Guidebook Bazaar Final En

8/3/2019 Guidebook Bazaar Final En

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GUIDEBOOKA Training course to develop skills for

e-entrepreneurship

This project has been funded with support from the European Commission.

This publication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of

the information contained therein.

EU Project No. 502846-LLP-1-2009-1-DE-Grundtvig-GMP


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Bazaar

Guidebook for teachers and trainers

October 2011

Reproduction is authorised, except

for commercial purposes, provided

the source is acknowledged

For more information see:

www.eu-bazaar.biz

Editorial:

EBG, Europisches Bildungswerk

fr Beruf und GesellschaftAlte Jakobstr. 79/80

10179 Berlin

Germany

www.ebg.de

[email protected]

Layout and print:

Mail Boxes Etc. 0123

Kanicke Business Service e.K.

Alte Jakobstr. 7710179 Berlin

Tel.: 030 28093251

[email protected]

Disclaimer:

This publication was compiled and

edited by the participating organizations

of the Bazaar project. The

information contained in this publication

does not necessarily reflectagreement or disagreement with the

views of the European Commission.

This project has been funded with support from the European Commission.

This publication reflects the views only of the author, and the Commission cannot be held responsible for any use which may be made of

the information contained therein.EU Project No. 502846-LLP-1-2009-1-DE-Grundtvig-GMP


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ThisprojecthasbeenfundedwithsupportfromtheEuropeanCommission.

Thispublicationreflectstheviewsonlyoftheauthor,andtheCommissioncannotbeheldresponsibleforanyusewhichmaybemadeof

theinformationcontainedtherein.

EUProjectNo. 502846LLP120091DEGrundtvigGMP

INDEX

0. Introduction and Rationale............................................................................................... 41.

Entrepreneurship for mature persons............................................................................ 12

2. Developing business ideas - Theoretical part................................................................ 14

2.1. Introduction............................................................................................................ 142.2. The business plan ................................................................................................. 152.3. The business risk .................................................................................................. 162.4. Features of a business idea .................................................................................. 162.5. The importance of networking............................................................................... 172.6. Criteria for assessing the business idea................................................................ 17

3. Developing business ideas Practical part ................................................................... 193.1. Executive summary............................................................................................... 193.2. Business idea........................................................................................................ 193.3. The market ............................................................................................................ 193.4. Organisational structure ........................................................................................ 203.5. Economic and financial elements.......................................................................... 20

4. Economical aspects of a company foundation .............................................................. 214.1. Establishing a company ........................................................................................ 214.2. Sales ..................................................................................................................... 264.3. Payments .............................................................................................................. 31

5. Your Business Plan ....................................................................................................... 366. Practical work with the internet sales platform Magento................................................ 45

6.1. Introduction to e-commerce................................................................................... 456.2. e-Commerce and the law ...................................................................................... 496.3. e-commerce business ........................................................................................... 536.4. Payment and order processing ............................................................................. 566.5. Understanding e-commerce contracts .................................................................. 596.6. Develop an e-marketing plan ................................................................................ 606.7. Get the right website for your business................................................................. 626.8. Building my own e-commerce portal ..................................................................... 636.9. Security and e-commerce ..................................................................................... 646.10. Common e-commerce pitfalls................................................................................ 65

7. Handout for students -practical instructions to establish a web shop............................ 677.1. Introduction............................................................................................................ 677.2. Login to the program system Magento.................................................................. 68


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7.3. Installation of a Shop Administrator....................................................................... 687.4. Installation of a new category................................................................................ 697.5. Adding a New Product........................................................................................... 707.6. Insertion of Images................................................................................................ 727.7. Buying with Magento............................................................................................. 73

8. Basic PC and Internet training....................................................................................... 74


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0. Introduction and Rationale

This guidebook has been written for Bazaar teachers and trainers and helps them to transfer

the knowledge that has been gathered and developed within the frame of the project. This

Guidebook is to be seen as a methodical recommendation; the tutors are advised tocompletely read the book before starting the course. Split into modules the scientific

elaboration was done by the representatives of the involved partner institutions.

The aim of the BAZAAR project is to develop and test innovative instruments, which facilitateemployability of older workers by removing existing obstacles (awareness in the society, newskills, and creative solutions) and making working attractive for the target group. Byenhancing the sense of initiative and entrepreneurship the project created a pool as an e-market by using internet to sell goods and services.

Bazaar addresses unemployed and retired people 50+ and encourages and trains them to

provide service and/or goods either with their already existing skills and experience liketeachers, web designer, accountants, hairdresser, tailor, masseur, cook, elderly careservices, gardener, or with their creative hobbies; photographing, painting, writing, sewing,woodworking.

It also aims to provide guidance and encouragement to improve older peoples employabilityby revaluing and upgrading their competences and knowledge. The Project motivates thetarget group to learn a new qualification and/or to start their own e-business. Coaching anda training course are also part of the project as well a dialog platform to share good practiceand advocate changes in attitudes of older people themselves and society are outputs of theproject.

About the course: Increased attention is being given to the benefits, both economic andsocial of encouraging greater levels of enterprise among older persons. This module

develops knowledge and understanding of entrepreneurship and associated skills working

with the Bazaar project to implement practical activities.

Studies have shown that there is an interest in enterprise and entrepreneurship on a huge

scale among older people and there is a youth-centric attitude to enterprise which is

inappropriate in an ageing society. The Bazaar project aims to address this by providing

training and opportunities for older entrepreneurs across Europe.

Aims

To develop knowledge and understanding of the nature of the role of and conditions forentrepreneurship.

To develop enterprising skills, attitudes and attributes.

To develop competence in business plan preparation and develop planning andmanagement skills

To apply entrepreneurship skills towards the development of an e-business through theBazaar project.


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Learning Outcomes

No. Domain Description

1 Knowledge Demonstrate knowledge and understanding of E-entrepreneurship

2 Research Retrieve and utilise relevant information from a rangeof sources e.g. textbooks, newspapers, websites,journals

4 Communication Clearly communicate information using a writingstyle and structure that is appropriate to theassessment tool and to workplace norms

5 Contribution andReflection

Develop the ability to work autonomously and reflectthrough self appraisal. Assess own entrepreneurialaspirations, abilities and skills

6 Practical Demonstrate practical business skills e.g. businessplanning and skill relating to e-entrepreneurship.

Learning and Teaching Strategy

This course will be delivered through a lecture and tutorial programme and contains 6modules for the duration of 120 lessons altogether (1 lesson 45 min). An additional modulefor basic PC knowledge and internet training (40 lessons) is optional and should be offered ifnecessary.

The lectures will be designed and delivered according to local custom in the relevantorganizations involved in the Bazaar project and may involve presentations by local rolemodels involved in e-entrepreneurship. Tutors will develop relevant exercises to assist inthe delivery of the training.

