4/8/2013

ENTREPRENEURSHIP AND
HOW TO ESTABLISH YOUR
OWN BUSINESS

Business Management IA
BSM1501
2013 VIDEO SESSION CHAPTERS 5 & 6

PRESENTERS
Etta Neethling
Andreas de Beer

PLANNING STAGE: Make decisions

Test viability

CHAPTER 5
THE BUSINESS PLAN

Viable

Not viable

Business plan

BUSINESS PLAN

BUSINESS PLAN

Introduction

Introduction

Character

Character

Guidelines

Guidelines

Structure

Structure

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INTRODUCTION

WHAT IS A BUSINESS PLAN?

What is a business plan?

Purpose

A detailed plan of action

that sets out the nature and strategy
of an enterprise

Users
Principles
Benefits

PURPOSE

Commercial
banks

To obtain financing

Stakeholders

To address all business activities

To serve as a communication instrument
to communicate with interest groups to:
Sell management ability
Sell business idea/make idea known

Management

Financing
entities

Users

Employees

Private
investors

Suppliers

BENEFITS
PRINCIPLES

Make wise decisions/fewer mistakes

Take
T k all
ll important
i
t t factors
f t
into
i t accountt
Blue-print
of the
business

Flexible
planning
document

Developed
by the
entrepreneur

Take decisions for future

Opportunity to test ideas

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BUSINESS PLAN

CHARACTER

Introduction

Analysis

Character

Synthesis or integration

Guidelines

Communication

Structure

Action

BUSINESS PLAN

GUIDELINES

Introduction

Based on facts and figures

Character

Short logical description

Short,

Guidelines

Proper headings

Structure

Capture readers interest

BUSINESS PLAN
Introduction
Character

QUESTIONS

Guidelines
Structure

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GENERAL STRUCTURE: MAIN ENTRIES

1. Cover page
2. Table of contents
3. Executive summary
4 Description of the enterprise
4.
5. Marketing plan
6. Location
7. Management
8. Financial plan
9. Conclusion

MAIN ENTRIES
2. Table of contents of business plan
Indicates where in the business plan
the different topics can be found
List of topics discussed in business
plan with relevant page numbers
Must be compiled after you have
written the business plan
Purpose: Facilitates easy reference

3. EXECUTIVE SUMMARY
Must include information such as

Name and location of enterprise

Name of entrepreneur
Products offered and target market
Expected sales figures
Number of staff members
Capital required
Own and loan capital
Security offered and expected profit

MAIN ENTRIES
1. Cover page

Name of enterprise
p
Address of the enterprise
Name and contact details of the
entrepreneur
Date when business plan was compiled

MAIN ENTRIES
3. Executive summary
Should be written after the business
plan
l has
h been
b
completed
l t d
Should be inserted before the
description of your enterprise
Should be a short summary of the
highlights of the business plan

MAIN ENTRIES
4. Description of the enterprise
What the business is about
Information on the production branch
and the branch of industry
Objectives of enterprise
Uniqueness of products/services
Who and where the suppliers are

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MAIN ENTRIES

MAIN ENTRIES

5. Marketing plan

6. Location

Market segmentation and target market

Competition
Size of potential market
Expected market share
Expected sales figures/sales volume
Marketing strategy

Where the business is located

Establishment factors
Advantages of location why the
entrepreneur has decided on that
specific location

MAIN ENTRIES

MAIN ENTRIES

7. Management

8. Financial plan

Organisational
g
structure TB p
page
g 132
Human resource plan
Form of enterprise
Ownership structure % ownership
of each owner

8. FINANCIAL PLAN
Security

Capital need fixed and current assets

Financing own and loan capital
Security
Break-even analysis
Income statement
Balance sheet
Cash budget

8. FINANCIAL PLAN
Financial statements
Figures should correspond

Refers to collateral security

Fixed assets such as buildings,
machinery and equipment
Note:
Own capital invested in the enterprise
cannot be regarded as security

Headings are extremely important as

th date/period
the
d t /
i d determines
d t
i
the
th
credibility of the statements
All financial statements should be
drawn up for the same period otherwise
there is no way in which they could
correspond

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8. FINANCIAL PLAN

8. FINANCIAL PLAN

Financial statements

Financial statements

Income statement
Break-even analysis
Cash budget
Balance sheet
Study information in chapters 4 and 5!

