Fundamentals of Small Business - Course Book for APMG NZ435

Course HandbookAPMG NZ 435 Fundamentals of Small Business

Faculty of Creative Industries and Business

Department of Management and Marketing (DoMM)

Bachelor of Business

(Ver 1.0)

NOTICEBooks, journals, multi-media and other materials made available by or at Unitec Institute of Technology are for the student’s own studies only. Copying or use of the materials for other purposes is an infringement of copyright.

Authored by Peter J. Mellalieu, 2010. 1st Ed February 2011.

The copyright of student materials remains with the authors.

Printed at The Copy Centre, Unitec Institute of Technology, Mt Albert, Auckland, New Zealand.

IMAGE: Reaching for the skies. AdventureWorks facility at Unitec Institute of Technology, Auckland. Credit: Peter J. Mellalieu

http://www.adventureworks.co.nz/

Version Ver 1.0 1 February 2011.

This document is subject to amendments and improvements in the online version as the course proceeds. Refer to back page for a schedule of amendments.

APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

http://www.adventureworks.co.nz


TABLE OF CONTENTS1. .........................................................................................Executive summary 1

2. ....................................................................................................Introduction 23. ...................................................................................................Course tutor 4

4. .......................................................Course descriptor and assessment matrix 55. ...............................................Workload overview and assignment sequence 11

6. .......................................................................................Learning resources 137. .........................................................Topics, content, and reading schedule 15

8. ......................................................Learning model and teaching philosophy 189. .........................................................Contact sessions: Studios and conduct 21

10. ........................................................................................Assessment policy 2211. ...............................House style: written and oral communication standards 25

12. ......................................................Agenda and course material for studio 1 2913. .....................................................Assignment 1: Profile of a small business 39

14. ..............................................................................................................Test 5515. ......................................Assignment 2: Performance measures and controls 64

16. ....................................................General information about Unitec courses 7017. ....................................Requirements to pass a course and grade standards 82

18. ...................................................................NZDipBus Programme Structure 8519. .................................Credit Recognition and Eligibility for a Unitec Diploma 87

20. ............................................Other Awards, Memberships and Qualifications 9221. ..............................Amendments and suggestions for course improvements 94

22. .........................................................................Passwords and access codes 9523. ...........................................................Semester-specific calendar and dates 96


1. Executive summary

Overview This course handbook is the ‘blueprint’ detailing many elements of the course APMG NZ 435 Fundamentals of Small Business. The handbook introduces the course descriptor, assignments, and learning resources for the course. You are provided with specific guidance for preparing for the first in-class meeting and first assignment.

PurposeThe purpose of the handbook is to ensure that a student enrolling in the course is informed comprehensively about:

The aims and learning outcomes of the courseSchedules for reading, personal study, workload, and assignmentsThe learning resources required for perusal by student, including texts, lecture notes, on-line resources, and web-based learning support systemsThe assignments that help students focus and demonstrate their learningAgendas for the first few weeks of class, including materials relevant for preparing for those classesSpecific activities that should be scheduled immediately for starting course assignments and the course ‘learning adventure’.

Recommendations for your immediate actionRead the Course Handbook Introduction, Section 2Skim read the Table of Contents and Course Descriptor, Section 4.Complete the preparation for the first meeting as specified in: Agenda and Course Material for Studio 1, Section 12.Skim read the requirements for the course assignments, especially those that you should commence immediately: Assignment ONEAcquire the course textbook… and skim read the Preface, Introduction, and Chapter 1.

Note: Navigating the on-line Course HandbookNote the navigation hyperlinks in the top left header (TOC) and bottom left footer (APMG NZ 435) that take the on-line reader directly to the Table of Contents, and Semester-Specific course calendar.


2. IntroductionKia ora, bon jour, and welcome to APMG NZ 435 Innovation & Entrepreneurship.

This course introduces you to the systematic processes and skills required to establish and/or manage an existing small-medium enterprise (SMEs). Although focussed on SMEs, this course introduces you to the skills of a entrepreneur that are required as much within a corporate setting as in a stand-alone start-up venture.

Many small business founders are innovators and entrepreneurs. They imagine and create the future. They create the future by making new things happen. They act and think differently compared with most “normal” people. Sometimes they are the brightest kids at school. They are equally likely to be the troublemakers who are invited to leave school as early as the ‘laws of the land’ permit! Until recently, they rarely studied formal courses in entrepreneurship! You will meet many of these kinds of people in this class.

How do the most successful entrepreneurs learn? Many entrepreneurs take great risks: many fail. Reason: they don’t know what they don’t know. However, skilled entrepreneurs with “the right stuff” pursue risky, but well-managed ventures that most “normal” people would avoid. In the long-run, these entrepreneurs succeed. They succeed creating new venture after new venture. In consequence, these ‘serial’ entrepreneurs and innovators “do good” for the world and/or create massive wealth. What is “the right stuff” that entrepreneurs possess? Can you also acquire “the right stuff” - or recognise it in others? These are some of the questions we will explore in this course.

New Zealand’s political and business leaders inform us that our country faces two challenges as a nation to “catch up with Australia by 2025”. First, we must increase our nation’s productivity. Second, we must increase our rate of innovation. Most nations are “running hard in the same race”. Can we ever catch up with the Australians? The Swedish? The Chinese? The Americans? How?

The smartest innovators ask “Can we run in a different race? … a better race? … a race with rules to our advantage?” These radical innovators join new venture teams to make their dream come true. In some cases, these teams may be lead by an entrepreneur.

At the heart of small business success lies innovation and entrepreneurship.

Welcome to APMG NZ 435 Fundamentals of Small Business. If this is the only business case that you ever study at Level 4, you have made the correct choice.


I thank you for all the knowledge and experience I have gained from your courses.

Without doubt, I have learnt lots and have gained more confidence.

In addition, these courses have also inspired me to becoming a successful entrepreneur. That ambition is something that I had never thought about!

K.T.


3. Course tutor

Peter J MELLALIEU, PhD, BTech(Hons), MPubPol, DipIwiEnvMgtStrengthsQuest Talents: Strategy. Learner. Ideation. Activation. Intellection. [Input]

Mihi

Ko Tongariro te maunga

Ko Waikato te awa

Ko Huguenot te iwi

Ko Geering te rangatira

Ko Mellalieu te hap!

Ko Pukawa te marae

Ko Boeing te waka

Ko Kaiako Jean-Pierre ahau

About

Associate Professor Peter MELLALIEU teaches innovation, strategic thinking, new venture development, and sustainable development and at Unitec Institute of Technology, Auckland.

Having emigrated from the United Kingdom in the mid-1960s, Peter grew up in the Waikato, later studying biotechnology and industrial engineering management at Massey University (Manawatu).

After university graduation he worked in Wellington as an industrial scientist implementing novel Decision Support Systems for long-range strategic development in several agribusiness sectors including the Waikato dairy industry. Later, Peter worked in Belgium in an entrepreneurial new venture information technology (CAD/CAM) systems company. The Flanders-based company was located near his family’s 17th century Huguenot roots

as silk-weavers in a north-east French village, Malaloy (Nancy).

Returning to the Manawatu in 1987, Peter commenced his tertiary academic career at Massey University. In 2000, he organised a conference on the theme ‘strategies for sustainability and success’ in which he engaged thought leader theologian Sir Lloyd Geering as keynote speaker. This conference lead to his current research interests in education for sustainability, eco-innovation, eco-enterprise, and eco-magination.

He spends many happy hours walking, sailing, singing, and skiing with family, friends, and learning partners around Tongariro, Taupo, and Auckland.

Contact

Department of Management and MarketingFaculty of Creative Industries & BusinessUnitec Institute of TechnologyOffice: 172 – 3020Mobile: 021 42 0118 (Preferred)Phone: 815 4321 Extension 8108Email: [email protected] Website: http://nz.linkedin.com/in/petermellalieuJournal: http://pogus.tumblr.com Office Hours: By appointment.


mailto:[email protected]?subject=Course%20enquiry%20from%20Unitec%20learning%20partner

mailto:[email protected]?subject=Course%20enquiry%20from%20Unitec%20learning%20partner

http://nz.linkedin.com/in/petermellalieu




http://pogus.tumblr.com

http://pogus.tumblr.com

4. Course descriptor and assessment matrix Course number: APMG NZ435

Name: FUNDAMENTALS OF SMALL BUSINESS1

Elective Prescription

Level 4

Credit 20

Version 1

Introduced 2006

Aim Students will demonstrate knowledge of the characteristics, options and operation of small business in the New Zealand context.

Prerequisites Nil

Assessment weightings

Learning outcomes Assessment weighting

%Students will describe characteristics of small business.

15

Students will compare business options, business structures and finance options of small business.

20

Students will identify sources of advice and assistance available for a small business.

5

Students will explain the importance of marketing choices for a small business.

20

Students will describe performance measures and controls used for small business.

40

TOTAL 100

All learning outcomes must be evidenced; a 10% aggregate variance is allowed.


1 This prescription replaces 115 Small Business Management.

Assessment NotesLearning outcome five (LO 5) is a core component of this prescription. It is designed to ensure that students are able to understand the key control factors when running a small business. Controls should be applied in the running of a small business to ensure that the effectiveness and success factors can be monitored. Controls are critical to lower and manage risk.

Learning outcome five (LO 5), key element b) requires student to describe four government controls for example HASE 1992, taxation requirements, employment law requirements. An example of a local government control would be the Resource Management Act 1991. Examples of an operational control would be quality management requirements such as ISO 9000 2000, zero defect or minimisation of rework.

LO 1: learning outcome One

Students will describe characteristics of small business.

Key elementsa) Profile:

· owner· staffing· turnover· customer focus· equity and asset value.

b) Success factors, four of the following:· capital· planning· systems· customer relations· product or service development· marketing· other.

c) Owner’s competing demands:· commitments and responsibilities· variety of roles· time demands.


LO 2: learning outcome TWO


Key elementsa) Existing versus new start up.

b) Business options:· independent· franchise· co-operative· e-business.

c) Business structures:· sole trader· partnership· company· trading trust.

d) Finance options.

LO 3: learning outcome three


Key elementsa) Specialist services and support:

· financial and non-financial· governmental and non-governmental.

LO 4: learning outcome fourStudents will explain the importance of marketing choices for a small business.

Key elementsa) Research.

b) Promotion.

c) Business environment.

d) Location.

e) Channels of distribution.


LO 5: learning outcome FIVEStudents will describe performance measures and controls used for small business.

Key elementsa) Financial:

· cash budget · income statement· balance sheet· break-even analysis· two other types of information (eg debtors).

b) Legal:· four from central government· one from local government.

c) Operational, three from the following:· quality· waste· product or service· hours of operation· other.

d) Risk management process.· risk· eco-sustainable production

AssessmentsThe following assessments apply to this course:

Assessment 1: 30 % Profile of a small business: assessing: LO 1, LO 2 (50%), LO 3

Mid-term test 40%, Assessing: LO 2 (50%), LO 4, LO 5 (25 %)

Assessment 2: 30 % Performance measures and controls assessing: LO 5 (75%)

The Assessment Matrix shows a detailed breakdown of the components of the Course Descriptor assessed by each Assessment item.


Assessment MatrixAPMG NZ435 Business Management

Learning outcomes Assessment weighting

%

Assignment 1 Test Assignment 2 Checksum

TOTAL 100 30 40 30 1001. Students will describe

characteristics of small businessProfile (33.3%)Success factors (33.3%)Owners competing demands (33.3%)

15 100 15

2. Students will compare business options, business structures and finance options of small business. (Note 1)Business options (33.3%)Business structures (33.3%)Finance options (33.3%)

20 50 50 20

3. Students will identify sources of advice and assistance available for a small business

5 100 5

4. Students will explain the importance of marketing choices for a small business.Research (20%)Promotion (20%)Business environment (20%)Location (20%)Channels of distribution. (20%)

20 100 20

5. Students will describe performance measures and controls used for small business. (Note 2)Financial (25 %)Legal (25 %)Operational (25 %)Risk (25 %)

40 25 75 40

Checksum 100 30 40 30

Note 1. All sub-components of LO 2 Introduced in Ass 1; Reinforced and extended in TestNote 2: Financial component of LO 5 assessed in Test. Legal, operational and Risk components of LO 5 assessed in Ass 2.


WARNING!!! You are required to submit ALL assignments. Failure to submit an assignment will result in failure of the course. If you fail to resubmit a failed assignment, then you will also fail the course as a whole.

Learning and teaching approachesCase studies, self and team assessments will form an important component of this course, culminating in the student producing a Learning Agenda as a basis for their future professional development and education. The Team Project provides students with practice in developing and applying their enterprising skills in a team-based venture.