Tutorial work will require students to assess their own entrepreneurial aspirations, abilitiesand skills. Ideally, students should keep a reflective journal of their progress throughout themodule.

Assessment Strategy

To be confirmed if required by Bazaar clients in individual countries.

CURRICULUM

Notes to trainers:

These are the suggested hours for the sessions. These may be reduced or added to

depending on the capabilities and background of the students.

Some students may need additional sessions on Basic PC and Internet Training (see

chapter 8 of the guidebook). Others may not need the whole session but may benefit

from learning about certain features.


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Module 1 Introduction:

Difficulties and barriers to entrepreneurship for mature persons 2,5 lessons

Learning goals Contents Focuses andform of training

Teaching

aids and

materials

Time

General

definition

What do we mean by theOlder Person/OlderWorker/Late Career

Lecture+

working groupsLaptop+PC 0,5

General

definition

Older persons specificdifficulties and barriers

Lecture+

working groups

Laptop+PC1

General

definition

Older persons advantagesfor developing

entrepreneurship

Lecture+

working groups

Laptop+PC1

Module 2 Developing business ideas Theoretical part 11 lessons

Learning goals ContentsFocuses and

form of training

Teaching

aids and

materials

Time

General

definition

Introduction Lecture

handout 1

Structure and

template

The business plan Presentation Laptop+PC2

Risk analysisThe business risk Lecture+

working groups

Laptop+PC2

Collecting ideasFeatures of a businessidea

Lecture+ mind

making

Laptop+PC2

General

definition

The importance ofnetworking

Lecture+

working groups

Laptop+PC2

Template,

checklist

Criteria for assessing thebusiness idea

Lecture+

working groups

Laptop+PC1

ForecastBusiness ideasustainability

Lecture+

working groups

Laptop+PC1


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Module 3 Developing business ideas practical part 10,5 lessons


form of training

Teaching

aids and

materials

Time

Looking for

Examples

Description of the businessidea Practical

exercises

Handout/

Whiteboard+

flip chart

sheets

1,5

Presenting

Examples

Executive summary Practical

exercises

Handout/

Whiteboard+

flip chart

sheets

1

Presenting

Examples

Business idea Discussion

groups

Whiteboard+

flip chart

sheets

2

Sourcing

Examples/intern

et

The market Practical

exercises Internet links 2

Checklist

template

Organizational structure Practical

exerciseshandout 2

Checklist

template

Economic and financialelements

Practical

exerciseshandout 2

Module 4 Economical aspects of a company foundation 36 lessons


form of training

Teaching

aids and

materials

Time

Introduction into

the area of

economics

- Economical areas in

which trade actions are

possible.

- Working relations within

the world of business

Lecture Laptops 1

Methodical

preparation of a

company

foundation

- General introduction

- Several methods and

procedures for planning acompany foundation

Lecture

Presentation

Laptops 2


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Draft of a

feasibility study

- Short overview

- Market overview and

market analysis

- Presentation of the

competitive advantages of

new enterprises

- Profit expectations

Lecture

Presentation

Laptops 3

Draft of a

business plan

including

earnings

forecast

- Expectations of the salesdevelopment

- Comparison of the

expected costs

- Resulting profit chances

- Realization of production

and product purchase

- Marketing strategies

- Issue of a balance sheet

- Required demand for

credit

Lecture

Presentation

Laptops

Work sheets

5

Organization of

the business

operations

- Purchase- Production- Sale- Money transactions- Marketing- Personnel

Lecture

Presentation

Laptops

Work sheets

8

New forms of

buying and

selling in the

Internet

(E-Commerce)

- Whats that?

- What chances does it

provide?

- How does it work?

Lecture Laptops 2

Introduction into

setting up an E-

shop in the

Internet

- Distribution in the Internet

- Advantages

- M-Commerce

- Providers forE-Commerce

Lecture

Presentation

Laptops 2

E-Commerce

and applicable

law

- Laws and regulations in

respective country (country

specific)

Lecture Laptops 4


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E- Commerce

business

- Types of selling platforms

- Professional help for web

design

- Business planning in the

Internet

- Payment and order

processing

- E-Commerce marketing

- Security in E-Commerce

Lecture

Presentation

Laptops

Work sheets

8

Module 5 Your business plan 24 lessons

Learning

goalsContents

Focuses and form

of training

Teaching aids and

materialsTime

Introduce tobusiness plan

How to do abusiness plan

presentation Handout/link 2

examples Outline of abusiness plan

Working group handout 2

Differentunderstanding

Business relatedissues, descriptionof business,

product/services,location

Individual andWorking group

Individual presentation 2

Introduce tomarketing plan

Marketing plan Focus on Individualplan

Individual presentation 3

Marketresearch

Competition Presentation/internet Laptop/PC/professionalpublications

2

Cost analysis Pricing and sales Individual working Proffesional templates 2

Marketingstrategy

Advertising andpublic relations

peer group Magazines,daily newsinternet

2

Definition,styles

Management Lecture,case studies Film, video,flip chart 3

Intruduction toaccounts andlegalrequirements

Financialmanagement

checklist charts 3

Keepingrecords

Supportingdocuments

Case studies Templates,PC,Internet,software

3


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Module 6 Practical work with the Internet sales platform Magento, 36 lessons


form of training

Teaching

aids and

materials

Time

Various

program

packages that

enable E-

Commerce

Introduction into state-of-

the-art systems

Lecture

Presentation

Laptops

Work sheets

2

Introduction to

the Internet

platform

Magento

- What is Magento

- The development history

of Magento

- How does Magento work?

- How can we use Magento

for our purposes?

Lecture

Presentation

Laptops

Work sheets

2

Preparatory

works for using

Magento for the

project

- The administrator area

(sales zone)

- The buying area

- How do I log in and log

off?

Lecture

Presentation

Exercise

Laptops

Work sheets

1

Creating a shop

administrator

Each seller registers in the

Magento system and

obtains certain rights

Lecture

Presentation

Exercise

Laptops

Work sheets

1

Creating a

business zone

for the seller

Each seller creates their

own business zone

according to the respectivebusiness idea

Lecture

Presentation

Exercise

Laptops

Work sheets

1

Filling the

business zone

with products or

services

Each seller fills their

business zone with the

products and services they

want to offer

Lecture

Presentation

Exercise

Laptops

Work sheets

8

Adding pictures

to the offered

products orservices

In order to improve the

presentation in the Internet,

the offered products andservices will be highlighted

graphically by means of

Lecture

Presentation

Exercise

Laptops

Work sheets

3


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pictures. These have to be

edited beforehand.

