in the market area that will impact your new business. education and any other relevant demographic statistics that would impact the feasibility of the project. This can easily be collected through the Internet with our team of professional Googlers. This also creates your pool or population that you will use for your demand modeling and estimates. Demand Model/Estimates with Recommendations – The final step to a quality market research feasibility study is putting together the first four components and using the findings from each to create a demand model. The questions are focused on current usage and predicted usage and understanding the impact the new business idea will have on the market. This is the most integral part of the market research feasibility study and many of the questions asked in the survey will serve as the foundation for the demand model and estimates. These stakeholders can range from key personnel in the organization. 2010) There are twenty one tips to be more effective in market research context and. RMS creates an expansive profile of each competitor and uses mystery shopping calls and visits to collect the non-publically available information. Information is collected for the market with regards to population trends. In market research context. age. outside the organization. C. those involved in the local economy or any other stakeholders who may offer credible feedback and play a role in your business’ plans. which works well for upper management if they do not have the time to read through a 100-plus page report. upsetting the traditional way of doing things by creating new ways to do them. Watch for and incorporate unsolicited feedback you receive on social networks or review sites. and follows through. and psychological. 5.. entrepreneurs are disrupters. how many respondents you require and what data you are hoping to collect before beginning. Say thank you to every single person who contributes to your research. A. Entrepreneurs usually start with nothing more than an idea—often a simple one—and then organize the resources necessary to transform that idea into a sustainable business. The term entrepreneur. 7. 2. Provide a place for open-ended comments on any survey that you use. 2012). A new business is started. management the risk associated to the opportunity and the skills to mobilize human. Identify your target audience. Answer2 Entrepreneurship is the attempt to create value through recognition of business opportunity. translates literally as “between-taker” or “go-between. In essence. Develop a chart or graph from the data collected to make it easier to visually analyze the results. 8. One business writer says that an entrepreneur is “someone who takes nothing for granted. Make it common practice to ask clients for suggestions at every interaction.”1 It originally referred to men who organized and managed exploration expeditions and military maneuvers. financial and material resources necessary to bring a project to completion. 6. Who is the entrepreneur? An entrepreneur is one who creates a new business in the face of risk and uncertainty for the purpose of achieving profit and growth by identifying opportunities and assembling the necessary resources to capitalize on those opportunities. ASSIGNMENT _ MSB726_Small Business Management 2017 Page 5 . and for whom action is a natural consequence of thought” (Norman M. Make sure your target group is relevant to your needs and represents the market you are targeting. material. a French word that dates from the seventeenth century. Be clear about your objectives before beginning your market research. The risks that go with creating an organization can be financial. 10. Understand the difference between qualitative and quantitative research and format your questions accordingly. someone incapable of confronting reality without thinking about ways to improve it. Review your surveys and questionnaires to ensure you’re not phrasing anything offensively. assumes change is possible. but most include the following behaviors: Creation. 3. The term has evolved over the years to have a multitude of definitions. 4.1. 9. An entrepreneur is a person who sees an opportunity or has an idea and assumes the risk of starting a business to take advantage of that opportunity or idea. Persistence: An entrepreneur should take repeated actions to overcome the obstacles that get in the way of reaching goals.2 All new businesses require a certain amount of entrepreneurial skill. General management. He personally undertakes research. 5. High levels of growth and/or profit are expected. He must be always in readiness to exploit it in maximising the interest of the organization. material. process. They act to do things that meet Or beat existing standards of excellence. 3. stand up eight". Innovation.. analysis or investigation on his own to get information in realising his goals. Looking for opportunities: A successful entrepreneur is one who always is on the look for and takes action on opportunities. The owner of the business bears the risk of potential loss or failure of the business.com) there are 15 most essential qualities of a successful entrepreneur 1.preservearticles. Information seeking: An entrepreneur is always in search of new ideas and information’s from various sources to help reach objectives or clarify problems. It is the entrepreneur who takes action that goes beyond job requirements or the demand of the situation. They believe in excellence. B. "Fall seven times. He does things before being asked or forced by the events. He can consult experts for business or technical advice. or organization. The business involves a new product. Performance intention. The degree of entrepreneurship involved depends on the amount of each of these behaviours that is needed. market. Risk assumption. For an interesting article reviewing the scholarly development of entrepreneurship topics. The owner of the business guides the business and allocates the business’s resources. see “Is There Conceptual Convergence in Entrepreneurship Research?” (Timothy S. Initiative: Initiation of any business activity should come from the entrepreneur. Current academic research in the field of entrepreneurship emphasizes opportunity recognition. 