3.2 How will the business be run?

Economic and management sciences

Grade 6

The business plan

Module 9

How will the business be run?

• How will the business be run?

Thousands of people buy and sell products and services, but all businesses are not run in the same manner. Some sell from a mobile unit (ice-cream seller), others do their business from a stall along the street, or on the pavement, while other entrepreneurs run their businesses from their homes.

• Where will the business be located?

It is very important to find the right location for the business. Many entrepreneurs find that their concepts seem to fail right from the start, simply because they are badly situated. An enterprise should be situated as closely as possible to the clients, but the rent of the premises should not be too high.

Answer the following questions after you have decided where to locate your business:

• What will the address of the business be?
• Are you sure that the local authority or inhabitants of the area will allow the business in the area?
• Why have you decided on the particular location?
• How will the product be stored?

This will depend on the nature of the product . Is it perishable or not? Is it large/small? A store might be required. It is also worth looking at the idea of delivering the product directly to the customer, rather than storing it.

Service , however, cannot be stored. When service is rendered to a client, time is also delivered and should be presented as attractively as possible. Once the time has passed, it cannot be bought back. To generate income from time, you have to strive to be busy doing so every moment of the day. This means that you have to concentrate on special offers during the quiet season of the year.

In the rain season the price of washing cars could, for instance, be lower because cars tend to become dirty sooner and owners might consider washing them more frequently.

Try to determine the time of year of the quiet season by experience and then make adjustments to the price of the product to compensate for this.

• How will the product/service be distributed to customers?

What will it cost to transport the product from the production point or purchase point to the client? Will vehicles or extra staff members be required? Remember that the product has to reach the client in good condition. Speedy delivery is therefore important. You have to be able to do it better and faster than your competitors.

If the idea is to sell "vetkoek" (dampers) with minced meat fillings to scholars, it will not be prepared at the school. Break times will have to be determined and the production schedule will have to be planned in such a way that the "vetkoek" arrives at the different schools while it is fresh and warm.

In South Africa, where service is often poor, the speed and reliability of the service is an important factor and could ensure the success of your business.

• How will after-sales service be provided?

Will any service be offered to the client after the sale of the service or product and where would this service be available? Would there be visits to the client's home or would the service be provided from the business premises? If any promises are made or guarantees are offered to the client, they should be honoured.