Practical

exercises with

Magento

The group will practise

selling and buying in the

Internet with the Magentoprogram package by using

the preset products and

services

Lecture

Presentation

Exercise

Laptops

Work sheets

14

Analyses of

sales figures

and stock by

using Magento

The participants of the

group can perform

commercial analyses within

their selling area and

deduce respective business

decisions from that

Lecture

Presentation

Exercise

Laptops

Work sheets

4


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1. Entrepreneurship for mature persons

This section will cover the following topics:

-What do we mean by the Older Person/Older Worker/Late Career?

-Difficulties and barriers to entrepreneurship for older people (Skills gaps, business skills,administration, ICT, marketing etc)

-Advantages of older persons entering entrepreneurship

What do we mean by the Older Person/Older worker/late career?

The European Commission says that one of the biggest challenges facing European regionsis the change in demographics. As Europes population ages the ratio between the numbersof people who work and those who dont needs to increase. Those in work will need to

remain working for a longer period and consequently the age of retirement will rise.Encouraging entrepreneurship in older people can be one way of offsetting this difficulty.

It can be difficult to define what we mean by an older person or an older worker.Chronological age is often too simplistic as a benchmark and age categories dont take intoaccount the different work experiences that people have had and are having. Variousapproaches to a definition of the older worker and the late career have been identified.(Sterns and Miklos, 1995).

The chronological and legal approach: defines the older worker and the late career on thebasis of chronological age and a legal definition of age. For example, the EU has supported

initiative in favour of older workers which use a definition of 45 years and over.

Functional approach: Here people are classified as older by an objective measure such asperformance, health, physical capacity or cognitive ability. Recognizes that people of thesame age can display marked differences in their functioning.

Psychosocial approach: This is based on the social perception of aging in workplaces andsociety. Individuals classified as older according to the social perception of what makes anolder worker. Also based on individuals self-perceptions of themselves and of theircareers as congruent with the social career timetable.

Organizational approach: This defines the older worker in terms of aging in organizational

roles. Relates to seniority and the age norms shared by the members of an organization.

Lifespan approach: This approach takes account of the variability in the aging process andthe possibility that behavioral change may occur at any point in the lifecycle.

There are many other contextual factors that are relevant when attempting to define the latecareer or older worker. The type of job is important too. A miner may be an older worker atthe age of 45 whereas a politician of that age may still be considered young! (Selfperception can be an interesting factor. Some people may regard themselves as an olderperson at the age of 45 whereas others may regard themselves at that age as being arelatively younger person.)


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The labels also depend on the legal retirement age in various productive sectors and indifferent European countries. The lower the retirement age in the sector or in the country thesooner the label older worker is applied.

Difficulties and barriers to entrepreneurship for mature people

Some of the difficulties and barriers that have been identified can be classified as follows:

Internal

People may lack sufficient confidence to pursue an idea after having been an employee forthe majority of their working life where there has been no need to develop and pursue theirown ideas.

They may be unsure how to set up a business having no experience of this after being anemployee even though transferable skills may be identified.

External

Lack of enterprise support for older people in the region sometimes support forentrepreneurs is aimed at younger people. Older people may have caring responsibilitieswhich may lead them to believe they have to limit the potential to fully develop a business.

Skills based

Financial management skills may be lacking, particularly with regard to those businessfinancial skills such as managing accounts, paying employees, taxes, etc. ICT skills may be

lacking and/or not up to date. People may not be confident when dealing with the Internet orPCs and this is an essential tool in business today.

Notes to trainer: Working with the group, identify any factors which they may see as barriersto entrepreneurship for themselves or for older people in general. Use the above guides asprompts to identify internal, external and skills based factors. How can these be overcome?Which are within the control of the person themselves? What does this mean for the personin terms of being able to overcome those difficulties/barriers?

Advantages of older persons entering entrepreneurship

Experience Confidence Financial security Work commitment Interests and hobbies

Notes to trainer: Working with the group, identify any factors which they may see asadvantages for an older person when entering entrepreneurship. Use the above guides asprompts or facilitate this process with examples of suitable case studies. Ask people to thinkfor themselves of examples of successful older entrepreneurs and to try to identify thefactors that made them successful.

This exercise can then be used to encourage people to start to think about theirentrepreneurial skills and abilities and how they can best be used to support their newbusinesses.


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2. Developing business ideas - Theoretical part


1. Introduction2. The business plan3. The business risk4. Features of a business idea5. The importance of networking6. Criteria for assessing the business idea

2.1. Introduction

Finding a business idea is one of the first difficulties for the potential entrepreneur. There areno defined paths to get to a good new business idea, but it is possible to prepare a fertileground for its detection, by observing reality and developing constructive criticism and

curiosity.

The new idea may come from the discovery of a new technology, the increase of request fora product or a service, the change in tastes and buying inclinations of consumers, thesuccess of other businesses, by identifying a need and a consequent market failure, byobserving, for example:

the local national and international economy, reading business pages of newspapersand specialist publications in order to obtain information on the different sectors andtheir opportunities for expansion or contraction;

everyday life. The opportunity to start a business could be developed from theabsence or lack of competition in a given field. Activities undertaken outside theworking environment (such as hobbies and personal interests) utilize skills andcompetencies that are often underestimated, but that could be a starting point forcreating a new business;

the working environment, whether working in a big corporation or a small enterprise,allows the identification of a specific field of business competition, new customerswith their needs and further developments in the sector;

other peoples ideas.

A business idea comes from an individual or collective creative act, which requires the abilityto catch an opportunity to create value. This opportunity, called "business opportunity", isgenerated by the dynamics in the existing social, technological and economic system.

The distinctive competence of the entrepreneur lies in the ability to interpret these dynamicsand to propose new solutions to meet emerging or consolidated needs. However, it isessential to carefully assess the feasibility of the idea: for selling something, it is necessaryto know what the customer desires. It is essential to produce goods and services accordingto customer needs and not to produce something and then try to sell it to the consumer.

To see if the idea can lead to a feasible project, it is necessary to be very objective and to dosome initial assessments:

defining the idea, detailing as clearly as possible the product or service that youwould like to offer in the market and its differences from goods or services thatalready exist;

seeking information about the sector in which you would like to operate;


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gathering opinions from experts and others, subjecting the idea to someone who isnot involved as you are, but who could be a potential customer, have the technicalexpertise, have entrepreneurial experience or know about the competition;

through a comparison with the world outside and the other people, thinking about theobstacles and inconsistencies between the idea and your own skills, the idea and thereference market, the idea and the resources to be invested.

2.2. The business plan

Once you verified that the idea has a realistic basis, that obstacles are not insurmountableand that there are real opportunities for development, you should proceed to prepare abusiness plan. As some steps are fundamental, it is necessary to focus on:

The entrepreneur: a good idea is necessary but not sufficient for determining success, it isnecessary that the entrepreneur acquires a set of skills or the know how to produce, sell andmanage the enterprise.

The product/service and its market: it is necessary to define the product or service and tounderstand in what context you want to include it by doing a market survey. To estimate thedemand and supply of the goods/service it is essential to estimate the sale level and sellingprice and, for that reason, to assume the production capacity of the firm and the trade policyto be adopted to make it grow.

