WHAT IS AN ENTREPRENEUR?
Comes up with an idea or recognises the need for a product or service in a given target
market and transforms it into a successful and profitable business venture
● A successful business: sells the RIGHT product/service to the RIGHT people at
the RIGHT place for the RIGHT price.
● A profitable business opportunity makes enough profit to: Serve as
income for the entrepreneur and put money back in the business for expansion
RESEARCH A BUSINESS OPPORTUNITY
● Before money is invested: an analysis of the specific people who will purchase the
product (target market), the industry in which product will fall, the price the target
market will be prepared to pay as well as the production of product and the
marketing of the product
● After business has been set up:Market research must be done periodically to
maintain competitive advantage and keep track of changing market trends.
MARKET RESEARCH
Market research is an attempt to obtain new information and to see if the
business:
Meets the need of the target market
Produces enough stock or delivers sufficient services to
satisfy the needs of the target market
Sells products/ services at a price that is competitive enough
to show a profit
Requirements for a profitable business
PASSION
Passion is shown by entrepreneurs in: How they treat their staff, how they act towards the target market, the
amount of time spent on the business. Passion drives enthusiasm and other people will become interested
too
TARGET MARKET
The target market is the specific group of people who would buy the product/ service
Who is the target market? Does the product/ service meet their needs? How big is the target market? Where
do they live? How often will they buy the product/ service How mush are they prepared to buy? Wat features
of the product are important to them.
PRODUCT OR SERVICE
The best product/service:
● meets the need of the target market
● Is offered at a price that the target market can afford
● Your product must be different from that of your competitors
,COMPETITION
● Who else offers the SAME/ SIMILAR products/ services?
● Who else is competing with you for the same customers?
● How will you give your product/service a competitive edge?
COMPETITIVE ADVANTAGE
● is when the product/ service has unique features to distinguish it from similar products offered by
other businesses
● Offering products/ services of outstanding quality at an affordable price
PRICE
● This is the main reason why customers buy a specific product/ ]service.
● The price that you charge must be in line with what your customers are prepared to pay for it
● the quality of the product/ service
The selling price is calculate as follows:
● Calculate the production costs (cost price)
● Add all other costs (operating costs/ overhead costs)
● Add a reasonable profit percentage
CAPACITY & CAPABILITY
How many products can you make and sell in a certain period
This will allow you to calculate if the business will generate enough money to make it worthwhile. Can you
sell this number of products easily?
LOCATION
This is about:
● The area of production
● The area where the product will be sold
These factors should be considered when deciding on location:
● Convenience
● Safety and security
● Accessibility
TEST THE BUSINESS CONCEPT
The business idea should be tested on individuals from the target market and feedback should be given on
the product or service,the price and the use of the product.
START UP CAPITAL
● This is the capital needed to set up the business and to run it until it reaches the profit threshold.
● Profit threshold (break even point): The minimum number of sales necessary to cover all the
expenses
● At this point, the income equals the expenditure The business shows no profit or loss
FORMULATING THE IDEA
, ● Investigate idea thoroughly
● Make sure you have the skills to develop it
● Be realistic/ avoid emotional decisions
● Organise your thoughts logically
● Identify strengths and challenges
● Evaluate your progress
● Test profitability
● Persuade possible investors
BUSINESS PLAN
1. information about the business:
Includes:
● Business name and address
● The names and ID numbers of the business owners
● Legal documents necessary for the type of ownership
● Long and short-term goals
2. Production plan:
● Includes a detailed description of the product, including product specification as well as: The
exact method of production
● The equipment used
● The suppliers
● The number of items that will be produced and be ready for sales per week or per month
● Quality standards
● Quality control
● Waste control
3. Market research and market plan :
● Product: describe and explain your product and its advantages
● Promotion: how you will convince customers to buy your product, how you will ensure a
competitive advantage
● Price: what you intend to charge for your product and how you calculated it
● People: to whom you will sell your product
● Place: where you will sell your product or how you will distribute it
4. Financial plan:
details how much money is needed to start the business and keep it going until it begins making a profit
The financial plan includes:
● Calculated start-up costs
● The source of the available funds
● A budget for income and expenditure
● Calculation of the breakeven point
● Estimation of time it will take to show a profit
5. Management plan:
Comes up with an idea or recognises the need for a product or service in a given target
market and transforms it into a successful and profitable business venture
● A successful business: sells the RIGHT product/service to the RIGHT people at
the RIGHT place for the RIGHT price.