4. ASSIGNMENT _ MSB726_Small Business Management 2017 Page 6 . He should never be disheartened by failures. 2012). 2. and trust. He should believe in the Japanese proverb. What are the essential qualities of the successful entrepreneurs? According to (www. Concern for quality products: Successful entrepreneurs always believe in high quality standards of their products with reasonable prices. social capital. employees. 7. 11. 10. 15. 13. 14. consumers. Concern for employee's welfare: Concern for employees welfare should be at the top of the agenda of successful entrepreneurs. Problem solving: Successful entrepreneurs are challenging by nature. He asserts strong confidence in his own company's product or services. Effective strategist: Successful entrepreneur develops and uses varieties of effective strategies to accomplish own objectives. Persuasion: A successful entrepreneur must be able to persuade others to do the work the way he wants them to do. 8. Systematic Planning: Entrepreneurs develop and use logical. They also identify new and potentially unique ideas to achieve their targets. skill. They also express a concern for satisfying their customers. realistic and proper plans to accomplish their goals. Self-Confidence: Successful entrepreneurs must have a strong belief in themselves and in their own abilities. 9.sellers. They are not at all cowed down by difficult situations. Assertiveness: A successful entrepreneur must be assertive in nature so that he can assert his issues with others for promotion of interest of his enterprise. He tells others what they have to do and rebuke or disciplines those failing to perform as expected. He must possess the ability to convince everybody . He is able to convince others through his knowledge and competence. 12. and competency to complete a task or meet a challenge. Monitoring: Successful entrepreneurs ensure regular monitoring of the working to achieve the organization's goal in the best possible manner. They are committed to their work. They believe in systematic planning and its proper execution to reach goals. creditors etc. They give priority to improve the welfare of the employees because it is the employees whose dedication and commitment services lead to super performance of the organization. Commitment to work: Successful entrepreneurs do every sacrifice to get the task completed. step-by-step. 6. They personally supervise all aspects of their project to ensure completion of the work within the schedule time and cost. They have full faith and confidence on their own knowledge. They are always interested in devising new methods aimed at promoting efficiency. They always try to find out ways and means to overcome the problems that come in their way. They also evolve relevant strategies which will safeguard and promote the interest of the organization. Efficiency orientation: Successful entrepreneurs find ways to do things faster with fewer resources at lower costs. ASSIGNMENT _ MSB726_Small Business Management 2017 Page 7 . They put highest priority for accomplishing their objective. There will be times where your emotions well up and get the better of you. No matter how optimistically you charge into the role or how committed you are to prioritizing your personal relationships. 1. 6. you’ll feel miserable and you’ll make worse decisions. You’ll be working long hours. C. You’ll do some of the work you love to do. they are going to suffer as you continue building your business. You’ll be distracted almost constantly. or fearful that you won’t make a profit in a reasonable amount of time. sometimes at home. You’ll make decisions that will haunt you. 4. You may feel depressed and discouraged about your progress. but no matter how much research you’ve done. You won’t make money right away. but you’ll also be an administrator. Your emotions will get the better of you. a supervisor. you’ll serve as the primary decision-maker for your company and you’ll have to make hard. stress-inducing decisions throughout your tenure. Your personal life will suffer. weekends and holidays. a technician. 2. The truth is. Some of those decisions will stick ASSIGNMENT _ MSB726_Small Business Management 2017 Page 8 . and as a result. What are the most notable dark side traits of entrepreneurs? According to (DeMers. you probably won’t receive a paycheck for several months. Trying to juggle everything will take its toll on you. Nothing will happen the way you think it will. 2015) there are7 Dark Truths About Entrepreneurship. Raising capital for your business is tough. Even the things you can predict won’t happen exactly how you envisioned. 