Task 1 and Task 2
You should by now have agreed with your tutor on the small business which you are going to use as the basis of your own project. You need to carry out two tasks at this stage. Both of them are important, but only of them will be marked as part of the project report writing.
Task 1 Analysis of the business
First you will need to carry out as far as you can an analysis of the business as it is at present. Unless you are very fortunate, we know you may not be able to get the real and accurate figures for the financial state of the business. Don’t worry, this doesn’t matter too much. What you should do is to make realistic estimates of the finances of the business. You will need these later.
You can do this as follows:
? You can easily find out what prices the shop sells things for – you only have to ask. ? Make a sensible estimate of the amount the shop sells in a week and multiply this by
50 to get a figure for the year.
? Now you can calculate a figure for the annual income of the shop.(INCOME) ? Assume that the difference between what the shop pays for its goods and the price it
sells them for – the mark-up – is 100%, and calculate how much the shop spends on buying its stock for the year. (STOCK COST)
? Make sensible estimates of the cost of things like wages for staff, rent and so on. They
don’t have to be the real figures, just ones that are realistic and possible. (RUNNING COSTS)
? You can now subtract the figures for buying stock and for other costs from the figure
for the annual income and you will have a realistic figure for the profit the shop makes.
PROFIT = INCOME less (STOCK COST plus RUNNING COSTS)
These are the basic figures you can use in carrying out the rest of your project. Once again, remember that these figures don’t have to be accurate, just look possible.
Task 2 Customer Profile
Now write a customer profile for the business you have chosen.
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Guide to Task 3
Now that we know what the present situation is, we need to start looking at the future a little bit. Here we want to know what the customers of the shop think about it, and what they would like to see being sold in the shop which you do not sell at present.
There are three main things that you can do.
An analysis of unsatisfied customer requests
A sensible shopkeeper keeps notes of occasions when a customer comes to ask for something but the shop does not sell what he or she wants. Keeping records of these unsatisfied requests helps to make decisions about getting new goods to sell. Clearly, if every week there are ten customers who ask for a particular kind of ice-cream that you don’t sell, it would help you take a decision to start stocking it.
Focus groups
A focus group is a small number of your customers (usually about 8-10), who are willing to meet together and tell you what they think about your business. The number of people needs not to be very large, but the people in the group should be a representative and uniform sample of your customers. Each group should represent a clearly defined group of your customers. In other words, if half your customers are housewives and half are students, then you might decide to have two separate focus groups. One would be made up of housewives and the other of students. Or you might think that the needs of female students are different from the needs of male students. In this case you might set up three focus groups – one of housewives, one of male students and one of female students. Depending on the kind of business you run and the range of your customers, you might want to have focus groups of other categories, such as age, nationality, job-type, etc.
When you have a meeting with a focus group, you should have ready a number of questions about your business that you want to know the answer to, but you should also ask for their suggestions about the development of the business. Don’t forget you want their criticisms as well as their positive suggestions. The discussion should be as free as possible so that you get the maximum information from each group.
Customer surveys
A customer survey is usually carried out by means of a questionnaire that is sent or
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given to a large number of your customers to find out their views. They are often used to confirm the information that you have collected from your focus group discussions. In other words the questions you ask in your survey should come from what you have learned in those discussions.
Customer surveys can be extremely useful but they are not easy to carry out. There are a number of problems:
1. Firstly, it is very difficult to design good questionnaires which really give you the answers you need. There is only one chance, as you cannot go back and explain if your question wasn’t clear to the person answering the questionnaire. Equally, if you don’t ask precisely the right questions, you risk getting false information.
2. Secondly, you need to give the questionnaire to a large number of your customers because, as is well known, only a small percentage of them will actually complete the questionnaire and give it back to you. Many will not bother and simply throw the questionnaire away.
3. Thirdly, you need to be sure that the questionnaire is given to a sample of your customers which fully represents the different groups of customers. This is not always easy to do, and if our sample is not representative you will get information that is biased. 4. Fourthly, the proper analysis of a large number of questionnaires is both complicated and time-consuming and a small businessman may not have the ability or time to do this. 5. Fifthly, because the sample you need is large, it can cost a lot of money to print and distribute the questionnaires, and perhaps still more money to pay someone to do the analysis.
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Task 3
Task 3 Focus group report
Write a report about what you think the results of a focus group discussion about the business you have chosen might be. Obviously, you will not be able to carry out a real focus group study, but you can use your own opinions about the business, and those of any people you know who use the shop. You could even talk to the owner of the business or someone who works there and get his or her ideas. You can also use your imagination to think of other possible opinions. The important thing, once again is to make the criticisms and suggestions as realistic as possible.
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Guide to Task 4
Now that we have collected all the information about what is happening in the business at present, and also have some information about what customers might want in the future, we can start to think about what we might do to improve or expand the business. But before we can decide, we need to do one further piece of analysis. This is called a SWOT analysis and it uses al the information we have gathered along with information about where the business is located and what may be happening around it.
SWOT stands for the 4 words: Strengths – Weakness – Opportunities – Threats What you do is to take each word in turn and list all the things you can think of which are related to your business and which belong with the word. Let’s look at each word in turn.
Strengths
What are the things your business or organization is good at?
What does your business or organization have that makes it strong or better than other similar businesses?
What advantages does your business enjoy that others don’t? Weaknesses
What are the things your business or organization is not very good at, or that you could do better?
What does your business or organization not have, which makes it less successful than others?
What disadvantages does your business suffer from when compared to others? Opportunities
What are the things you don’t do at present which you could do?
What is there in the physical or economic environment that you could make use of to improve or expand your business? Threats
What dangers are there which might harm your business? What risk to your business is there from your competitor?
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