MAIN ENTRIES

You must be able to explain the

statements the definitions
Know how to calculate for example net
profit/ending cash flow the methods
You must know the main entries know
what they entail

PLANNING STAGE: Make decisions

9. Conclusion
Test viability
Short paragraph in which you highlight
the following once again:

Need for the product

Sales figures
Own capital contribution
Security
Expected profit

Viable

Not viable

Business plan

CHAPTER 6
SETTING UP A BUSINESS
QUESTIONS

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IMPLEMENTATION STAGE: Take actions

Implementation

SETTING UP A BUSINESS
Forms of enterprise
Legal requirements

Start the enterprise/

Put the idea into practice

Labour legislation
Establishment factors
Functions of enterprise

SETTING UP A BUSINESS
Forms of enterprise

FORMS OF ENTERPRISE
The different forms

Legal requirements
Characteristics
Labour legislation
Establishment factors
Functions of enterprise

FORMS OF ENTERPRISE
Sole proprietorship

Factors influence choice

Procedures registration

Factors to consider in choice of form

Need to involve third parties financially

Legal requirements

Partnership

Legal personality
Liability of owners

* Close corporation

Continuity of the enterprise

Tax obligations

Private company

Nature of the products or services

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SETTING UP A BUSINESS

LEGAL REQUIREMENTS

Forms of enterprise

Licensing

Legal requirements

Register with the South African

Revenue Service (Receiver of Revenue)

Labour legislation
Establishment factors
Functions of enterprise

Registration for unemployment

insurance
Registration with the Compensation
Commissioner (Workmens Compensation Commissioner)
Registration with local authorities

SETTING UP A BUSINESS
Forms of enterprise

LABOUR
LEGISLATION

Legal requirements
Labour legislation
Establishment factors

Employment
contracts

Acts

Functions of enterprise

SETTING UP A BUSINESS
Forms of enterprise

ESTABLISHMENT
FACTORS

Legal requirements
Labour legislation

Commercial and
Service enterprises

Manufacturing
enterprises

Establishment factors
Functions of enterprise

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COMMERCIAL AND
SERVICE

MANUFACTURING

Market
Accessibility
Cumulative attraction
G
Growth
th potential
t ti l
Suitability of premises
Limited risk of
competition
Interception of
consumers

Raw materials
Labour
Transport
E
Energy
and
d water
t
Climate
Nature of end
products
Incentives

SETTING UP A BUSINESS

QUESTIONS

MARKETING

Forms of enterprise
Legal requirements
Responsible for the transfer of the
products/services to the consumers/
target market

Labour legislation
Establishment factors

How? By using the marketing strategy

Functions of enterprise

PUBLIC (EXTERNAL) RELATIONS

Marketing strategy
Product
Price
Distribution

Responsible for the promotion of the

image of the enterprise among all the
interest groups of the enterprise
Social responsibility

Marketing communication

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INFORMATION MANAGEMENT

FINANCIAL FUNCTION

Also known as the administrative function

Responsible for determining the capital

need and how this need will be financed
need,

Responsible for collection, processing,

storage and distribution of information

Determining capital need

The need for fixed and current assets

Must create an efficient record-keeping/

filing system for the enterprise

Financing the need

Sources of capital own/loan capital

HUMAN RESOURCES

Responsible for the provision and

maintenance of a competent,
motivated labour force
Includes job analysis, recruitment,
selection, employment, induction and
remuneration of employees

OPERATIONS FUNCTION

Responsible for
f the transformation
f
off
inputs (raw materials) into outputs
(final products), by using the four
factors of production to manufacture
a product or to create a service

PURCHASING FUNCTION

Responsible for provision of production

means of the right quality, in the right
quantity, at the right time, to the right
place, at the right price, from the right
supplier
Find suitable suppliers

GENERAL MANAGEMENT

Includes all the activities that are

performed in the enterprise to enable
the enterprise to attain its goals
Found in each of the other functions
of the enterprise
Planning, organising, leading, control

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4/8/2013

Public
relations
Information

General
management

Functions
Interaction

Human
resources

Financial

Marketing

Operations
Purchasing

QUESTIONS
EXAM INFORMATION

EXAM INFORMATION

A. TUTORIAL 201/3/2013

A. Tutorial 201/3/2013

Calculation:
Year mark and final mark

B. Additional information

The examination paper

C. Examples of questions

Assignment feedback

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THE EXMINATION PAPER

1. GENERAL INFORMATION

1. General information
2. Preparation for the examination
3. Allocation of marks per chapter
4. Completing the mark-reading sheet
5. Answering the paper

Case study
70 Multiple-choice questions
Total: 70 Marks (one mark per question)
Duration: 2 hours
Remember!
HB Pencil, eraser, pencil sharpener

6. Previous exam papers

7. Examination details

2. PREPARATION FOR THE EXAM

Study
chapter 1 in theFOR
textbook
2. PREPARATION
THE EXAM
Study the information about chapter 1
in the workbook and study guide
Try to answer the multiple-choice
questions in exercise 1 in the workbook
without looking at the answers
Evaluate your answers for exercise 1
with the aid of the answer book

3. ALLOCATION OF MARKS PER CHAPTER

CHAPTER

MARKS

12

18

13

12

TOTAL

70

2. PREPARATION FOR THE EXAM

Answer the questions about chapter 1

in assignment 02 again
your answers with the aid of
Evaluate y
the memorandum
Repeat this exercise for each chapter in
the textbook
Phone us if there is anything that you
are not sure about before the exams!