3. sometimes in ways you don’t want to adapt. You’re too invested in your own enterprise for this not to happen. an HR manager and a marketer all at the same time. As an entrepreneur. As CEO of your own business. You’ll spend more than you’ll generate in revenue. you won’t be able to predict everything. and you’ll be on call for resolving business problems on nights. you’ll be forced to adapt. As an entrepreneur. Your business plan might carefully detail out every step you envision for the first few years of your company. 5. you’ll wear many hats. thinking about the problems your business is facing. even if you try to suppress them or find a healthy outlet for them. for most businesses. When your emotions get the better of you. and the financial stress you’ll bear will take its toll on your relationships. the first few years of operations are spent getting your infrastructure up and running. You’ll have to rely on your personal savings or reserves for basic living expenses and hope things pan out in the future. and usually serves as a financial eye-opener to hopeful young entrepreneurs who think business ownership leads to quick profits. You are going to fail. (v) Utilising waste material. are often developed as business ventures. (iii) Converting hobby into business.in) Approaches to Generating Business Ideas are: (i) Brainstorming. Recycling waste or turning them into useful products are good product ideas. (iv) Improving an existing product. but must be made. The obstacle of failure is ever present and always daunting when you’re leading a business. Elaborate the following: A. Pre-launch cash flow is likely to be close to nil. that will interfere with your plans and compromise your vision. even if you make the logically correct one. The major approaches in generating business ideas? According to (sol. interior decoration. An existing product can be improved by using old techniques with more care or using newly developed technology. money is likely to be one of your biggest concerns. there will be some other failure. If it doesn’t. You’ll have to fire people. part of entrepreneurship. massive or minor. You’ll have to sacrifice part of your vision for the company.du. ASSIGNMENT _ MSB726_Small Business Management 2017 Page 9 . Conservation and environment protections are presently getting a lot of attention. Your entire company might go under.As a new entrepreneur. so making and saving money will usually take priority over everything else.with you. 7. It should be conducted by an expert and none of the ideas mentioned should be evaluated or judged. Highlight the common errors in business opportunity identification. and they will haunt you. energy conservation products also have good potential. 1. Some people are adept at doing something or the other as a hobby or for use in the house only. One approaches can be to examine if these could be made by a different and newer method that would give the entrepreneur an advantage over the older methods.These decisions are never easy. and essential. Hobbies like photography. You’ll have to part ways with partners. and working through that failure is too much for some. Presently. At this stage one should not worry if the ideas are suitable or not.ac. It is possible to use such skills to set up an enterprise. b. (ii) New ways of doing old things. It helps in generating a large number of product ideas. fashion designing etc. though realizing this rarely makes it easier to accept. You’ll have to change company direction. Not spending enough money or spending too much money. Failure is an inevitable. Answer 3 Entrepreneurs generate ideas in variety of ways and fall into different traps on their way to financial independence. A large number of products are being made and provided in the market using traditional methods and practices. 7.There are two mind-sets I tend to see among new entrepreneurs: Either “You have to spend money to make money” or “I’ll spend the bare minimum until I have some decent cash flow. You know your products inside out. so. sometimes not) among new entrepreneurs. Making hiring decisions based on cost. 3. “If you build it. Being incapacitated by fear of “what if’s.” This is a common belief(sometimes conscious. Having too small margins. to potential investors and lenders. It describes a business opportunity. They will review the business ASSIGNMENT _ MSB726_Small Business Management 2017 Page 10 . Answer 4 Business plan is a helpful document to the entrepreneurs. New entrepreneurs can be so enraptured by their “big idea. Not setting attainable goals. A. it’s common to think that no one can do the job as well as you can. it’s tempting to skimp on the cost of new hires. loyal customers who will buy over the long term (DeMers. Not thinking about marketing. it’s critical that you have a customer-first mentality. or that their product is so head-and-shoulders above those of their rivals that they’re in a category of their own. 4. however. “Only those who dare to fail greatly can ever achieve greatly. The problem with this strategy. The excitement about a new product or business can often lead new entrepreneurs to think they really have no direct competition.and long-term goals. 9. They think that their products are so revolutionary that they can just rely on free PR and word of mouth. thinking you have no direct competitors. Putting your product first and people last. 2015). 2006) A business plan is a proposal that outlines a strategy to turn a business idea into a reality. 