A key feature of this course explores how the international and local issues of sustainable development impact new venture formulation.

Academic learning outcomesThe course focusses on developing the following academic literacies that you will use elsewhere through your academic studies:

ALO 1: General Academic skills - learning, listening, participatingALO 2: Collaborative learning and working in teamsALO 3: Academic writing for case analysis reports; Critical analysisALO 4: Advanced learning processesALO 5: Develop the project management, quality control skills, team working, and leadership skills you require to join or establish a new venture or small enterprise;ALO 6: Develop investigation and research skills - drawing on both primary and secondary information sources;ALO 7: Develop writing and editing skills appropriate for marketing a small business’ products and services to a global customer audience, and reviewing a business plan prepared for raising financial resources;


5. Workload overview and assignment sequenceThe following two tables suggests how you could allocate your 200 hours required for the course across all course activities. Workload is based on a your being a B grade point average student for whom English is your best language.

The workload assessment also EXCLUDES an hourly allowance for your development of generic academic literacies

The assignments are constructed so that you are REQUIRED to work on ALL ASSIGNMENTS simultaneously. In some cases, you are required to read ahead in the text in order to identify the theoretical knowledge required to address an assignment appropriately. You are advised NOT to wait until the text content is covered formally in the course contact studios.

The Test is constructed so that you can pursue the work with little need for engagement with the course studios. You can start immediately! Assignment 1 is a group project. You will experience all the special challenges of coordination, leadership, and work-load allocation that occur in such circumstances. Assignment 2 is a reasonably standard ‘individual’ assignment.

You definitely need to attend class studios to understand and develop the requirements for all assignments.

You are required to submit ALL assignments. Failure to submit an assignment will result in failure of the course. If you fail to resubmit a failed assignment, then you will also fail the course as a whole.

Gannt Chart: Schedule of assignments per week across course semester

Studio 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Ass 1

Test

Ass 2

x

x

xCalendar dates for specific events such as assignments vary each semester. See: Semester-specific dates and passwords. Mid semester break is USUALLY between Studio 6 and 7.


Break down of assignment weight, workload and sub-component weight

Assignment Week Due Weight Out of

Work hours

Assignment 1 Week 6 30 100 40

Test Week 10 40 100 40


Class work and other activities

Class attendance 13 studios 40

Personal study 40

Total: 100 200

Calendar dates for specific events such as assignments vary each semester. See: Semester-specific dates and passwords.


6. Learning resourcesYou will be disadvantaged relative to other students if you fail to acquire your own copy of the Course Handbook and Prescribed Text.

Course handbooks and selected readingsPrinted copies available from the Unitec Copy Centre

Mellalieu, Peter J. (2011) Course Handbook BSNS NZ 435 Fundamentals of Small Business, Department of Management and Marketing, Auckland: Unitec Institute of Technology

Prescribed textsCopies available from ther Unitec Book Store.

Oliver, L., & English, J. W. (2007). The Small Business Book: A New Zealand Guide for the 21st Century. Allen & Unwin

Recommended textTurner, K., Ireland, L., Krenus, B., & Pointon, L. (2009). Essential academic skills.

Oxford, UK: Oxford University Press.

Manalo, E., Wong-Toi, G. & Bartlett-Trafford, J. (2009). The business of writing: Written communication skills for business students (3rd ed.). North Shore, NZ: Pearson Prentice Hall.

Reference textsBolton, B., & Thompson, J. (2003). The Entrepreneur in Focus. London: Thomson.

Bolton, B., & Thompson, J. (2004). Entrepreneurs: Talent, temperament, technique (2nd ed.). Oxford: Butterworth Heinemann.

Frederick, H., & Kuratko, D. F. (2010). Entrepreneurship: Theory, Process, Practice (Asia-Pacific Edition) (2nd ed.). Melbourne: Cengage Learning.

Kawasaki, G. (2004). The art of the start: the time-tested, battle-hardened guide for anyone starting anything. Portfolio.

Spackman, K. (n.d.). The Winner's Bible: Rewire your brain for permanent change. Atlanta: The Winner’s Institute


Online resourcesStudents are required to:

Access the Unitec Learning Management System (LMS) Moodle and Ning internet sites for materials and communications relevant to this course. Use http://turnitin.com to submit written components forming parts of all assignmentsUse a citation management system such as Endnote or Zotero to manage their database of reading. See http://www.zotero.orgUse Unitec library - all prescribed texts and reference texts are placed on course reserve.Use Unitec Library databases onlineVisit Department of Management and Marketing Blog: http://thedomm.com/Visit Department of Management and Marketing Facebook Site: http://www.facebook.com/group.php?gid=104981291451


http://turnitin.com

http://turnitin.com

http://www.zotero.org/

http://www.zotero.org/

http://thedomm.com/

http://thedomm.com/

http://www.facebook.com/group.php?gid=104981291451




7. Topics, content, and reading scheduleNote. All topics scheduled here will not always be covered in class meetings. You are required to keep up-to-date with this reading schedule to meet the requirements of assignments.

Week/Studio Agenda Reading Assignment

Due

1

LEARNING OUTCOME ONE: OVERVIEWStudents will describe characteristics of small business.

Key elementsa) Profile:• owner• staffing• turnover• customer focus• equity and asset value.

b) Success factors, • capital• planning• systems• customer relations• product or service development• marketing• other.

c) Owner’s competing demands:• commitments and responsibilities• variety of roles• time demands.

Topics:• Introduction to entrepreneurial business• What is small business and

entrepreneurship?• Small and corporate business in New

Zealand • Finding business opportunities• Business planning

O&E Preface

Introduction Ch1 - Introduction

Ch 2 - Business opportunity

Ch 6 - Business planning

2 LEARNING OUTCOME ONE (continued) Exercise 1: Self-employment assessment

3 LEARNING OUTCOME ONE (continued)



Due

4

LEARNING OUTCOME TWO: START-UP OPTIONS, STRUCTURE, AND FINANCINGStudents will compare business options, business structures and finance options of small business.

Key elementsa) Existing versus new start up.b) Business options:• independent• franchise• co-operative• e-business.c) Business structures:• sole trader• partnership• company• trading trust.d) Finance options.

Topics:• Finding a business opportunity• Small business survival and success• Learning about small business• The role of entrepreneurs in creating new

business• Foundation business structure and legal

issues• Good business: Ethics, social responsibility

and business character• Launching an entrepreneurial business

O&ECh 2 Finding a business

opportunityCh 9 Financing

Ch 4 LegalCh 5 Franchising

5 LEARNING OUTCOME TWO (continued)

6

LEARNING OUTCOME THREE: ADVICE AND ASSISTANCEStudents will identify sources of advice and assistance available for a small business.


• financial and non-financial• governmental and non-

governmental.

Topic:• Government Programmes• Trade Associations• Chambers of Commerce• Intellectual Property protection and

management

O&E Ch 3

ASS ONE

7 Guest speaker or Field Trip



Due

8

LEARNING OUTCOME FIVE: CONTROLStudents will describe performance measures and controls used for small business.

Key elementsa) Financial:• cash budget• income statement• balance sheet• break-even analysis• two other types of information (eg debtors).

O&EExercise 2: Trans Crash

TransportCh 7 Financial Information

Ch 8 Cash FlowCh 9 Financing

Ch 10 Profit Planning

9

LEARNING OUTCOME FOUR: MARKETINGStudents will explain the importance of marketing choices for a small business.

Key elements• Research.• Promotion.• Business environment.• Location.• Channels of distribution.

O&ECh 11 Market strategy

Ch 12 Advertising, salesCh13 Export marketing

10 LEARNING OUTCOME FOUR (continued) TEST

11

LEARNING OUTCOME FIVE: CONTROL (continued)Students will describe performance measures and controls used for small business.

Key elementsa) Financial (Note: this element completed in earlier weeks)b) Legal:• four from central government• one from local government.c) Operational, three from the following:• quality• waste• product or service• hours of operation• other.d) Risk management process

O&ECh 14 Retail and service

operationsCh 15 Manufacturing

operationsCh 18 Troubleshooting and

recoveryAdditional research

12 LEARNING OUTCOME FIVE (continued)13 Study Week ASS TWO

O&E => Chapters from course text: Oliver & English (2010). Other readings listed above: see ‘Learning Resources’. Calendar dates for specific events such as assignments vary each semester: See: Semester-specific dates and passwords.


8. Learning model and teaching philosophyIn this course, your learning will be driven by several concurrent and equally important elements. Combined, they form a ‘learning adventure’.

Textbook and lecture based learning: provide base knowledge, concepts, ideas. A roadmap for your thinking. Experiential learning: where you experiment and practice applying your knowledge in situations that simulate the ‘real world’ of practice Assessment-based learning: focusses learning on application to a given personal or professional context.Reflective learning: where you incorporate your learning from practice and study into your personal knowledge base, and identify future areas for strengthening your personal and professional development.

Studio workshop elements: the ALAPA learning process modelEach studio is organised according to elements selected from the ALAPA workshop learning process model. The process model may differ from conventional teaching approaches.

In brief, the ALAPA model comprises these elements as a natural sequence There will be variances from the ALAPA model as time and opportunities for creative diversions permit.

ASSESSMENT and AGENDA - Activities that raise participants’ interest in the workshop theme and learning activities that will follow. Examples: short questionaries, role-plays, group discussion questions, or ice-breaker exercises. AGENDA - Overview of the workshop.

LEARNING - Overview of learning resources presenting concepts relevant to concerns and issues raised in the ASSESSMENT phase. Examples: reading, lecture activities, references to research.

ANALYSIS - Activities that engage participants with the learning activity to further enhance their learning and discovery. Examination of how others have behaved in similar situations related to the workshop topic. Examples: role plays; discussions based on case studies, television shows, or movies.

PRACTICE - Reinforcement of LEARNING through deliberate PRACTICE of skills in a work-like situation in the classroom. An opportunity for immediate in-class experimentation, feedback, and reflection.

APPLICATION - ‘Take home’ assignments that provide the opportunity for the participants to transfer the workshop learning to their real-life personal or work situations. Examples: Assignments that facilitate both short-term and long-term experimentation. These assignments are usually conducted by participants after the workshop has concluded.

(Quinn et al, 2006, Ch 1: Organising the Learning Process; DiPadova 1996, p. 8).


Improving our teaching and learning environmentOn a weekly basis we use an instrument to identify the extent to which students in the class are progressing from, say, worry and anxiety about the course to a state of creative, high-performance ‘Csikszentmihalyian flow’.

On the basis of feedback from this instrument, the teacher can adapt his teaching approaches to improve learning outcomes. Furthermore, students can adapt their learning approaches and/or support each other within their project teams. The Japanese call this process of continuous innovation, kai-zen. We use an instrument called the Csikszentmihalian (‘Chicks-send-me-high’) flowmeter, developed by Mellalieu. See Mellalieu & Emerson (2009) as a basis for timely conversation with our students to improve learning outcomes.

Mellalieu, P. J., & Emerson, A. (2009). Developing reflective learning in a strategic thinking class. In Unitec Teaching and Learning Symposium. Presented at the Unitec Teaching and Learning Symposium, 28 September 2009, Auckland, NZ: Unitec Institute of Technology. Retrieved from http://web.mac.com/petermellalieu/Teacher/Blog/Entries/2009/9/29_Symposium%3A_Developing_reflective_learning_in_a_strategic_thinking_course.html

Introduction to reflective learning

Figure 4.1 shows the usual education practice: you accept an assignment, conduct the assignment, and sometimes present a report. Subsequently, your tutor assesses the quality of what you have submitted. You are dependent on their judgement alone in assessing the quality of your learning.

In our ‘learning adventures’ as part of this course, you are required to extend on the activities of Figure 4.1 through observing your own performance - perhaps in relation to your team and other members of the class. Figure 4.2 illustrates how you continue your experience of the class through recording your observations, and reflecting on how you might improve your practice and your learning in your future professional life - Figure 4.2.


http://web.mac.com/petermellalieu/Teacher/Blog/Entries/2009/9/29_Symposium%3A_Developing_reflective_learning_in_a_strategic_thinking_course.html






Figure 4.1: Traditional learning process

Figure 4.2: Learning process augmented with observation, reflection, and generalisation of learning for future practice


9. Contact sessions: Studios and conductYour learning experience assumes that you will attend class contact studios to clarify assignment requirements and to participate in extending the learning you gain from the Required Reading Schedule, Section 4. Accordingly, all studio sessions are compulsory. Email your team and tutor in advance if you will fail to attend.

Studio sessions will be the primary time discussions will be held about the assessments.