● A profitable business opportunity makes enough profit to: Serve as
income for the entrepreneur and put money back in the business for expansion
RESEARCH A BUSINESS OPPORTUNITY
● Before money is invested: an analysis of the specific people who will purchase the
product (target market), the industry in which product will fall, the price the target
market will be prepared to pay as well as the production of product and the
marketing of the product
● After business has been set up:Market research must be done periodically to
maintain competitive advantage and keep track of changing market trends.
MARKET RESEARCH
Market research is an attempt to obtain new information and to see if the
business:
Meets the need of the target market
Produces enough stock or delivers sufficient services to
satisfy the needs of the target market
Sells products/ services at a price that is competitive enough
to show a profit
Requirements for a profitable business
PASSION
Passion is shown by entrepreneurs in: How they treat their staff, how they act towards the target market, the
amount of time spent on the business. Passion drives enthusiasm and other people will become interested
too
TARGET MARKET
The target market is the specific group of people who would buy the product/ service
Who is the target market? Does the product/ service meet their needs? How big is the target market? Where
do they live? How often will they buy the product/ service How mush are they prepared to buy? Wat features
of the product are important to them.
PRODUCT OR SERVICE
The best product/service:
● meets the need of the target market
● Is offered at a price that the target market can afford
● Your product must be different from that of your competitors
,COMPETITION
● Who else offers the SAME/ SIMILAR products/ services?
● Who else is competing with you for the same customers?
● How will you give your product/service a competitive edge?
COMPETITIVE ADVANTAGE
● is when the product/ service has unique features to distinguish it from similar products offered by
other businesses
● Offering products/ services of outstanding quality at an affordable price
PRICE
● This is the main reason why customers buy a specific product/ ]service.
● The price that you charge must be in line with what your customers are prepared to pay for it
● the quality of the product/ service
The selling price is calculate as follows:
● Calculate the production costs (cost price)
● Add all other costs (operating costs/ overhead costs)
● Add a reasonable profit percentage
CAPACITY & CAPABILITY
How many products can you make and sell in a certain period
This will allow you to calculate if the business will generate enough money to make it worthwhile. Can you
sell this number of products easily?
LOCATION
This is about:
● The area of production
● The area where the product will be sold
These factors should be considered when deciding on location:
● Convenience
● Safety and security
● Accessibility
TEST THE BUSINESS CONCEPT
The business idea should be tested on individuals from the target market and feedback should be given on
the product or service,the price and the use of the product.
START UP CAPITAL
● This is the capital needed to set up the business and to run it until it reaches the profit threshold.
● Profit threshold (break even point): The minimum number of sales necessary to cover all the
expenses
● At this point, the income equals the expenditure The business shows no profit or loss
FORMULATING THE IDEA
, ● Investigate idea thoroughly
● Make sure you have the skills to develop it
● Be realistic/ avoid emotional decisions
● Organise your thoughts logically
● Identify strengths and challenges
● Evaluate your progress
● Test profitability
● Persuade possible investors
BUSINESS PLAN
1. information about the business:
Includes:
● Business name and address
● The names and ID numbers of the business owners
● Legal documents necessary for the type of ownership
● Long and short-term goals
2. Production plan:
● Includes a detailed description of the product, including product specification as well as: The
exact method of production
● The equipment used
● The suppliers
● The number of items that will be produced and be ready for sales per week or per month
● Quality standards
● Quality control
● Waste control
3. Market research and market plan :
● Product: describe and explain your product and its advantages
● Promotion: how you will convince customers to buy your product, how you will ensure a
competitive advantage
● Price: what you intend to charge for your product and how you calculated it
● People: to whom you will sell your product
● Place: where you will sell your product or how you will distribute it
4. Financial plan:
details how much money is needed to start the business and keep it going until it begins making a profit
The financial plan includes:
● Calculated start-up costs
● The source of the available funds
● A budget for income and expenditure
● Calculation of the breakeven point
● Estimation of time it will take to show a profit
5. Management plan:
