Grade 8 and 9 Learner Workbook

Table of Contents

How to use this workbook……………………….2

Getting Started……………………………………3

Create your Business Plan………………………5

Cover page ……………………………………….7

Summary of the business idea………………….9

Description of your business……………………11

Marketing plan……………………………………15

Management plan………………………………..21

Financial Plan…………………………………….25

Record and Evaluate……………………………..31

Motivation and Conclusions……………………..37

Acknowledgements

Project Manager: Jerome Gordon, Senior Curriculum planner: GET
Economic and management Sciences Learning Area, Western Cape Education
Department
Many thanks to the following contributors:
All Economic and management Sciences Learning Area curriculum Advisers

Author: L Zeeman

Printing: Edumedia (WCED)
All Business Studies teachers who will be facilitating the booklets/material
The City of Cape Town Department of Economic Development and Tourism,
RED Door, Cape Regional Chamber of Commerce, and other partners in the
World of Business, who all participate in developing Entrepreneurial skills in school going youth.

How to use this Workbook

This Workbook provides you with a step-by-step guide to complete your Business Plan.It will help you to find a suitable business idea and provide you with practical examples of the different components that you need to complete for your Business Plan. The layout of the information provides for detailed examples and explanations of how you should go about putting the information together and then provides you with templates to complete your own business plan.

Templates for your SWOT analysis and Income Statement have been provided for two more attempts and forms part of this booklet. This will give you the opportunity to refer back to what you have done in previous rounds.

At the same time this booklet will serve as your Portfolio of evidence to show how you have reached the following Learning outcomes and Assessment standards:

Grade 8

LO 4 AS 2 Discusses different ideas for starting a business (including ideas to attract tourists, franchising

LO 4 AS 4 Evaluates the financial viability of a business (e.g. start-up costs, production costs, sales, profit).

LO 4 AS 5 Engages in a business activity that involves purchasing, production and marketing (should involve financing of business with own or borrowed capital - e.g. bank overdraft

Grade 9

LO 3 AS 1 Completes a basic income statement and balance sheet for a service and retail business.

LO 3 AS 5 Analyses financial statements for decision-making at a basic level.

LO 4 AS 1 Generates, through SWOT analysis, possible business ideas to meet the need for manufactured goods or services.

LO 4 AS 2 Develops a business plan (including a budget) for a manufacturing, service or tourism enterprise based on the best business opportunity from the ideas generated.

LO 4 AS 3 Engages in the business activity planned and discusses the reasons for choosing a particular form of ownership.

LO 4 AS 5 Conducts a marketing campaign to promote a product and discusses the self-selected advertising media.

Good luck with your Business venture!

GETTING STARTED

Many people do not start their own business because they have no idea what to produce or sell. Here are some tips that might help you to think of a business idea.

Write your own business ideas:7

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Rank your business ideas according to what you think is the best:

Create your Business Plan

You need to decide if your ideas are good, workable business ideas and if you can make a profits. In order to be successful, your business must always focus on the needs of customers. .

Put your idea in writing

PROFIT = (SELLING PRICE – COST PRICE) X VOLUME –

Why do you think it will be a success?

Make a prediction about the money that your business will make:

1.COVER PAGE

The Cover page is very important as it will be the first opportunity for you to create a good impression. Make sure you apply the AIDA technique:

A Attract attention – the cover must be neat, clear and if you can include an interesting visual or a logo it would immediately attract the attention of the readers

IInterest – the name of your business will be a key factor when trying to get the interest of the reader, make sure it is creative and holds a promise.

DDesire – an immediate desire to start reading the business plan can be created if you make sure that your cover page is neat , clear and well-organised

AAction – if you have all three the above principles in place, it will be easy to convince the reader to turn to the next page!

You must also include all the personal information of the owner:

Name
Address
Telephone numbers
Fax number
E-mail address

Create your cover page here

2SUMMARY OF THE BUSINESS IDEA

This summary is to inform the reader of the purpose of your business plan . It is not yet a full description of the business, the focus should be on what it is that you need and how you think you will be able to repay whatever it is that you are asking for.

Read the following example to guide in you in what it is that you should include on this page. However, if you do not require assistance then you can move on to the next page.

My business idea is to assist elderly or sick people from the community that are unable to get their daily grocery supplies from the local shop. I will collect their orders and the money in the morning before school and then deliver to their homes in the afternoon. I need to purchases a bicycle with a large carrier. The bicycle will cost R800 and I will charge 10% on the total of each order that I carry out. My projected figures show that I should initially make about R50 per week. If I pay back R25 per week on the R800 that I borrowed, it will take me 32 weeks to repay my loan.