The technical, human and financial resources: every business needs resources and it will benecessary to decide whether or not to start the activity taking into account only yourstrengths or relying on third parties for some of the operations (technical, commercial andfinancial). Whichever way you choose, you still need to establish the financial resources youneed and if there are facilities that you may use.

You also need to take into account the bureaucratic aspects of implementation. It isfundamental to check the following elements:

permissions to be requested for each activity (authorizations, licenses, complaints,visa, concessions, acknowledgement, etc.);

procedural steps (eg. some permissions are required before starting the activities,others later);

forms to fill in for obtaining permissions or forwarding complaints; agencies or bodies to apply for permissions (Chamber of Commerce, Municipality,

Region, Government Departments, local health authorities, etc.).

You should carefully consider the various administrative restrictions and commitments thatare indispensable to set up a new enterprise. Several studies have shown that one of themost serious causes of failure of new business activities is bureaucracy.

If, at the end of this process, the project still looks like being too difficult to implement, youmay choose one of the following options:

postponing the implementation of the project; changing some aspects of the project without completely disrupting the basic idea, in

order to avoid to work in a context that you do not like; abandoning the idea.

You can go on verifying the feasibility and earning power of the project now that it has afactual basis.


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2.3. The business risk

Another thing is to estimate the risk.

The risk is a crucial part of the idea of enterprise: taking the risk that something goes wrongis connected to the idea of setting up an own enterprise.

See the definition of entrepreneur according to your civil law.

It is impossible to eliminate the risk, but it is possible to calculate it. At this stage it isappropriate to make a study of "pre-feasibility", to allow you to assess the "strengths andweaknesses of the business idea (risk factors) and estimate the degree of overall risk.

At this stage you can also use simulations with the help of experts and technicians, to help tosee if the realization of the idea will lead to satisfactory results for you in terms of

remuneration of effort and achieved goals.

2.4. Features of a business idea

The preliminary evaluation of an idea is the first step in designing an innovative enterprise.Many ideas fail in becoming successful innovations because, even if they incorporate verysophisticated scientific and technical knowledge, their value is not perceived by potentialcustomers.

It is necessary for potential entrepreneurs to answer to some basic questions:

Who are our customers?

How does our product/service meet the needs of customers? How is our product/service better than alternative solutions?

Successful innovation lies at the "matching" point between the highest value perceived bythe customers and highest value perceived by the innovator.

Customers perception

Low value High value

Lowvalue

Incrementalimprovement

Shadow

Product

Innovators

perception

Highvalue

Disappointment

Product

Successfulinnovation

In this situation, the innovative technological features of the product or service are able torespond with a superior performance to the actual needs of users.


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The main risk to avoid is to finish in the quadrant occupied by the disappointment products,for which the enthusiasm of researchers/entrepreneurs for a particularly elegant orsophisticated idea has not an effective feedback by the customer.

The other two quadrants of the matrix describe situations in which innovators find orintroduce technologies that are not perceived as radical changes, so people attribute them a"limited value".

If there is a convergence of perceptions between the innovator and the customer, you canstill identify some business opportunities that result in incremental improvements ofproducts, services and performances. It is also possible that customers attribute to the newproduct/service an unexpected value, not foreseen by the innovators. It is the case of so-called "shadow products" (eg "post-it").1

2.5. The importance of networking

Knowledge alone does not generate development!

With regard to this topic, business to business interfaces (associations, districts, networks,regional centers of expertise) play a fundamental role because they represent a way toexpress functional integrated governance and trigger virtuous reactions among the actors.

Within these networks, the complex system of tangible and intangible relations can stimulatecontinuous innovations of products, processes and markets from a common base ofknowledge.

It is also important not to underestimate the possibility afforded by a project like Bazaar, that

allows people to take the first steps towards the creation of new business ideas in a"protected environment", that is an international network specifically designed to encourageand assist early crucial steps towards entrepreneurship.

2.6. Criteria for assessing the business idea

Listed below are some important elements for the preliminary assessment of the businessidea.

Business idea sustainability

Will be evaluated:

Profit and dimensional perspectives (economic feasibility), in terms of capacity to operate inthe market with profit results, size of the market, size of the income/investments ratio.

Potentiality of the product/service, in terms of innovation, practicability and productivity of thetechnical features the business project is based on.

1 ThetechnologybehindtheadhesivePostitwasnotpartofthestrategicobjectivesthe

companygavevaluetoandwasdeveloped"bychance"byamanagertosolveadaily

problem(to

avoid

losing

the

"sign"

he

left

on

its

amateur

choristers

scores).

Although

thetechnologywasnottheobjectofinvestmentby3M,customersgaveitaveryhigh

valueintermsofutility,asevidencedbytheuniversalspreadofthesestickynotes.


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Financial sustainability in terms of ability to raise the capital necessary to finance the startingof activities, based on the type and structure of the investment required for starting-up,initiative capacity to produce positive cash flows.

Features of the promoters of the Business Idea

Will be evaluated:

Ability of the team in terms of knowledge, professional experience, presence of technical-scientific, entrepreneurial and managerial skills consistent with those required for thesuccessful management of the initiative.

Quality of the Business Plan

Will be evaluated:

Consistency between the business development plan and the business idea in terms of theplan as a whole, adequacy of investments for the implementation in relation to the companyinvoice, contribution to the overall cost of the Business Plan by the investors.

Critical success factors

It will be particularly important to pay attention to the following elements:

Ability to develop relationships with new markets and stakeholders (at internationallevel, too).

Ability to attract investment capitals from local, national and international financial

institutions and investors. Ability to promote greater integration between existing firms by increasing the supply

chains.


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3. Developing business ideas Practical part


1. Executive summary2. Business idea3. The market4. Organizational structure5. Economic and Financial elements

With all the elements developed in the previous part in mind and with the aid of the diagrambelow, the participants will focus on a first draft of their business project, which will bedeveloped further in the next modules.

Description of the business idea

3.1. Executive summary

This outlines the mission that the new business will pursue through the synthesis of all theelements explained in detail in the following paragraphs.

3.2. Business idea

The business idea: description of objectives and key elements of the business idea;

The product/service: description of the technical features of the product/service;

Products/services innovation: description of potential technical advantages of theproduct/service;

The production process: description of the technology necessary for producing theproduct/service;

Timing: assessment of the time necessary for the development and production of theproduct/service, for the market analysis and other tests about the feasibility of the business;

Strategies for protecting intellectual property: if and how the basic business idea products,services and know-how can be protected/defended by intellectual property rights.

3.3. The market

General information on the potential market of product/service nature and size

Main competitors in the reference market

Assessment of the product/service strengths in comparison with its competitors (higherefficiency, lower costs, ...)