Please ensure that before coming to the studio sessions that you are prepared. Skim read the relevant chapters prior to the relevant class. Prepare questions and/or case examples you would like to discuss drawn from recent news events.

Follow up classes by reading fully the chapters indicated in the section: Topics/Content and Reading Schedule.

WARNING!!! All material presented and discussed in class is EXAMINABLE in the Test. The test includes:

Material presented by students and guests, and required text reading.Material detailed in the course reading schedule.


10. Assessment policyWe expect that for each assessment, students will spend approximately two to three weeks duration on each. Heavy emphasis is placed upon the quality of course work. The section “Workload Overview” suggests when and how much to allocate time on your assignments.Schedule several weekly sessions to progress work on your Assessments. All assignments demand demonstration of ‘deep’ learning rather than shallow recall of facts. Accordingly, only mediocre results … and low grades … can be achieved from attempting overnight assignment writing. The assignments build on the work of previous assignments and text readings. My expectations are outrageously high.Some assessments requires references and theory. I expect students to access other scholarly and professional textbooks and journal articles based upon quality research and thinking. I expect you to extend beyond the course textbook and a simple-minded Google search. Use Google Scholar, the Unitec on-line scholarly databases, and advice from the Unitec reference librarians. When referencing, please reference properly and accurately. Hint: If you use Zotero or Endnote, you will be able to transfer data from your personal reading database into APA referencing format instantly, directly and automatically! Extensions require a doctor’s certificate without question. Group free-riders and plagiarists will gain less credit for the marks gained by the team as a whole..

Submission of all written assessmentsLatest hand-in time: On the date specified before class commencement. Deliver at the start of class or post into the DOMM physical assignment drop boxes on Level 4, Building 172. See Semester-specific calendar.This course uses http://www.turnitin.com for all written report Assessment work and presentations handouts. Submit before the latest hand-in time for the bound document.Prepared in a professional report format acceptable to a managerial audience. Bound properly and professionally.

I reward excellence! I reward outrageous

failure!! But I do not reward

mediocrity!!!Peter Mellalieu


http://www.turnitin.com

http://www.turnitin.com

Style: 12 pt, 1.5 pt paragraph spacing in a web-optimised font such as Georgia or Verdana.Please do not email me your Assessment. In an ABSOLUTE emergency you may email me a backup copy if you fail to submit to turnitin.com and the physical delivery box. Ensure the Email Subject line includes: COURSE ID, Assignment Number, Student Name. Submit directly to my office a bound copy when you are able.

Requirements for presentations To be held at studio times in the week and date specified. To be prepared in a professional format acceptable to a managerial audience.Presented in Acrobat pdf, DVD, PowerPoint, or (by arrangement) Keynote.Test out all technology you intend to use at least 60 minutes prior to commencement.Blended-Learning students should accompany their presentation with presentation notes but you do not have to present in person. If you are able to come and present in person to the class then I welcome this. You are welcome to attend lectures.

All Assessments grades will include the following grading factors. For some Assessments these factors may account for up to 50 percent of the allocated grades:

Argument development (the ability to present evidence-based logical conclusions) Professionalism (the ability to deliver high quality standards)Writing suitable for an international business audience, for whom English is a second language.

Creating an A+ AssignmentMany students have found the following guide helpful in planning their academic (and professional) assignments.

Mellalieu, P. J. (2001, October 21). Creating the A+ assignment: A project management approach. Retrieved July 27, 2009, from http://web.mac.com/petermellalieu/Teacher/Blog/Entries/2007/10/21_Creating_the_A%2B_assignment%3A_A_project_management_approach.html.


http://web.mac.com/petermellalieu/Teacher/Blog/Entries/2007/10/21_Creating_the_A%2B_assignment%3A_A_project_management_approach.html






Fairness in marking - team presentationsStudents who present later in the course have both additional time and the experience of observing and learning from earlier student presentations. Accordingly, a moderating process will be used to ensure that those students who present earlier in the course gain an equitable mark compared with those who present later.

Feedback grades (interim) will be presented at the conclusion of each week of Presentations. Grades will be moderated subsequently and adjusted if necessary once all presentations have been complete.

I reward outrageous failure!!!OPPORTUNITY!!! This course attempts to practice what it preaches: innovation, creativity, and enterprise. Innovation often means experimentation and the risk of failure. To make this course safe for YOU to take risks (calculated or intuitive) you are REWARDED for reflecting CONSTRUCTIVELY on the mistakes, disasters, and outrageous failures you have experienced during the class. The rewards attach to your Assignment 3 journal and reflective essay.

WARNING!!! Plagiarism, copying, and turnitinAs a routine policy I shall display for course members the turnitin report for all assignments submitted in this course WITHOUT EXCEPTION. The turnitin report displays the degree (from 0 to 100 per cent) to which an assignment has been copied from other sources.

My purpose in displaying this report is to help teams quickly identify members who require assistance in correct research and writing techniques, such as those explained in Turner et al: Ch 4: Basic Academic Writing Skills: paraphrasing, quoting, summarising, and writing citations.

A turnitin copy-level of greater than 30 per cent usually results in the assignment gaining zero marks. Harsher penalties could apply such as: full course failure, or exclusion from the BBus programme. See General Information: Misconduct in Assessments


11. House style: written and oral communication standards

The quality of your communication is a CRUCIAL requirement for your success in this course .. and your future career. Feedback from employers and recruitment consultants advises me that you can DOUBLE your entry-level salary in a management position through possessing writing and oral communication standards that enable your work to be presented directly to an employer’s clients without ‘hand-holding’.

Accordingly, for this course you are expected to write in a style suitable for an international business audience for whom English is a second language: Global English.

All of your assignment writing is assessed according to the Figure ‘Six-trait method’. The figure specifies the criteria used to assess your writing quality. The reading resources later in this section explain some of the special writing features I require: Global English, paragraphing, and sentence sense, for instance.

Haswell’s Minimal marking

To encourage you to seek excellence, and avoid mediocrity, your written assignment will be marked using the principles of “Minimal Marking” (Haswell, 1983).

You will receive a Contingent Mark for the assignment that you submit on the due date. If there are errors in the grammar, style, word choice, organisation, fluency, or layout, a selection of these errors will be indicated to you by a “X”. The errors will NOT be corrected by the marker.

WARNING!!! If you fail to gain a grade of 24/30 marks for the Professional Language or Presentation/Format components of your assignment on your first submission, your document will be returned to you for correction. You are then required to rewrite the document to achieve a grade of 24/30 for the Professional Language and Presentation/Format components.

You will be credited with zero marks for this assignment UNTIL you have corrected the errors to the satisfaction of the course marker. You will have a maximum of two weeks to re-submit your assignment. If you achieve the required writing standard, you will receive a grade NO HIGHER than the initial Contingent Mark allocated by the tutor.

All resubmissions must be made before the end of the Study break period.

WARNING!!! If you fail to resubmit your assignment to the required level, then you will receive zero marks for the assignment.

If you fail to resubmit a failed assignment, then you will also fail the course as a whole.


Professional Language: Six-Trait Method for Evaluating Writing Quality

Trait High / 4 - 5 Middle /2 - 3 Low /0 - 1 Mark

Ideas and content

Focussed, succinct, specific. The ideas and topic keep the reader’s attention. Argument logical, persuasive, and supported with evidence.

Some really good parts. Some parts not there yet.

Just beginning to figure out what you want to say

Word choice Extremely succinct, visual, and accurate. You picked the correct words for the correct places. Choice of Global English word

Correct but not striking. The words get the message across, but don’t capture the reader’s attention.

Confusing. The reader is often asking “What did you mean by this?”

Grammatical conventions

Mostly correct. There are few errors in the paper. Global English applied.

About halfway there. Several bothersome mistakes need cleaning up.

Editing not under control yet. It would take a first reading to decode, and a second reading to get the message.

Organisation Clear and compelling. You have chosen an order that works well and makes the reader want to find out what comes next.

Some really smooth parts. Other parts need work. The order makes sense most of the time.

Not shaped yet. The order of the paper is jumbled and confused.

Voice Individual and powerful. The paper has personality and sounds different from the way anyone else writes.

Individuality fades in and out. What you truly think and feel shows up only sometimes.

Not “you” yet. You don’t know what you truly think or feel yet.

Sentence fluency

Varied and natural. The sentences in your paper are delightful to read out loud.

Routine and functional. Some sentences are choppy and awkward, but most are clear.

Paper needs work because there isn’t enough sentence sense yet.

Total Out of 30

Out of

A mark of 24/30 or better is required to AVOID a resubmission under the policy of Haswell’s Minimal Marking.

Source: Summarised from: Student Friendly Writing Rubric from a School using the Six Traits of Writing, Discovered by John Norton while traveling in Alabama. Thanks to teachers at Maryvale Elementary in Mobile! www.middleweb.com


http://www.middleweb.com/ReadWrkshp/RWdownld/MvaleRubric.pdf


Writing resourcesExamine the following guides and examples of the writing style required for this course.

* WARNING!!! Denotes VERY, VERY HIGHLY RECOMMENDED reading!

About writing in general

Manalo, E., Wong-Toi, G., & Bartlett-Trafford, J. (2009). The business of writing: written communication skills for business students (3rd ed.). North Shore, NZ: Pearson Education New Zealand. [See Selected Readings]

Turner, K., Ireland, L., Krenus, B., & Pointon, L. (2009). Essential Academic Skills (Revised). Melbourne, Australia: Oxford University Press. [See Selected Readings]

About organisation of writing

Mellalieu, P. J. (n.d.). The essay factory: A collaborative learning adventure. [Explains principles of five-paragraph essay-writing] Retrieved July 27, 2009, from http://web.mac.com/petermellalieu/Teacher/Blog/Entries/2007/6/27_The_essay_factory%3A_A_collaborative_learning_adventure_.html.

** Mellalieu, P. J. (2007, October 18). Model answer: A “Five Paragraph” essay in management. Retrieved July 27, 2009, from http://web.mac.com/petermellalieu/Teacher/Blog/Entries/2007/10/18_Model_answer%3A_A_%E2%80%9CFive_Paragraph%E2%80%9D_essay_in_management.html.

About word choice and grammatical convention

* McAlpine, R. (1997). Global English for Global Business, Auckland: Longman, ISBN 0 582 73998 5. [See Selected Readings]

** Mellalieu, P. (2007, July 3). Let’s all learn and teach Global English in our business schools! [Example of a five-paragraph essay] Retrieved July 27, 2009, from http://web.mac.com/petermellalieu/Teacher/Blog/Entries/2007/7/3_Let%E2%80%99s_all_Learn_and_Teach_Global_English_in_our_Business_School!.html.

*** Quality Web Content - From Plain English to Global English [Excellent overview of the vital need for adopting Global English .. and demonstrating how to achieve Global English in your writing], Retrieved 3 July 2007 3:32 PM, http://www.webpagecontent.com/arc_archive/139/5/


http://web.mac.com/petermellalieu/Teacher/Blog/Entries/2007/6/27_The_essay_factory%3A_A_collaborative_learning_adventure_.html






http://web.mac.com/petermellalieu/Teacher/Blog/Entries/2007/10/18_Model_answer%3A_A_%E2%80%9CFive_Paragraph%E2%80%9D_essay_in_management.html






http://web.mac.com/petermellalieu/Teacher/Blog/Entries/2007/7/3_Let%E2%80%99s_all_Learn_and_Teach_Global_English_in_our_Business_School!.html








http://www.webpagecontent.com/arc_archive/139/5/


ReferencesHaswell, R. H. (1983). Minimal marking. College English, 45, pp. 600-604.

Emerson, L. (1999). A collaborative approach to integrating the teaching of writing into the sciences in a New Zealand tertiary context (Doctor of Philosophy in English). Massey University, Palmerston North, NZ.


12. Agenda and course material for studio 1

AimIntroduce students to the overall course structure, aims, and assignmentsLEARNING OUTCOME ONE (LO 1) Students will describe the characteristics of small business.

Key topicsIntroductionRefer to Course Handbook Section 7: Topics, content, and reading schedule Class operating principles, values and guidelines.Safety, health, and risk management of class activitiesClass Discussion: David Slack and http://speeches.comLecture 1: Introduction and overview of small business in New ZealandOverview of Course Handbook and Course TextbookIntroduction to Assignment 1: Team ProjectFormation of Assignment teamsLecture 2: Creating a winning enterprise: Your place in the entrepreneurial processDefinitions of key concepts - small, medium, and large business in New Zealand.

PreparationRead the story (‘business case narrative’ in academic-speak) about David Slack - Speechwriter to the world. Prepare to discuss in small groups your responses to the questions.Prepare responses for discussion in class to the questions below:

• Would you prefer to work in a big business, a small business, a not-for loss organisation, or an entrepreneurial organisation? Why?