4. COMPLETING MARK-READING SHEET

Follow
the instructions
onTHE
howEXAM
to
2. PREPARATION
FOR
complete your personal details on the
mark-reading sheet
U
Unique
i
number:
b
On
O the
th cover page off
the question paper correct code!
PLEASE follow the instructions on how
to indicate your answers on the markreading sheet!

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4/8/2013

4. COMPLETING MARK-READING SHEET

Please refer to the exam slides on

myUnisa: Additional resources (podcast
slides)
Please watch the video clip (podcast)
on examinations

6. PREVIOUS EXAM PAPERS

Examples on myUnisa: Official study

material (only 2012 exam papers are
applicable)
BUT:
We do NOT repeat exam papers
The exam paper will be in the same
format as Assignment 02 (NOT the
same case study and questions!)

5. ANSWERING THE PAPER

Read the case study before you answer

the questions
Read each question carefully
Pay attention to the key words
Read the question again after you
have answered it
Answer all the questions!!

7. EXAMINATION DETAILS

Please contact the exam department

for information regarding the venue,
ti
time
and
d date
d t off the
th exam
Please read my Studies @ Unisa for
contact details and more information
about the rules and regulations
concerning examinations

SUPPLEMENTARY EXAMS

DURING NEXT EXAMINATION PERIOD

B. ADDITIONAL INFORMATION

EXAMINATION PERIODS
May/June
October/November

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4/8/2013

SCOPE

THERE IS NO SCOPE YOU HAVE TO

STUDY ALL THE CHAPTERS!!

C. EXAMPLES OF QUESTIONS

CHAPTER 1

An employee that is creative and

innovative and responsible for the
growth of the enterprise, is known as
1)
2)
3)
4)

a small business manager.

an entrepreneur.
an intrapreneur.
a franchisor.

MAIN
CHARACTERISTICS

ENTREPRENEUR

SMALL
BUSINESS
MANAGER

INTRAPRENEUR

Risk

Takes risks

Still carries
Does not
financial
want to take
risks
risks

Owner of
enterprise

Owner of
enterprise

Owner of
enterprise

Does not
want to own
enterprise

Creativity/
innovation

Creative
and
innovative

Not creative
and
innovative

Creative
and
innovative

Growth

Growth

No growth/
only profit

Growth

CHAPTER 2
A business that manufactures shoes
and sells it directly to the consumers,
can be classified under the
production branches.
1)
2)
3)
4)

manufacturing and service

commercial and service
manufacturing and commercial
shoe manufacturing and shoe
trading

Branch off industry

Branch off industry

Production branch

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4/8/2013

CHAPTER 3

DEVELOPMENT OF IDEAS
Bow-tie diagram

An entrepreneur would use a to

develop and evaluate his or her
potential business idea.
1)
2)
3)
4)

feasibility study
viability study
market analysis
bow-tie diagram

CHAPTER 4
The entrepreneur has to determine
when and how often consumers would
buy his or her products. This is an
example of the segmentation of the
total potential market for the product.
1)
2)
3)
4)

geographic
demographic
psychographic
behaviouristic

CHAPTER 5
The executive summary should
1) be written before the entrepreneur
compiles the business plan.
2) contain a short summary of the
highlights of the business plan.
3) contain a long description of the
potential target market.
4) include a full set of financial
statements.

Used to develop and evaluate the

business idea further in terms of:
The essence of the idea
The possible combination of ideas
The possibility of taking a new
direction with the idea

Geographic

Where are the consumers?

Where do they stay?

Demographic

Who are the consumers?

What is their income?

Psycho-graphic

What products do they buy?

What do they like?

Behaviouristic

When do they buy?

How often do they buy?

MAIN ENTRIES
3. Executive summary
Should be written after the business
plan
l has
h been
b
completed
l t d
Should be inserted before the
description of your enterprise
Should be a short summary of the
highlights of the business plan

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CHAPTER 6
The prospects of financing of a
partnership would
1) depend on the creditworthiness of
the partnership.
2) be better than those of a private
company.
3) depend on the creditworthiness of
the partners.
4) depend on the creditworthiness of
the shareholders.

FORMS OF ENTERPRISE
The different forms
Characteristics
Factors influence choice
Procedures registration

Factors to consider in choice of form

Need to involve third parties financially

Legal requirements
Legal personality
Liability of owners
Continuity of the enterprise
Tax obligations

QUESTIONS

Nature of the products or services

GOOD LUCK!!!

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