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3.4. Organisational structure

Available human resources

Missing skills

Means of production (domestic production or outsourcing,) and necessary structures (plant,machinery, offices, laboratories,), description of services delivery system.

3.5. Economic and financial elements

Estimated costs of the various expenditure categories, for starting the enterprise in relationto the foreseen activity program (staff, materials, external services, promotion,).

Indication of quantity and timing of potential revenues.

Initial assessment of necessary external financial resources.


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4. Economical aspects of a company foundation

4.1. Establishing a company

Sectors of economic activity

Although the structure of each country is different, their economies can be shown to havesimilar sectors. When speaking of business or economic activity, we normally recognizethree majors sectors.

Primary Agriculture, Fishing, Mining, Construction, Oil

Secondary Crafts and manufacturing, Electronics, Computers, Food processingbeverages, Chemicals, Aerospace, Vehicle manufacturing, Engineering,Other

Tertiary Services education, Banking, Hotels and restaurants, Catering,Insurance, Airlines, Transport, telecommunications, Retailing, Other

The occupational structure

The types of activities that most workers are occupied are different from one country toanother and from one period to another. In most developing countries, and in all countriesbefore the 19th century, the vast majority of the workforce work in the agricultural or primarysector. Their work is almost entirely manual and most of the countrys labour power isconcentrated on the basic task of feeding population. In fully developed countries far more oftheir productive resources are directed towards other economic activities.

In recent years a growing percentage of the population is working in the secondary sector.

Many of them are women. The type of their work depends on their educational background.A growing number of women specially 50+ leaving in small cities or villages are workingprocessing local products in a traditional way having established their own small villages orbeing members of a local co-operative.

Work relationships

Work relations with other people at the place of work include relationships with fellowemployees, workers, or colleagues. A great part of work or job satisfaction comes fromgetting on with others at work.

Work relations will also include those between management and employees. These relations

are not always straightforward.

In a small business the boss will probably work alongside his workers. Anything which needsto be sorted out will be done face-to-face as soon as a problem arises: there will be noformal meetings or procedures. The larger the businesses, the less direct contact there willbe between employees and management.

Before you start your new business

Before you start any kind of business it is necessary for you to prepare a Feasibility Analysisof your idea.

If you have to write a business plan for a new business or venture, I implore you to do aFeasibility Analysis before you do a business plan! Why? Because you need to verify the


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enterprise is viable before you spend the time and money into doing a full-blown businessplan. Do not worry, any information you gather and the time you spend on the FeasibilityAnalysis will be directly useful in developing the business plan.

The purpose of the Feasibility Analysis is to make sure that you are on the right track whowants to be on the wrong track. Two basic questions need to be answered with the analysis:

1) Is there sufficient demand for the product or service?

2) Can the product or service be provided on a profitable basis?

Please note that a Feasibility Analysis is not a whole study of the anticipated business butmore like a preview of the business plan with the cogent issues discussed.

The Feasibility Analysis should be no more than 5 (five) pages suggested in length (and Imean suggested):

I. A brief overview of what the business is about (1 page).

II. Overview of the market for the product or service and the results of the marketanalysis (1-2 page(s)).

III. Competitive advantage of your product or service over the competitor, and thestrengths and weaknesses of your competitors (1 page).

IV. Rough proformas, including the income statement, which should show the expectedlevel of profit over the next five years (1-2pages).

Please, please remember as you write the Feasibility Analysis that the whole purpose forthis document is to assist you in assessing whether or not to move on with your businessconcept. If at this stage it looks as if your idea is not feasible that is okay. Like mostentrepreneurs, you have tons of ideas and the nature of the Feasibility Analysis is to ensurethat you embark on your path of the tremendous success. If a few ventures do not pass themustard (or is it ketchup), then this is fine. We all have options and we must be very carefulnot to fall in love with the first, or second, idea that pops into our heads. The primarypurpose, therefore, of the Feasibility Analysis is to act as filter or screening device.

I would recommend that you not only limit the pages of this document (5), but that you alsolimit your time as well to no more than 12 to 16 hours.

Okay, how do you get started? Well, the first step is to draft a brief description of thebusiness including some information about production and sales.

The next step in the Feasibility Analysis is to do the market analysis. Of course you aresaying, What is a market analysis?

A market analysis is simply the act of ascertaining if there is the demand for the product orservice. This is the heart of both the Feasibility Analysis and the business plan. You mustshow on an empirical level, that people want to buy your products or services. I can notstress how important this step is in the Feasibility Analysis. I implore you, I beg you to do a

thorough job in this area as it is so, so important.


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Okay, you are convinced it is important or I have brain washed you, now how do you do thismarketing analysis? Well like most things there are two parts:

1) Looking at the health of the activity.

2) Quantifying the demand for the product or service.

Health of the Activity

By health of the activity I mean its viability and future growth. Also, you might want to checkout the web for various sources (do not want to list anything here as things tend to changeso rapidly).

One of the key elements in this section is to ascertain the future growth of the activity. This isimportant as you do not want to be selling in a declining market, if you can avoid this. Clearlyyou do not want to be in the adding machine business when computers are coming out.

Where do you go to get this information? Look for the publications on the web.

Sometimes, unfortunately, you will not be able to find information. Do not give up, andpersevere. However, if you still can not find this information, there are a couple ofalternatives to assist you.

One way to get some quick data or growth rates is to look at other firms in the same fieldsand what analysts are saying as to their expected growth rates.

Quantifying the demand for the product or service

Of the parts of the Feasibility Analysis that we have discussed so far, quantifying thedemand for the product or service is the most critical. It is this portion of the FeasibilityAnalysis that states what people will pay to buy your product. One thing you do not want todo, is ask your friends or relatives what they think of your products or services, but they area great choice for sources of funds. They clearly are not going to be your friends very long ifthey give you negative feedback, and at this stage of the analysis you need as muchfeedback, both positive and negative, as is possible.

It is preferable for you to do a survey of at least 20 people who are randomly selected. Byrandom selection, I am not talking about surveying folks from just standing in front of thegrocery store. Try to get as many varied people (in terms of age, gender, and race) as youcan. The written or verbal should contain at brief description of the product and at least the

following two questions:

1) Would you buy the product or service? ______YES _______NO

2) If you answered yes to the previous question, what would you be willing to pay for theproduct?

Some other questions to ask this time would be:

a) What suggestions would make you want to buy this product more (The more input,the better)?

b) Where would you expect to find this product for sale (This helps in planningdistribution)?


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c) If you did not want to buy this product or service, why? (This is very importantinformation)

d) Any other comments that they may want to give.

By doing this study of market demand you are verifying that people would consider buyingyour product and the numbers serve as the basis for ascertaining if you can generateadequate levels of profitability.

