Develop Business Practice

Wolkite Polytechnic College

Outlines:

LO1: Identify business opportunity

LO 2: Identify Personal Business Skills
LO 3: Plan for the establishment of business operation
Lo4:Implement establishment plan
LO 5: Review Implementation Process
Identify business opportunity

Concept of paradigm shift

"Paradigm" designates what the members of a certain scientific community have
in common, that is to say, the whole of techniques, patents and values shared by
the members of the community which may be consciously articulated or, more
likely, simply assumed and not intentionally acknowledged.
Paradigm shift is the decline of the old paradigm, when the paradigm begins to
fail solving problems and the emergence of a new one paradigm.
A paradigm shift is necessary in most cases in order to generate a new business
Cont…

A business idea is the response of a person or persons, or an organization to solving an

identified problem or to meeting perceived needs in the environment (markets, community,
etc.).
A business opportunity may be defined simply as an attractive investment idea or
proposition that provides the possibility of a monetary return for the person taking the risk.
Cont…

Criteria for identifying a business opportunity

 Real demand; it should have the potential to fulfill the needs and wants of
customers
 Return on investment;
 Availability of resources and skills
 Meet objectives
 Be competitive
Unusual business opportunities

Unusual business opportunities may originate as a result of different occasions; some of

these may be:
 Public holidays
 Ceremonies
 Natural disaster
 Campaigns
 Changing way of life
 Changing culture
 Changing technology
 Economic growth
Cont…

Unusual business opportunities may differ from place to place, from culture to culture, as
well as from country to country. This is because what may be unusual business opportunity
in one culture or country may not be unusual business opportunity in another culture as a
result of differences among two or more cultures and countries.
Concept of a Feasibility Study

A feasibility study is an analysis that takes all of a project's/business’s

relevant factors into account—including economic, technical, legal, and
scheduling considerations—to ascertain the likelihood of completing the project
successfully.
Business skills: are the necessary skills required by individuals to conduct
business operation successfully.
Cont…

The followings are the common business skills

 Communication skills

 Planning skills

 Productivity skills

 Creativity skills
Personal attributes for business

Personal attributes for undertaking a business are those characteristics of an individual that

make him/her successful in the day to day activities of a business. The followings are the most

common ones
 Working Hard
 Getting Family Support
 Be Energetic
 Having an Internal sense of responsibility for all actions,
 Taking moderate risks
Cont…

 Having a high Need to Achieve

 Getting Business Experience
 Being Independent
 Having a Self-employed Parent as a Role Model
 Has Self-confidence
 Has Determination
 Adapts to Change
 Has a Good Network of Professionals
Cont…

The importance of Feasibility studies include the followings

 They can allow a business to address where and how it will operate
 Identify potential obstacles that may impede its operations
 Recognize the amount of funding it will need to get the business up and running.
 Lead to marketing strategies that could help convince investors or banks
Tools for Conducting a Feasibility Study
 Get feedback about the new concept from the appropriate stakeholders.

 Analyze and ask questions about your data to make sure that it's solid.
Cont…

 Conduct a market survey or market research to enhance data collection.

 Write an organizational, operational, or a business plan.

 Prepare a projected income statement.

 Prepare an opening day balance sheet.

 Make an initial "go" or "no-go" decision about moving ahead with the plan .
Parts of a feasibility study report

The followings are the major elements of a feasibility study report

 Executive summary—Narrative describing details of the project, product, service, plan,

or business.

 Technological considerations—what will it take? Do we have it? If not, can we get it?
What will it cost?

 Existing marketplace—examine the local and broader markets for the product, service,
plan, or business.

 Marketing strategy—describe it in detail.

Cont…

 Required staffing, including organizational chart—what are the human capital needs for

this project?

 Schedule and timeline, along with significant interim markers, for the project's completion

date.

 Project financials.

 Findings and recommendations—break down into subsets of technology, marketing,

organization, and financials.

Undertaking market research on product or service

Marketing is the process of planning and executing the pricing, promotion, and
distribution of products and services in order to create exchanges that satisfy both the firm
and its customers.
Focus areas of marketing
 Getting the right goods and services
 To the right people,
 At the right place and time,
 With the right price, and
 Through the use of the right blend of promotional techniques.
Meaning of market research

Marketing research is the function that links the consumer, customer and public to the marketer

through information – information used to identify and define marketing opportunities and problems;

generate, refine, and evaluate marketing actions; monitor marketing performance; and improve

understanding of marketing as a process.

Marketing research specifies the information required to address these issues; designs the method for

collecting information; manages and implements the data-collection process; analyzes the results; and

communicates the findings and their implications.

Marketing research is a function that links the consumer, customer and public to the marketer

through information for marketing purposes

Reasons for conducting a Marketing research

The goal of doing market research is to equip yourself with the information you need to make

informed business decisions on the 4Ps of marketing activities.

Product- Improve your product or service based on findings about what your customers really

want and need. Focus on things like function, appearance and customer service or warranties.

Price- set a price based on popular profit margins, competitors' prices, financing options or the

price a customer is willing to pay.