5. Thinking you can do it all yourself. such as new business or plans to expand an existing one. but letting yourself become incapacitated by this fear can significantly hinder your progress. But the reality is you must set realistic and attainable goals in order to succeed. This is closely tied to number one.” they work without a solid plan. Being scared of failure and rejection is understandable. Having a healthy profit margin will be critical to your success. When funds are tight. 6. Kennedy said.” Robert F. In the beginning.having satisfied.” 2. 8. and make sure they’re specific. they will come. but is so important it deserves to be mentioned separately.” Starting a new business is scary and isn’t for the faint-hearted. Setting it too low now will make life infinitely more difficult for you in the future -. and are the only one who truly has the passion to make the business succeed.your customers likely won’t be thrilled when you need to raise your prices later on. is that you’ll end up paying in the long run. What is business planning is meant? According to the (Lois Schneider fares. When creating your product and determining your business model.Make a point of setting both short. Yet many new entrepreneurs are so concerned about making money (understandably) that they forget the key to having a sustainable business -. 2) to attract capital for starting up the business. It should contain three main components: 1. Providing Direction: Business plans should provide a road map for future operation. Attracting Capital: Almost all start-ups must secure capital from bankers or investors.Description and analysis of the proposed business 2. and 3) to provide direction for your business after it is in operation. Bankers in general are financially conservative. Your business plan will show that you know what you are doing and have thought through the problems and opportunities. It is truly an exciting time! Unfortunately. Therefore. In addition to helping you obtain financing a business plan will guide you as you open the business and plan its management. They have to be accountable to depositors for the money entrusted to their care. Your business plan should convince investors and lenders that your business idea is profitable.Financial plan.plan before granting you credit or start-up capital. so before they risk their capital. Committing your ideas to paper forces you to look critically at your means. One of the first questions a banker or investor will ask when approached about participating in a business is “Where is your plan?” You need to appreciate the bankers’ position.Wanting to have a business does not automatically mean that a market exists to support your desire. You may love boats and want to build a business around them. it is unlikely that you can create a viable boat business.. “Can’t see the forest for the trees” and “It’s difficult to remember that your initial objective was to drain the swamp when you’re up to your hips in alligators” are clichés that well apply to starting a small business in that so much of your time can be consumed by handling immediate problems (“management by spot fire” or paying attention to the latest dilemma to flare up) that you have ASSIGNMENT _ MSB726_Small Business Management 2017 Page 11 . but if you live 100 miles from the nearest body of water and are unwilling to move. and expectations. a complete business plan is needed before you can raise any significant capital.Organizational and marketing plan 3. business decisions based purely on emotion are often not the best long-term choices. B. A business plan must be well organized and easy to read. goals. they will want assurances that you are knowledgeable and realistic in your projections. 2012) three primary reasons for writing business plans are 1) to help you determine the feasibility of your business idea. Many people thinking of starting a small business get caught up in the excitement and emotions of the process. identity procedures necessary to legally establish the business and work as a management tool to identify the month-to-month steps necessary to operate a profitable business. What are the purpose and benefits of business planning? According to the (Timothy S. Proving Feasibility: Writing a business plan is one of the best ways to prevent costly oversights. A well-run monthly plan review with plan vs. and adjusting the plan is steering. But when sales on account. hiring that sales manager. or opening the new location. effort. You can’t do everything. 4. Strategic alignment. With good planning process you regularly review assumptions. and resources strategically. and working capital needs as well? Take a step back and look at the larger picture. you are more likely to stay on course. Good planning process sets expectations and tracks results. By having a road map to guide you over the long term. Business planning done right connects the dots in your business so you get a better picture of the whole. actual analysis is a dashboard. Good business planning connects the dots in cash flow. Manage cash. Does that show up in your plan? Do your sales connect to your sales and marketing expenses? Are your products right for your target market? Are you covering costs including long-term fixed costs. Allocate your time. Good work shows up. or repaying debts are involved. their target markets. Does your day-to-day work fit with your main business tactics? Do those tactics match your strategy? If so. and their products or services tailored to match. ASSIGNMENT _ MSB726_Small Business Management 2017 Page 12 . See the whole business. you have strategic alignment. 5. These are key goals you want to achieve. Sometimes just watching profits is enough. 