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Self-employment in Food and Beverage
Grade 12
What do the following establishments have in
common?
FRANCHISES
• Well-established name
• Forms part of a chain
• Individual owners = keep the profit
FRANCHISES
• The FRANCHISOR (company) gives permission to the FRANCHISEE (an individual) to use the name of the company and sells its products.
EXAMPLES OF FRANCHISES
• Spur
• Nando’s
• Wimpy
• etc
ADVANTAGES OF FRANCHISES
• Approved way of starting a business
• Umbrella advertising
• Centralised purchasing
• Staff training
• Management support
• etc
ENTREPRENEURSHIP
It all starts with an IDEA and YOUR believe in it!
ENTREPRENEURS
An entrepreneur takes the risk to starts his/her own business.
ENTREPRENEURS
ACT on your idea
The Importance of Entrepreneurship
The Importance of Entrepreneurship
• Unemployment is very high in SA
• The SA economy cannot absorb all school leavers
• Entrepreneurship gives you options
• You can become financially independent
• You can be self-reliant
Characteristics of an Entrepreneur
• Identify the gap = business opportunity
Characteristics of an Entrepreneur
• Take calculated risks
Characteristics of an Entrepreneur
• A sense of responsibility
• Love of achievement
• Future perspective
• Confidence
• Good organising and management skills
• High level of energy
• Sense of humor
But can I do it??
Everybody has the potential to be an entrepreneur
Are you ready to be an entrepreneur??
1. How comfortable are you with being uncomfortable?
2. Are you disciplined?
3. How is your health?
4. Do you love what you do and are you good at it?
5. Do you play well with others?
Financing Opportunities
Financing Opportunities
• Capital : Start up funding for 2-3 years
• How to obtain funding:
1. Develop a business plan
2. Consider the source of funding
e.g. Loan, partner, investment etc.
Entrepreneurial Support
• The Department of Labour offer small business training programs
• FET and HE offer courses
• Learner ship (CATHSSETA)
• Incubators
Entrepreneurs in Hospitality
Many big organisations in the services industry outsource functions e.g. catering, cleaning etc.
List some opportunities for entrepreneurs within the Hospitality Industry from the following
illustrations:
Entrepreneurs in Hospitality
Home Industry
Entrepreneurs in Hospitality
Birthday parties
Entrepreneurs in Hospitality
Function Catering
Entrepreneurs in Hospitality
Office Lunch
Entrepreneurs in Hospitality
Bed and Breakfast
Entrepreneurs in Hospitality
Baking
Entrepreneurs in Hospitality
Requirements:
• Kitchen
• Equipment
• Transport
• Staff to help prepare
• Staff to help clean
• Business plan for investment & financing
BUSINESS PLAN
• You need to think your business idea through and plan for all possibilities. What should you consider?
• Give an easy way/method of doing this.
= Conduct a SWOT analysis
SWOT ANALYSIS
• A SWOT analysis indicates areas where you need to improve
• All four quadrants are interrelated
• A SWOT analysis is not the all and end of your business plan
STRENGTHS WEAKNESSES
THREATS OPPORTUNITIES
SWOT Analysis
SWOT ANALYSIS
• STRENGHTS:
– Strong points
– Your strong points
– Assets
– Interpersonal skills
– Business contacts
– Anything that can be used to the business’ advantage
SWOT ANALYSIS
• WEAKNESSES:
– Weak points
– Things you are not good with
– Things that you need
– Lack of finance and assets
– Lack of skills
SWOT ANALYSIS
• OPPORTUNITIES:
– Environmental factors
– Access to culinary school training
– Gaps in the market
– Access to cheap/trained/skilled labour
SWOT ANALYSIS
• THREATS:
– Competition
– Inflation
– Rising fuel prices
– Power failures
– Anything that might have a negative impact on your business
SWOT
INTE
RN
AL
FAC
TOR
S EX
TER
NA
L FA
CTO
RS
POSITIVES NEGATIVES
List your items here
WEAKNESSES
List your items here
STRENGTHS
List your items here
OPPORTUNITIES
List your items here
THREATS
RESOURCES WEEK 4 LESSON 4 Worksheet Memo Template
THE BUSINESS PLAN
• Needed by every entrepreneur to set up and run a business.