• What do the terms innovation, invention, and entrepreneurship mean to you? Describe examples of your favorite innovators, inventors, entrepreneurs, and leaders. Discuss the innovations one of your favourites has brought to success.

• Consider the best team that you have ever observed or worked within. What do you think made that team ‘the best’? (Your choice of team may be made from a work team, sports, recreation … or family). Discuss ‘the worst’ team you have worked with?

• Course relevance: How do you think the course APMG NZ 435 might be relevant to your other academic studies? … And to your current or future work life?


http://speeches.com

http://speeches.com

Read the Executive Summary and Introduction to this Course Handbook. Identify aspects of that surprise or intrigue you. Why? What aspects do you agree with? What aspects do you disagree with or find surprising? Why?Complete the New Venture Application for Team Assignment in preparation for your being allocated to an Assignment 1 Project Team in Studio 2. Read the Course Descriptor, Reading Schedule for this courseAcquire the course text books Oliver, L., & English, J. W. (2007). The Small Business Book: A New Zealand Guide for the 21st Century. Allen & Unwin. Note: Extracts and previews of the course text can be accessed on Google Books. Click: here

• Examine the textbook table of contents. • Browse through to the start of each chapter. Read the introductory

paragraphs and chapter objectives.• Skim read Chapter 1.

Identify the location of the lecture slides to accompany this studio’s lectures. They are at the end of this Course Handbook in the Lecture Slides section. Powerpoint versions are also available on the Moodle Learning Support System.

Science is not the scarce resource. The

scarce resource is entrepreneurship.

Geoffrey Moore


http://books.google.com/books?id=xlXZX9FDzKYC&dq=oliver+english+small+business+book&printsec=frontcover&source=in&hl=en&ei=EJxkTdbUHITuvQPUjbmrBg&sa=X&oi=book_result&ct=result&resnum=11&ved=0CHsQ6AEwCg#v=onepage&q&f=false

http://books.google.com/books?id=xlXZX9FDzKYC&dq=oliver+english+small+business+book&printsec=frontcover&source=in&hl=en&ei=EJxkTdbUHITuvQPUjbmrBg&sa=X&oi=book_result&ct=result&resnum=11&ved=0CHsQ6AEwCg#v=onepage&q&f=false

Course agenda for studio 1ID Agenda Start Dur/

minEnd Ref

1 Introduction & welcome• Agenda overview• Mihi/About the tutor• Class operating principles, values and

guidelines• Safety, health, and risk management

0 15 15

2 Class health - start of studio• Csikszentmihalian flowmeter

15 10 25

3 Class Discussion: David Slack and http://speeches.com

25 20 45

4 Questions 45 5 50

5 Break A 50 10 60

6 Overview of Course handbook: Exec Summary 60 15 75

7 Lecture 1: Introduction and overview of small business in New Zealand

75 15 90

8 Introduction to Assignment ONE 90 10 100

9 Question time 100 10 110

10 Break B 110 10 120

11 Lecture 2: Creating a winning enterprise• Who wants to be part of a winning team?• Why do we need winning teams?• What is required to create a winning team?• Note: Audio recording here

120 15 135

12 Any other business (AOB) 135 15 150

13 Preparation for the next few weeks of your learning adventure. Before next studio:• Complete required reading according to

Reading schedule• Read Assignment ONE CAREFULLY. • Plan your next five weeks workload.• Any other business, questions?• Learning from ‘outrageous failure’

150 15 165

14 Class health - conclusion of studio• Csikszentmihalian flowmeter

165 5 170 Course book

15 Conclusion 170 0 170

16 End 170


http://speeches.com

http://speeches.com

http://speeches.com

http://speeches.com

http://www.scribd.com/doc/28298764/Creating-a-winning-enterprise-your-place-in-the-entrepreneurial-process

http://www.scribd.com/doc/28298764/Creating-a-winning-enterprise-your-place-in-the-entrepreneurial-process

http://www.archive.org/details/CreatingAWinningEnterpriseYourPlaceInTheEntrepreneurialProcess

http://www.archive.org/details/CreatingAWinningEnterpriseYourPlaceInTheEntrepreneurialProcess

Preparation prior to class: Case Discussion: David Slack - Speech writer to the worldLet’s begin with an ice breaker – a warm up exercise – to develop a shared experience for our journey of learning together. The ice breaker is a case discussion based around one example of a small business established in New Zealand by entrepreneur David Slack.

InstructionsRead the following article, and answer these questions:

1. What is David Slack’s business? Why did he set up the business? What was the moment of conception (or, the “knock on the door”)?

2. What skills did he bring to bear on his new business from his earlier career?3. How long was the “gestation period” – the number of years it took before David

“gave birth to the enterprise” following the moment of conception?4. What special challenges did he face in setting up his business? How did he

meet those challenges?5. What are some of the distinctive features (special capabilities, or competitive

advantages) of the business that David established?6. Is this a successful business? On what terms?7. What makes his business valuable? If he sold the business, what could he sell?

Would you buy this business? Why? Why not?

Case 1: David Slack - Speech writer to the worldSource: Brown, Russel, “Speech writer to the world” February 1999, Unlimited, p. 24

Stuck for words, Jewish Americans and British policemen are turning to a Devonport man with a pencil and a modem.

David Slack is pure uncut knowledge worker. He writes speeches. He'll write them for almost anyone, including New Zealanders. But 90% of his speeches are for US citizens- three or four in an average day, all commissioned over the internet and composed from his home office in Devonport.

"Americans are comfortable with ordering a service remotely ‑ and a service of this kind," Slack observes. "The inclination in New Zealand is for people to do it themselves ‑ it's the DIY nation."

Ironically, it's probably that DIY doggedness that got Slack where he is today. A rising star within DB, he was cut down early by a heart attack. "It changed my point of view 180 degrees."


Image Right: David Slack.

Source: Speakers, Engage Your Community - a web conference for community organisations. (n.d.). Retrieved February 24, 2011, from http://www.eyc.org.nz/past/wellington08/speakers/

David spent a couple of years rehabilitating and part‑time consulting on the bar business. Eventually he found himself in the employ of Geoffrey Palmer, Minister of Justice. When David Lange resigned, Slack suddenly found himself speech writer to the prime minister. Briefly at least. Neither stayed long, but the taste of speech writing had Slack hooked.

After a couple of years in PR he struck out, determined to make a living writing speeches. It was tough going. First he took up an account with Auckland's first commercial Internet provider, Iconz, in 1994.

"The thing about speechwriting is that you need to become an instant expert. The Internet gave me quick access to a reasonable depth of material and meant that I could turn around a speech reasonably quickly and with fresh material.

"And gradually I thought that this might not be just a way of researching my work, but of actually extending my network. When you're in a niche business like I am, you want to be reaching as wide a market as possible."

He contacted a US Internet company and bagged the priceless domain name http://speeches.com.

There were no how-to-make-a-successful-Web-site books in 1995, so Slack had to figure it out for himself. He devised some gimmicks to draw people to his site: free consulting for a second opinion on speech texts, an archive of the great speeches, and the Automatic Speech Writer, a system of forms on his site that collects key details from visitors and generates off-the-shelf wedding speeches.

Nuptial punters and others can pay $US10 via an AT&T 900 number to have a speech auto-written for them in minutes. He hasn't changed or marketed the service for a while, but the money quietly rolls in.

A different form fields the 30 or 40 enquiries he receives daily, fires off a "semi automatic" response and has been "absolutely the most effective way I have of getting specific information that I need from people and motivating them to actually say 'yes, please help me'."

Slack's other breakthrough was dropping his prices.

"I realised as I built up a base of speeches that I was getting a lot of good material that I could adapt from one speech to another, and I was getting much faster at turning these things around," he says.


http://www.eyc.org.nz/past/wellington08/speakers/




http://speeches.com

http://speeches.com

"I could charge $US100 to $200 for a speech, rather than a corporate rate in the thousands, turn it around in an hour or two and still have a good return on my time."

Slack now has a thriving line in Jewish ceremonial occasions and has written speeches for a bail bondsmen's conference and on institutional racism for a senior British policeman.

"And I did one for a guy in Florida about sharks and why they're not as dangerous as you might think," he chuckles. "I almost convinced myself."


New Venture Application for Team AssignmentTeam Allocated (Office use only)Preferred and Personal NamesFAMILY NAME (Caps)

A person I most admire is:… Reason ...

What I aspire to learn and achieve from this course is ….Qualification pursuing BBus Diploma (state)

International exchange Other (state)

Major(s) (Circle) Management Marketing Operations Human Resources Finance Accounting Other: state

Best/most preferred subjects (state up to 3)Number of level 6 and higher courses completed Years worked in NZ

Languages spoken(State)

English, Maori, Mandarin, Canton, Hindi,Spanish, German, French

Countries in which dwelt and/or worked (Enter years in brackets)

NZ ( ) China ( ) India ( ) Germany ( ) Sweden ( ) etc

I suspect my strongest contributions to a New Venture Team will be (Rank 1=top, 4 = least)

( ) Relating— interpersonal bonding and connecting ( ) Impacting — impact or influence lives of others ( ) Striving— motivate and generate energy ( ) Thinking— informational and perceptual (ideas, creativity, analysis)

The key strengths and experience I will bring to my New Venture team are:

I am absolutely, absolutely ABSOLUTELY NOT available for team meetings at these times

Mon Tue Wed Thur Fri Sat Sun


Kai-zen: Improving our teaching and learning environment

Csikszentmihalian flowmeter (‘Chicks-send-me-high’)

We use an instrument called the Csikszentmihalian flowmeter on a weekly basis to identify the extent to which students in the class are progressing from, say, worry and anxiety about the course to a state of creative, high-performing ‘Csikszentmihalyian flow’.

On the basis of feedback from this instrument, the teacher can adapt his teaching approaches to improve learning outcomes. Furthermore, students can adapt their learning approaches and/or support each other within their project teams.

Worry, anxiety, and stress occurs when we perceive that we face a challenge that is beyond our current skills. We may feel ‘Anxiety’ or Worry’. We can respond to productively to anxiety (for example) through increasing our skills. We progress towards ‘Control’ and ‘Flow’. Alternatively we can respond unproductively in a variety of ways, such as withdrawing from the challenge (to Apathy)), complaining or blaming. There are other productive responses that we will discuss in class when appropriate or on request. See Also Frederick & Kuratko (2010, Ch. 2 Stress & the entrepreneur, pp. 47-51)


Defining your Csikszentmihalyian state

Emotion Value Definition

In flow

In control

Excited

Relaxed

Apathy

Boredom

Worry

Anxiety

5Performing vigorously and enthusiastically. Operating in the zone of our ‘peak performance’ where our skills just match the challenges presented.

4 The power to influence or direct [strongly] one’s behavior or the course of events.

3 Excited or provoked to a feeling of anger or strong emotions. Aroused to action.

2 Free from tension and anxiety.

-2 Lack of interest, enthusiasm, or concern.

-3 Weary because one is unoccupied or lacks interest in one's current activity.

-4 Give way to unease; allow one's mind to dwell on difficulty, uncertainty, or troubles

-5 Nervousness, or unease, typically about an imminent event or something with an uncertain outcome

Note: the above list is not exhaustive. For instance, unrelieved anxiety can lead to depression, whilst unrelieved flow can lead to mania or burnout. Add your own definitions of other emotions you regularly face… despair, panic!!!. Learning to identify a person’s emotional state enables you to self-manage your temperament: Self-management is a key requirement for successful leadership, management, and entrepreneurship. Definitions adapted from Apple Dictionary by Mellalieu.


My Weekly Csikszentmihalian Flow RecordEach class, mark your Csikszentmihalian/emotional state at the START (S) and FINISH (F) of each class. Note in your journal the conditions that gave rise to your emotion, the reasons for changes in your emotion, and actions you intend to undertake..

Emotion Score 1 2 3 4 5 6 7 8 9 10 11 12 13

Class date

In flow

In control

Excited

Relaxed

Apathy

Boredom

Worry

Anxiety

5S

F

4S

F

3S

F

2S

F

-2S

F

-3S

F

-4S

F

-5S

F

S

F

S

F


13. Assignment 1: Profile of a small business


Work hours


1 - ScenarioImagine that you are a new recruit to a small, but growing enterprise, MyndWriters. You will join to make a team of five new recruits. Your team has been assigned the task of researching and writing one documents: a speech, a magazine article describing the profile of a small business.

The remainder of this document presents the instruction that you have received from the entrepreneur-owner of MyndWriters.

Each team member is expected to contribute 40 +/- 5 hours to all aspects of the assignment combined. Keep a record of your contributions in a diary or blog.