What happens, however, if the results are very negative? Then there could be two problems,first it could mean that the sample of people you surveyed is not representative of the entiremarket. If is the case then you just need to do another test in different geographical areas. Ifyou repeat the process again, and still find yourself receiving negative responses; then it istime to consider abandoning the project. While this at the time might seem harsh, it is evenharsher for you to continue on with the project if people will not buy your product.

I have seen numerous projects that should have stopped at this point, continue on and theentrepreneurs lost all of their money and had to file for bankruptcy. It is better to pull the plugearly on a project and devote your energy and finances to other projects that will besuccessful.

Competitive Advantages-

This next section of the Feasibility Analysis is divided into two parts.

a) Competitive Advantages

b) Strength and weaknesses of your major competitors

With competitive advantages it is important to lay out what really differentiates your productfrom

your competitors. Some of these ideas could be:

a) Quality

b) Features

c) Location

d) Price (Not a good idea)

e) Service

f) New Application

Price is not a very good competitive advantage for most entrepreneurs as it does notgenerate repeat business. Most entrepreneurs want and need to have repeat business. Byselling on a price basis you do not generate repeat business. Customers are only interestedin price and are not loyal to the business this is not the type of customers an entrepreneur

should be after.


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The strengths and weaknesses of the competition portion of the Feasibility Analysis is whereyou need to list each competitor and their critical attributes on how they relate to yourproduct. SWOT analysis looks at the Strengths, Weaknesses, Opportunities and Threatswhich surround your business. This helps the entrepreneur to asses the viability of theiroptions and determine a competive advantage.

The last section (finally we get to this) of the Feasibility Analysis is the financials. In thissection we need to determine the firms breakeven point and a proforma or forecastedincome statement. The purpose of this section is to quantify if we can generate a profit offthe product or service. While having a demand for the product or service is great, the litmustest of the entire Feasibility Analysis rests on the financials. We want to know does it lookreasonably promising that the business will make adequate money (very important)!

Breakeven Analysis

(Here we go into some simple math so hang on). The breakeven point is the dollars of

revenue or units of sales that will be necessary to cover both the fixed and variableexpenses. In order to find the breakeven point, we need to find where

TR = VC + FC

Where, TR = Total Revenue,

VC = Variable Costs, and

FC = Fixed Costs.

At the point where TR = VC + FC this is the breakeven point and this can be shown in thegraph below (first equations and now graphs!)

Proforma Statement

A proforma income statement is just fancy buzzwords for a forecasted income statement.The proforma income statement is just a statement of future profitability of the businessbroken down into revenue and expenses. The revenue will be a function of the marketresearch you have done, adjusted for growth rate in sales. For example, if you forecast thatyou will generate sales of 1.000,00 euro in the first year of operations then estimate (we willrefine this growth rate in the business plan) the expected growth in sales. So if weanticipated sales in year 1 to be 1.000,00 euro and then grow at the 10% growth rate, the

resulting sales levels are shown below.

Year 1 2 3 4 5

Sales 1.000,0 1.100,00 1.221,00 1.343,00 1.475,00

Remember in the Feasibility Analysis that we are not trying to get these sales estimatesexact, but rather we just need to have numbers that are in the ballpark. The next step in theproforma income statement development is to estimate what various expenses per year willbe. Some of the typical major expenses will be:

1. Cost of Goods Sold (COGS)2. Rent3. Labor


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4. Utilities5. Office supplies6. Advertising7. Administrative8. Miscellaneous

Then we apply these costs to the sales estimates to produce a proforma income statement.If the final result is negative, we reject the idea and move on to a profitable and viablebusiness venture and repeat the same calculations.

Summary

This chapter addressed the Feasibility Analysis as a screening device before a completebusiness plan is done. The two critical sections of the business plan are the marketingsection and the financial section. With the marketing section of the business plan you needto ascertain if there is a demand for the product and the price people would be willing to pay

for the product or service. With the financial section, the purpose is to forecast the financialviability of the business. The Feasibility Analysis is a great way to do a preliminary test of anew venture.

If your Feasibility Analysis convince you that your idea is viable then you must madeto the next step which is to organise your production, the communication with hwcustomers the promotion strategy and the sales.

4.2. Sales

DEALING WITH PEOPLE

For successful sales people must have talent an outgoing personality and proper behaviour.The skills they employ can be used by everybody. They must know how to

a) built and maintain relationships with different kinds of people

b) listen to and take notes of what people tell

c) explain things to people or discuss ideas with them

BUSINESS WITH PEOPLE

PEOPLE DO BUSINESS WITH PEOPLE: a company doesnt just deal impersonally withanother firm, but a person (or a team) in the buying department receives personal visits fromagents representing the firms suppliers.

Any company needs to establish a personal relationship with the key accounts (its majorclients) and with the prospects (the potential clients).

SALES DEPARTMENT

Export trade companies often have a separate export sales force, but travel andaccommodation expenses are sometimes high. Therefore servicing overseas customers

may be done with not so many personal visits: by phone, fax or e-mail. An overseas agent ordistributor - whose own sales force and takes over responsibility for selling products inanother country is often appointed by many firms.


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Salespeople on the road spend much of their time travelling, for that reason for a companyis much more expensive than employing them to work in the office.

Export trade companies often have a separate export sales force, but travel andaccommodation expenses are sometimes high. Therefore servicing overseas customersmay be done with not so many personal visits: by phone, fax or e-mail. An overseas agent ordistributor - whose own sales force and takes over responsibility for selling products inanother country is often appointed by many firms.

A sales department consists of many people who are based in different parts of the countryor in other countries, who dont have the day-to-day contact and opportunities forcommunicating with each other that office-based staff have. For this reason, big firms holdregular sales conferences where their entire sales force can meet, receive information andask questions about new products and receive training.

THE SALES PROCESS

Here are shown the three main phases of the sales process.

The opening stage It is usually done by telephone. You have to talk to your client inperson, not to a secretary.

Identify yourself and try to make a business meeting.

The building stage Prepare and rehearse for the meeting.

Dress suitably and behave in a friendly, confident but business-likemanner.

Show that you are a responsible, trustworthy person.

Dont spend too long on social conversation.

Tell the client about the benefits of your product.

Mention well-known firms who use your product

Encourage your client to talk by asking him questions and only talkhalf the time yourself

The closing stage Recognize exactly when your client is ready to place an order: itdepends on timing.

Thank your client for the order and leave.


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SOME USEFUL RULES

If you want to have success in selling and negotiating you should:

Know your product and its main features Know the strengths and weaknesses of competing products Find out who makes the buying decisions in your clients firm Plan each sales interview before it takes place Match what youre selling to each clients want and needs Listen to what your client tells you Remember that each client is an individual, not a number

MARKETING

THE MARKETING PROCEDURE

The marketing procedure consists of the FOUR Ps: providing the customer with the rightPRODUCT at the right PRICE, presented in the most attractive way PROMOTION andavailable in the easiest way PLACE.