Write your Summary here

3.Description of your Business

This section must be very comprehensive and explain exactly how you plan to turn your business idea into a profitable business. Include all information that will impact on the potential success of your business, including what type of ownership, the reasons for your choice of ownership. A well thought through SWOT analysis, where you see the business a few years from now and a very strong motivation of why you believe your business will be successful. Read through the following example and then complete your own business description:

Business description

There are many elderly and sick people in my community who needs daily fresh supplies of milk, bread, vegetables, meat and other supplies. As they are not able to get to the local store to make these purchases, my idea is to take their orders, buy what is required and deliver the goods to their homes. For this I would use a bicycle, it might mean that I have to make more than one trip per day, but the local store is situated in the residential area and close to the homes of the people that I intend to deliver the service to. I will charge a commission of 10% on every order that I execute. The business will run on a 100% cash basis and I will collect the money upfront.

Type of ownership

I will start the business as a sole trader, as I will at first run the operation completely on my own. I also need to pay back the loan for the bicycle. I do think that in time to come, I will consider taking in a partner, which will then change my form of ownership to a partnership.

Write your Business description here:

Describe your form of ownership:

SWOT analysis

Strengths / Weaknesses
10% commission is very reasonable. / It is hard work and time consuming.
There is no such a service currently in the community. / I am not yet able to purchase bulky items, as I am using a bicycle for delivery.
With a partner I can extend the service and
include more people.
Opportunities / Threats
Many people in the community that need the service. / Existing charity organisations might in future perform the service.
Members of the working class that are pressed for time can also use the service. / Family members usually look after other family members.
Other entrepreneurs might do the same thing and cash in on my market.

Business Potential and Growth possibility

I believe this business idea has a lot of growth potential as there are many people who will easily pay the commission to save them the time and effort to go to the shops themselves.
I can easily take on a partner that also has a bicycle to help me with the deliveries and share in the commission.
The target market can extend into more than just the sick and elderly.
5 years from now I see this business running with more than just a bicycle or two, but could include a deliver van. This will put the business in the position to deliver more than just the daily fresh produce, but rather weekly groceries of busy families.
I believe my business will be a success because I am a very hardworking person with a will to succeed and grow my business.

Complete your SWOT analysis here:

Strengths / Weaknesses
Opportunities / Threats

Write your goals and growth potential of the business here:

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4.Marketing Plan

Your marketing plan should contain a description of your target market, evidence of the market research that you have conducted, information about any competitors, how you plan to advertise your business and the cost.

Target market

Criteria / Description
Average age / 50 years and older
Gender / Male and female
Marital Status / Both married and unmarried
Home Language / isiXhosa and English
Average monthly income / R2000
Geographical area / Within 5km of the local grocery shop
Lifestyle / Simple lifestyle with a need for basic foodstuffs
Other important information / Not able to access transport and do not have a large support structure

Market research

Possible questions that need to be asked to the target market could include:

Do you buy milk, bread, vegetables on a daily basis?

Where do you buy your supplies?

How often do you go to the shop?

Do you do your own shopping?

How much do you spend on average on a daily basis?

Will you be interested in having your order delivered to your home?

Are you willing to pay 10% of the total of the order for this service?

How often do you think you will make use of such a service?

Describe your target market:

Criteria / Description
Average age
Gender
Marital Status
Home Language
Average monthly income
Geographical area
Lifestyle
Other important information

Design your questions for the Market research questionnaire:

Question / YES / NO
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2
3
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5
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Possible demand for the product

You have to make an accurate projection of your potential income. This projection must be based on facts and the information must be obtained from actual market research. Your calculation might look like this:

Number of potential customers………………………………….20

Average weekly purchase per customer……………………...R25

Average weekly commission income…..(10% of R500)…….R50

Competitor Analysis

Calculate your market potential:

Complete your Competitor Analysis:

Criteria / Competitor 1 / Competitor 2
Product or Service
Price
Place
Promotion Strategy
Weaknesses
Strengths

Promotional Strategy

Every business must have an advertising strategy in place. You can not simply rely on word of mouth to become known in the area, especially if you are thinking of expansion in the future. Think about your target market and how best to get the information about your business to them. Think creatively and make plans for a few months in advance. Be prepared to change your plans if it does not pay off.