8. actual included becomes an impromptu review of tasks and accomplishments. Set priorities. Milestones. Business planning helps you keep track of the right things. Startups and small business need to focus on their special identities. product development. and catch new developments so you can adjust. if you run a gourmet restaurant that has a drive-through window. For example.trouble concentrating on the overall needs of the business. If not. track progress. We’re human. Profitable businesses suffer when slow-paying clients or too much inventory constipate cash flow. Strategy is supposed to relate to tactics with strategic alignment. and the most important things. Strategic Focus. According to the (Berry) Here are those top ten benefits. you’re out of alignment. purchasing assets. 3. 2. cash flow takes planning and management. 1. A plan helps you see the problem and adjust to it. It’s a tool for regular review of what’s expected and what happened. 7. physical products. We work better when we have visible goals we can work towards. Plan vs. like reaching a defined sales level. Good business planning sets milestones you can work towards. Develop accountability. the business planning will bring up the hidden mismatches. Manage change. 6. Disappointments show up too. Over-Hype You may believe your business idea is the next big thing but you need to be able to back-up your claim. but there are also calls. Lenders and investors expect to be shown a realistic picture of where your business is now and where it hopes to be. it will ring warning bells and cause the plan to be rejected. The business planning process becomes a regular reminder. Unfortunately when rushing to get your funding in place and launch your business. but sometimes we need to push back to maintain quality and strategic focus. trips. present how you have made these assumptions and outline how you will specifically target this market. Figure out the numbers that matter. and so forth. It often takes time. Use your business planning to define and track the key metrics. research and financial plan. during the heat of the everyday routine. to remember the priorities and focus. Put your performance indicators and numbers to track into a business plan where you can see them monthly in the plan review meeting. It’s hard. your plan can get neglected. Below we have highlighted a few of the very common mistakes (pitfalls) made when writing a business plan: 1. C. 10. conversion rates. Need help defining your target market and learning about primary and secondary market research? Small Business BC offers seminars on market research (hyperlink) and one-on-one consultations with an in-house market research expert. ASSIGNMENT _ MSB726_Small Business Management 2017 Page 13 . seminars. 2. 2011) There are many elements that make a good business plan. 4. Over-hyping your business idea and littering your plan with superlatives like hottest and greatest does not substantiate your product or service. 9. Wow them with you business idea. By using incorrect or out of date information you will discredit your business idea and the remainder of the plan. therefore if the plan is overly optimistic with no explanation of the projections. Most Canadians are familiar with the businesses on CBC’s Dragons’ Den who grossly overestimate the value of their company and are chastised and shot down by the dragons. You must define your specific target market. Sales and expenses usually do. 3. Metrics. We all want to do everything for our customers. returns. What are pitfalls to avoid them in business planning? According to (KOONER. Unrealistic Financial Projections. patience and many revisions before you get it right. Bad Research All research must be double checked and substantiated. Not Defining the Target Audience No business will appeal to everyone. Realistic regular reminders to keep on track. web traffic. not with the words you think they want to hear. but the customers’ need still existed. how you plan to compete in the marketplace and paint accurate picture of what the industry is like now and where you see it going in the future. create an appendix. Not Knowing your Distribution Channels Have a secure plan how to provide your service or distribute your product. Hiding Your Weaknesses Do not hide your weaknesses but do not highlight them too much. Every business has its weaknesses but by hiding them or highlighting them too much you will put off the investor. Including Too Much Information If you were an investor. The purpose of your plan is not to demonstrate the depth of your knowledge but to focus on the key elements of your business. Focus on your niche. would you want to read a 200 page business plan? Most investors have a mental checklist of 10 to 12 points that they are looking for in the plan. everything else just gets in the way. Take time to review each section of your business plan. 10. The only way to address these weaknesses is to include a detailed strategy of how you plan address these problems. One Writer. check and double check. 7. it comes down to the dollar. One Reader Make sure you ask several people to review your plan before submitting it. Sections of plans are often written on different days or by different people and then pasted together into one document resulting in inconsistency. It is easy for you to glaze over spelling mistakes and grammatical errors because you know the information inside and ASSIGNMENT _ MSB726_Small Business Management 2017 Page 14 . 