Product Customers buy to satisfy a need they feel they have: this is the mainconcept of PRODUCT. Not just an assembled set of components. That iswhy image and design of the product are as important as its specification.

Price It is necessary to PRICE products so that an effective competition with rivalproducts in the same market can become effective.

Promotion Customers must know the product through ADVERTISING PACKAGING

(for example design, labels, materials), PUBLICITY, public relations andpersonal selling.

Place Your product must be available to customers through the most cost-effective channels of DISTRIBUTIONS. A consumer product must beoffered to end-users in suitable retail outlets, or available on hire purchaseor by mail order.

THE MARKETING STRATEGY

Today marketing influences almost every part of a companys activities. A firm must beaware of its STRENGHTS and WEAKNESS, OPPORTUNITIES and THREATS (S.W.O.T.) itfaces in the market place. That is why the marketing strategy is based on the marketingconcept.


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MARKETING CONCEPT

The firm produces what the customer wants, not what the firm wants to produce.

The customer A firm must put the customer first and organise the company so thatthis happens.

Find out A firm must find out what the customer wants carrying out marketresearches.

Supply A firm must supply exactly what the customer wants.

The marketing mix A firm can do this by offering the right marketing Mix:

the right product

at the right price

through the right channels of distribution

- presented in the right way

THINKING MARKETING

The entire company must be involved in thinking marketing. This means that everybodymust have a clear idea of:

What the customer needs What the customer wants What causes him to buy What the product is to the consumer: its functional, technical and economic

aspects as well as the aesthetic, emotional and psychological aspects

Features and benefits S.W.O.T. : a company must be aware of strengths and weaknesses as well as

the opportunities and threats to face in the market.

PROMOTION

PROMOTING PRODUCTS

Customers can be attracted in many ways to a product.

Packing Labels and presentation increase the impact of a product

Personal selling An agent can visit customers: this is the most effective method ofpromotion, but also the most expensive.

Point of saleadvertising

The attention of customers can be attracted by displays in retailoutlets such as supermarkets, chain stores, etc.

Public relations Public relations can ensure that a firm keeps a high profile andthat people are aware of a firms good reputation and image.

Publicity A firm can inform public of new development through newspapersarticles. The press can be informed by issuing press releases.

Sale literature Potential customers can be sent direct an e-mail, brochures,leaflets and catalogues which describe a product in more detailand give more information that an advertisement.

Showrooms Customer can be invited to premises and see a demonstration of


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products and get hand-on experience.

Sponsorships The cost of a sporting or artistic event can be supported by a firm:the brand name or the logo of the firm will be displayedprominently.

Telephone sales Customers can be called by telephone agents, or customers cancall a toll-free number of a firm to request sales literatures or askfor information.

Trade fairs andexhibitions

The company takes a stand or mounts an exhibit to enablecustomers to see products and talk to the agents.

Word of mouth Actual customers tell their colleagues, friend, relatives aboutproduct efficiency and recommend it to them.

e-Commerce The promotion of the products via Internet

SELLING

SELLING & PURCHASING

In business it is necessary to talk about money with suppliers and customers. Even in asmall company a certain person deals with the money paid out to suppliers for goodsdelivered, the money received from customers for goods supplied and with the creditassessment.

The different activities which involve money in an account department are shown below.

SCHEME TO INPUT

PURCHASING

receive from supplier send out to supplier

INVOICESPAYMENTS

send out to supplier receive from

customer

SALES


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THE NEGOTIATION PROCESS FOR SELLING

There are different models of negotiations in international business. Here is a basic kindwhich shows the four main stages of the negotiation process.

The preparation stage In this stage the sellers works out what he wants and what hismain priorities are.

The debating stage In this stage the seller tries to find out what the customer wants.The seller says what he wants but doesnt know yet what thefinal conditions are. The seller uses open questions and listensto the customer to try to find out in what areas they may beprepared to move

The proposal stage In this stage the seller suggests some of the things that could betraded or be prepared to trade, offered or conceded. The sellerformulates his proposals and listens to the clients proposals.

The bargaining stage In this stage the seller indicates what he will actually offer or

concede. In turn sellers and buyers individual points areexchanged.

AGREEMENTS & CONFLICT SITUATIONS

In general sellers and customers expect to reach an agreement. Usually both parties areinterested in reaching to an agreement in which both sides take away something positivefrom the deal.

Customers might politely break off from the negotiation or try to postpone a decision.Naturally everybody try to avoid conflict. Situations which might lead to such negotiations

Could be late delivery, poor performance of a product, component failure or the need tomake compensation payments.

4.3. Payments

METHODS OF PAYMENTS

Payments may be done in different ways. In international trade the security of payment byconfirmed irrevocable letter of credit when dealing with unknown firms in distant countries ispreferred.

Trade between countries within a free trade area and within the European Union is simplerbecause no special customs documentation is required for trade between firms in differentparts of the EU, but VAT rates vary from country to country.

To be familiar with different types of payment that exist study each item below:

Cash with other (CWO) Uncommon method since credit to supplier is extendedand risk that goods will not be shipped under contractterms. This method is generally used with mail order,Eurocheque, cheque or using credit cards.

Open account It is an agreement in which the customer pays the goods

after having received them. Money can be sent to theseller in different ways: cheque, bankers draft,telegraphic transfer, international payment order,


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international money orders.

Documentary bill of exchange This is a widespread method (as the Irrevocable Letterof Credit) since benefits are offered to both parts.Payments are not required until the goods are notdelivered. The supplier is protected by the law.

REGULAR INCOMING

Being in business means to guarantee money coming to finance the costs of goods andservices produced also by managing cash flow.

Improving credit control can make the real difference to business potential. Click on the 10numbers and discover advices about the importance of having a regular incoming.

1Credit risk of every customer must always be assessed and a credit limit must beassigned to customers before goods are supplied. Trade and bank references shouldalways be taken up before accepting a customer on credit terms.

2 Credit terms must be specified clearly on each invoice.

3As guarantee against bad debt and to help cash flow a percentage of the invoicevalue should be asked.

4If credit checks do not come up to standard, a credit insurance can provide up to 100per cent cover on approved debts, guaranteeing payment by a specified date.

5 Debt collection agencies could be used for smaller debts.

6The potential of factoring should always be investigated. Factors purchase a firmsunpaid invoices, paying up to 70 per cent or more of the face value, but they oftenonly take on the best customers.

7The name and the department of the person to whom invoices are sent should bealways precise.

8 It should be clear to check how long existing customers take to pay. If necessary newcredit terms could be negotiated.

9When possible, discounts should be offered to customers for paying up promptlywhen invoiced.

10Invoices should be followed up to make sure it isnt overlooked, disregarded or left atthe bottom of the pile.

