Module 1:

Introduction to Business Planning

Contents:
Section 1: Section 2: The Workbook Lifelong Learning

Personal Aims and Objectives Personal Skills Survey Personal Development Plan Personal SWOT - Strengths, Weaknesses, Opportunities & Threats Communication Image and Presentation Section 3: Starting To Plan

Business Plan Introduction and Walk Through Personal Survival Budget Start-Up Costs Key Task Specifications Action Planning

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Section 1: The Workbook The Workbook

This Workbook consists of exercises for Modules 1 7, these exercises will help you to develop an understanding of setting up in business and what is required. The Workbook contains all of the exercises you will need for your business plan and provides evidence of competence. It can also be used to demonstrate to a prospective employer your learning if you choose not to start your own business and become employed.

Section 2:

Lifelong Learning

You will find that as your business starts to grow and develop you will need to constantly improve your skills in order to manage the business successfully.

The Importance of Personal Development

When you start your business you will have to wear many different hats in addition to your main business skill. You will need to do Marketing, Accounts, Human Resources, Sales, Health and Safety and Networking. It is important to think regularly about your current skills and assess where the gaps are and how you can fill them. You cannot always afford to learn through your mistakes because they might cost you your business.

Improving how you learn

You will find that once you put your personal development plan together that you are continuously learning new skills. There are 4 main ways in which people learn: Intuitive: A natural way of taking in information you are not aware of. Incidental: A more conscious approach triggered by events Retrospective: A process of analyzing what you have just learnt, thinking more rigorously. Prospective: Actively planning what you hope to learn from a particular experience and reviewing if carefully. People learn in different ways, and have different learning styles that help them to understand what they have heard in training and how they then interpret and transfer that learning to the workplace.

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Learning Styles Activists:

Extensive research suggests that there are four learning styles: People who learn best from relatively short, perhaps intensive, immediate and active involvement in practical tasks. They tend to favour intuitive and incidental types of learning. People who learn best from situations and activities in which they stand back, listen, and observe before they act. They tend to favour the retrospective type of learning. People who prefer to place their learning in the context of a theory or model. They tend to favour retrospective and prospective types of learning.

Reflectors:

Theorists:

Pragmatists: People who learn best when they see a clear practical
link between the subject matter and a personal or work based problem or opportunity. They tend to favour the prospective type of learning provided it is directed towards a practical goal.

2a: Personal Aims and Objectives A person without a goal is like a ship without a rudder What is a Personal Aim? An aim is a statement of what you would like to achieve by a particular time. Goal setting research shows that individuals who set goals and then regularly review them are much more likely to achieve their aims than those who merely dream. Example of a Personal Goal To travel to Australia within the next 2 years To have my mortgage paid off within the next 10 years, in order for me to invest in a holiday apartment in France. To learn Spanish, by attending classes at college, within the next year.

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Most people start a business to fulfil at least one personal aim, whether this is to be independent, to have the chance of a better lifestyle or simply to improve their employment prospects. Aims can be for a specific event, or broader covering a short or longer period of your life. You might want to buy a house, have a new car, lead an independent life, go out more, be able to help other people, keep your family happy etc. Starting a business may be a way to help you achieve some of your person aims it doesnt matter if it doesnt, but it would help! An important aspect of setting aims or goals is to keep them SMART

S M A R T
TASK 1: 2b:
Objectives.

Specific Measurable Achievable Relevant Timely

Refer to the Workbook and complete your Personal Aims and

Personal Skills Survey

There are several skills people use almost every day in order to get along socially and in business. It is important that you recognise your competence in these skills when planning your business and to improve on them if necessary. It is useful to know which skills you feel you are good at and which ones you feel you are not so good at.

TASK 2: Complete your Personal Skills survey in the Workbook 2c: Personal Development Plan
Realistically assessing your Knowledge, Skills and Abilities is an important part of running a successful business. Once you have assessed them you can develop a plan to help you to fill any gaps. Continuous personal development will enable you to keep learning about yourself, the business

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and the markets you are operating in. In the Workbook, Task 2 you will find a Personal Development Plan, you will be updating and adding to this throughout the course please look at it now.

TASK 3: Refer to the Workbook and review the Personal Development

Plan.

2d: Personal SWOT Opportunities, Threats)

(Strengths,

Weaknesses,

A SWOT analysis is a diagnostic that can be used for assessing your personal attributes, competition, customers and markets. In this section you can use it to assess your own personal strengths and weaknesses, as well as opportunities and threats to your business on a personal level.

TASK 4: Please complete your SWOT analysis in the Workbook 2e: Communication

Effective communication skills can be developed by anyone. In your business you will have to learn to communicate with your customers, competition, financial institutions, suppliers, and the media, amongst others. You will need to learn to speak with confidence about your business and to listen carefully to your clients needs. You will also need to steer conversations towards a sale; influence people to buy your product, negotiate with suppliers; and generally have an impact on your audience. When you are communicating with somebody you might want to consider the following:

Your Audience Who is your audience? What is their background? How would they prefer for you to communicate with them? What do they want to hear? Using Your Voice and Body Language How do you sound?

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 How can you make your voice more expressive? How can you use your voice to influence? How can you appear more approachable, friendly and condiment? How can you make eye contact and control your body language?

Styles of Communication
What is your preferred style of communication? How can you become aware of other peoples body language? How can you use different methods of communication to get your message across?

2f:

Image and Presentation

It only takes a few minutes for someone to form an opinion of you and once that judgement is made it is hard to change. Having professional business etiquette can: a. Improve your customers perception of your business. b. Improve financial institutions perception of your business. c. Motivate your employees to project professionalism. d. Encourage professional development. A person who looks confident and professional is perceived to be more capable. The way you present yourself can also lead to networking success. Remember, it is all about making new connections that lead to business relationships. Networking is a skill that anyone can learn and use to fain the competitive edge. (a) You do not get a second chance to make a first impression. (b)Your customers are likely to buy you before they buy your products or services.

Section 3: 3a:

Starting to Plan

Business Plan Introduction and Walk Through

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3b:

Personal Survival Budget

To find out if you can afford to start your own business (or, indeed, if the business can afford you) you need to calculate your own survival income. This figure is the amount of money you need to be able to pay all of your personal expenses, less the money you have coming from sources other than your business during the next twelve months. The net result represents the amount of money you will have to find from your business (or a job). Much of the information will come from what you spent over the last twelve months. The calculations should be made for the household, not just your share of the bills unless you genuinely apportion those bills i.e. if you share a house with others or you are living with parents etc. Remember: Be honest with yourself, dont underestimate any of your bills

Dont forget those luxuries e.g. evenings out, holidays etc You may have to live on a very low income during the first few months
can you? Some people with additional sources of income will find that they have minus figure this means that their household bills are covered at the moment. Any additional money coming into the household will simply be a bonus i.e. disposable income. The overall figure will act as a guide when planning how much money to take out of the business for yourself in the first twelve months this figure is called your Drawings if you are a sole trader or partner. It is called a Directors Remuneration if you are starting a Limited Company. As each is taxed differently, you will need to recognise the difference. A Word About Drawings... This is the money that a sole trader or a partner takes from the business as personal payment. Drawings come out of the profit of the business (when looking at your business performance). You do not pay tax on drawings when you take them, like you do with a salary under PAYE (Pay As You Earn), but you are still liable for tax. You are taxed on the net profit of the business before drawings have been deducted. You can choose to take as little or as much as you want as drawings and you can choose when you take drawings. This flexibility can be an

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advantage and a disadvantage to a small business as drawings can get out of hand when paying for personal items with business money. You must keep a note of all of your drawings.

TASK 5:
Budget

Please turn to the Workbook and work through your survival

3c: Start Up Costs Your start up costs is the money required to set yourself up before you start trading. Start-up costs can include property required, equipment, tools and machinery, transport, insurances, training costs and marketing and advertising you want to do to launch your business.

TASK 6: Please turn to the workbook and work through your Start up
costs.

3d: Key Task Specifications The owner of any small business is required to undertake many jobs, as invariably they are the only person available to do them You effectively take on two jobs: e. Making the product or providing the service. f. Managing the business g. It is not unusual for new owner/managers to spend over 70 hours per week working in their business. How would your family feel if this happened to you? Another way to lessen the workload is to take on employees. Deciding when to take on an employee is a delicate balancing act. On the one hand, if you increase your manpower you might not be able to cover increased costs straight away. On the other hand, extra manpower could free you to spend more time on other activities, such as marketing or planning which should, in the end, mean increased profits. A useful rule of thumb for choosing the nest time to increase your manpower is to ask yourself if you can generate enough extra sales to cover the cost of taking on the extra employee. It you will not be able to increase your sales straight away, you could still employ someone; but, in this case you will need to keep your business afloat with cash reserves until you have built up sales to the level needed.

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Whatever you decide you will need to analyse the tasks involved in running your business and decide, it you are taking on someone else, who will undertake which task. For example: Susan is opening a clothes shop and she had identified some of the key tasks in her business: Key Tasks Stock control Timing Every evening Monitored/Evaluated by Goods sold deducted from previous stock record and new stock balance calculated All income and expenditure recorded Full range of products on display Stock record from close of business on Friday against established stock holding.

Bookkeeping Re-stocking of shelves and rails Ordering of new stock

Every evening Every Morning Every Saturday morning

There are many other key tasks involved in this business. At present Susan can cope with the amount of work involved but this could change if business levels increased and she may need to consider taking on an employee. By using a Key task specification like the one above, you can evaluate and plan when each task must be done. It is important to keep the customer at the front of your mind when doing this i.e. How far back from the sale must this task be done? The areas of work you need to look at include.,.. (c) The way the product or service is made or provided (d)The tasks involved in buying and keeping the right amount of stock or materials (e) The way the customer gives you an order and what you do once you have received the order. (f) The way payment is collected (g)The ways you intend to market your business. (h)The ways you intend to control the finances of your business. If there is more than one person involved in your business, you should decide who is to be responsible for which key tasks.

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There may be a key task that you do not feel condiment or competent in doing. You should then highlight this as a training need i.e. you will need to find these skills either through personal training, through employing someone with the skills or by using a professional e.g. an accountant. For example, some businesses will need to be VAT registered, a key task will then be completing the VAT returns. If you are not confident in doing this you could employ a bookkeeper or use an accountant.

3e:

Action Planning

Throughout the programme you will be looking at the various steps involved in starting your business. You will be creating a marketing plan that takes account of the various steps involved to effectively market your products and services. You have also completed a personal training plan to make sure you have all the necessary skills to run your business. It is worthwhile to produce one action plan that takes account of all the things you have to do before you are ready to trade. You should set action points for at least the following: Market Research Opening a bank account Finding suppliers Making any start-up stock Insurance Personal training Finding premises Marketing Sourcing any finance required Buying any start-up stock Organising business stationery Buying equipment needed Recruiting any staff Refurbishing/fitting out premises if necessary

Each of these may have a number of action points associated with them. You can see that planning all of this activity could be consuming, especially when you have to do some things before you do others. Remember it would be foolish to take on business premises before you had done any market research. One of the easiest ways of planning many activities is to produce a time map, sometimes called a Gantt chart. This plots out what the activity is, when it is due to start and when it is due to finish.

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