TIP 1: Location of the Enterprise
When deciding upon an appropriate location for your business, you must consider the following:
• Health and environmental requirements must be satisfied
• Basic infrastructure and amenities e.g. water, electricity, roads, etc. should be in place
• The location should be adequately secured
• Storage space will be required
• Adequate workspace will be necessary to function efficiently
• The location should be easily accessible to customers.
Most entrepreneurs start with their home as the primary business location. Some of the pros and cons of doing so are as follows:
• You will not have to pay rent
• You will spend less time commuting
• You will be closer to your children and family.
• Domestic interruptions from children, spouse and other family members
• Work and personal life may become too intertwined
• If your business is expanding you may not have enough space at home.
Even though you may decide to operate from your home, it is still advisable to register your business.
Tip 2: Availability of Raw Material, Tools, Equipment and Other Resources
The type of tools, equipment and other resources needed for the new enterprise depends on the nature of the enterprise. You should put measures in place to avoid shortages of resources that may result in setbacks that can negatively affect your sales and customer loyalty. Therefore, you should keep an inventory and have a stock management plan for your business. It is also important for you to have an alternative plan in the event that you are unable to acquire material from your regular source(s) or have a back-up plan for machinery malfunction.
For example, if you use clear plastic bags to package your product, you must ensure that you always have these bags in stock. It is wise to have business relationships with more than one supplier so that in the event that you are unable to source inputs from your regular supplier, you would have an alternative.
If you are in the baking business it would be wise to have a second oven so that if one malfunctions, you will still be able to continue your business operations for some time. Always remember that if you encounter problems that result in non-completion of jobs, you may have dissatisfied customers, which may result in loss of customer loyalty and future sales.
If you are having difficulties with delivery, you should inform your customers in a timely manner and possibly refer the client to another service provider who you believe can do the job. This way you could maintain your customer base and respect.
It is unacceptable to simply say to your customer that you cannot do the job. Additionally, it is your responsibility to ensure that the service providers you refer persons to or other persons with whom you work also provide a high quality service to your customers in order to keep them satisfied.
TIP 3: Receipt of Payment
When operating your own business, especially in the service industry, you must be sure to collect your funds when due as non-receipt of funds could affect your ability to cover your operating expenses. You must be able to prepare proper estimates for all your jobs. In your estimates (proforma invoices), you should include the total cost of providing the service i.e. all materials and labour including any individual(s) hired. You should request a down-payment before you begin the job and ensure that the customer signs to pay you upon completion of the job. Exercise caution when providing services for credit.
Additionally, you must prepare receipts for your customers. This will also enable you to keep better records.
TIP 4: Workload
If you work in the service industry, do not take on more work than you can handle. This may result in a number of unfinished jobs and lead to customer dissatisfaction, loss of customer loyalty and therefore loss of revenue. You must properly schedule jobs so that you would have an idea about how much work you can take on. If you recognize that you have an increase in business that you are unable to manage on your own, you should consider hiring more staff.
ENTREPENEURIAL RISKS AND CHALLENGES
As an entrepreneur, you will be exposed to a number of risks and challenges. A true entrepreneur however, is tenacious – able to withstand obstacles and hold firm even in the face of adversity! Some of these risks and challenges include the following:
• You may experience emergencies or unexpected events such as becoming ill, getting in an accident or natural disasters affecting your business.
• Competition from other small and more established businesses. For example you may set up a catering service in your area and when doing well someone else may set up a competing business and attract some of your clients.
• Your actual revenue is less than anticipated, rendering you unable to meet some of your expenses.
• One mistake made that can affect future operations, especially if you are in the service industry. An example of such can be prepared food that was found to be tainted. You should have measures in place to deal with these challenges as they arise.
You can do the following:
• Plan well - Budget
• Establish an emergency fund
• Constantly enhance your products or service in order to maintain your reputation and your customer base
• Keep abreast of market trends and changes so that you will always have a current product or service
• Manage your time well
• Have patience and give your business time to grow
• Provide a ‘top of the line’ service to whomever you are serving
• Be positive at all times even when everything may seem difficult
• Make every effort to maintain a high level of efficiency
• Think about the things that can go wrong and try to develop back-up plans.
SAMPLE OF EXECUTIVE SUMMARY – BUSINESS PLAN
WOODEE’S FURNITURE STORE
Woodee’s is a specialty furniture store located at Quash Trace, Sangre Grande. It is owned by Mr. Lawrence Woods and Mr. Thomas Dee and is registered as a partnership. Woodee’s sells handmade furniture that is tailored to meet clients’ requests. Customized to the desires of its client base, Woodee’s range of products include dining sets, work tables, wardrobes, space savers, cupboards, doors, counter tops, computer desks, cabinets and more. Giving persons the opportunity to obtain any of these pieces made especially to his/her liking, will make the service offered by Woodee’s sought-after by persons who crave exquisite and unique furniture pieces to decorate their homes or offices.