8. Even if your business is one of kind. Clear and concise writing is always appreciated and if you have additional information which you would like to include in the document. Being Inconsistent Highlighting different target markets. where would they spend their money? Equally if you highlight your competition too much the investor will worry that the business will not survive. There is no such thing as no competition. what differentiates you from the competition. Including all possible channels in your plan without substantiating why these are the correct channels and how they will reach your target market will make the investor assume that you have just thought of the list off the top of your head. The ability to articulate your strategy about how your product or service will reach your client is vital. 6. if your business didn’t exist. No Focus on your Competition Even if you think you have a ‘unique’ business idea and are sure that no other business like yours exists. 9.5. quoting conflicting statistics or having competing strategies within a plan will make an investor challenge whether you know your business and its market well enough. Limited geographical network ASSIGNMENT _ MSB726_Small Business Management 2017 Page 15 . 5. Perfection 9. 2. Offer customers products at forefront 7. INTERNAL FACTORS STRENGTHS (+) WEAKNESSES (-) 1. Sale to individual customers 6. out. Answer 5 Case study: Find the attached CAS STUDY and answer questions at the end of the case. We have experienced in PVC 1. Specialize in public and collective markets known 9. Consumer preferences 12. Creativeness 10. Double glazing technology not well 8. Basic products 10. No room for consumer market 12. Employment opportunities 11. Marketing strategies are week. Staff for manage the marketing and cusotmer are not enough 3000C per 4. Have wide range and a high quality products 5. We have a long history of business 2. Customized services sales man. Another set of eyes will help your plan to look more professional and ensure that it reads correctly. Need to manage the sales staff sale 6. Use the SWOT tool to synthesize this information. Age of the company 4. Improved technical attributes of 13. Volatile market 11. Invest in new office and building timing rahter then using their time in administration activities 7. Honesty products 14. 1) Conduct an internal and an external diagnosis of the company. People know our brand 3. Market area coverage less 3. Low turnover only 10% innovation 8. 4. 5. Aluminum share is increasing as compared 6. Marketing. Creativeness and Honesty ASSIGNMENT _ MSB726_Small Business Management 2017 Page 16 . Energy Prices environmental changes 4. Global marketing to PVC but PVC is still dominant and we 7. Wide range and high quality products. Experience gained through many years in the window business. Sale to individual customers 9. Focus on customization 10. Perfection. Industrial relocations 3. Improve technology according to 3. Importation of raw materials dominant.. Technical and technological innovations 7. Customer Price Consciousness ecofriendly 2. Consumer preferences 4. 7. Provide greater customization could be oppurtunity. Eco friendly products. 6. Customization. Customer evolved about sustainability and 1. 3. Better insulating materials 8. Tax 2. Strict regulations and legislations 6. EXTERNAL FACTORS OPPORTUNITIES (+) THREATS (-) 1. Sharp rise in new buildings 9. Specialize in production/manufacturing 2) The Key Factors for Success from the diagnosis. Brand name. 5. 8. 9. 2. Custom made products are already more professional in PVC so by increasing technological we can remain 8. Specialize in public and collective markets. Do it yourself market is restricted 5. New legal regime 10. 1. The company controls of the entire supply chain. Many consumers are willing to spend large sums on products which produce immediate benefits.) to encourage their continued training and to support sales of this product. Triple-glazed products are better in terms of insulation and sophistication. Remember to take into account the potential objections of customers: provide the employees with arguments to counter customers’ misconceptions. Financial incentives: Bonuses. Individual Incentive: It consists on monthly basis according to their sale (Product/target incentive) and services according to their assign targets and area of services. right through from the order to delivery to the customer and sometimes installation. (It can be answered by direct visit to client and then could be reply to their misconceptions) As consumer preferences vary greatly from one country to another. Proper waste management 3) Write a sales pitch for the company. Collective Incentive: It consists on yearly basis at company sales target and it goes to everyone in sales staff. Thus. Expenditure on housing (including joinery) often involves substantial outlay. from design to installation. collective or individual incentives. Yet such investment is an effective way to reduce energy costs significantly. 4) Suggest incentives to stimulate the sales force (bonuses. the company’s marketing should focus on the potential savings in energy costs for homeowners over the long term. Prepare sales claims to be presented to sellers. or any rapid change) ASSIGNMENT _ MSB726_Small Business Management 2017 Page 17 . which partly explains the customization this phenomenon. Spontaneous/Emergency Trainings: (About any issue. Most reliable key source of our Sales pitch is our sales staff and other sources are social media. which further limits the importation of materials. their benefits claim as per deal. etc. Training and Sales support. Commissions. 