SPEEDY DELIVERIES

FROM YOUR LIPS TO YOUR DOORSTEP!

Contact: Eric

Cell: 0827755134

YOUR WISH IS MY COMMAND!

I WILL BUY WHATEVER YOU NEED AND BRING IT RIGHT TO YOUR DOOR FOR ONLY 10% OF THE TOTAL OF YOUR ORDER! EVERYDAY SERVICE, INCLUDING SUNDAYS AND PUBLIC HOLIDAYS!

Describe your advertising plans:

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Create your advertising pamphlet here:

5.Management Plan

A business must have a leader. But unless you have chosen to run your business completely on your own, you are going to need all the help that you can get. You might have to employ people to do certain jobs within the business. Choose your team carefully. The most effective teams have people with different strengths that are essential for the success of the business. Choose your team according to the needs of your business.

Make a list of everything that needs to be done. Identify how many people will be needed to perform all the tasks within the business. Complete a short job description and a job specification for each of the tasks that the business will require.

Look at the visual presentation of the tasks that must be performed for a business that bakes and sells cup cakes:

Make a list of all the jobs to be performed in the business:

Position / Job Description / Job Specification

Complete a visual diagram of all the tasks to be performed:

The Organogram

This is a diagram of how the business is structured, with lines showing who reports to whom and the various functions within the business. An organogram is also known as an organisational structure. Once you have created your organogram it does not have to stay static. An organogram can change if the business needs change.

An example of an Organogram:

Create your own organogram:

6.Financial Plan

Start up

Sometimes entrepreneurs have great business ideas, but the expense of starting up the business is simply too high. It might take years for the entrepreneur to pay back a loan that funded the start-up of the business. Businesses do not necessarily start to make money from Day 1, a month or two might go by before customers start spending money. However you will still have lots of expenses to pay, although your business is not yet showing any income. There is always some pre-operating costs, that you will not easily recover. You will have to consider your start-up requirements as well as your pre-operating costs very carefully before you make a final business decision.

Some pre-operating costs to consider:

Starting inventory/stock/materials
Advertising
License
Telephone connection
Electricity connection
Cash on hand

Some fixed assets you might need:

Cash register
Display stands
Shelving
Cabinets
Tables
Office equipment
Advertising sign boards
Decoration

Calculate your total Start-up costs:

Total Finance required:

Costing and Pricing

Your costing strategy will be linked to whether you have chosen to start a service business, a trading business or a manufacturing business.

First make a list of all your expenses, remember to include overhead expenses such as rent, electricity, wages, advertising costs, etc. If possible calculate your unit cost, so that you can work out what your price should be. For a service business you must remember that your time that you are giving to the deliver the service must also be costed in. Make sure that your price is in line with what your competitors charge. If you want to charge more, then your product will have to offer more.

Study the following example of a costing and pricing process:

Complete your Costing and Pricing:

List all your costs and expenses / R
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Total costs / ……………….
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Calculate your unit costs:
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Explain your pricing strategy:
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Calculate your break-even point:
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Projected Income Statement

The most difficult part of your Business Plan is to make financial predictions. However this is a very important part of your Business plan and will be one of the main considerations to go ahead with the business.

Look at the example of a Projected Income Statement for Trading -/ Manufacturing business:

Sales / 3 000,00
Less Cost of goods sold* / (1 200,00)
Gross Profit / 1 800,00
Less operating expenses / ( 950,00)
Rent / 100,00
Advertising / 300,00
Wages / 500,00
Stationery / 50,00
Net Profit / 850,00

*(Cost of goods sold calculation: 800 cup cakes at R1,50 each = R1 200,00)

An example of a Projected Income Statement of Speedy Deliveries (a Service business):

Income from services rendered / 500,00
Less operating expenses / ( 150,00)
Bicycle maintenance / 60,00
Advertising / 50,00
Stationery / 40,00
Net Profit / 350,00

Complete your Projected Income Statement:

Projected Income Statement of ……………………………..

for the period ended …………………………..

Show your Cost of Sales calculation:

(Remember this figure is based on the actual products sold; make a note of your leftover stock)

Record and Evaluate

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Income Statement of ……………………for the period ended ………………………

Show your Cost of Sales calculation:

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Balance Sheet of………………………… as at ………………………………

Notes to the Balance Sheet

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Business Event Number 2

Now that you have some experience in starting and running a business, you might want to change some of the aspects or change your initial business idea completely!

Briefly describe you changed business idea: