UNIT 36: BTEC NATIONAL BUSINESS

UNIT 36: STARTING A SMALL BUSINESS

Introduction Starting a small business is the ambition of many people. The business idea could be almost anything - a coffee shop, a courier service, a hairdressers, a motor vehicle repair workshop, a DJ service, a painting and decorating business, an equipment hire operation, an organic smallholding producing fruit and vegetables, etc. However, starting a small business can be fraught with difficulties and the idea may not always be successfully realised. Those setting out on such a venture will need to consider the business idea, where funding will come from, what the potential market is, what the competition is like and a host of other issues that must be addressed if the business start-up is to be successful.
This unit will give you the opportunity to consider your idea within structured business parameters, such as the type of business, the attractiveness of the business idea, the target market and the need to balance personal and business needs. You will also consider your ability to run the business, including the skills you already have that will support the business idea and what new personal development you may have to undertake in order for the venture to be successful. You will also develop your knowledge and understanding of the legal status and trading terms and conditions of your proposed business, legal aspects such as fire regulations, taxation, VAT and HM Revenue and Customs, and financial aspects, such as start-up and operational costs, as well as personal needs. You will have the opportunity to devise an outline proposal for a business startup. This will cover the reasons for preparing a business proposal and will include many of the components expected by financial advisers, including the type of business, its target market, available resources, financial information and forward planning.

HANDOUT DATE: SUBMISSION DATE:

9 January 2012 30 March 2012

UNIT 36: BTEC NATIONAL BUSINESS Section One and Two should be presented in the form of a formal report. All ideas and aspects of the report should be planned and discussed with your teacher prior to being submitted.

Section One PASS (P1) Present the initial business idea using relevant criteria

P1/a

Explain the type of business that you have chosen. What product(s)/service(s) will the business provide? How many people will be required to run the business and why? What will the business be called? Explain the aims of your proposed business. Discuss the various aspects that make the proposed business idea attractive to you and your potential customers. Describe the external influences that may affect the success of your proposed business.

P1/b P1/c P1/d

Section Two PASS (P2) Explain how to identify the target market

P2/a P2/b

Describe the methods that could be used to identify the target market for your business. Explain the target market that you expect to aim your business at, using the criteria for P1 to justify your decision. 2

UNIT 36: BTEC NATIONAL BUSINESS

MERIT (M1) Explain methods used to identify the target market for the proposed business

M1/a

Competition Use a map of Milton Keynes and look up all the similar businesses to your business in the local area. You should mark on their name and address and any further information you have about them e.g. size ownership, prices. You may need to visit the business to find this information out (prices in particular)

M1/b

Secondary research and market trends You need to compile information about the market your business is in. You should use search engines to find out as much as you can about the size of the market and the current trends. Make sure you acknowledge any sources you have used in your work.

M1/c

Primary research, customer choices and their effect on the business You must carry out primary research in the form of a questionnaire. Present the results of your findings and explain whether they confirm or contradict your original views prior to this research.

M1/d

SWOT Carry out a brief SWOT analysis on your business idea Are there any environmental issues that will affect your business?

M1/e

Identifying the market Describe your target market Write a paragraph to describe the methods of market research you have used and how this has helped you identify your target market

UNIT 36: BTEC NATIONAL BUSINESS

M1/f

Explain which methods of research were suitable for your business, giving reasons for your choices.

Section Three PASS (P3) Describe the skills needed to run the business successfully and what areas require further personal development P3/a P3/b P3/c
Describe the skills you possess and explain how your skills will be able to contribute to running the business successfully. Identify and explain the skills that you and the business will still require in order to be successful. Describe how you will obtain the skills still required to benefit your business and for your own personal development.

MERIT (M2) Analyse the personal development needed to run the business successfully
For each area of development you have identified in P3/b:

M2/a

Explain how important each one is to the running and success of the business - you could even rank them in order. What would happen to your business if these skills were not developed? Explain what you can do in order to make your areas for development stronger e.g. what training course could you go on, what sources of advice could you get?

M2/b

UNIT 36: BTEC NATIONAL BUSINESS

M2/c

Make a timeline for between now and when your business will launch to show what you will do to address your development needs.

Section Four PASS (P4) Describe the legal and financial aspects that will affect the start-up of the business P4/a P4/b P4/c P4/d P4/e
Describe the legal status of your proposed business. Explain the legal liabilities, duties and responsibilities that your proposed business will have. Describe the types of costs that your proposed business may face. Describe the pricing policy that your proposed business may administer. Explain the use of the following financial tools when setting up a business: Break even Cash flow forecasting Profit and loss accounts Describe the sources of finance that your proposed business may utilize.

P4/f

UNIT 36: BTEC NATIONAL BUSINESS

MERIT (M3)
Assess the implications of legal and financial aspects that will affect the startup of the business

M3/a M3/b

Explain the impact that the legal and financial aspects described in P4 will have on the start-up of your business. Describe the systems that you will have in place for addressing this.

Section Five PASS (P5)

Produce a proposal containing the essential information for the start up of a business

P5/a

Collate all of the information you have gathered so far for your business proposal and produce an outline business plan in a formal report format. Your report should cover the following: Type of business Aims of the business Target market Human resources required Physical resources required Financial resources required Break even analysis Cash flow forecast Profit and loss forecast Plans for growth and development Contingency plans Discuss the content of your report with your teacher; be prepared to answer questions about its viability.

P5/b

UNIT 36: BTEC NATIONAL BUSINESS

DISTINCTION (D1) ate the following ratios: business proposal that addresses all relevant Present a comprehensive
aspects of business start-up

D1/a

Present your report in the form of a fluent proposal. Prepare your proposal carefully, discussing a draft with your teacher, making improvements and revisions where necessary. It should be clear from your proposal that you have reviewed your information and ideas, set appropriate targets and goals and that you are clear on the overall purpose of your plan.