Cont…

Placement- Decide where to set up and how to distribute a product. Compare the
characteristics of different locations and the value of points of sale (retail, wholesale, on
line).

Promotion- Figure out how to best reach particular market segments (teens, families,
students, professionals, etc.) in areas of advertising and publicity, social media, and
branding.
Major Elements of a marketing research report

A market research should be prepared in terms of report which include the followings in

sequential order.
 Cover page

 Acknowledgement

 Table of contents

 List of tables

 List of figures

 Problem statement

 Research objectives
Cont…

 Develop data collecting tools (questionnaires, interview)

 Launch the study and collect the data
 Data Analysis
 Presentation of the results
 Conclusions
 Recommendations
Deciding who should do the marketing research

A marketing research may be undertaken by a firm’s own research staff alone, given to an
outside agency to perform, or some combination of both of these options.
If the research is conducted in combination, the research proposal should identify who
should do what.
Specialist and relevant parties in marketing research

The type of specialists who can assist in the marketing research process depends on the nature

of the marketing research and its divisions. Therefore,

 Research experts
 Economists
 Accountants
 Marketing experts
 Psychologists
 Technical experts of the business whose data is used for conducting marketing research
Definition of technology and technological change

The concept of technology can be grouped in to three major clusters as follows:

 Technology could be taught as tools, machineries
 Technology may be considered as the process of transforming inputs into outputs

(production technology)
 Technology may be also considered as a symbol and ideology ( a key factor in

transforming societies; it has became associated with modernity, progress and rationality)

A technological change, from the definition of technology point of view, means change in tools,

machineries, process of technology, symbol and ideology

Impact of changing technology on business operation

It is clear that technological change bring either a positive or negative impact on the day to day

activities of businesses. Some of the positive impacts of technological change in the day to day

activities of businesses are

 Increased productivity
 Increased service quality
 Faster production of goods and services
 Better quality of products and services
 Bring new products and services
 More profitability
Cont…

Some of the negative impacts of technological change in the day to day activities of
businesses are
 Closure of businesses
 Layoffs of workers
 Increased prices of goods and services
Cont…

Before any new business is started its operation, the practicability of this operation should
be checked in terms of risk, return and availability of resources.
Practicability of business opportunity in line with risk
 The types of risks to be taken based on the nature of business should be determined
before launching a business venture.
 The mechanisms for reducing or eliminating those risks should be well developed for the
smooth operation of the business.
Cont…

Practicability of business opportunity in line with return

 Every business established the purpose of getting profit (return). Therefore, it should be
clear that as a result of its day to day activities, a business should be assured that it will
get the anticipated profit (return) otherwise it will not start operation.
 In this case, the business must clearly identify the resources required to start business as
well the costs that should be incurred for these resources.
Cont…

Practicability of business opportunity in line with available resources

 Every business needs resources of various types for conducting its activity.
 An appropriate effort should be made to assure the business that it will get these
resources in adequate amount as required as well have the capability to obtain these
resources i.e. the business enough finance for getting the necessary resources for its day
to day activities.
Concept of a business plan

A business plan is a detailed report on a company's products or services, production

techniques, markets, human resources, organization, requirements of infrastructure, financing

requirements, and sources and uses of funds.

Major components of a common business plan

The followings are the parts of the common business plan

 Executive Summary (summary of the full business plan)
 Background (short historical background of the business)
 Main products, Markets and Customers (of the business)
Cont…

 Market Analysis
 Marketing Plan
 Business operations Management
 Management and Organization
 SWOT Analysis
 Financial planning (basic financial statements, breakeven point, cash flow
statements...)
When is a business plan prepared?

 When thinking of going into business/startup of a new business

 When updating the business is required
 When new information/idea is obtained
 When new experiences are gained
 When there is a major decision
Who prepare a business plan?

 Prospective business owner/managers (CEO and, marketing, production, HR and finance

managers)
 An advice/support agency, or a professional figure such as an accountant, may assist in
writing certain areas of the business plan for it to look professional
 A computer programmed providing a model that can be modified to suit your business
can also be utilized.
Basic considerations of a business plan?

Market (should be large enough for the business to survive profitably)

Financial projections should be realistic
The return for the investors or lenders should be clear and guaranteed
Size of the Business Plan - Content of B/Plan - should be between 15-35 pages.
Period covered by the B/Plan – 3-5 years projection.
Design- use blank spaces between sentences. Use short sentences and paragraphs - 6-8
lines, and double space lines
Cont…

Type of Fonts – Times or Times New Roman size 10-12.Titles – Arial or Univers12-16
bold face, italics or underlined.
Bullets – Highlight important information with bullets. Reduce your sentences, use direct
language and separate information into paragraphs
Images – Colorful graphic, photograph, graphs and tables
Revision / updating/ of a business plan

Revising/Updating a business plan is necessary as there are many factors changing from time to time.

The followings are the common eight reasons for revising/updating a business plan.
 A new financial period is about to begin

 You need additional financing.

 Significant markets change

 New or stronger competitors are looking to your customers for their growth.

