LECTURES:
Assignment 2 Sources
LECTURES:
Great business is never planned
Gut precedes data: All of my best decisions
in business and in life have been made with
heart and intuition, not analysis. When you
can make a decision with analysis, you should
do so, but it turns out in life that your most
important decisions are always made with
instinct, intuition, taste, heart. Jeff Bezos
Start the planning of a new business with a
mission, a vision, and a value proposition.
A business plan: a comprehensive document
that outlines the objectives, strategies, and
financial projections of a business; a roadmap
for the business's future and for attracting
investors, securing loans, and guiding
business operations.
A good plan must be falsifiable
Falsifiabilityto be tested, falsified, and refined in practice.
Planning and anti-planning: a plan must be implemented; but no plan has ever been exactly
and fully implemented.
Scenario planning.
Just plan it: doing is learning
Does planning need the plan? plan-based and non-plan-based planning.
Shift from plan to process.
Vision without action is merely a dream. Action without vision is merely passing time. But
vision with action can change the world. Nelson Mandela
BUSINESS PLANNING ESSENTIALS - THE BUSINESS PLAN
Introduction
Whether youre starting a small business or exploring ways to expand an existing one, a business plan is an important tool to help guide your decisions. Think of it as a roadmap to success, providing greater clarity on all aspects of your business, from marketing and finance to operations and product/service details.
A business plan is essential to entrepreneurship, not every entrepreneur sees the need for one. Many are reluctant to have their plan written down and there are numerous articles online claiming that the business plan is dead or irrelevant. Of course, not everyone agrees with that. While some owners may be tempted to jump directly into startup mode, writing a business plan is a crucial first step for budding entrepreneurs to check the viability of a business before investing too much time or money. The purpose of a business plan is to help articulate a strategy for starting your business. It also provides insight on steps to be taken, resources required for achieving your business goals and a timeline of anticipated results.
You should aim to have a well-documented plan that speaks for itself. It needs to be clear and easy to read and understand.Before writing a business plan, it is important to consider two important factors:
Who will the reader be?
What do you want their response to be?
For existing small businesses, a business plan should be updated annually as a way to guide growth and navigate the expansion into new markets. Your plan should include explicit objectives for hiring new employees, market analysis, financial projections, and potential investors. The objectives should indicate how theyll help your business prosper and grow.
This module will present the outline of a business plan, explain the importance of each section, and provide you with guidance as to how you can craft this information for your own ventures. You will also cover the dos and donts of preparing a business plan (especially in the podcast Professor Maureen Burke).
LECTURES:
Marketing small business
Attract, not chase Value first, marketing second: marketing itselfdoesnt attract customersits the value ofthe products and services that attracts. Marketing strategy: define target audiences,develop a brand identity, and design marketingchannels and approaches. Reflective marketing: what has worked, whathas not, and how to improve. Good wine is not afraid of deep alleys.yesand no.
One-story telling: make it simple Its like directing a film, writing a paper, and making a presentation. Dont oversell: promise less, deliver moreput ourselves in our customers shoes. Insanely simple!
What youre working on is the best marketing:do it truly well Customer loyalty: serving the existing customers wellthey will know and tell. Word of mouth is the most effective marketingchannel. Pursuing excellence without a consciousness ofmarketing.
What is marketing? What is its purpose? What is the fundamental logic of marketing? What is meant by attract not chase? What are the two main points that should be emphasized?
Definition and Purpose of Marketing:Marketing encompasses the strategies and activities aimed at promoting products, services, or brands to potential customers. Its purpose extends beyond mere sales generation to include building brand recognition, fostering customer loyalty, and ultimately driving business growth.
Fundamental Logic of Marketing:At its core, marketing is about understanding customer needs and desires, and effectively communicating how a product or service can fulfill those needs. It involves identifying target audiences, crafting compelling messages, and selecting appropriate channels to reach and engage customers.