2 - Learning outcomesIn this assignment you are REQUIRED to demonstrate achievement of the following course learning outcomes:

! Identify, describe, and assess the stages of development that a new enterprise and its founding entrepreneur(s) undergo on their journey towards establishing, developing, and growing, a small business including:

Describe the characteristics of small business (Course LO 1)

Compare business options, business structures, and finance options (Course LO 2), and

Identify the sources of advice and assistance available for a small business (Course LO 3).

This assignment is also intended to help you achieve the following professional development outcomes:

! Develop the project management, quality control skills, team working, and leadership skills you require to join or establish a new venture or small enterprise;

! Develop investigation and research skills - drawing on both primary and secondary information sources;

! Develop writing and editing skills appropriate for marketing a small business’ products and services to a global customer audience, and writing a business plan to raise financial resources;


3 - Business profile magazine articleYou have been commissioned by a magazine to write a profile article about the foundation, growth, and development of a small business. The text, layout, and writing style must match the mission and readership of the magazine. You have a choice of writing for2:

! GMagazine - The Green Lifestyle Magazine - See http://www.gmagazine.com.au/

! Good - New Zealand’s guide to sustainable living - See http://good.net.nz

Select a business that would interest readers of either magazine. For instance, select a business that has been - or could be - a national or regional winner of the Sustainable Business Awards. The awards are arranged by the Sustainable Business Network (SBN). http://www.sustainable.org.nz/cms1/index.php?page=how-to-enter

Conduct the following tasks to produce an example like previous students, or the example: Trash & Treasure, Nogrady, 2008):

! Assemble your project team

! Devise a Project Plan of responsibilities and deadlines for the remaining tasks.

! Identify an appropriate entrepreneur and/or small-medium business and/or new venture

! Conduct background research using published documents about the organisation.

! Devise a set of questions to ask the entrepreneur and/or an officer of the organisation. Ensure that your questions will give you answers to ALL the detail required as indicated in the course Prescription Matrix for the course Learning Outcomes for this assignment. (See Section 2 - Learning Outcomes, section 6 - Assessment Criteria, and Annex D)

! Gain the entrepreneur’s written approval to interview, write, and publish the results of your writing. Have them sign the official Consent Form, Appendix E.

! Write and edit the article. The article is required to be 875 +/- 50 words long.

! Format the article as a two-page spread for Good or GMagazine, including photographs and figures. Remember: The text, layout, and writing style must match the mission and readership of the magazine.

! Prepare a set of discussion class questions and answers based on your article (See Section 4 - Class Discussion Questions)

! Present a “work in progress” of your assignment to the class TWO WEEKS prior to the Assignment Due date. Your work will be peer reviewed constructively by the course participants at this session.

! Submit on the Due Date a copy of all the documents in PRINT and CD-ROM format in the sequence shown in Section 7: Document submission


2 You may suggest writing for another magazine or e-zine. Seek approval from the course tutor. For instance, Unlimited, Idealong, NZ Business.

http://www.gmagazine.com.au

http://www.gmagazine.com.au

http://good.net.nz

http://good.net.nz

http://www.sustainable.org.nz/cms1/index.php?page=how-to-enter

http://www.sustainable.org.nz/cms1/index.php?page=how-to-enter

4 - Class discussion questionsThe articles published in the magazines are used by teachers as a basis for their teaching about new venture creation, small business management, eco-sustainable business and green issues. Accordingly, the magazine editors also require that you prepare five questions that a teacher could use based on the material written in your article, or found easily by a student using an Internet search.

Write model answers for the questions. Use a style similar to the model answers used in the David Slack/Speeches.com case discussed in class. Reference each of your answers: i.e.: Slack, page 2, paragraph 6, or to the internet sources you used, and to relevant theory in your course textbook.

5 - Assessment criteriaThe Assessment Criteria for this assignment are presented in ANNEX A, B, and C.

The Course Learning Outcomes are specified in greater detail in the document: Course Prescription and Assessment Matrix . See LO 1, LO2, and LO 3 indicated in Section 2 above. You must ensure that your speech, case article, and discussion questions address ALL the key elements topics specified in the Course Prescription and Assessment Matrix.3

To accomplish the assignment requirements you need to ensure you cover the learning outcomes and key elements of LO 1, LO 2, and LO 3.

You must attach a table to you assignment showing the list of LO elements, and referencing where they occur in your article and/or Question-Answer section. See ANNEX D: Checklist for Learning Outcomes.

6 - Writing, referencing, and acknowledging assistanceCommunicating accurately and succinctly through the written word is a FUNDAMENTAL skill for any business professional. For example, you need to create web sites for your products and services, business plans, presentations, correspondence, and pamphlets. Accordingly, this assignment requires that you seek coaching to develop the writing skills needed for this assignment, for your future studies, and professional life. Please schedule time to consult with Unitec’s Student Learning Centre early in your project planning.

The readers of GMagazine and Good are of mixed ethnicities (Croatian, Pasifika, Lebanese, etc.). They possess a relatively low level of formal education and English-language capability. Accordingly, you are required to write your assignment in a Global English style (McAlpine, 1997). Global English is the 'house-style' of MyndWriters. You are required to achieve a McAlpine EFLAW Readability Score of 22 or less in the first three and last two paragraphs of your writing ... and ideally throughout ALL your writing! Calculate the EFLAW rating and state the rating on the Assignment Cover sheet in the space provided.

Cite and reference your literature in all your products. Use a citation and reference style guide such as APA.


3 Available on the course BLACKBOARD/ASSIGNMENTS.

The reference and questions sections of your assignment do NOT form part of your word count.

An extremely useful software tool for keeping track of web material, references, and your own computer’s material is Zotero. Zotero quickly produces Reference lists in APA style through simple ‘drag and drop’ mechanism. Zotero is a free, open-source add-on that you use as part of the Firefox open source web browser. Visit http://www.zotero.org/

Include an ‘Acknowledgements’ section to state briefly the assistance that you have received for the Unitec Learning Centre, other students, or other coaches in your progress to produce this assignment. Present your ‘Acknowledgements’ section after the References’ section.

You are advised to keep a personal blog (or diary) of your progress in fulfilling all the foregoing tasks. Using a blogging tool such as tumblr is useful for this purpose. One purpose of keeping this journal is to assist the course tutor in resolving any disputes that might emerge regarding unequal contributions made by team members to the assignment work. ... It happens!

7 - Document submissionSubmit to the Course Tutor a copy of all the following documents in PRINT and CD-ROM format in the following sequence:

! Assignment cover sheet

! Assignment marking guides (Annex B, C, D)

! Consent form

! Magazine article

! Class discussion questions and answers

! Bibliography

! Interview Questions

! Interview transcript

! Supporting documents, web pages, etc

! Project plan

! Team members project logs of time and activity contribution

Reminder: you are required to submit your assignment in electronic format to http://turnitin.com, See ASSESSMENT POLICY, SECTION 10.


http://www.zotero.org


http://www.tumblr.com/about

http://www.tumblr.com/about

http://turnitin.com

http://turnitin.com

8 - ReferencesFrom Plain English to Global English: Quality Web Content, Retrieved 3 July 2007 3:32 PM, http://www.webpagecontent.com/arc_archive/139/5/

Haswell, R. H. (1983). Minimal Marking, College English, 45, 6, pp. 600-604.

McAlpine, R. (1997). Global English for Global Business, Auckland: Longman, ISBN 0 582 73998 5.

McAlpine EFLAW Readability Score, Retrieved 30 July 2007 12:33 PM, http://www.webpagecontent.com/arc_archive/139/5/#score

Mellalieu, P. J. (2001). Creating the A+ Assignment: A Project Management Framework

Mellalieu, P. J. (2007a). Let’s all Learn and Teach Global English in our Business School!, Auckland: Unitec Business School Working Paper Series, 6 July 2007 (Version 1.1).

Mellalieu, P. J. (2007b). The Five-Paragraph Persuasive Essay (ANNEX C) in “The Assignment Factory: A Collaborative Learning Adventure”, Auckland: Unitec Business School Working Paper Series, 28 August 2007.

Nogrady, B. (2008), Trash and treasure, G: The green lifestyle magazine (GMagazine), pp. 12-13, Jan-Feb.

The Economist: Research Tools: Style Guide: Introduction, Retrieved 3 July 2007 3:24 PM, http://www.economist.com/research/styleGuide/index.cfm?page=673899

Zotero - Quick Start Guide. (n.d.). . Retrieved February 3, 2009, from http://www.zotero.org/documentation/quick_start_guide.

71 - Resource accessExamples of previous Assignments and the articles by MELLALIEU are available on the course MOODLE SITE and from the BLOG ARCHIVE in:

http://web.mac.com/petermellalieu/Teacher/Blog/Archive.html

9 - AcknowledgementsJeff Marriott, Asoka Gunaratne, and Howard Frederick for advice on the earlier versions of this assignment.




http://www.webpagecontent.com/arc_archive/139/5/%23score




http://www.economist.com/research/styleGuide/index.cfm?page=673899


http://www.zotero.org/documentation/quick_start_guide






Assignment Submission Cover Sheet Course Title APMG NZ435 Fundamentals of small businessAssignment ID Assignment 1: Profile of a small businessProgramme NZ Diploma in BusinessDepartment Management & Marketing, Unitec Institute of TechnologySemester:Date issued:Due date and time:Delivery: ! Deliver the assignment (print + CD-ROM) to the tutor before the

start of class! Or post in the assignment box on Level 4, Building 172.! You MUST ALSO submit a soft copy to turnitin.com

Total marks: 100 marksWeighting: 30% of course (approx. 45 hours input per team member)EFLAW score 22 or less Achieved:

Instructions: ! Complete this cover sheet and attach it to your assignment.! Answer ALL questions.! Where applicable, show details of your workings.! This is a team assignment and must be your own team’s work.! Collusion, copying or plagiarism may result in disciplinary action! We advise that you keep a copy of this assignment.

Students' Names:

Student ID No:

Lecturer: Peter J. MELLALIEU Class time:Student declaration: I confirm that:

! This is an original assessment and is entirely our own work.! Where I have used ideas, tables, diagrams etc of other writers,! we have acknowledged the source in every case.! This assignment has not been submitted previously as assessed

work for any academic course.Signature of students:

Date of signature:


ANNEX A: Grading schedule APMG NZ435 Fundamentals of small business

Team members’ names (enrolled FAMILY NAME, personal name, (preferred name), ID):________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

Item – relative emphasis weightings shown in percentages Weight Grade

LO 1: Students will describe characteristics of small business.! Profile (15)! Success factors (15)! Owners competing demands (15)

45

LO 2: Students will compare business options, business structures and finance options of small business.! Business options (10)! Business structures (10)! Finance options (10)

30

LO 3: Students will identify sources of advice and assistance available for a small business. 15

Professional language Word choice, grammatical conventions, sentence fluency, organisation and logic, voice, and overall coherence, EFLAW readability < 22. See ANNEX C.

10

PenaltyMarks DEDUCTED if your document FAILS to:! Present in the sequence and style of a magazine article ! Provide questions and answers appendix! Supply complete documentation: Article, consent form, questions and

answers, interview transcript, research documents, etc (Section 7)! Fulfill academic conventions: Referencing, layout and presentation,

innovation, and creativity

-35

Final Grade 100

NOTE: The above items indicate relative weighting from each part of the assignment. See the Assignment Instructions and the ANNEX A: Grading Criteria and ANNEX D for a complete specification of the requirements for each section of grading.The score calculated for Professional Language (above) is 1/3 of the mark determined using ANNEX C.


ANNEX B: The six-trait method for evaluating writing quality

Trait 5-4 3-2 1-0 Mark

Ideas and content

Focussed, succinct, specific.

The ideas and topic keep the reader’s attention

Argument logical, persuasive, and supported with evidence.

Some really good parts.

Some parts not there yet.


Word choice Extremely clear, visual, and accurate.

You picked the accurate words for the correct places.

Global English word choice.

Correct but not striking.

The words get the message across, but don’t capture the reader’s attention.

Confusing.

The reader is often asking “What did you mean by this?”


Mostly correct.

There are few errors in the paper.

Global English grammatical structures.

About halfway there.

Several bothersome mistakes need cleaning up.

Editing not under control yet.

It would take a first reading to decode, and a second reading to get the message.

Organisation Logical and compelling.

You have chosen an order that works well and makes the reader want to find out what comes next.

Some really smooth parts.

Other parts need work. The order makes sense most of the time.

Not shaped yet.

The order of the paper is jumbled and confused.

Voice Individual and powerful.

The paper has personality. It sounds different from the way anyone else writes.

Complies with Global English style

Individuality fades in and out.

What you truly think and feel shows up only sometimes.