 Your firm develops a new product, technology, service or skill

 You have had a change in management

 Your old plan doesn’t seem to reflect the present reality anymore
LO 2: Identify Personal Business Skills

Maintaining an Entrepreneurial Outlook

 Feel and Think Like an Entrepreneur

 Think along non-traditional and nonconformist lines

 Think about starting small

 Think realistically about finances

 Think always about viable business ideas

 Think about what people are willing to buy

Cont…

 Think about doing things for yourself

 Think about cost-benefits of business involvement

 Think about doing things differently

 Think about family and people who can support and help you

 Think like an achiever

 Think clearly about complex problem situations

Cont…

 Behave and Act Like an Entrepreneur

 Have a good product or service that is of value to other people

 Utilize the skills, experience and abilities you have

 Adopt and use the language of achievement

 Move ahead and do things at your own pace

 Have a positive attitude and compete with yourself

 Be determined and motivated in whatever you do

Cont…

 Lead and guide other people

 Develop plans on what you want to do

 Initiate activities in no matter what situation

 Maintain hope and never give up easily

 Dress well to gain attention and respect

 Be healthy, active and enthusiastic/passionate

 Unconditionally accept your own worth/value

 Have a Goal (Something you work to gain from)

 Set small goals for yourself (“Today I will finish my homework”). When you have

accomplished the small goals, move on to larger ones (“I will own business”).

 Complete one goal at a time. If you have too many goals, you achieve few of them.

 If your goal is too big to reach as a whole, break it into smaller goals and aim for the smaller

goals one at a time.

 Choose realistic goals. Don’t set your sights on goals you’ll never be able to achieve in your

lifetime.

 Give yourself rewards along the way. Without encouragement to glue the bricks together, the

wall will fall apart.

Cont…

 Never forget where you are and where you are going. Remind yourself which goals you’ve

reached and which still need to be achieved.

 Be specific and concise when starting your goals.

 Express your goals in qualitative terms that will tell you whether a goal has been achieved or

not.
Business risks

Risk is a condition in which there is a possibility of an adverse deviation from a desired

from a desired outcome that is expected or hoped for.

Risk management is the identification, measurement, and treatment of property, liability,

and personnel pure-risk exposures.

 Objectives of Risk Management

 Mere survival: to exist as a business enterprise as a going concern

 Peace of mind: to avoid mental and physical strain of uncertainty of a person

 Lower risk management costs and thus higher profits.

Cont…

 Fairly stable earnings: to eliminate the fluctuating nature of earnings due to fluctuating losses.

 Little or no interruptions of operations

 Continued growth

 Satisfaction of the firm’s sense of social responsibility or desire for a good image/ creating
good will on society/value maximization/

 Satisfaction of externally imposed obligations.

Risk Management Process

STEP 1: ESTABLISH THE CONTEXT

General context: The process occurs within the framework of an organization’s strategic,
organizational and risk management context.
External Factors: The external environment includes the financial, operational, competitive,
political (public perceptions/image), social, client, cultural and legal aspects of the
organization’s functions.
Internal Factors: Before a risk assessment occurs, it is necessary to understand the
organization and its capabilities, as well as its goals, objectives and strategies to achieve
them.
Activity-specific Factors: The aims, objectives and scope of the activity or project should be
established from the outset.
STEP 2: IDENTIFY RISKS

Risk identification is the process by which a business systematically and continually identifies

property, liability, and personnel exposures as soon as or before they emerge. This step seeks to

identify the risks to be assessed, treated and monitored.

Techniques for identifying risks are as follows:

 Brainstorming

 Expert interviews

 Professional judgment

 Organizational data and records

 Checklists
Cont…

 The aim of Risk Identification is to establish what can happen, and how and why it can
happen.
STEP 3: RISK ANALYSIS AND MEASUREMENT
There are three types of risk analysis:
3.1 Qualitative Analysis: it uses word form or descriptive scales to describe the magnitude
of potential impacts and probabilities.
 Qualitative analysis is used as an initial screening activity to identify risks which require
more detailed analysis, or where the level of risk does not justify the time and effort
required for a fuller analysis. It can also be used where the numerical data are
inadequate for a quantitative analysis.
Cont…

3.2 Semi-Quantitative Analysis:

 The number allocated to each description does not have to bear an accurate relationship to the
actual magnitude of the impact nor its probability.
 The numbers can be combined by any one of a range of formulae provided that the system
used for prioritization matches the system chosen for assigning numbers and combining them.
 The objective is to produce a more detailed prioritization than is usually achieved in
qualitative analysis, not to suggest any realistic values for risk such as is attempted in
quantitative analysis
Cont…

3.3 Quantitative Analysis: uses numerical values, rather than the descriptive scales used
in qualitative and semi-quantitative analysis, for both impact and probability using data
from a variety of sources.
 Three-Point Estimating is a quantitative technique that assigns numerical values to
define a range of possible outcomes so that risk analysis may be carried out to better
inform decisions.
STEP 4: RISK EVALUATION

This involves combining the estimates of Probability and Impact to derive an overall score
that can be attached to that risk. We can use a Probability Impact Diagram for this purpose.