"Attract not Chase" Concept:This concept emphasizes the idea that while marketing plays a crucial role in connecting businesses with customers, it is ultimately the value proposition of the offerings that should attract customers, rather than aggressive marketing tactics. Businesses should focus on showcasing the inherent value of their products or services to naturally draw in customers.
Emphasized Points:
Prioritize Value Over Marketing: Businesses should prioritize delivering high-quality products or services that genuinely meet customer needs and provide value.
Communicate Value Effectively: Marketing strategies should revolve around effectively communicating and showcasing the value proposition of the offerings to the target audience.
Example in Small Business Marketing:For a small artisanal coffee shop, the emphasis should be on sourcing high-quality coffee beans, providing exceptional customer service, and creating a welcoming atmosphere. By focusing on delivering value through superior products and experiences, the coffee shop can attract and retain customers without resorting to aggressive marketing tactics.
Why do we need to employ reflective marketing? Is value more important than good marketing? What is meant by storytelling? Provide a simple explanation of it.
Reflective Marketing Importance:Reflective marketing involves analyzing past marketing efforts to gain insights into what worked well and what didn't. It allows businesses to learn from their experiences, refine their strategies, and improve their future marketing efforts.
Value vs. Marketing:While both value and marketing are important aspects of business success, prioritizing value is crucial for long-term sustainability. Good marketing can initially attract customers, but it's the consistent delivery of value that fosters customer loyalty and drives repeat
business.
Storytelling Explanation:Storytelling in marketing involves crafting narratives that resonate with audiences and evoke emotions. It's about weaving a compelling story around a brand, product, or service to engage customers on a deeper level and create memorable experiences.
Example in Small Business Marketing:A small family-owned farm can use storytelling to share the journey of their sustainable farming practices, highlighting their commitment to environmental stewardship and producing fresh, organic produce. By telling a story that resonates with consumers' values and aspirations, the farm can differentiate itself in the market and build stronger connections with customers.
What is word of mouth and why is it important?
Definition and Importance:Word of mouth refers to the organic spread of recommendations, opinions, or information about a product, service, or brand from one person to another. It is considered one of the most powerful forms of marketing due to its high level of credibility and trustworthiness.
Importance of Word of Mouth:Word of mouth is important because it relies on personal recommendations and endorsements, which are highly trusted by consumers. Positive word of mouth can lead to increased brand awareness, customer acquisition, and loyalty, without the need for costly advertising campaigns.
Example in Small Business Marketing:A boutique clothing store can benefit greatly from positive word of mouth. If customers have a great shopping experience and love the unique clothing offerings, they are likely to share their positive experiences with friends and family, leading to new customers visiting the store based on those recommendations.
Financing a small business
The value for clients attracts investors Investors dont invest in business; they invest invalue creation. Investors dont decide on a business plan; theydecide on peoplethe entrepreneurs who cancreate value. We dont get what we want; we get what weare:Value Creation Entrepreneurs,Customers, Investors
Money follows good business ideas, not good ideas
Dont be self-fascinated with your ideas; business people
see ideas as products, services, and value.
Many businesses fail because the ideas are too good: there
is no market for them.
The business world is not short of money; it is short of good
business ideasinnovation, entrepreneurship, and value
creation.
You dont want too much money Sources for financing a small business:personal savings; friends and family; bankloans; grants; crowdfunding; angel investors;venture capital; businessincubators/accelerators... Money has a cost: calculate how much youwant and how much you wan to give. Be wary of more money than needed: it canhave negative externalitynegativelyinfluence business operation, culture,innovation, and risk-taking.
Introduction
Researching your many options for funding your business can be time-consuming. If youre looking to start a business or take the next step and expand, you have the option of debt or equity finance. These can be provided by many sources and you must understand the implications and costs of each source. It is also important to understand all of the necessary start-up costs for a business as well as the ongoing fixed and variable costs. In a business plan, financial information and projections are essential because they demonstrate to potential investors the potential for profit and serve as the guideline for managing the business financial aspects.