Not “you” yet.

You don’t know what you truly think or feel yet.

Sentence fluency

Varied and natural.

The sentences in your paper are delightful to read out loud.

Routine and functional.

Some sentences are choppy and awkward, but most are clear.


Total

(Out of 30)

Source: Summarised from: Student Friendly Writing Rubric from a School using the Six Traits of Writing, Discovered by John Norton while traveling in Alabama. Thanks to teachers at Maryvale Elementary in Mobile! www.middleweb.com. See also: SIX-TRAIT ANALYTICAL WRITING ASSESSMENT MODEL Scoring Guide (Rubric) http://www.nwrel.org/assessment/toolkit98/traits/index.html, Accessed: 16 February 2011




http://www.nwrel.org/assessment/toolkit98/traits/index.html


ANNEX C: Checklist for Learning OutcomesLearning outcome and component Page

referenceMarks out of

Marks

LO 1: learning outcome One:-

Students will describe characteristics of small business:-

Profile: 15

! owner

! staffing

! turnover

! customer focus

! equity and asset value.

Success factors, five of the following: 15

! capital

! planning

! systems

! customer relations

! product or service development

! marketing

! other.

Owner’s competing demands: 15

! commitments and responsibilities

! variety of roles

! time demands.

Sub-Total: LO 1 45


Learning outcome and component Page reference

Marks out of

Marks

LO 2: Learning outcome TWO


Business options: 10

! Existing versus new start up.

! independent

! franchise

! co-operative

! e-business.

Business structures: 10

! sole trader

! partnership

! company

! trading trust.

Finance options. 10

Sub-Total: LO 2 30

LO 3: Learning outcome THREE


! Specialist services and support:

! financial and non-financial

! governmental and non-governmental.

Sub-Total LO 3 15

Professional writing 10

Total 100


ANNEX D: Consent form for interviews

Unitec Department of Management & Marketing

Faculty of Creative Industries & Business

Unitec Institute of Technology

We seek your consent to interview you as part of students’ study for APMG NZ435 Fundamentals of Small Business. I have had the project explained to me and I have read and understand the information sheet given to me. I understand that I do not have to be part of this project if I request. I may withdraw from the project at any time by advising the project researcher.I understand that everything I say will form the basis for an assignment forming part of the interviewer’s study of Small Business.I also understand that all the information that I give will be stored securely on a computer at Unitec for a period of 5 years.I understand that I will be provided with a copy of the finished assignment.The finished assignment will be used a basis for future teaching at Unitec.We do request that we record the interview. The recording will not be used outside the research team and teaching class. You may decline to be recorded.I have had time to consider everything and I give my consent to be a part of this project.

Participant Signature: …………………………. Date: ……………………………

Contact details: Phone ............................... Email ...................................

Project Researcher: ……………………………. Date: ……………………………

Contact details: Phone ............................... Email ...................................

This study has been approved by the course teacher, Dr Peter MELLALIEU. If you have any complaints or reservations about the ethical conduct of this research, you may contact the teacher (ph: 09 815-4321 ext 8108 or 021 42 01 18). Any issues you raise will be treated in confidence and investigated fully. You will be informed of the outcome.


Example Assignment: Going Incognito4

!


4 Assignment created by: Tony Fenwick, Grant Helleur, Lisa Palmer, Vaijayanti Salri, Liebling Tang, March 2009.

Running the streets of Auckland can be a dangerous pastime. After

one too many close calls with Auckland’s traffic Grant Helleur

decided to do something about it. “I’m not sure if people genuinely

don’t see you, don’t care, or are just too arrogant to give way”

says Helleur. We talk to this recidivist entrepreneur and

company founder.

Like many marathon runners Helleur ran with mid-week groups, weekend

packs and a club. A couple of runners from a mid-week group sported

orange high visibility tunics brought back from overseas events like the

New York Marathon.

Frustrated by the lack of safety gear for runners available in New Zealand

in late 1999 this mad keen runner spotting an opportunity he decided to

run with it.

He had no business plan, no goal, no exit strategy. It started through

necessity for self preservation. Helleur jumped on, held tight and rode the

product development as far as it would take him.

Initially he looked off shore for

suppliers. However, poor quality or the high cost of importing made it

prohibitive. Not satisfied he continued to dig, asking questions. The answers

led him to produce his own range of reflective vests.

G O I N G G O I N G

I N C O G NI N C O G N

I T O !I T O !

Market research into product and

customer demand was limited. “Basically I wanted one and if I

wanted one there must be other runners out there who wanted one

too. It was as simple as that” confesses Helleur.

Having forged a career in the

construction industry crossing the divide to what could loosely be called

the fashion industry was not without challenges. “It was like stepping of

the plane in a foreign country for the first time. Where you know nobody


Trading his hammer for a

sewing machine ensured

original garment

prototypes were at best

crude, yet functional.

and don’t speak the language” reflects

Helleur “Who would have known there were pattern makers, specialist cutters,

and that fabric has a bias”

Early on Helleur

found an ally with industry

experience and contacts, Charlie.

Charlie was an angel willing to

impart his knowledge and mentor Helleur through his industry transition.

Trading his hammer for a sewing

machine ensured original garment prototypes were at best crude, yet

functional. Influenced by the only reflective vests on the New Zealand

market at the time, the stereotypical orange road workers high visibility

vest. Early samples evolved thanks to commonsense, brutally honest

feedback and the generosity of time and experience of his mentor.

Researching material choices, product

limitations, supply continuity, colour options and quality combined with

personal values shaped the product. Not content to compromise “whatever I

put my name to had to do the job I promised it would and be of high

quality” Helleur says “I didn’t want to produce something that would fall

apart after just one wash”.

At the time there were no standards for recreational safety products - Incognito

Sportswear voluntarily adopted NZS5839 standards for road working

safety equipment, thereby ensuring performance quality and matching

industry best practice.

The choice of brand name was a little tongue in cheek Helleur reflects

“Incognito is hardly what we were trying to achieve with a range of

reflective products”.

Taking the advice of their accountant

Helleur and his wife set up a partnership under which to trade the

Incognito name.

Initial capital came from the sale of a previous business venture and

personal savings. With enough fiscal wherewithal to finance the business

without the need for external financial influences gave the couple

freedom to

operate business on their terms and pace. Establishing a small business

with both partners employed full time meant investing every

waking hour ensuring

whatever shape the business took it would

be successful.

While the manufacturing of the

vests was outsourced their spare room resembled a fluorescent warehouse.

Helleur was researcher, product developer and also looked after sales

and marketing, inwards and outward goods. His wife took charge of packing,

dispatch and administration.

They set about marketing the vests. “Basically we sat down with the Yellow

Pages and identified retailers the vests would match” Helleur explains. How do

you gain market share with a new product that has no customer demand?

You knock on doors and don’t take no for an answer. They found supplying

product on consignment opened the doors they had knocked on. Within

weeks the retailers were reordering stock.

It soon

became evident one

product was not

going to create

fierce competition

for the likes Nike

or Adidas. Within a

short period of time the product breadth had expanded from the basic

vest to include cycle vests. Not satisfied stopping there, recent media

coverage at the time and a chance

meeting with a duck hunter, saw the pair start working on a bright orange

hunting vest.

When you have the

drive, passion and you’re

looking to expand your

product line you simply develop new products.

Most running shorts lack pockets for

keys or emergency money, a clever little shoe pocket also featuring a small

reflective strip was soon added to the product line.

Customer loyalty was

generated through

creative marketing.

For a few extra dollars

they offered retailers an

opportunity to add their

name or logo to the vests using the same reflective material as the stripes.

A cost companies such as Shoe Science and Hedgehog Bikes were only to

willing to absorb.

Twelve months after establishing an initial need Incognito Sportswear had

reached the market. Within 18 months of making their first sale they had

customers from Whangarei, across Auckland, through the Waikato and Bay

of Plenty, Wellington and as far south as Christchurch.

A conscious marketing decision made

during brand establishment phase saw the company target retail outlets that

would allow them to maintain reasonable margins. They avoided

going down the path of high volume low margin with retailers like The

Warehouse.

The gamble paid off. While still holding down full time employment the

momentum gained had forced Helleur to re-evaluate the business and where

it was going.

It was at this timely juncture Helleur and his wife were approached by a

Manufacturer’s Agent. The reflective

qualities of the cycle vests had caught their eye. They were impressed by the

rapid growth of the brand and the market penetration they had achieved

in a short time.

An offer provided an unforeseen exit strategy for the couple. Incognito was

sold. It has provided them a breather for the time being, but we’re sure this

is not the last we’ll see of this entrepreneur.


Supplementary questions for class discussion

1. Why was the decision made to go into business selling this particular product?

Frustration around the lack of safety products for runners lead Grant to begin thinking about what type of personal safety products he requires when running (page 1; paragraph 3). At the time there was very little on the market to meet the needs of runners so Grant looked into importation, however, this proved too costly (page 2; paragraph 1). Grant realised there was a gap in the market, and that if he needed one of these vests there would be other people out there who needed them also( page 2;paragraph 2) .

2. What obstacles did Grant have to overcome to set up the business?

He had no experience in this industry and with he and his wife working fulltime all there spare time had to go into starting up the business (page 2; paragraph 3, 9, 17). Another obstacle Grant faced was sourcing materials, developing prototypes and generating interest via marketing (page 2; paragraph 5, 6, 11).

3. What types of marketing did Grant do to give his business a competitive advantage?

Grant would supply stores with his product on consignment which gave the store manager / owner the ability to trial the product without too much financial commitment or risk (page 2; paragraph 11). Grant allowed store logos to be added to his product for a small fee which proved successful and he purposefully avoided approaching high volume low margin retailers to maintain what he believed to be a premium product (page 2; paragraph 14, 16)

4. What assistance did Grant obtain to get the business up and running?

In the first instance Grant utilized the Yellow Pages as a potential source of customers (page 2; paragraph 11).

Grant had a mentor “Charlie,” come on board for the product development stage of the business setup, and was able to use Charlie’s skills and knowledge to ensure a good product( page2; paragraph 4,5). Another significant source of assistance for Grant was that of his wife, who was responsible for the packing and dispatching of orders as well as handling the administrative side of the business (page 2; paragraph 9, 10)


5. Into what other products was Grant able to expand his business?

Once the running vest was successfully launched, Grant expanded his range to include a cycling vest, a hunting vest, and the development of a shoe pocket for runners to carry emergency money or keys (page 2; paragraph 12, 13).

Interview QuestionsQ 1 - Give us a brief overview of your business.

Q 2 - How did you get involved with this particular business?

Q 3 - What lead you to choose this particular product?

Q 4 - Work did you have to do before you started your business?

Q 5 - Did you design the product or did you import it from overseas?

Q 6 - When you started up was quality a focus?

Did you intend to create a product of high quality?

Q 7 - What goals did you set for yourself and the business?

Q 8 - What sort of obstacles did you overcome to get up and running?

And what was the driving force to get you over these obstacles?

Q 9 - What was your point of difference from other similar products similar products in the current market?

Q 10 - Did you think of expanding your business into other product ranges?

Q 11 - How did you increase your market profile and customer base?

Q 12 - From your experience what knowledge would you be able to give someone else

who is starting a business like yours?

Q 13 - What was your business structure?

Q 14 - Why the business not the success that you had hoped it to be?

Q 15 - How did you raise the capital to launch your business?

Q 16 – What sort of turnover was the business doing?

Q 17 - If you were to start the business again what would you do differently?


14. Test


Work hours

Test Week 10 40 100 40

The test will comprise TWO sections similar in format to the example presented on the following pages.

SECTION A: (75 %) Short answers, multiple choice, and numerical calculations.SECTION B: (25 %) Financial analysis, based on your analysis of a Financial Spreadsheet with which you will be provided.

WARNING!!! All material presented and discussed in class is EXAMINABLE in the Final Test. This includes:

Material presented by students and guests, Required text reading,Lectures and lecture notesMaterial detailed in the course reading schedule.


Unitec Business School

NZ Diploma in Business

APMG NZ435 Fundamentals of small business

BRIEFING for Test – Semester 1, 2009

Date: Monday, 18 May 2009Start time: 5:30 pm (1730 hours)Time allowed: 70 minutes plus 10 minutes reading timeTotal marks: 100 marks Weighting: 40% of course

Instructions: Answer BOTH Parts

Answer the questions directly in the answer booklet provided.

Read each question carefully. Answer only what is asked for.

Please write clearly.

State your Name and Student ID in the top right hand corner of the Answer

Sheet.

Part A: Multi Choice – CLOSED BOOK

Part B: Financial Analysis.

