CHAPTER ONE
BUSINESS DESCRIPTION
It gives a brief description of the entire business. If a business is already in existence, its history should be included and this section should begin with mission and vision statements. Core values can be incorporated too.
- Business name.
- Give the name of the business
- Describe how the name of the business was selected
- Come up with the logo of the business
- The logo identifies the business
- Elaborate more on the slogan/motto
- Business location and address.
- Location of business, place and site.
- The site should be specific
- Map of location
- Physical address including postal address and email address
- Website
- Form of ownership
- The form of business may include;
- Sole proprietorship.
- Company-private or public.
- Cooperative
- Give reasons for choosing that kind of ownership
- Give advantages and disadvantages to show that you understand the form of organization that one want to embark on.
- Type of business.
- Is the business start-up or ongoing?
- Give activities of the business(wholesaling,retailing,manufacturing,logistics)
- Products and services.
- Which products or services are you going to offer?
- Describe clearly the features of the above stated elements and indicate the size, colour, shape, materials, quality and packaging of the products.
- Capture the benefits that customers will obtain from using your products/services. Consider the following,
- Performance
- Convenience
- Economy
- Comfort
- Durability
- Usage
- Flexibility
- Servicing
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- Justification of the opportunity.
- Give the reasons for choosing the kind of the business e.g.
- Exploit the available resources
- Nutritional value of opportunity
- Niche market
- Technological advancement
- Professional qualifications
- Unmet demand
- Favorable climate
- Infrastructural advancement
- Good security
- Industry
- Which industry does your proposed business belong to? E.g.
- Matatu-logistics/transport industry
- Consider the total number of firms in that industry or competitors
- Evaluate the industry trend i.e. growing, stable or declining emanating from dynamics
- Explain what is happening in that industry…scan the trade cycle
- Evaluate the industry characteristics in terms of;
- Capital requirement.
- Kind of technology.
- Labour requirement.
- The main industries are:
Agriculture, manufacturing and allied, transport, education, health, banking, insurance, automobiles and accessories, commercial and services, construction and allied, energy and petroleum, investment, telecommunication and technology
- Business goals and objectives
- Short term goals
Critically examine what the business want to achieve in short term e.g.
- Become the quality leader
- Market leader
- Penetrate in other markets
- Maximize profits
- Increase sales turnover
- Minimize costs
- Optimal use of available resources
- Satisfy customer needs and wants (niche marketer) e.g. equity bank –Addressing grievances of low income earners.
- Long term goals
Entails what the business would like to achieve in long run…
Replica of above
- Entry and growth strategy.
- Entry strategy/plan
- How will you penetrate and gain acceptance in the market?
- Consider the competitive advantages among the competitors, pricing and advertisement/promotional methods.
- Examine weaknesses of the competitors’ e.g. poor leadership, unskilled workforce, insufficient resources, poor product quality, slow distribution and delivery channels, outdated technologies and poor of planning etc.
- Craft the best pricing plan
- Craft the best methods to attract customers.
- Growth strategy/plan
- Evaluate trends that signal business growth.
- Evaluate opportunities emanating from the trends/prevailing opportunities.
- Craft plans to take advantage of opportunities.
NB Carry out SWOT analysis or use the Marketing mix elements (8 ps) when crafting entry and growth plans.
SWOT Analysis
The SWOT analysis is one of the very useful tool for understanding and decision-making for all sorts of situations in business and organizations. SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats. A scan of the internal and external environment is a crucial part of the strategic planning process, which is being covered by SWOT analysis. It is used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. Strengths, Weaknesses are considered to be internal to the corporation or organization whereas Opportunities, and Threats are part of the external environment. The analysis involves identifying the purpose of the business venture or project and recognizing the internal and external factors that are favorable and unfavorable to achieve that goal.
Strengths
These are those things you do well, the high value or performance points. Strengths can be tangible e.g. loyal customers, efficient distribution channels, very high quality products, excellent financial condition. Strengths can also be intangible e.g. Good leadership, strategic insights, customer intelligence, solid reputation, and high skilled workforce often considered ‘core competencies’.
Weaknesses
Refers to those things that prevent you from doing what you really need to do. Since weaknesses are internal, they are within your control. Weaknesses include; bad leadership, unskilled workforce, insufficient resources, poor product quality, slow distribution and delivery channels, outdated technologies, lack of planning etc.
Opportunities
Refers to a chance for a firm to grow or progress due to a favorable juncture of circumstances in the business environment. Opportunities can be a potential areas for growth and higher performance. The possible opportunities include; Emerging customer needs, Quality improvements, Expanding global markets, Vertical integration etc.
Threats
A threat is a factor in your company’s external environment that poses a danger to its well-being. It considered to be challenges confronting the organization, external in nature. The possible threats include; New entry by competitors, changing demographics or shifting demand, emergence of cheaper technologies, regulatory requirements etc. Threats can also take a wide range of bad press coverage, shifts in consumer behavior, Substitute products, and new regulations.