10. Arguments to counter customers’ misconceptions The company’s focuses on the potential savings in energy costs for homeowners over the long term. services claim. from which the expected savings are less obvious to individuals. Sales claims for sellers are product replacement after some time or upon seller request. Salary increment. The Company is focusing on developing products within the frame-work of sustainable development. it is very difficult to market a standard product globally. In addition. over 90% of windows are custom made. Objections regarding quality and services must be taken in account. which allow an increase in performance of over 40% compared to the best double-glazing on the market. including waste recycling. MPO Fenêtres maintains its commitment to the continuous improvement of its products. Total: 70 Marks End of Question paper ASSIGNMENT _ MSB726_Small Business Management 2017 Page 18 . especially at trade fairs and exhibitions. The current team of agency is very less about 3000C/Sales man it should be at least 1000C/Sales man. and a network of eight agencies deployed in northeastern France. using the information provided in the case study. Or sales team should divide with different tasks like some have generates leads. 6) Assess the feasibility of a commercial promotion offering “triple-glazed windows for the price of double glazing” for the product launch. some have complaint handling and after sales services. allowing the company to showcase its commitment to sustainable development. as the control of about 15% of its market area. Broachers. 5) Determine the optimum size of a business team for an agency. The company’s salespeople actively seek potential clients. General Trainings: (About products. Services and other related issues) This kind of training is conduct after periodic time and everyone knows it. from product design through to its installation. including products with triple glazing. These agen-cies are the cornerstone of the distribution network. Like (Bi training. all owned by the company. as stated above. quarterly training. The company distributes its products through two distribution channels: a central department in charge of “key accounts” and “communities”. meetings and follow up. but MPO Fenêtres has also improved its installation and waste treatment along ecological lines. and operates in a sales territory of approximately 45. as well equipment’s related to field. yearly training) Sales Support: Trainings. These events are of paramount importance: they afford opportunities to expand the client base and win new contracts. incentives are also the sales support but we also focus a little bit more buy providing them recreational activities. MPO Fenêtres has obtained certification. Consider the effectiveness of an agency’s sales team and the commercial influence that the agency can exercise in its area of operation. MPO Fenêtres highlights its long-term commitment by ensuring that the joinery products it sells are environmentally- friendly. This kind of training could be call any time before one day notice. Semi training.000 customers. Up to 25% of the annual turnover of an agency can be attributed to contacts made during these events. Each agency employs fifteen salespersons. This commitment is reflected in all companies’ activities. Retrieved 12 16. T.preservearticles.bplans. K.com/marketing/7-stages-or-steps-involved-in-marketing-research- process/27953 DeMers.com: http://www.investopedia. A. Retrieved 1 6. mymanagementguide.).com: https://timberry.com/terms/m/market-research. 10 COMMON BUSINESS PLAN MISTAKES.com/encyclopedia/market-research Gregory.d. (2012. Prentice Hall.com/market-research-tips/ Investopedia.).ca/article/10-common-business-plan-mistakes/ Lois Schneider fares. S. (n. 5 Key Components of a Market Research Feasibility Study. Retrieved 12 16. 2018.com: https://www. mymanagementguide.entrepreneur. www. Retrieved 1 6. Marketing Essentials.ac. 5 4).. from www.d. (n. Retrieved 1 7. Canada. Retrieved 12 28. Retrieved 12 26.asp K. 21 Market Research Tips.in: https://sol. from www. from www. from www.). 7 11). 2017. yourarticlelibrary.. Timothy S.preservearticles.html ASSIGNMENT _ MSB726_Small Business Management 2017 Page 19 . (2011.). (2012)..d.com: https://rmsresults.).com: https://www.shopify. Effective Smalle Buseness Management. from timberry.com: http://www.).d.du. preservearticles. (2012).mymanagementguide.com/article/245640 encyclopedia.entrepreneur. from smallbusinessbc.d.sitepoint. (2011. 2017. B. 7 Dark Truths About Entrepreneurship. H. 2018. Starting a business made easy. Investopedia. Newyork: MCGraw Hill. Retrieved 12 16. 9 28).Bibliography (n. from rmsresults.php?id=1239&chapterid=882 Berry. 11 2).com: https://www. 2017.com.mymanagementguide.d.bplans. from www.shopify. (n. (2015.preservearticles. Business encyclopedia. 2017. Retrieved 1 6.com/201101223643/15-most-essential-qualities-of-a-successful- entrepreneur. 2017. 2017. (n.com/2012/09/28/5-key-components-of-a-market-research-feasibility- study/ KOONER. Retrieved 12 18. from sol. (2006).com/10-benefits-of-business-planning-for-all-businesses/ Chand.du. S. from www.investopedia.yourarticlelibrary. 2018.com: http://www.sitepoint.com/the-importance-of-market- research-explained-or-why-you-should-research-markets/ Norman M. 8 26).ac.yourarticlelibrary.ca: http://smallbusinessbc. J. G.. G.com: https://www. from www. 2018.in/mod/book/view. Retrieved 12 16. R. 2017. (n. (2010. Small Business Management: Entrepreneurship and Beyond.