• A “living” document
• Used to obtain financing
• Consist of:
COVER PAGE
• Business Name:
• Name(s) and ID Number(s) of Owner(s):
• Address (Owners) :
• Contact numbers:
• Table of contents:
EXECUTIVE SUMMARY
In 2 pages or less summarise the most important aspect of the business
• Business Concept:
• Financial Features:
• Financial Requirements:
• Current Business Position:
• Major achievements:
BUSINESS/COMPANY DESCRIPTION
• Name of the company & Business Address (map) • Branding , logo, uniform • Type of legal entity e.g Sole Owner, Partnership • Ownership • Significant assets • Mission statement • Goals and objectives – short, medium and long term • Company strengths and core competencies • The industry
Type of Business/ Legal Entity
Sole Owner/Sole Proprietorship
• The simplest and most common form of business conducted by a single individual
• Conduct business under own name or trade name • Owner’s liability includes personal assets • Net profit is viewed as personal income and taxed as
such • No operating expenses of other legal entities • Only one owner – cannot sell shares
Type of Business/ Legal Entity
Choosing the right format of your business is key
to its success.
Type of Business/ Legal Entity
CC: Close Corporations.
• No longer possible to form a new CC in SA. • Can still buy a shelf CC but very scarce. • Audited financial statements are not required • Meetings are not compulsory – on ad hoc basis • Members may take part in the management • The members are not personally liable for the debts of
the CC • 1-10 members
Type of Business/ Legal Entity
(Pty)Ltd: Private Company Proprietary Limited
• Treated as a separate legal entity and has to register as a tax payer in its own right
• Owners are shareholders • Shareholders have limited liability • Easier to transfer ownership and to raise capital • Efficiency of management • Adaptable for both small and large businesses • Not required to file annual financial statements with the
Registrar of Companies
Type of Business/ Legal Entity
Partnership
• Less than 20 owners but more than one • = an association between 2 and 20 people who are
contractually bound to one another to operate a joint, profit-generating business.
• Each partner contributes money, goods or services • Quite cheap to set up – doesn't’t have to be legally
registered • Not taxed as a company
BRANDING
• Company name
• Public image
• Logo/slogan
• Uniforms
GOALS
• Targets that you want to reach by a set date – financially or other.
• Short term
• Medium term
• Long term
LOCATION OF BUSINESS
LOCATION OF BUSINESS
• Renting or buying?
• Explain why the location chosen will be effective for you specific business and target market.
• Describe the surrounding area
• Also note any disadvantages or possible problems presented by your location and how you will combat that
What will describe the following?
OPERATIONAL PLAN
The part of the business plan where you dig into more of the nuts and bolts of you business:
• Purchasing & Suppliers
• Stock control
• Personnel plan – Organogram
– Job descriptions
– Individual responsibilities
OPERATIONAL PLAN
Purchasing, suppliers & stock control
• One or a choice of suppliers (more bargaining power and less shortages)
• Terms of payment/credit
• Explain how you will manage inventory – include an example of program for this.
TERMS OF PAYMENT
OPERATIONAL PLAN
Personnel plan
• Organogram
• Job descriptions
• Individual responsibilities
• Also include details regarding salaries/wages
• Explain how you will abide by the employment act and other relevant rules and laws (consider unions)
PRODUCT/SERVICE DESCRIPTION The Opportunity
• Where is the gap in the market? What has given rise to this gap? How was this gap identified?
• How will the gap be filled? The Industry • What are the barriers to entry in this industry? How much power do the customers have? • How much power do the suppliers have? Are there substitute offerings for the product or
service? • Who are the competitors and how strong is the competitive rivalry? • What are the major changes affecting the industry? The Market • What is the total size of the market? How fast is the market growing? • What percentage share of the market will you have? (This is important only if you think you
will be a major factor in the market.) • What are the major trends in target market – trends in consumer preferences, demographic
shifts and product development?
MARKETING PLAN
• The product (or service) and why it is valuable to customers
• The focused and detailed description of the target market
• The positioning of the product or service – how it should be perceived by customers
• The pricing strategy with specific price points at which the product or service will be sold
• The sales and distribution channels that will be used to get the product or service to the customer
• The promotion strategy including public relations activities, specific promotions, advertising and intended viral marketing activities
FINANCIAL PLAN
• Cash flow analysis
- how much money came into the business
- Where the money came from
- How was the money used on a monthly basis
• A businesses cash-flow will determine if it will stay in business – must be liquid at all times
FINANCIAL PLAN
• Income statement (Profit/loss statement)
– Shows the profit/loss for a certain period of time
– An income statement shows a company’s revenues less their costs and expenses over a given period (e.g. a financial year or one month).
– The conclusion of an income statement shows the company’s net income (or net loss).
FINANCIAL PLAN
• Balance Sheet:
– Snapshot of a company's financial condition
– The only statement which applies to a single point in time of a business’ calendar year
– Indicates the following at the end of a financial year:
• The assets
• Liabilities
• Owner’s equity
FINANCIAL PLAN
• Break-even analysis
– The amount of units you have to sell before fixed costs (expenses) has been covered
– The point where you start making a profit
– Even after your company is up and running, it can remain helpful as a way to figure out the best pricing structure for your products.
FINANCIAL PLAN
• Budget
– Planning how money will be
utilised in the next financial
Year/over a certain period