 The Probability Impact Diagram is a 3 x 3 matrix that returns a Risk Score that
corresponds to a set of probability and impact estimates attached to a specific risk.
 Once all risks have been scored, they can then be arranged in priority order to separate
high risks from low risks, and to inform the next step – Risk Treatment.
STEP 5: TREAT RISKS

Treatment Options: Risk treatment involves identifying the range of options for controlling risk,

assessing those options, preparing risk management plans and implementing them. four options for

treating risk

1. Treat: Risk treatment allows an organization to continue with an activity while also taking action

to constrain the associated risks to an acceptable level. Risk treatment seeks to control or reduce both

the probability of an adverse occurring as well as its impact. Some techniques for treating risk are:
 Probability can be controlled or reduced by: audit and compliance programs, testing, supervision,

inspections, formal reviews of requirements and specifications, R&D, training, and project

management.
Cont…

Impact can be controlled or reduced by: contingency planning, contract provisions, insurance,
minimizing exposure to the sources of risk, engineering measures, fraud control planning, and
public relations.
2. Tolerate: The residual risk after treatment may be tolerable without any further action
being taken. Even if it is not tolerable, ability to do anything about some risks may be limited,
or the cost of taking any action may be disproportionate to the potential benefit gained.
Cont…

3. Transfer: Alternatively, residual risks can be further reduced by transferring them. This might be done

by conventional insurance, or by paying a third party to accept the risk. This option is particularly good

for mitigating financial risks or risks to assets.

Risk transfer works because another organization may be more capable of effectively managing the risk.

It is important to note that some risks are not (fully) transferable – the ultimate responsibility will always

remain with the original party.

4. Terminate: Some risks will only be treatable, or containable to acceptable levels, by terminating the

activity. This option can be particularly important in project management if it becomes clear that the

projected cost / benefit relationship is in jeopardy. It should be noted that on operations, the ability to

terminate an activity may be limited by necessity.

Cont…

Selecting the Appropriate Risk Treatment Measure:

Selection of the most appropriate option involves balancing the cost of implementing each

option against the benefits derived from it.

 In many cases, it is unlikely that any one risk treatment measure will be a complete

solution for a particular problem. Often the organization will benefit substantially by a

combination of options such as reducing the probability of risks, reducing their impacts,

and transferring or retaining any residual risks.

 Risk treatment options should consider how risk is perceived by affected stakeholders.
Cont…

Risk Management Plans (RMP): it should document how the chosen treatment option or
combination of them is to be implemented. The RMP should identify responsibilities,
schedules, the expected outcome(s), budgeting, performance measures and the review process
to be set in place. The plan should document the management response to the treatment of
risk and might include:
 Description of risk
 Action to be taken
 Person responsible for plan implementation
 Resources to be used and budget allocation
Cont…

 Timetable

 Monitoring and review arrangements

Risk Ownership and Plan Implementation:

 The risk owner is the person responsible for managing the risk and should be the individual best

able to control it. Responsibilities should be agreed between the parties at the earliest possible

time.
 The successful implementation of the plan requires an effective management system which

specifies the methods chosen, assigns responsibilities and individual accountabilities for

actions, and monitors them against specified criteria.

Cont…

Monitor, Review and Report:

 RMPs must be monitored because changing circumstances will alter risk priorities. Few

risks remain static. Ongoing review is essential to ensure that the RMP remains relevant.

 Factors which may affect the probability and impact of an outcome may change, as may the

factors which affect the suitability or cost of the various treatment options. It is therefore

necessary to regularly repeat the risk management cycle and to report regularly on progress.

 The RMP should become a primary management tool of any organization.

Cont…
Communicate And Consult: Communication and consultation are an important consideration at

each step of the risk management process. It is important to develop a communication plan for both

internal and external stakeholders. This plan should address issues relating to both the risk itself

and the process to manage it. Perceptions of risk can vary due to difference in assumptions and

concepts and the needs, issues and concerns of stakeholders as they relate to the risk or the issues

under discussion.
 Stakeholders are likely to make judgments of the acceptability of a risk based on their perception

of risk. Since stakeholders can have a significant impact on the decisions made, it is important

that their perceptions of risk, as well as their perceptions of benefits, be identified and

documented and the underlying reasons for them understood and addressed.
LO 3: Plan for the establishment of business operation

Concept of organization and organizational structure

 Organization is a formally constituted group of people who have identified tasks and

who work together to achieve a specific purpose defined by the organization.

 Organizational structure refers to the way in which a group of people is formed, its

lines of communication and its means for channeling authority and making decisions.
 Organizational chart: Is a picture of an organization to show the organizational

structure. It can help in identifying roles and expectations

Cont…

Example of an organizational structure

Types of organizational charts

1. Simple structure (an organizational structure with low departmentalization, wide spans
of control, authority centralized in a single person, and little formalization)
2. Functional structure (A functional structure is an organizational structure that groups
similar or related occupational specialties together)
3. Divisional structure (an organizational structure that consists of separate business
units or divisions)
Business operational procedures

A Standard Operating Procedure (SOP) is a set of written instructions that document a routine or

repetitive activity followed by an organization.

