MilbaDjunga Smart money- How can I start my own business?

Section 4

icon for section 4Act

In this stage you will:

  • learn about the skills needed to run a business

  • learn how to write a business plan, carry out market analysis, develop a production/operations plan and write a financial plan.

portraits of Tash and Sam, Indigenous girl and boy

Tash: What do you reckon now, Sam? Have you come up with a product to sell?

Sam: Yeah Tash, I want to sell my famous meat pies. You know how everyone wants one when I make them?

Tash: That is a good idea, Sam. You could make them and sell them but you still have to think about a few things before you can just start your business.

Sam: What do you mean?

Tash: You have to figure out how much it is going to cost you to get started. You think that all the things that go in the pies are free?

Sam: No.

Tash: Do you know where you’re going to get the pastry, meat and sauce from?

Sam: No.

Tash: How many can you sell in a day? Have you even written your recipe anywhere? Remember that one time you made a pie that was yuck!

Sam: You know something, Tash? I think you’re right about one thing. I have a lot to think about before I get started.

Tash: Actually Sam, you need to do more than just think about it, you need a plan.

Sam: That will help - a plan. Hmmmm … now where do I start with my business plan?

Read the definitions of these skills which are needed to run a business. Which of these skills do you have? Make a list of the skills that you have in your resource booklet.

Determination

willpower, purpose, strength of mind

Ability to set goals

ability to aim for something

Drive and energy

get up and go

Self-confidence

belief in yourself and your abilities

Resourcefulness

good at problem solving

Initiative

ability to act on your own without help or advice from other people

Passion

great enthusiasm

Flexibility

ability to adapt to a new situation

A business plan is important for anyone who is going to start a business. A business plan is needed to get finance from a creditor (bank) to pay for your upfront costs. The plan can keep you focused in the future once your business has started. Business plans can be different depending on what sort of business you are starting.

A business plan

However, there are some common elements of a business plan:

Summary, introduction, market analysis, marketing plan, production/operations plan, management plan and financial plan.

For this exercise we will focus on the following three elements only:

  • market analysis

  • production/operations plan

  • financial plan

Market research is important to your business. It will let you understand what the customers need and what your competitors are doing. Being able to use statistics and research will help you make better decisions about your business.

Being able to see things like trends can help you place your business in a good position for future opportunities. There are many ways to get your information: from direct surveys to using government data and trade statistics and publications.

Now it is your turn to write out your market analysis. Complete this with your group or by yourself.

Classroom activity: Market analysis (.pdf 168kB) Arrow icon linking to an activity

A production plan is important to your business. It is a complex undertaking where you have to deal with many things. Read these terms and their definitions:

Demand

Demand is your prediction of how much product you can sell in a day. What is a realistic number to sell? What happens if you run out?

Capacity

Capacity is being able to write down where you will get our product resources, the prices and how much of each item you will need to make your product.

Human resources

The human resources need to be considered too; the time to make your product, and the set of instructions of how to make it or go about doing it.

Quality assurance

How are you going to make sure that the quality of your product or service is going to be kept up?

Being prepared and making sure that you have taken into consideration all these aspects of product production is important to help give your business a good start.

Now it is your turn to write out your production plan. Complete this with your group or by yourself:

Classroom activity: Production/operations plan (.pdf 188kB)Arrow icon linking to an activity

Having a sound financial plan is important to your business. Most banks and other lenders will look at the financial plan before they will be lending you any money. Read the terms below to see what is included in a financial plan:

a financial plan shown on a computer monitor

A cash flow projection

how much you will make when you sell and how much money you will spend on resources

A balance sheet

statement of how much money the business has

The break even point

when you start making a profit

The start up costs

how much money you need before you start your business

Assumptions

how you came up with the numbers in your financial plan

Being able to write all this information in a financial plan gives you, the business owner and any lenders, the confidence that your business planning is well thought out and that you have considered the costs of having your business

Classroom activity: Break-even point (.xls 12kB) Arrow icon linking to an activity

Now it is your turn to write out your financial plan. Complete this by yourself or with your group:

Classroom activity: Financial plan (.pdf 276kB) Arrow icon linking to an activity

Now that you have carried out your Market Analysis, written up your Production/Operations Plan and worked out your Financial Plan you need to write up your own Business plan. Again you can do this individually or with your group:

Classroom activity: Business plan (.pdf 164kB)Arrow icon linking to an activity

portrait of Tash and sam, Indigenous girl and boy

Tash: Well we are at the point now where Sam has to put all that we learned into practice. Sam has a business plan written. He knows what he wants to sell – his famous pies. He knows how to make them and how long it takes to make them. Sam is doing this to provide for our community’s wants. They just love his pies. Sam knows how much money it is going to cost him to start his business. He also has a realistic prediction of when we will start making money.

Sam: You know what I reckon? That you mob who have been learning all this stuff with us know enough now to try and start your own business too. So, take everything we have shown you so far and get to it. The longer you wait, the longer it will take to make yourself some money! Oh, and a little advice, don’t be afraid to make changes to the business plan. You may need to change it if you have to react to your customer’s demands or needs. You might have issues with your goals or your projections for the future. You might have to make more realistic goals.

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