Example: Order

Im writing to you because we to order 5000 metres of your silk. According to the catalogueand the samples you send us:

-1000 metres of bleached silk product number 5486 price 15000,00 including delivery

- 4000 metres of pure silk product number 1001 price 25000,00 including delivery

Delivery must be completed by 23 November 2011.

Please confirm that silks are available from stock and let us know when we can expectdelivery.

Yours sincerely,

Sophie Barceau, Buying Manager


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1 Name, address, phone, fax, e-mail of the senders organisation

2 The date

3 Name and address of the recipient

4 Salutation

If you know the name of the recipient: Dear Mr Smith (for a man) / Dear MsJones (for a woman)

If you do not know the name of the recipient: Dear Sir (for a man) / DearMadam (for a woman)

If you do not know the name or the sex of the recipient: Dear Sir or Madam

5 The subject of the letter

6 The message: of the letter.

State the purpose of the letter: your to order the recipients products. Explain allrelevant information about the product. (quantity, price and reference number onthe catalogue).

7 The message: requirements

Explain what you want in order to confirm the availability of the order

8 Conventional ending

9 Signature of the sender

10 Name and job title of the sender

Example: Confirmation

Thank you very much for your order for pure and bleached silks.

I can confirm that the total price for your order will be 40.000,00 CPT.

This sum is payable by irrevocable Letter of Credit confirmed on a EFTAM Bank and validfor 90 (ninety) days from the date of your order.

I can confirm that two trucks will move from our factory in Venezia on the 21 November 2005

and will arrive to your atelier in Paris on the 23 November 2005 to unload materials.

A proforma invoice is being sent to you by fax today.

1 Name, address, phone, fax, e-mail of the senders organisation

2 The date


4 Salutation


If you do not know the name of the recipient: Dear Sir (for a man) / Dear


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Madam (for a woman)

If you do not know the name or the sex of the recipient: Dear Sir or Madam

5 The subject of the letter

6 The message: for a confirmation

Thank the customer fro the order. Confirm (or dont confirm) exactly order,payment and terms of delivery


Explain what you want in order to confirm the availability of the order




Example: in case not receiving the payment

Study carefully this letter to discover how it is structured.

Dear Mrs Barceau,

Invoice n. 128954

According to our records, payments of our invoice n 128954, sent to you last November,has not yet been made.

As specified on all our estimates and invoices our terms of business are 30 days net. Yourinvoice has now been outstanding for 90 days. In the case of unsettled debts of this duration

it is our company policy to take legal action.

We would naturally prefer not to have to go so far. Would you please send us a cheque byreturn? In case you have lost/mislaid the original I am enclosing a copy of our invoice.

We look forward to receiving your payment by return.

Yours sincerely,

Remo Gondola, Accountant

1 Name, address, phone, fax, e-mail of the senders organisation2 The date


4 Salutation


If you do not know the name of the recipient: Dear Sir (for a man) / DearMadam (for a woman)

If you do not know the name or the sex of the recipient: Dear Sir or Madam5 The subject of the letter


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6 The message: of the letter

State the purpose of the letter: you company has not received payment yet andwould receive it. Explain all relevant information about the number and the date ofthe invoice, the possibilities for setting debts


Explain what you want the addresses to do to settle debts





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5. Your Business Plan


Definition of a business plan Outline of a business plan

Business related issues, description of business, product/services, location Marketing Plan Competition Pricing and Sales Advertising and public relations Management Financial Management Supporting documents Objectives of the module To understand what a business plan is and what is it created for

To practice at creating a business plan.

Trainer remark:

The lesson should be realized as a workshop. Every time a subject is discussed it isrecommended to see the examples within the group;

By the end of this training the trainees should not only understand what a Business Plan isand but also have ready a first draft of a business of their own.

What is a business plan?

Trainer remark:

Before giving the official definition (several definitions can be found) it can be useful to checkwhat the learners know about business plans.

Definition

A document prepared by a business/entrepreneur to summarize operationaland financial objectives ifor a new business or for the near future of an existing one (usuallyone to three years) and to show how they will be achieved. It serves to guide thefirm's policies and strategies, and is continually modified as conditions change and

new opportunities and/or threats emerge. When prepared for an external audience (lenders,prospective investors, sponsors etc.) it details the past, present, andforecasted performance of the firm. Usually, it also contains a balance sheet, incomestatement, and cash flow statement, to illustrate how the financing being sought will affectthe firm's financial position.

Business Plan Outline

As it is a document that serves sometimes to present the project to external persons (bank,lenders, prize givers), it is important to point out that it should be presented in a formalway having a cover page, table of contents etc.


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It will have 4 major chapters:

Executive summary - Statement of Purpose Business related issues Financial Data Other supporting Documents

Trainer remark:

We will discuss the first 3 chapters first the executive summary will be created once allthe other chapters are done.

The business related issues are also more important than the 2 last ones since we aretalking about very small businesses and it is possible that they wouldnt need such omplexityin terms of financial documents.

Business related issues

Description of Business

In this section, you provide a detailed description of your business.

The 1st question to be asked is: "What business am I in?"

In answering this question include

products

market services what makes your business unique?

Through the development of the business plan, you may have to modify or revise your initialquestions/answers.

The business description section is divided into three primary sections.

Section 1 actually describes your business

Section 2 the product or service you will be offering

Section 3 the location of your business, and why this location is desirable (if you have afranchise, some franchisors assist in site selection).

When describing your business, generally you should explain:

Legal business form: proprietorship, partnership, corporation. The licenses or permitsyou will need.

Business type: merchandizingii, manufacturing or service. What your product or service is. Is it a new independent business, a takeover, an expansion, a franchise?

Why your business will be profitable. What are the growth opportunities? Will franchising impact on growth opportunities?


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When your business will be open (days, hours)? What you have learned about your kind of business from outside sources (trade

suppliers, bankers, other franchise owners, franchisor, publications).

Trainer remark:

Some of the issues might not be relevant for the specific context of E-Bazaar, but still haveto be mentioned since they are important for Business Planning in general.

You may mention this to the learners in order to reassure them (they might stress at all thedetails).

A cover sheet goes before the description. It includes the name, address and telephonenumber of the business and the names of all principals (if any). In the description of yourbusiness, describe the unique aspects and how or why they will appeal to consumers.Emphasize any special features that you feel will appeal to customers and explain how and

why these features are appealing.The description of your business should clearly identifygoals and objectives and it should clarify why you are, or why you want to be, in business.

Product/Service

Try to describe the benefits of your goods and services from your customers' perspective.You should know what customers want or expect from you. Anticipating it can be helpful inbuilding customer satisfaction and loyalty. It is also a good strategy for beating thecompetition or retaining your competitiveness.

Describe:

What you are selling. How your product or service will benefit the customer. Which products/services are in demand; if there will be a steady flow of cash. What is different about the product or service your business is offering.

The Location

The location of your business can play a d