 The term “SOP” may not always be appropriate and terms such as protocols, instructions,

worksheets, and laboratory operating procedures may also be used

 An SOP is a procedure specific to your operation that describes the activities necessary to complete

tasks in accordance with industry regulations, provincial laws or even just your own standards for

running your business.

 Any document that is a “how to” falls into the category of procedures. In a manufacturing

environment, the most obvious example of an SOP is the step by step production line procedures

used to make products as well train staff.

How to prepare an operational procedure for a business

Developing an SOP is about systemizing all of your processes and documenting them. A few
typical SOPs,
Production/Operations
 production line steps
 equipment maintenance, inspection procedures
 new employee training
Finance and Administration
 accounts receivable – billing and collections process
 accounts payable process – maximizing cash flow while meeting all payment deadlines
Cont…

Marketing, Sales and Customer Service

 approval of external communications: press releases, social media, advert, etc.
 preparation of sales quotes
 service delivery process, including response times
 warranty, guarantee, refund/exchange policies
 acknowledgment/resolution of complaints, customer comments and suggestions
Employing Staff
 job descriptions
 employee orientation and training
 corrective action and discipline
 performance reviews
 use of Internet and social media for business purposes
Benefits of operational procedure of a business

One of the specific measurable outcomes of an operating procedure manual is productivity

improvements, and as a business owner, you need to be highly productive to succeed.

The common five benefits of a standard operating procedure include

 Reduced learning curve/training time /for new employees

 Ensured business continuity

 Standardized processes

 Delegating tasks becomes easier (because of having short job description for each

employee)
 Ensure that your clients are getting the best possible experience with you
Securing financial requirement for business operation.

What is finance?
 Finance may be defined as the art and science of managing money.

 Finance also is referred as the provision of money at the time when it is needed.

 Finance function is the procurement of funds and their effective utilization in business

concerns.
 Sources of finance for business operation

There are two primary sources of financing to establish a business. These are:
 Owner’s equity (It is the money the owner puts into the business)
 Borrowing from lending institutions (like banks and microfinance institutions)
Places to secure finances

 Micro finance institutions: financial associations that help people start their own small

business by providing loans which will be difficult to get from the main banking system.
 Government Banks: banks owned by the state or federal government
 Private Banks: banks: that are owned by individuals or by an individual
 Saving and credit associations: associations that are formed by group of people working

in the same organizations for the purpose of money saving and loan for these people.
Identifying and compiling legal and regulatory requirements of a business

Legal and regulatory requirements of a business

 Depending on the type of business you manage, there could be many

regulations and legal obligations you must comply with in order to operate the

company such as tax laws, material handling laws, and employment laws.
 Whether you are establishing a business organization, protecting proprietary

information, shipping products across state lines, or managing employees,

certain business laws affect all companies.

Examples of legal and regulatory requirements of a business

The following areas cover companies in most industries:

 tax laws;

 environmental laws;

 consumer protection laws;

 employment and labor laws;

 antitrust/fair competition laws;

 license and permitting laws;

 contract laws;

 intellectual property laws;

 financial regulation laws;

resources requirements of a business

Human resources requirements of a business

 The human resource requirements of a business refer the individuals who are going to
fill the positions that inevitably become vacant because of employees retirement,
resignation or promotion.
 It also refers to individuals who are going to fill the new positions created as a result of
business expansion.
Cont…

Physical resources requirements of a business

These are resources the business needs to be able to operate and carry out its work except the human
resources.
The followings are the common physical resources of a business
 Buildings and facilities
 Materials and waste
 Plant and machinery
 Equipment including IT
 Emergency provision
 Insurance
 Security
Development of recruitment and procurement strategies.

Recruitment is described as “the set of activities and processes used to legally obtain

a sufficient number of qualified people at the right place and time so that the people

and the organization can select each other in their own best short and long term

interests”.

Recruitment strategies

A Recruitment strategy is a means to conduct recruitment process. And it is formal

plan of action involving an organization’s attempts to successfully identify, recruit,

and hire high-quality candidates for the purpose of filling its open positions
Cont…

The answers to the following questions form the foundation for the preparation of a

Recruitment strategy
 What is the desired outcome?

 What recruiting tools and resources do I have at my disposal?

 Which of my personal experiences will help guide me?

 How will the experiences of other people help guide me?

 What research can I conduct that can help guide me?

 What criteria will I use to track the effectiveness of my strategy?

Cont…

In addition to the above questions, the following issues should be considered during the

preparation of a recruitment strategy

 Identification of the stage(s) of the recruitment process being addressed

 The timeframe involved

 The expectations for all parties concerned during the stage

 How those expectations are communicated

 How all parties are held accountable for those expectations

 What happens if and when expectations are not met

Cont…

Procurement is the business management function that ensures identification, sourcing, access

and management of the external resources that an organization needs or may need to fulfill its

objectives.
 It covers the complete range of events from the identification of a need for a good or service

through to its disposal / removal.