Summary of paper: (Time in minutes is recommended only for your guidance)

Section Type/Topic Marks Time(minutes)

A Short answer. Forty (40) questions 75 40B Financial Analysis 25 30

Total 100 70


PART A: Short answer questions 75 marks

! Answer ALL questions.

! You have a maximum of 40 minutes for this part.

! Note that this section includes: multiple choice (one answer required), multiple answer (one

or more correct answers), fill in the blank(s), and numerical calculations.

! The questions are drawn from class notes AND your reading of Oliver & English chapters 2,

4, 6, 7, 8, 9, 10, 11,

Example Questions

Q1 Fill in the Blank 1 points

There are several types of small business. The types are: services, retailing, _______, and

wholesaling.

Q2 Multiple Answer 2 points

There are several advantages if you start a new business from scratch. Indicate which of the

following are the advantages stated in your text.

Answer

a. You can match the business to your own goals.

b. It is easier to innovate when you have the flexibility to select your target market

c. It is easier to create an image and build patronage.

d. You can select and train staff you own way

Q3 Calculated Numeric 2 points

You propose to purchase a business. The business earns $75,000 per year after paying all

expenses including your salary, before interest and tax. You assess that the business is half as

safe as placing your investment capital in a bank term deposit. The bank term deposit rate is

currently 5 per cent. Use a capitalisation rate of 10 percent to calculate the capitalisation value

for the business.

Q4 Multiple Choice 2 points

There are several ways of meeting price competition. Which of the following ways does your

text suggest as a method for meeting price competition?

Answer

a. Reducing the range of products

b. Increasing the price

c. Improve the convenience of purchasing the product

d. Increase the expenses associated with using the product


Part B: Financial Analysis 25 marks

! Write all your answers on the Part B: Answer Sheet.

! Attach the Answer Sheet to your Test Booklet

! Ensure you record your name and student id on the Answer Sheet.

You are intending to purchase a company, Trans-Crash Transport Company, TCT.

Your accountant has prepared a ‘business as usual’ profit analysis, and a monthly cash flow spreadsheet for the company (Exhibits B.1 and B.2).

Exhibit B.2 includes additional details of transactions not detailed in the business as usual analysis. These details relate to overhauling the trucks, and payment of tax liabilities incurred in the previous year.

You plan to take over operating the company from 1 January 2010.

Your business partners have presented you with some questions concerning the financial cash flow and profitability of the company you propose to buy. Compile your answers onto the Answer Sheet for Part B. Make sure you indicate clearly the Cell Reference from which you have found the required data.

All revenues received by TCT include GST, Goods and Services Tax.

NZ435 Fundamentals of small business

Page 3 of 5


Student ID Family Name Personal Name

Part B: Question & Answer Sheet for APMG 4840 Entrepreneurial Business – 2009-1

NOTE: The following are EXAMPLES of the questions you will be asked in the test.

Financial Analysis for Angel Investors Cell identifier

Answer

Exhibit B.1: ‘Business as Usual’ Year

B1. In a ‘business as usual’ year, what is TCT’s Total Revenue? ($/year)

B2. In a normal year, what is TCT’s Total Net Revenue per year? (Exclusive of Provisional taxes)B3. What is the average monthly contribution to Total Net Revenue earned by the 2-tonne truck (Total net revenue, $/month)B4. Which truck contributes most to the Total Net Revenue of the TCT?

B5. What is the Total Revenue that the 2-tonne truck earns for the company in the month of September?B6. Calculate the GST to Pay (on sales revenue) for the 2-tonne truck, in September ($/month)B7. What is the Breakeven Point (in $/month) for the 6-Tonne Truck

B8. How many kilometres per month must the 6-tonne truck travel in order to reach its Breakeven Point?B9. State the months in which the 6-tonne truck travel a distance that is BELOW its Breakeven Point?

B10. If the 2-tonne truck were to travel 10,000 km/month, what is its contribution to profit per month (before taxes)?

(10 marks)

Turn over to next page


Page 4 of 5


Financial Analysis for Angel Investors Cell identifier

Answer

Exhibit B.2 (continued): Cash Flow Projections by Month

B11. In what month does TCT first face a “cash flow crisis” (that is, a negative Ending Cash Balance”)B12. How much extra cash does TCT require in the month when it has its most serious cash flow crisis?B13. What is the Ending Cash Balance in December?

B14. Calculate by how much TCT’s Cash Balance has increased from 1 January to 31 DecemberB15. In which month does TCT receive a GST refund from the IRD?

B16. How much is the GST refund in that month?

B17. In which month(s) does TCT have its greatest Net Cash Inflow

B18. What is the greatest Net Cash Inflow that TCT receives? ($ per month)B19. In which months does TCT make its highest GST payments to the IRD (Department of Inland Revenue)?B20. What is the highest monthly GST payment that TCT makes to the IRD?

(10 marks)

B21Outline the steps the TCT could take in order to manage its cash flow “crisis”.

(5 marks)


Page 5 of 5


Exhibit B1

123456789

1011121314151617181920212223242526272829303132333435363738394041424344454647484950515253545556575859606162636465666768697071727374757677

A B C D E F G H I J K

Exhibit B1: Trans Cash Transport Company ('Business as Usual' Situation) 2009-1Based on Oliver & English, 2002, pp 184-185

ParametersFixed Interest Term Loan $5,000GST Tax Rate 10.00%GST Divisor 11.00Company Tax Rate 30%Fixed loan interest rate 15.0%

The Bottom Line 2-Tonne 6-Tonne TOTAL TOTALTruck Per month Per month Per month Per year

TOTAL NET REVENUE (GST inc) $8,286 $218 $8,504 102,053

Revenue (Gross, GST inclusive) 2-Tonne 6-Tonne TOTAL TOTALMileage travelled Km/month Km/month Km/month Km/yearKM/month - Jul-Dec 10000 3800 13800 82,800Km/month - Jan-Jun 8500 3000 11500 69,000AVERAGE MILEAGE 9250 3400 12650 151,800

Revenue breakdown ($/km) 2.20 5.20

Total Revenue (GST inclusive) $/month $/month $/month $/yearTotal Revenue - Jul-Dec 22000 19760 41760 250,560Total Revenue - Jan-Jun 18700 15600 34300 205,800TOTAL: AVERAGE REVENUE (GROSS) 20350 17680 38030 456,360 Divide by 2 to get the average sales per month

Costs 2-Tonne 6-TonneVariable Cost Breakdown cents/km cents/kmDiesel 8.20 29.68Oil 0.56 1.20Maintenance 2.80 6.40Road Tax (no GST payable) 2.44 6.72TOTAL - cents/km 14.00 44.00

Variable Costs $ $ $/month $/yearVariable cost - Jul-Dec 1,400 1,672 3,072 18,432 Remember to convert from cents to dollars!Variable cost - Jan-Jun 1,190 1,320 2,510 15,060TOTAL - AVERAGE VARIABLE COST 1,295 1,496 2,791 33,492

Fixed Costs ($):Overhead allocation 40% 60% 100% The overhead allocation

is NOT given in the O&E dataSalaries & wages:Driver 1,900 1,800 3,700 44,400 Note how the MONTHLY costs are apportionedOffice Clerk 600 900 1,500 18,000 to each truck, according to the 'overhead allocation'Owner 1,000 1,500 2,500 30,000Subtotal: Salaries 3,500 4,200 7,700 92,400

InterestTerm loan interest 25 38 63 750Sub total: interest 25 38 63 750

Other:On road costs 400 600 1,000 12,000 …Advertising 1,400 2,100 3,500 42,000Lease on Premises 1,100 1,650 2,750 33,000Other cash expenses 1,940 2,910 4,850 58,200Lease/month 1,200 4,000 5,200 62,400Sub total: Other 6,040 11,260 17,300 207,600TOTAL: FIXED COSTS 9,565 15,498 25,063 300,750

The Bottom Line 2-Tonne 6-Tonne Per month Per YearNet RevenueTOTAL: REVENUE 20,350 17,680 38,030 456,360TOTAL: VARIABLE COST 1,295 1,496 2,791 33,492TOTAL: FIXED COSTS 9,565 15,498 25,063 300,750GST To Pay 1,204 468 1,672 20,065TOTAL NET REVENUE 8,286 218 8,504 102,053

GST CalculatorGST Paid on Variable Costs 97 115 212 2,549GST Paid on Fixed Costs 549 1,024 1,573 18,873GST to Pay on Revenues (Average) 1,850 1,607 3,457 41,487GST to Pay 1,204 468 1,672 20,065


Exhibit B1 (continued)

78798081828384858687888990919293949596979899100101

A B C D E F G H I J K

Profit PlanningSales $20,350 $17,680Variable Cost (inc variable GST) $1,295 $1,496 Ignore the impact of GST on variable costs and salesContribution Margin 93.64% 91.54% See O&E, p.170

Fixed Cost $9,565 $15,498Breakeven point ($/month) $10,215 $16,930 See O&E, p.170Breakeven point (Km/month) 4643 3256 Divide Breakeven Point ($) by Revenue $/KmMargin of Safety 49.80% 4.24% See O&E, p.171. Use average monthly revenue, per year

Contribution Margin and Profit-Loss2 Tonne Truck 6 Tonne Truck

Km Revenue Contribution Fixed Cost Profit Revenue Contribution Fixed Cost ProfitPer month Margin ($) inc GST on FC $/month Per month Margin ($) inc GST on FC $/month

0 0 0 9565 ($9,565) 0 0 15498 ($15,498)1000 2200 2060 9565 ($7,505) 5200 4760 15498 ($10,738)2000 4400 4120 9565 ($5,445) 10400 9520 15498 ($5,978)3000 6600 6180 9565 ($3,385) 15600 14280 15498 ($1,218)4000 8800 8240 9565 ($1,325) 20800 19040 15498 $3,5434500 9900 9270 9565 ($295) 23400 21420 15498 $5,9235000 11000 10300 9565 $735 26000 23800 15498 $8,3037500 16500 15450 9565 $5,885 39000 35700 15498 $20,203

10000 22000 20600 9565 $11,035 52000 47600 15498 $32,103


Exhibit B2

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37

AB

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GH

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KL

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Cas

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ansp

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Cas

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ctio

ns b

y M

onth

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

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15. Assignment 2: Performance measures and controls


Work hours


1 - Government controls (legislation and regulation)There are many government controls that influence the manner in which operations are conducted in a business. Some examples of government controls are:

! Health and Safety in Employment (HSE) Act

! Company Tax, and Goods and Services Tax (GST)

! Resource Management Act (RMA)

! Employment Relations Act

! Own choice from a local government regulation

For EACH of the government controls presented above:

! Describe the purpose of the legislation (or regulation) from the points of view of (a) the business and (b) the public interest. (Approximately 100 to 150 words for each control)

! Describe an example of how the control achieves its purpose(s) in a small or medium-sized business. You may draw on the examples presented in class, your own experience, or previous class assignments (available on Blackboard in Assignments/Examples). (Approximately 150 - 250 words per example)

2 - Operational measurement and controlThere are several systems of operational measurement and control that influence the manner in which operations are conducted in a business. Some examples of measurement and control systems are:

! Quality control, eg ISO 9000 series

! Eco-Sustainable production, eg ISO 14000 series and waste management

! Stock control (or Inventory control)

For EACH of the operational measures and controls presented above:

! Describe the purpose of the control from the points of view of the (a) business and (b) its stakeholders (such as employees and customers) (Approximately 100 to 150 words for each control)

! Describe an example of how the control achieves its purpose in a small or medium-sized business. You may draw on the examples presented in class, your own experience, or previous class assignments from Assignment 1 (available on Blackboard in Assignments/Examples). (Approximately 200 to 300 words per example)


3 - Risk managementThere are several systems of risk management that influence the manner in which operations are conducted in a business.

For a risk management measure presented above:

! Describe the purpose of the control from the points of view of the (a) business and (b) its stakeholders (such as employees and customers) (Approximately 100 to 150 words for each measure)

! Describe an example of how the risk management system achieves its purpose in a small or medium-sized business. You may draw on the examples presented in class, your own experience, or previous class assignments from Assignment 1 (available on Blackboard in Assignments/Examples). (Approximately 200 to 300 words per example)

4 - Writing, referencing, and acknowledging assistanceCommunicating accurately and succinctly through written language is a FUNDAMENTAL skill for any business professional. For example, you need to create web sites for your products and services, business plans, presentations, correspondence, and pamphlets. Accordingly, this assignment requires that you seek coaching to develop the writing skills needed for this assignment, for your future studies, and professional life. Use Global English. Please schedule time to consult with Unitec’s Student Learning Centre early in your project planning.

Cite and reference your literature in all your products. Use a citation and reference style guide such as APA.