Understanding how to determine start-up costs, calculate your break-even point and be able to prepare basic accounting reports and calculate ratios is part of being a small business manager.
Study Guide: Financing the New Business
Financial accounting and managerial accounting are the two main branches of business accounting.
After completing this module you should be able to answer the following:
Can you now explain the differences between these and the different types of accounts utilized by a business such as asset accounts, liability accounts, equity accounts, revenue or income accounts, expense accounts, and contra accounts?
What is the difference between accrual accounting and cash accounting?
How do businesses use the following financial statements: the income statement, the balance sheet, the cash flow statement, and the statement of changes in equity?
What is break-even analysis? Why and when is it used?
Describe each of the following types of investment: angel investors, bootstrapping, venture capitalists, micro-lending, peer-to-peer lending, banks/financial institutions, government agencies, customer financing, crowdfunding, and bartering.
OPERATING A SMALL BUSINESS
To do and to dont Prepare two lists: to do and to dont. Focus as both a noun and a verb. Say No, ruthlessly, to distractions from others and, more importantly, to your owns.The single most important factor in their success: focus
The devil is in the detail Establish structures and systems:organisation, HR, value chain, marketingand sales, technology, financialmanagement, legal compliance... People-centric: customers, staff,collaborators, competitors, and community. Do things well although they are not seenprofessionalism.
General or unique Do the basics right before doing differentthe corecompetitiveness of a small business. Go beyond the general-unique binary. Less is more: essentialism, not minimalism.
Indigenising small business
Indigenous innovation Authentic, locally-established, inspired bytraditions: look backward to inform forward. Create and apply new ideas, products,processes, or services of small business thatdraw upon the unique cultural knowledge,traditional practices, and local resources, andempower the local community. Harness indigenous perspectives, values, andways of knowing to address contemporarychallenges, foster economic development andinclusive growth, environmental protection,social equity, and preserve cultural identity.Source: Indigenous Innovation Initiative
Wisdom over knowledge and skills Knowledge is changing; wisdom is enduring. Indigenous ways of knowing. The value of traditional ecological knowledge,sustainable resource management practices, andhuman-nature relationality.
WisdomKnowledgeInformationDataDIKW pyramid
Diversity in harmony Respect and incorporate indigenous knowledge andperspectives into business practices. Engage with indigenous communities; contribute to theoverall wellbeing of indigenous communities; and alignwith their priorities and needs. When in Rome, do as the Romans do.
STARTING THE ASSIGNMENT
The purpose of this activity is to help you to start researching for Assignment 2. For Assignment 2, you need to gather information from owners, customers, staff or others to use in a case study report focusing on a small business.
Something that you may hear when you are hoping to start a small business is that it is essential to have a business plan. Is this really true? How do real small business owners use business plans? As a group, you are going to do your own primary research to find the answer.
Step 1:Find a small business to use as a case study in your assignment. It is important for you to be able to talk to the people that run the business and at least some of those who use it. You may need to approach several different businesses before you find one that is happy to talk to you, or you can select a business you already own or work for.
Step 2:Ask the owner about their business planning. Did they have a business plan in place before starting their business? How do they do their planning and is it successful?
Step 3:Share your findings with the group and respond to others on the Padlet below by selecting the '+' symbol in the bottom right hand corner.
FINDING GOOD SOURCES FOR ASSIGNMENT
The purpose of this activity is to guide you on finding good sources of information forAssignment 2: The essentials of small business management.This assignment asks you to use both primary and secondary sources of research. Primary research means going and gathering data yourself. In this case, your main source of primary data will be the owner/s of the small business you have chosen as well as the customers, employees and even suppliers. Secondary data comes from internet research. It could come from government websites, such as the Australian Tax Office (ATO) or the Australian Bureau of Statistics (ABS), or from research papers.
Step 1:Read the assessment task again to make sure you understand the task clearly.
Step 2:Set up one or more interviews with the owner/s of your chosen business. Remember they are busy people and may not be able to give you much time. You may need to be able to offer them something in return for their time (such as sending them a copy of your report when complete).