There are two terms which seem similar to procurement but have a slight difference; these are

acquisition and purchasing

 Acquisition is a part of Procurement which denotes buying or obtaining something

 Purchasing is also acquiring something but unlike acquiring it introduce payment

Cont…

Procurement strategies
A procurement strategy plan is one of the most important documents or plan examples
that your business should have.

A procurement strategy document helps in ensuring the efficiency of using resources

and acquiring new items that can benefit the business and its operations in the best way
possible.
Lo4:Implement establishment plan

Persuasion is a symbolic process in which communicators try to convince other people to change their

attitudes or behavior regarding an issue through the transmission of a message, in an atmosphere of free

choice.

Persuasion strategy is a means/method/technique by which persuasion is conducted. The most common

persuasion strategies are

1. Claim – your main point

2. Big Names – experts and important people that support your side of the argument

3. Logos – using logic, numbers, facts, and data to support your argument

4. Pathos – appealing to your audience’s emotions

5. Ethos – making yourself seem trustworthy and believable

Cont…

6. Kairos - building a sense of urgency for your cause

7. Research – using studies and information to make your argument seem more convincing; you

can use words, graphs, tables, illustrations

Laws of persuasion: People are faced with countless decisions every day, and the laws work

because they provide shortcuts to making many of those decisions.

These laws of persuasion which are called Cialdini’s Six Laws of Persuasion are:

1. Law of Reciprocity: This states that people try to repay what they have received from others.

2. Law of Commitment and Consistency: Consistency of (or at least the appearance of)

thoughts, feelings, and actions is important.

Cont…

3. Law of Liking: When you like someone, or believe that they are “just like you,” you are more
inclined to wanting to please them.

4. Law of Scarcity: If something you want becomes “the last one available,” you tend to feel like
you have to act immediately or you might miss out.

5. Law of Authority: Advertisers count on the law of authority when using celebrity
endorsements or “expert” testimonials.

6. Law of Social Proof: If others are doing it, then it must be the right thing to do.
Undertaking feasibility study to determine business viability

Customers are people who need and consume the goods and services of businesses. Customers

are not interruptions to your job but they are the reasons you have a job or establish and conduct

a business. Customer handling /Customer service/ skills and attitudes

 Customer handling or customer service is taking that extra step to help customers without

being asked! It’s all about attitude and skills.

The attitudes that assist in providing good customer service are

 Enjoy helping people

 Handle people well

 Care for your customers

Cont…

 Give fair and equal treatment to all

 Be understanding of people with special needs

The skills that assist in providing good customer service are

 Know about your organisation
 Learn the technical parts of the job
 Communicate well
 Be consistent
 Be organised
 Know your place in the team and be a team player
 Emphasize
 Developing a customer service policy

In order to create a customer service policy, you are expected to perform the followings
 Develop a vision statement. This is the guiding principle that informs how your company

seeks to interact with its customers.

 Set customer service goals in line with your vision and based on your research into

customer needs. These goals should provide quantifiable targets to address the customer

service areas you identified as most important.

 Make your customer policies straightforward and customer-friendly. Review your

customer feedback to see which policies have proven most troublesome.

Cont…

 Use your goals as a guide in creating your customer service policy. Take time to
consider it from the customers’ point of view.
 Give your employees the right and authority to deal with customer problems.
Instead of strict rules, give your employees broad guidelines to help customer solve their
problems.
 Train your employees in the new policy. Hold a mandatory meeting to introduce the
plan and to explain its purpose.
Undertaking market research on product or service

 Steps to identify customers’ needs

Here are the steps that can be used by any business to gather information about customers’

needs/wants.
 Talk to customers
 Listen to employees
 Address the real issues
 Reality check with customers
 Develop on-going processes for working with customers
Common types of customer’ needs

 Before you can get an idea of what your customers want, you have to know who they are.

 “Know” your customers don't necessarily mean that you have to recognize them when they come into

you or remember their name after every transaction but it means having a general picture of who
buys from you.
Customers have six basic buying needs pertaining to the product/service:
1. Safety.
2. Performance.
3. Appearance.
4. Comfort.
5. Economy.
6. Durability.
Customer satisfaction

Customer satisfaction measures how well the expectations of a customer concerning a product or
service provided by your company have been met.
 Businesses used surveys to gather information about customer satisfaction which addresses the
following areas:
 Quality of product
 Value of product relative to price - a function of quality and price
 Time issues, such as product availability, availability of sales assistance, time waiting at checkout,

and delivery time

 Atmosphere of store, such as cleanliness, organization, and enjoyable shopping environment
 Service personnel issues, such as politeness, attentiveness, and helpfulness
 Convenience, such as location, parking, and hours of operation
Seeking assistance with feasibility study of specialist and relevant parties

 Gathering data on customers

There are five different data collection activities that together will tell us what we need to know about

our customers:

1. Customer Segment Analyses: These are focus groups that allow us to meet face-to-face with

customers while they talk about service issues important to them.

2. Interaction Tracking: These are surveys conducted to monitor how satisfied customers are with the

service they receive by telephone (both field office and 800 number), office visit (both field and

hearings offices), and the Internet.

3. Special Studies: These are customers’ focus groups or surveys conducted whenever we need more

information about specific issues.