Our customer base includes home owners, business persons, and persons renting apartments. Competition from other joiners is limited as there are relatively few in Trinidad. Our major competitors however are the large furniture stores like Courts, Standards, Singer and American Stores. They all have business outlets in Sangre Grande in close proximity to high customer traffic areas. Woodee’s however, attracts customers because of the options we give them in terms of personalized furniture. Our customer base will be maintained because of the high quality product and service we provide at competitive prices as compared to the prices charged for the mass produced items at the large furniture stores.
Woodee’s assets include cutting tools, staplers and other manufacturing equipment. Our overhead costs include rent and utilities. Our variable cost include raw material such as treated wood, polish, handles, screws, and staples. Sources of finance include personal funds pooled together by the partners with the difference needed obtained from a NEDCO loan. The loan finance would be used to purchase operating equipment and initial stock.
SAMPLE OF BUSINESS DESCRIPTION – BUSINESS PLAN
Dzign Clothing Concepts (DCC)
Dzign Clothing Concepts (DCC) is a personalized tailoring service available to persons who experience difficulty obtaining that perfect fit from ready-made clothing. DCC has recognized that it is really impossible for ready-made clothes to fit the wide range of body shapes and sizes of different individuals.
Therefore many persons while shopping have the hassle of finding the right sizes for pants, sleeves, waistlines, busts, etc.! Many times compromises are made when purchasing ready-made outfits. With DCC however, persons can have all aspects of their clothing suited specifically for their bodies!
The business provides specially designed clothing by the two partners who also manage the business. The industry within which DCC operates is relatively large as there are a number of tailors and seamstresses. It has been identified though that the high demand for personalized tailoring services, outweighs the supply of these services. Therefore, there is tremendous opportunity for business growth.
SAMPLE OF DEVELOPMENT AND PRODUCTION PLAN – BUSINESS PLAN
Sandira’s Preservatives provides preserved fruit for eight grocery outlets and six local mini-marts. The preservatives stocked by us are sweet mango, pepper mango, sweet plum and pepper plum. Moderate demand exists for Sandira’s Preservatives’ products. It is estimated that five hundred packs of preserved fruits will be demanded monthly by our larger clients (groceries) and one hundred packs demanded monthly by our smaller clients (mini-marts). Therefore, an estimated four thousand, six hundred packs of preserves will be demanded monthly.
A bulk-production and packaging method will be employed since the fruits utilized are seasonal. The preservation process will be organized in three batches. Each batch will commence in the respective months of the fruits’ bearing seasons (which last approximately three months each). Using the estimated demand for preservatives above, fifty-five thousand, two hundred packs of preservatives will be required for one year. Each month during the respective seasons for both fruits, nine thousand two hundred packs of preservatives will be produced. Fruits are packaged and distributed on a first-in first-out basis to avoid spoilage and wastage. The preservatives have a shelf life of approximately eight months.
After the fruits have been acquired, they will be washed thoroughly and examined for imperfections. The mango will require cutting via the use of cutting machinery or by a machete. After the fruit is cut it is washed again and placed in barrels. A mixture of water, sodium benzoate, saccharine (an artificial sweetener), salt, peppers and colouring is added to the fruit. The barrels will be covered with air tight lids and checked periodically to ensure that fruit does not become too soggy. The actual preserving process time fluctuates and can be between one and four months. After the fruit is preserved, it will be placed on large tables for drying. When the fruit is dried, it is placed in bags and sealed.
Raw materials required for production essentially include the relevant fruits (mango and plum), seasonings, preservatives, colouring, sweeteners, plastic bags, sealers and cutting machinery. The labels for the packages will be outsourced and acquired from a design company.
SAMPLE OF MARKETING STRATEGY – BUSINESS PLAN
MARKETING STRATEGY – THE KOMPUTER WIZ
The Komputer Wiz provides maintenance and service repairs to personal computers, laptops, printers and scanners for personal (as opposed to commercial) use. There are many businesses which provide computer services however the services of Komputer Wiz will be like no other!
Our target market has been identified as:
• Young adults
The Komputer Wiz, once contacted will solve customers’ computer problems in a speedy manner. We offer special packages to customers which will come at minimal cost to us, yet assist in maintaining customer loyalty. We also plan to provide courtesy calls on customers to ensure that they are satisfied and that their machines are in good working condition. This will also allow us to create sales potential as customers may have minor problems or issues that they wanted addressed but did not get the time to call!
We will also provide a shopping service to consumers for computer parts, computer accessories and software upgrades. This additional service will enhance customer loyalty and contribute to widening our customer base.
We will advertise using classified ads, attractive flyers placed in strategic locations, signage on vehicles and distribution of call cards. Additionally, we believe that word-of-mouth will assist in promoting sales since we anticipate satisfied customers communicating to their peers about our effective and reliable service. We will price our services competitively to attract and maintain customers. Additionally, house visits is another benefit for customers.
Our strengths include:
• Efficient service attributable to our experience and knowledge about computers
• Access to new software, accessories and information relevant to persons interested in staying on in the cutting edge of developments in information technology
• The fast, high quality service we provide.
Our weaknesses include: