biz start Flashcards
(4 cards)
Explain the different ways in which a new business can be started, and the key factors that must be considered during the process.
A new business can be started in three primary ways:
Starting from an Idea – This involves developing a unique business concept. The entrepreneur must assess:
Feasibility: Whether the idea can realistically be implemented.
Viability: If it can generate profit and sustain itself.
Market Research: Understanding the target market, competitors, and demand.
Business Plan: A formal plan that outlines strategy, finance, operations, and marketing.
Buying an Existing Business – This allows an entrepreneur to take over an established operation. The advantages include an existing customer base and systems, but the disadvantages include inheriting hidden debts or a bad reputation.
Buying a Franchise – This involves operating under an established brand. The entrepreneur (franchisee) gets access to:
Trained systems and operations
Group marketing campaigns
Ongoing support from the franchisor
It reduces risk, but offers limited independence.
- Starting from an Idea
Create a new, unique business concept.
Key things to check:
Feasibility – Can the idea actually work?
Viability – Will it make profit and survive?
Market Research – Know your customers, demand, and competitors.
Business Plan – A detailed plan covering strategy, finances, operations, and marketing.
- Buying an Existing Business
Take over a business that’s already running.
Advantages:
Existing customers and systems.
Disadvantages:
Possible hidden debts or a bad reputation.
- Buying a Franchise
Operate a branch of an established brand.
Franchisee gets:
Ready-made systems and training.
Shared marketing.
Support from the franchisor.
Lower risk, but less independence.
Discuss the role of proper systems in managing a business and explain how they contribute to its success.
Proper systems are essential for effective business management. A system is a structured method of handling tasks and processes consistently. They help a business in the following ways:
Tracking Performance: Systems help monitor operations, sales, inventory, and staff productivity.
Efficiency and Productivity: Set procedures reduce confusion and improve task execution.
Legal Compliance: Systems ensure labour laws and tax obligations are met, especially if employees are hired.
Problem-Solving: With defined processes, issues can be addressed quickly and effectively.
Time and Stress Reduction: Systems reduce the pressure of decision-making by providing clear procedures.
A system is a structured way to manage tasks consistently. Good systems are key to managing a business well because they:
Track Performance – Monitor sales, inventory, operations, and employee output.
Boost Efficiency & Productivity – Clear steps reduce confusion and help tasks get done faster.
Ensure Legal Compliance – Help follow labour laws and meet tax requirements, especially when hiring staff.
Solve Problems Quickly – Defined processes make it easier to fix issues.
Save Time & Reduce Stress – Clear procedures help with faster, less stressful decision-making.
Explain the 4 P’s of marketing and how they influence the success of a small business.
The 4 P’s of Marketing are critical tools for promoting and selling a product or service:
**Product **– This refers to what is being sold, including features, quality, and design. A product must meet customer needs.
Price – The cost to the customer. Pricing must reflect value, be competitive, and allow profitability.
Promote – Refers to advertising, social media, word-of-mouth, and any means of informing customers. Effective promotion boosts visibility.
Provide (Place) – This refers to the distribution channels used (e.g., online store, retail outlet). Accessibility affects sales.
The 4 P’s are key tools used to market and sell products or services:
Product – What you’re selling (features, quality, design). It must meet customer needs.
Price – What the customer pays. Must reflect value, stay competitive, and bring profit.
Promote – How you advertise (social media, ads, word-of-mouth). Good promotion increases awareness.
Place (Provide) – Where and how the product is sold (online, in-store). Easy access increases sales.
Compare and contrast the roles and responsibilities of a franchisor and a franchisee.
Franchisor:
The original business owner who grants the rights to operate under their brand.
Must have in-depth business knowledge and experience.
Provides training, support, marketing, and brand materials to franchisees.
Maintains quality and consistency across all franchises.
Invests in brand development and offers updates and innovations.
Franchisee:
The individual or business that buys the rights to operate under the franchise name.
Follows the franchisor’s established systems and brand rules.
Markets the business locally and ensures quality customer service.
Provides the initial capital investment and manages daily operations.
Participates in group activities and promotions coordinated by the franchisor.
Both parties must collaborate effectively. The franchisor ensures brand strength, and the franchisee drives local success.
Franchisor
Owns the original brand and gives rights to others to use it.
Has strong business experience.
Provides:
Training
Ongoing support
Marketing tools
Brand materials
Keeps quality and consistency across locations.
Invests in brand growth and improvements.
Franchisee
Buys the right to run a business under the franchisor’s brand.
Follows the franchisor’s systems and rules.
Handles local marketing and customer service.
Invests money to start the business.
Runs daily operations.
Joins franchisor’s group promotions and activities.
Comparison Summary:
The franchisor protects the brand and supports the system.
The franchisee runs the business locally and makes it successful.
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🍔 Frank the Franchisor
Frank owns a famous burger brand.
F: Frank Founded the brand
R: He gives Rights to use it
A: Offers Assistance (training, support)
N: Keeps things Neat and the Same everywhere (quality)
K: Always Keeps building the brand
🔑 Think: Frank = Founder, Rules, Resources, Reputation
🧑🍳 Sam the Franchisee (SMART)
Sam pays to open a local FrankBurger store.
S – Spends money to start the business
M – Manages daily operations
A – Adheres to franchisor’s rules and systems
R – Reaches local customers through marketing
T – Takes part in group promotions and activities
🔑 Think:
SMART Sam = Spends, Manages, Adheres, Reaches, Takes part
This version keeps it neat and easy to remember using the real word SMART.
