My Small Business

My Small Business

The Idea

I had a general idea to start a business. This business was new to me and I did a thorough search about the goods I intend to produce. The first thing that came into my mind was that would there be demand; the real need for the goods to enter the market in the first place? Am I able to find an area with suitable land size to set my store & workshop? and the place situated in a good location? My goal was to have a building with floor area large enough to fit two manufacturing lines. One manufacturing line to be constructed, leaving an empty area where additional line can be built in the same building for future.

Next I did a search on the regulations imposed by the government concerning the business itself and products related to the business. There will be competition from larger manufacturing companies that I should take note.

It would be best for me to operate as a sole proprietorship. After a deep thought, I gave the company its name.

I handled the resources. People, equipment and raw materials, money and information pertaining the work that goes within the business.

I devised a strategy to guide its planning and development. Specifying what should be done, how, by whom, where and when. It involves forecasting events, identifying the options to do the business and determining the best course of action. I also plan future expansion of my business.

Financially, I need first to have a capital to get the business started and to run it smoothly. This would be obtained from my savings, the money which I earned from years working for company owned by others.

This would pay up rent space, purchase equipment and furnishing, buy the initial inventory and provide working capital. I also need to make available the funds to keep the business alive during slow sales.

The generation of revenue and profit will come from the willingness of the buying customer to pay for its price.

Each product shall have a price tag on it. Setting of the price will depend on competitor's price. Often when products cannot be easily differentiated, we charge the same price as the competition. Setting prices must consider the perceived value of that item in the marketplace.

Price setting base on cost to produce a product will be the sum of the following:-

• unit cost for materials and labour
• unit cost for overhead
• Profit margin - a percentage of cost (normally 30%)

Oversupply is not good for business. Price reduction is to boost demand for clearing up an oversupply of products. Its a norm to be able to set a price depends on the supply and demand for the product. For most products, the quantity demanded goes up as the price goes down.

Strategically, an occasion when we may temporarily sell products below cost  to match competition for generating cash flow, or even to increase market share, but in the long run, it cannot survive by selling product below cost.

For marketing the products we will have showroom/ gallery/ shop area to sell the products.

Also for supply to retailers, the various types of merchandise retailers as the following categories:-

• Department store; large organization offering wide product mix and organized into separate departments
• Discount store; self-service, general merchandise store offering brand name and private brand products at low prices
• Supermarket; self-service store offering food and nonfood products
• Superstore; giant outlet food and nonfood product found in supermarket
• Hypermarket; combination supermarket and discount store, larger than a superstore
• Warehouse club; large-scale, members-only establishment combining cash-and-carry wholesaling with discount retailing
• Warehouse showroom; facility with large area low cost building with large on-premises inventories and minimum service

We have to find wholesalers that will buy our products in large quantities and they sell to retailers in smaller quantities.


The outcome

After the idea, money and effort have been put through, finally I have something to show for it. So, it's a workshop to manufacture ceramic products. The workshop located at the back of the facility and the area in front is the gallery to put the products for sale. For those who are interested to learn to make pottery, I have pottery lessons for them. This attracted customers and promoted the business.

My ceramic products stands out from everyone else’s. We have expert craftsmen qualified to make ceramic plates, bowls, cups and pottery products. Our prices are reasonable. The products are of best quality that meets high standard of inspection. Raw materials are obtained locally and overseas that are also of highest quality.

Most of the ceramic dinnerware have simple shapes hence we manufacture them using machines. We also have products with unique design that are hand-make. Production capacity will be increased for faster delivery to meet order by customer. The products are made with artistic design and yet strong, practical for use. Most importantly they meet the needs of customers and they have a lot of design of choice to choose from. We also offer lessons so participants can make their own.

We have good marketing strategy. We keep good contact with retailers. The retailers acquire goods from us and sell them to customers.

We also supply our goods on consignment agreement with retail consignment shop. Retail consignment shop will take exceptional care of the consigned goods and covered by insurance during his care; however, goods still belong to the consigner until sold.

There is a minimum initial consignment period as per the agreement (say 60-day). We are the consigner and when the shop make a sale we will receive 70% of the selling price for goods during this period. At expiration of the initial consignment period, the items must be picked-up within 10 days of the expiry date, or they will become the property of the retail consignment shop.


Business Plan

Introductory Page

A brief summary about the company:-

• The name and address of the company
• Owner name, telephone number, fax number, e-mail address and website address
• Description of company and the nature of business
• Statement of financing needed
• Statement of confidentiality of report

Executive Summary

• Describe the need for this business.
• How will the business will serve the market.
• The customer base you will be targeting.
• Describe your products or services and and what will make them appealing to the target market.
• Outline your plans for marketing your products/services.
• Describe your competition and your strategy for getting market share. What is your competitive advantage, e.g. what will you offer to customers that your competitors cannot?
• How will the company will make money and how much?
• Summarize the financial plan including projections for at least the next three years.
• Describe the owners and the key staff members and the expertise they bring to the venture.
• Outline the schedule for taking your business from the planning stage to opening your doors.

Mission Statement – Articulates the purpose of your business. In a few sentences describe what your company does and your core values and business philosophy.
Company Information – Give a brief history of your company - describe your products and/or services, when and where it was formed, who the owners and key employees are, statistics such as the number of employees, business locations, etc.
Business Highlights – describe the evolution of the business - how it has grown, including year-over-year revenue increases, profitability, increases in market share, number of customers, etc.
Financial Summary – if the purpose of updating the business plan is to seek additional financing for expansion, then give a brief financial summary.
Future goals – describe your goals for the business. If you are seeking financing explain how additional funding will be used to expand the business or otherwise increase profits.

Industry Analysis

• Future outlook and trends
• Analysis of competitors
• Market segmentation
• Industry and market forecast

Description of Venture

• Products
• Services
• Size of business
• Office equipment and personnel
• Background of entrepreneur

Production Plan

• Manufacturing process (amount subcontracted)
• Physical plant
• Machinery and equipment
• Names of suppliers of raw materials

Operations Plan

• Description of company’s operation
• Flow of order for goods and/or services
• Technology utilization

Marketing Plan

• Pricing
• Distribution
• Promotion
• Product forecasts
• Controls

Organizational Plan

• Form of ownership
• Identification of partners or principal shareholders
• Authority of principals
• Management team background
• Roles and responsibilities of members of organization

Assessment of Risk

• Evaluate weaknesses of business
• New technologies
• Contingency plans

Financial Plan

• Assumptions
• Pro forma income statement
• Cash flow projections
• Pro forma balance sheet
• Break-even analysis
• Sources and applications of funds

Appendix (contains backup materials)

• Letters
• Market research data
• Leases or contracts
• Price lists from suppliers

Details on the Facility

Work out the details on the following information:-

• Location:  The company’s location and its accessibility to customers, suppliers, and distributors.
• Manufacturing operations: Basic machine and assembly operations need to be identified, as well as whether any of these operations would be subcontracted and to whom.
• Raw materials: The raw materials needed and suppliers’ names, addresses, and costs should be determined.
• Equipment: The equipment needed should be listed, with its cost and whether it will be purchased or leased.
• Labor skills: Each unique skill needed, the number of personnel required for each skill, and an assessment of where and how these skill will be obtained.
• Space: The total amount of land and building floor area needed, including whether the area will be owned or leased.
• Overhead: The amount cost of spending for each item needed to support manufacturing such as utilities, rental, advertisement, insurance and staff & labor salaries.
• Logistics: The activity of transport to bring in the raw materials to the company’s location and transport of product to customers, suppliers, and distributors.

Activities that must be performed to generate business:-

• Buying: Understand the need of customers to determine the products to be made available.
• Selling: Expedite selling in a persuasive manner accomplished through promotion (advertising, personal selling, sales promotion, publicity and packaging).
• Transporting: Moving the products from the seller to buyer. Focus on transportation cost and services.
• Storing: Warehousing of goods. Warehouses hold products for lengthy period so as to be able to satisfy demand in timely manner. This especially concerns seasonal goods. Some products are only available for a period of time in a year, but the consumer demands are throughout the entire year. Storage shall be able to maintain a steady supply at all time.
• Grading: Standardizing products by dividing by subgroups to display and label them so that customers clearly their nature and quality. Products are graded according to a set of standards established by the authority.
• Financing: Certain products can be arranged for credit to expedite the purchase.
• Marketing research: Through research, the need for new goods and services can be ascertained. By gathering information regularly enable to identify new trends and changes in consumer taste.
• Risk taking: The potential risk for loss due to marketing decisions. Developing a new product creates a chance of loss if consumers do not like it enough to buy it. Spending money to hire a sales force or to conduct marketing research involves risk. The implication of risk is that most marketing decisions result in either success or failure.

Business Operational Plans / Calendars and preparing Continuous Improvement Plans
formulating and communicating business wide Operating Strategies
reviewing and evaluating Decision Support Packages and making recommendations within the Company Operational Decision Process
Development and Report Tracking of 5 Year Plans
Engineering initiatives on Capex & Opex reduction by tracking of the implementation of initiatives.
coordinating the operational learning from Root Cause Analysis investigations
undertaking specialist analytical Techniques to better understanding the operational effectiveness and efficiency of the business



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