Step 3:Prepare the questions you want to ask and plan for how you will record the answers. A good way of doing this is to get an audio recording of the interview, but ask permission first. Note that you do not have to ask all of the questions below.
A possible list of questions are:
How long have you been in business? What made you decide to do this as a business?
Did you need to source investment to start your business? Was this difficult to do? Any tips?
What kind of revenue does the business take? (The owner might not want to tell you exact numbers, so try to keep your financial questions general if this is the case). How have profit margins been affected by things like the pandemic and inflation?
Step 4:Do other research, some of which can be done from your desk. Here are some ideas:
Check how your chosen business matches up with theAustralian Tax Offices business benchmarksLinks to an external site.(or other similar data in the country you are living in).
Research how many other similar businesses there are in the local area or in the region. Some of your data may come from theAustralia Bureau of StatisticsLinks to an external site.. Speculate what sets your chosen business apart from them.
FURTHER GUIDANCE IN FINDING GOOD SOURCES OF INFO
The focus for this sub-module is on the topic of business operations.
Step 1:Read the assessment task again to make sure you remember what you need to include.
Step 2:Set up one or more interviews with the owner/s of your chosen business. Remember they are busy people and may not be able to give you much time.
Step 3:Prepare the questions you want to ask and plan for how you will record the answers. A good way of doing this is to get an audio recording of the interview, but ask permission first. Note that you do not have to ask all of the questions below.
A possible list of questions are:
What do you think makes your business successful? What does your business offer that your competitors don't?
How do you find good suppliers and good employees?
Have there been any difficult times? How did you make it through?
Are you working long hours and on weekends, or have you found a good work/life balance? How did you achieve this or when do anticipate it will change?
Who are your main competitors? Have there been new competitors since you opened that made things difficult for your business?
Have you decided to move premises since you started? What prompted the change? Did business metrics improve since you did this?
Do you track customer numbers? Has your customer base been increasing? Is there a seasonal fluctuation you need to plan for?
Step 4:Do other research, some of which can be done from your desk. Here are some ideas:
Find out about customer satisfaction. What online ratings can you find about your chosen business e.g., from Google or Facebook? If you can, interview some customers and ask them why they chose to use this business instead of another one.
Find out about employee satisfaction if possible/relevant. Interview the business employees and ask them why they like or dont like working there (this could be a sensitive topic between the employees and the owner, so be tactful how you go about doing this).
APPLYING INDIGENOUS WISDOM IN SMALL BUSINESSES
Think about how your small business case study could apply Indigenous wisdom to their processes, philosophy, finances or strategy. Completing this activity will support you with the completion ofAssessment 2: The essentials of small business.Step 1:Watch the two videos:
Wombat City Studios (2020) Indigenous wisdom
In the following video (1:55 min), an Aboriginal elder describes how the Indigenous peoples of Australia view all of us as caretakers of the environment
CMX (2018) What we can learn from Indigenous tribes for our communities
In this video (approx. 18 min: starts automatically at 1:13 min), Jessica Wawoe explores what lessons we can gain from the ways that Indigenous tribes relate to one another and organise their communities.
Step 2:Consider how the lessons from the videos apply to your chosen small business.
Step 3:Enter your thoughts in the documentation tool and export to a Word document.
Questions to help APPLYING INDIGENOUS WISDOM
How does your small business case care for the environment?
How could they become a better caretaker?
How does your small business case create a sense of oneness and kinship that attracts people to the business?
Is there a common language that is shared by staff and customers? How does the business help customers and employees to improve their understanding of the language?
Does everyone in the business have a clear role? Is there clear leadership from the business owner? Could roles be better clarified? How are individual rights and differences respected or even actively embraced?
What beliefs related to the business mission or purpose do the staff share? Does the business have any rites or rituals that help to bring together staff and/or customers?
Are there opportunities for laughter and play for staff and/or customers?
