What product or service are you offering?
Q2. What Industry will you be Operating in?
Current trends in the industry
Long term future of the industry
Gross profit margins
Terms of credit from suppliers
Terms offered to customers
Names and addresses of suppliers
Q3. What information do you have about your industry?
Can the business be started on a small scale?
Can the business be started from home?
Strategic Phase: SWOT Analysis
Operational Phase: Marketing Plan /
Policies / Budget
/ Nature of the Business /
See Also: Market Research & Promotion
/ Financial Plan / Accounting
& Financial Matters
Costing the Products or Services / Break-Even
Research & Promotion
Have you defined your market by:
Size, Geographic location, Age, Income level, Taste preference
of customers, Llife cycle of product.
On what basis can you set your prices? Same as
competitors, Cost plus.
What sort of packaging will you need?
Cost of packaging?
What do you know about your potential customers in terms of:-
What they buy, Why they buy, Where they buy, How often they buy
What pre- and after-sales services do they expect
Who are your competitors?
What will you offer customers that is better or different?
What is your competitive advantage?
What is your competitive disadvantage?
How can this competitive disadvantage be overcome?
What will affect your market?
Fashion trends, Dsposable income, Consumer confidence, Industrial
relations, The economy
What forms of promtions will best suit your type
- Direct mail
- Yellow pages & similar business registers
- Magazines & trade journals
What will these forms of advertising cost?
Do you know the what level of sales will be required to break
Do you know how much capital you will need to
- Fixtures & fittings
- Office furniture & equipment
- Tools of trade
- Motor vehicles
- Initial supplies/stock in trade
- Legal & accounting fees
What will your monthly expenses be for?
- Motor vehicle expenses
- Postage & stationary
How long will it take for the business to start
showing a profit? 1 month / 3 months / 12 months
How much money is required to start and run the
business until it is profitable?
- Prepare a simple cash flow (money in, money
out) for the first 12 months
- Add up all the shortfalls of cash
Does the plan provide for an adequate return
on the money which you propose investing in the business?
Do you know what record-keeping
books you will require?
Do you know...
How to keep records? Where to obtain a bookkeeper?
Do you know how to prepare a cash flow statement?
Can you prepare budgets?
Can you reconcile accounts & bank statements?
the Products or Services
What is the minimum
production level to cover the cost of running the business?
Which Laws & Regulations Affect:
Warranties or Guarantees?
Terms offered to customers?
Advertising & other forms of promotion?
Labelling & packaging?
Have you contacted the Business Licence Centre in your state
about regulations, permits and licences which may apply to your
Have you discussed your insurance needs with a broker?
Have you decided to register a business name?
Do you plan to operate as a Sole trader? Partnership?
or a Proprietary Company?
Have you organised supply of stock?
Are your suppliers reliable?
Have you considered joining an Industry Association?
Do you need training?
What factors affect the performance of the
Has the business the resources to achieve its objectives?
A useful technique for determining the answers is a SWOT analysis;
that is, assessing the business' strengths and weaknesses and,
identifying ooportunities and threats in the business environment.
Strength & Weaknesses
The internal analysis should cover:
- Products and product range
- Market share
- Level of borrowed funds
- Staff skills
The external research should cover such factors as:
- Their present position
- Likely future
- Reason for success or failure
- the state of the economy
- interest rates
- level of employment
- Social Position
- changes in social behaviour
- standard of living
- levels of incomes
- changes to existing products
- methods of distribution and production
- Health and Safety
- changes in zoning regulations
Following the analysis, you are now in the position to decide
upon: What steps to take and what resouces have to be acquired
in order to achieve your business objectives.
The Operational Planning
has two phases.
The first phase is the preparation of the marketing, stock turnover
plan, and personnel plan. The second phase draws together these
plans in the financial plan which includes the annual budget and
the cash flow.
The research will seek to answer the following
Who are your potential customers ?
Whare are they ?
Why do they buy your products or services ?
When do they buy them ?
How do they buy them ?
How much will they buy ?
How often do they buy them ?
How can you communicate with them ?
(what do they read/listen to ?)
What are they prepared to pay ?
This information may
be available from:
The Australian Bureau of Statistics, Trade associations or chambers
of commerce, State government departments, Trade journals or similar
publications, Suppliers, Customers.
The records of business
Who are your existing/potential competitors ?
What can you offer that is different or better than what your
What skills are needed by the staff involved in the marketing
and selling of your products?
What skills are available, in house or in the market place?
What training is available?
Which laws and regulations affect the way you:
Warrant or guarantee products?
Offer terms to customers?
Promote your products?
Label and package your products?
Setting Sales Targets
Sales targets are set to achieve a predetermined level of profit
and return on investment. The proposed level of sales should be
compared to the estimated total market for the product. Check
that the proposed market share is realistic. Include a Breakeven
These decisions should
Product/ product range, Pricing, Promotion, Advertising, Packaging,
Publicity, Method of distribution, Customer Service, Purchasing.
Effecting these decisions will provide the unique mixture that
will distinguish your business from its competitors.
Budget & Cash Flow
The annual budget consists of a budgeted profit
and loss account and a budgeted balance sheet. The profit and
loss budget shows the proposed trading activities of the business
usually on a monthly basis. It will show your projections of:
Sales, Stock movements, Gross profit margins, Fixed and variable
costs, Profits, Return on investment.
The budgeted balance sheet will show your projected
The net worth of the business, Assets, Working capital.
The cash flow statement will indicate how the trading activities
and asset purchases/disposals affect the availability of cash
in the business. In other words how much money is needed and for
the Nature of your Business
The nature of the business is determined by
the products or services offered and by the market served by the
business. The following questions will help you define the nature
of your business.
Products or Services
What products do you currently sell?
Which products contribute most to your turnover?
Which products contribute most to your gross products?
What competing products are available?
How do these items compare
in terms of:
Price, Nature of use, Terms of payment, Availability, Method of
distribution, Customer accessibility, Customer awareness, Depth
of range, Profitability, Demands on resources, What is the status
of the product's life cycle, What new products are coming onto
Market Served by the Business
What customer needs are being met in terms
Geographic location, Buying patterns, Use of product, Source of
Pre-Sale & After-Sales Service.
Which of the following factors about the consumer
Age, location, sex, occupation, income level, family status?
Which customers contribute most to turnover?
Which customers contribute most to gross profits?
How many competitors are there in your industry?
How many competitors are there within 5km?
How many competitors have started/ceased trading in the last twelve
To develop a statement which clearly describes
your business, you now answer the following questions:
Is your business conservative or trendy?
Is your business capital or labour intensive?
Does your business have a large or small number of competitors?
Are your customers easy or difficult to define and identify?
Is the image of your business important?
Does your business work on high or low profit margins?
Is the location of your business important?
Are specialist selling skills required?
Is the promotion by your competitors low or high key?
Your answers to the checklist
will give you the information you will need to:-
Describe your industry
Describe your business in relation to your industry
Define your competitive advantage