Cont…

4. Comment Cards: For years, field offices and tele service centers have used comment cards

to solicit customer feedback on the quality of our service.

5. “Talking and Listening to Customers” (TLC) System: This is an Agency-wide system that

is being developed to capture, analyze and address customer-initiated complaints and

compliments.

The known two forms of data are quantitative and qualitative data.
 Quantitative data: data of numerical character which is expressible as a quantity of relating

to or susceptible of measurement (Example: “Export wheat without quantitative limitations”)

 Qualitative data: data of non numerical character involving distinctions based on qualities.
Cont…

 Analyze data about customers

After collecting data of customers, the next step is to analyze the data for reaching on the findings

which are important for making informed decisions. It means to look at and to identify what is going on.

The two most basic types of procedures that may be used to analyze quantitative data are: summary

measures and variance measures.

Summary measures consider questions like:

 How do the data converge (come together)?
 What is a “typical” (average) value?
 Where is the middle (center) of a group?
Cont…
Variance measures consider questions like:
 How do scores differ?
 What are the differences between individuals in a group?
 What is the range of outcomes?

The common procedure used to analyze qualitative data is a narrative analysis method using

questionnaires and interviews.

 The first step in analyzing qualitative data is to arrange the data in a manageable format that will

facilitate the process of assigning codes and themes /topics/to sections of the transcript.
 Once the theme has been established, count the number of times that the theme/topic/ was

identified. At this point the themes can be arranged in order of frequency.

Evaluating impact of emerging or changing technology

Maintaining customer data

 Keeping accurate and up-to-date records is vital to the success of any business. In
particular, maintaining data about customers is also vital as the business Ultimate goal is
to satisfy customers’ need and wants.
 Customer data should be accurate, reliable, easy to follow, consistent as to the basis used
and be very simple.
 Maintaining a customer database

 It is an important way to keep up-to-date on customer information and data. A

database provides access to clients, builds loyalty, and encourages repeat business.
 A customer database is the collection of information that is gathered from each

customer. The database may include contact information, like the person's name,

address, phone number, and e-mail address. The database may also include past

purchases and future needs.

 Developing a customer data base
The sequence of activities to create a database include
 Purchase database creation software: Choose a product that is compatible with the word

processing and other software tools used in the business.

 Determine the type of information that will be stored in the customer database: Most designs

will include information such as company name, mailing address, physical address, contact name,

telephone and fax numbers, and email addresses.

 Consider the possible uses for the database: Along with providing a centralized resource to

retrieve important data, think in terms of what types of reports could be created using the data.
 Organize the data fields: Create a simple template that follows a logical sequence when it comes to

entering names, addresses, and other contact information.

Cont…

 Set authorizations on each of the fields: This includes identifying which fields will be included

on report formats as well as which can serve as the basis for sorting or searching the database
entries.
 Prepare report formats: A few basic formats that can be used frequently will often be sufficient,

although key users can be granted the ability to create customized reports that include fields
relevant to the user's job position and level of access to customer data.
 Establish login credentials and access rights: A workable customer database includes the ability

to create login credentials that allow only authorized employees to access the information.
 Review and test the customer database before release: Try using the beta version with a small

group of employees to make sure each of the functions work as envisioned.

Assessing practicability of business opportunity

Characteristics of products/services of the enterprise

Product is a tangible result of an economic activity which has the capability to satisfy the needs and

wants of individuals. It could be classified as either functional or innovative based upon certain

Characteristics of the product and its market demand.

 Functional products: functional product satisfies basic needs and typically does not change over time.

 Innovative products: these products are often trendy, fashionable, or high tech and exhibit highly

variable demand.

Service is an intangible result of an economic activity which has the capability to satisfy the needs and

wants of individuals.
Cont…

The two primary characteristics of services are intangibility and simultaneity. These primary

characteristics lead to two secondary characteristics, namely, perish ability and variability.

Intangibility: services cannot be touched or determined using sense organs.

Simultaneity: Service delivery and consumption are inseparable from each other and must be

produced and consumed simultaneously.

Perish ability: services cannot be stored for future use, unless these are converted into tangible

forms.

Variability: Since services are intangible, these are variable too.

Matching the needs of customers with the nature of products/services

Always, consumers buy and use goods and services in line with their reactions to different features of

these goods and services.

The reactions of consumers to the features (signals of quality) can be categorized as

 Consumer reactions to packages
 Consumers reactions to colours
 Consumers reactions to shapes
 Consumers purchase intention

Therefore, consumers buy goods only when their needs match their specific reactions to the feature

(signals of quality) of goods.

Completing business plan

Customer Profile
 A customer profile is a description of a business’ customers based on their

demographics, backgrounds, hobbies, and interests.

 A customer profile template is a list of questions with instructions that will help you

craft your customer profile(s).

 The details about customer can be obtained from receipts, purchases, mail order

requests, information inquiries, subscriptions, feedback forms, and other sources

representing customer preferences or predisposition to purchasing a product.

Elements of a Customer Profile

Elements of a customer profile are the types of information about customers that should be

included in a customer profile. Even if elements of a customer profile change, they almost

always include

 Demographic information (age, gender, and race);

 Socioeconomic information (income and occupation, for instance); and

 Psychographics (customer interests and behavior). Here are the elements of a customer

profile:
Cont…

 Keys of documenting customer details

The followings are keys for a proper documentation of customers’ details

 Time and Date

 All Appropriate Names

 Important Account Information and Identifying Information

 Important Transaction Information

 Details That Matter Later, Not Just Now

 Scheduling a Follow Up
LO 5: Review Implementation Process

Ensuring Continuity of Growth Small Business

A best practice is the process of finding and using ideas and strategies from outside your

company and industry to improve performance in any given area.

Benefits of Best Practices for Small Business

 Reduce Costs: Small companies often do not have the deep financial pockets of big business

to "re-invent the wheel". By learning what other companies have successfully done, a small

business can save money without testing new ideas.

 Avoid Mistakes: Solving business problems on your own can result in costly errors. Learning

what others have done can keep your business in business.

Cont…

 Find New Ideas: Adopting the "Not-Invented-Here" attitude can spell disaster for small

business. Learn to borrow the best from beyond your company.

 Improve Performance: When your business looks for best practices outside your

business, a wonderful thing happens. You raise the bar of performance and set new
standards of excellence to propel your company forward.

Management consultants serve small businesses as well as large corporations. The

entrepreneur should regard the services of a competent management consulate as an
investment in improved decision making or cost reeducation.
Cont…

Two broad areas of services are rendered by management consultants:

1. Helping improve productivity and/ or prevent trouble by anticipating and eliminating

its causes

2. Helping a client get out of trouble

DETERMINE THE RESOURCES REQUIRED TO ACHIEVE THESE GOALS

Once you know the goals, determine the physical and human resources, both internal and

external, that you will need to accomplish them.

Internal resources: exist within the company but may need to be redeployed to achieve the

new goals.

External resources: need to be acquired to achieve this goal, either permanently, such as a new

hire or new equipment, or temporary, such as the services of a consultant or renting equipment.

Human resources: include people and expertise, both existing employees (internal human) or

new hires, consultants or contract employees (external human).

Cont…

Physical resources: include equipment required to achieve the stated goal, both already
owned (internal physical) or new or rental equipment (external physical).
Implementing and monitoring identified improvements

 Monitoring is the systematic collection and analysis of information as a project progresses.

 In other words, monitoring is an on going process which help us to understand how we are
using our resources within the action plan and what we are immediately getting out of it.

 It is aimed at improving the efficiency and effectiveness of a project or organization.

 It is based on targets set and activities planned during the planning phases of work.
Cont…

In Summary Monitoring:

 on-going process

 movement towards the objective or away from it

 focuses on inputs and outputs

 means of checking on progress

 alerts managers to problems

 tool for improvement

Cont…

Monitoring involves:

 Establishing indicators of efficiency, effectiveness and impact;

 Setting up systems to collect information relating to these indicators;

 Collecting and recording the information;

 Analyzing the information;

 Using the information to inform day-to-day management.

 Monitoring is an internal function in any project or organization.

Cont…

Evaluation is the comparison of actual project impacts against the agreed strategic plans.

It looks at what you set out to do, at what you have accomplished, and how you

accomplished it.

In Summary Evaluation:

 periodic

 in-depth analysis of achievements

 provides managers with strategy and policy options

 provides feedback for analysis of impacts, outcomes, results of activities

Evaluation involves:

 Looking at what the project or organization intended to achieve – what difference did it want to

make? What impact did it want to make?

 Assessing its progress towards what it wanted to achieve, its impact targets.

 Looking at the strategy of the project or organization. Did it have a strategy? Was it effective in

following its strategy? Did the strategy work? If not, why not?

 Looking at how it worked. Was there an efficient use of resources?

 In an evaluation, we look at efficiency, effectiveness and impact

 Evaluation is an internal or external activity to assess whether a project or program is

achieving its intended objectives

Cont…

What monitoring and evaluation have in common is that they are geared towards
learning from what you are doing and how you are doing it, by focusing on: Efficiency,
Effectiveness and Impact
 Efficiency tells you that the input into the work is appropriate in terms of the output.

This could be input in terms of money, time, staff, equipment and so on.
 Effectiveness is a measure of the extent to which a development program or project

achieves the specific objectives it set.

 Impact tells you whether or not what you did made a difference to the problem

situation you were trying to address. In other words, was your strategy useful?
Cont…

Monitoring and evaluation can:

 Help you identify problems and their causes;
 Suggest possible solutions to problems;
 Raise questions about assumptions and strategy;
 Push you to reflect on where you are going and how you are getting there;
 Provide you with information and insight;
 Encourage you to act on the information and insight;
 Increase the likelihood that you will make a positive development difference.
Cont…

An effective M&E provides the ability to:

 Assess to what extent the objectives of the project are fulfilled;

 Evaluate how effectively change is promoted;

 Equip managers with a tool for timely information on the progress of activities;

 Identify problems in planning and/or implementation;

 Make adjustments so that you are more likely to “make a difference”.

THANK YOU