The references do NOT form part of your word count.

An extremely useful software tool for keeping track of web material, references, and your own computer’s material is Zotero. Zotero quickly produces Reference lists in APA style through simple ‘drag and drop’ mechanism. Zotero is a free, open-source add-on that you use as part of the Firefox open source web browser. Visit http://www.zotero.org/

Include an ‘Acknowledgements’ section to state briefly the assistance that you have received from other students, or other coaches in your progress to produce this assignment. Present your ‘Acknowledgements’ section after the ‘References’ section.

Reminder: you are required to submit your assignment in electronic format to http://turnitin.com, See ASSESSMENT POLICY, SECTION 10.




http://turnitin.com

http://turnitin.com

5 - ReferencesFrom Plain English to Global English: Quality Web Content, Accessed 3 July 2007 3:32 PM, http://www.webpagecontent.com/arc_archive/139/5/

McAlpine, R. (1997). Global English for Global Business, Auckland: Longman, ISBN 0 582 73998 5.

Mellalieu, P. J. (2001). Creating the A+ Assignment: A Project Management Framework

Mellalieu, P. J. (2007a). Let’s all Learn and Teach Global English in our Business School!, Auckland: Unitec Business School Working Paper Series, 6 July 2007 (Version 1.1).

Mellalieu, P. J. (2007b). The Five-Paragraph Persuasive Essay (ANNEX C) in “The Assignment Factory: A Collaborative Learning Adventure”, Auckland: Unitec Business School Working Paper Series, 28 August 2007.

The Economist: Research Tools: Style Guide: Introduction, Accessed 3 July 2007 3:24 PM, http://www.economist.com/research/styleGuide/index.cfm?page=673899

Zotero - Quick Start Guide. (n.d.). . Retrieved February 3, 2009, from http://www.zotero.org/documentation/quick_start_guide.

6 - ResourcesThe articles by MELLALIEU are available from the BLOG ARCHIVE in:













ANNEX A: Assignment Submission Cover Sheet Course Title APMG NZ435 Fundamentals of small businessAssignment ID Assignment 2: Performance measures and controlsProgramme NZ Diploma in BusinessDepartment Management & Marketing, Unitec Institute of TechnologySemester:Date issued:Due date and time:Delivery: ! Deliver the assignment (print + CD-ROM) to the tutor before the

start of class! Or post in the assignment box on Level 4, Building 172.! You MUST ALSO submit a soft copy to turnitin.com

Total marks: 100 marksWeighting: 30% of courseEFLAW score 22 or less Achieved:

Instructions: ! Complete this cover sheet and attach it to your assignment.! Answer ALL questions.! Where applicable, show details of your workings.! This is a team assignment and must be your own team’s work.! Collusion, copying or plagiarism may result in disciplinary action! We advise that you keep a copy of this assignment.

Students' Names:

Student ID No:

Lecturer: Peter J. MELLALIEU Class time:Student declaration: I confirm that:

! This is an original assessment and is entirely our own work.! Where I have used ideas, tables, diagrams etc of other writers,! we have acknowledged the source in every case.! This assignment has not been submitted previously as assessed

work for any academic course.Signature of students:

Date of signature:


ANNEX B: Grading schedule APMG NZ435 Fundamentals of small business

Enrolled FAMILY NAME, personal name, (preferred name), ID:………………………………………………………………………………..…….

Item – relative emphasis weightings shown in percentages Weight Grade

Government controls

! Health and Safety in Employment (HSE) Act 1992 (5)! Resource Management Act (RMA) (5)! Company Tax, and Goods and Services Tax (GST) (5)! Employment Relations Act (5)! Own choice from Local Government regulations (5)! Descriptions: 1/2 of available marks. Examples: 1/2 of available marks

25

Operational measurement and control

! Quality control (12.5)! Stock control (or Inventory Control) (12.5)! Sustainable production and waste management (12.5)! Descriptions: 1/2 of available marks. Examples: 1/2 of available marks

37.5

Risk management

! Risk management (12.5)! Descriptions: 1/2 of available marks. Examples: 1/2 of available marks

12.5

Professional language

Word choice, grammatical conventions, sentence fluency, organisation and logic, voice, and overall coherence, EFLAW readability < 22. See ANNEX C

10

Penalty

Marks DEDUCTED if your document FAILS to:! Unsatisfactory professional language! Fulfill academic conventions: Referencing, layout and presentation, innovation, and

creativity

(-35)

Final Grade 85

NOTE: The above items indicate relative weighting from each part of the assignment. See the Assignment Instructions and the ANNEX A: Grading Criteria for a complete specification of the requirements for each section of grading.

The score calculated for Professional Language (above) is 1/3 of the mark determined using ANNEX C.


ANNEX C: The six-trait method for evaluating writing quality

Trait 5-4 3-2 1-0 Mark

Ideas and content

Focussed, succinct, specific.

The ideas and topic keep the reader’s attention

Some really good parts.

Some parts not there yet.


Word choice Extremely clear, visual, and accurate.

You picked the accurate words for the correct places.

Global English word choice.

Correct but not striking.

The words get the message across, but don’t capture the reader’s attention.

Confusing.

The reader is often asking “What did you mean by this?”


Mostly correct.

There are few errors in the paper.

Global English grammatical structures.

About halfway there.

Several bothersome mistakes need cleaning up.

Editing not under control yet.

It would take a first reading to decode, and a second reading to get the message.

Organisation Logical and compelling.

You have chosen an order that works well and makes the reader want to find out what comes next.

Some really smooth parts.

Other parts need work. The order makes sense most of the time.

Not shaped yet.

The order of the paper is jumbled and confused.

Voice Individual and powerful.

The paper has personality. It sounds different from the way anyone else writes.

Complies with Global English style

Individuality fades in and out.

What you truly think and feel shows up only sometimes.

Not “you” yet.

You don’t know what you truly think or feel yet.

Sentence fluency

Varied and natural.

The sentences in your paper are delightful to read out loud.

Routine and functional.

Some sentences are choppy and awkward, but most are clear.


Total

(Out of 30)

Source: Summarised from: Student Friendly Writing Rubric from a School using the Six Traits of Writing, Discovered by John Norton while traveling in Alabama. Thanks to teachers at Maryvale Elementary in Mobile! www.middleweb.com. See also: SIX-TRAIT ANALYTICAL WRITING ASSESSMENT MODEL Scoring Guide (Rubric) http://www.nwrel.org/assessment/toolkit98/traits/index.html, Accessed: 16 February 2011






16. General information about Unitec courses

Key StaffDr. Robert Davis, Head of Department: Management & Marketing (DoMM), Tel. 815 4321, Ext 7418 [email protected]. Liz Rainsbury, Head of Department: Accounting & Finance, Tel. 815 4321, Ext 8803, [email protected] Slessor, Programme Director — BBus, Tel 815 4321 Ext, [email protected] Marriott, Programme Director — NZ DipBus, Tel. 815 4321, Ext 8131. [email protected] Rose Coveny, Programme Director—DipProfAcc, Tel. 815 4321, Ext 8084, [email protected] Stuart, Programme Administrator - BBus, DipMgt, DipProfAcc, Tel. 815 4321, Ext 8282, [email protected] Solomona, Lecturer/Pacific Advisor, [email protected], or [email protected] Molyneux, Lecture/Maori Advisor, [email protected], 815 4321 Ext 7065Hiroko Hodge,Programme Administrator, Tel. 815 4321, Ext. 8937, [email protected] Brown, Student Advisor, Tel 815 4321, Ext 8286 [email protected]. Peter Mellalieu, Curriculum po-ffessor, Tel 021 42 0118, [email protected]

Key ContactsThe Unitec Counseling Service, Tel. 815 4321, Ext 8605Maia Māori Development Staff, Tel. 815 4321 Ext 8695 Unitec Campus Bookstore, Tel. 815 4321 Ext 7490 or Ext 8437 Te Puna Ako - Learning Support Centre, Tel. 815 4321 Ext 8611 Unitec Library Front Desk, Tel. 815 4185 Pasifika Student Support, Tel. 815 4321 Ext 8782 Student Loans and Allowances Administrators Tel. 815 4321 Ext 8545 USU Students’ Association at Unitec, www.usu.co.nz


mailto:[email protected]




mailto:[email protected]?subject=Inquiry%20re%20BBus%20BSNS%205391

mailto:[email protected]?subject=Inquiry%20re%20BBus%20BSNS%205391



















http://www.usu.co.nz

http://www.usu.co.nz

Policies and ProceduresPlease read these policies specific to the Bachelor of Business in conjunction with the Unitec publication, “Your Guide to Unitec’s Rules and Policies”

Unitec’s Commitment and Expectations of Students:

Unitec is committed to providing you with:

Lecturers who are well prepared and organised Display a thorough knowledge of their subject Good communicators Provide you with useful feedback on your performance Responsive to your learning needs Qualifications that are credible and portable A quality education in a climate of continuous improvement Accurate information about your programme Assessment that is fair, valid and timely The opportunity to evaluate courses and teaching in confidence A learning environment that is safe and one that enables you to achieve your full potential.

We expect students to:

Be punctual and reliable in attendance Be well organised and prepared for each class Be committed to your own learning Participate actively in group work and other learning activities associated with their programme. Abide by Unitec statutes and regulations Respect the rights of your fellow students and Unitec staff Provide useful feedback to courses and teaching to assist us in improving our programmes and services.

Cellphones

Cell phones must be turned off during class. Students who leave cell phones on during class time may be asked to leave for the duration of that session, or have the phone confiscated until the end of class.


What is a programme?

A programme leads to a qualification such as a degree, diploma or certificate and consists of a number of courses. When you complete a course in a programme, you achieve a certain number of credits. In the case of a BBus student you would receive 15 credits for each course successfully passed.

What is a course?

A course is a module of study within a programme that is usually taken over a semester. In this time you may be required to attend lectures and tutorials, sometimes a lecture/tutorial, complete with assignments as well as exams. In some programmes all courses, sometimes called papers, are compulsory, while in others there may be elective courses.

Study Options

You can study full-time over three years or part-time over a longer period. You have to complete the Bachelor of Business within TEN years. Each course is one semester long. Selected courses are also offered during Unitec’s Summer School, which is held in December and January.

Full-time classes are scheduled Monday to Friday, with a range of times during the day for you to choose from. Typically you will spend between 12 to 16 hours per week in the classroom and at least 20 to 24 hours per week on study, assignments and other class work.

Learning Support

If you have any difficulty understanding information given in lectures, you should in the first instance speak with your lecturer. Also ensure that you attend the tutorials for the course. If you continue to have a problem with a particular concept or skill you should make an appointment with the Te Puna Ako Learning Centre situated in The Hub, Building 180. Te Puna Ako provides a range of learning support services, including workshops. They can also provide help on how to write essays, reports etc, and help you to understand the requirements of assignments.


Staff Support To Get Help with: Contact: A particular subject: The Course LecturerYour studies in general: Student Advisor or BBus Programme Director

Problems about assessments: The Course Lecturer first, then the Business Information & Support Centre, or Programme

Administrator Enrolling, Cross Credits, Exemptions:

Business Information & Support Centre or Programme Administrator

Planning Your Programme: Student Advisor or BBus Programme Administrator

Personal Matters Affecting Your Studies: Any of the above staff or Unitec Counselling

ServiceFinancial Matters: Unitec Student Financial Advisor or Unitec

Counselling Service Scholarships: Unitec Student Financial Advisor, Maia staff,

Student Advisor, or email [email protected]

Centre for PacificThe Centre for Pacific was established to meet the needs of Pacific communities and to enhance and increase the participation, completion and progression rates of Pacific students.

The Centre currently provides the following services:

Academic support; general and content specific

Careers adviceCourse and programme enquiriesFinancial/Scholarship advicePastoral careMentoringPacific lecture series




Pacific events: Orientation, Graduation, Pacific Leadership Fono (Secondary Schools), student and staff events, Fanau evenings, KavalUP – Quarterly newsletter.

Computer Laboratory Rules You will be provided with a username and a directory for storing files, as well as access to a range of software in our computer labs (your username is the same in each lab where you work). Inform your lecturer immediately if the equipment is faulty. Professional and ethical behaviour is expected of our students, just as it would be in a work situation. These rules are needed to make it possible for a large number of people to co-operate in using the laboratories. Breaches of the rules may lead to penalties ranging from loss of access to labs to exclusion from the programme.

Do not do anything that will interfere with the normal operation of the equipment, other users, and networks.

Do not password protect files, otherwise virus checkers may be impeded. Do not connect your lap top to the Unitec network. Respect the laws of copyright. No private material is to be used on Unitec equipment. No copying of Unitec software is permitted. Do not copy files or applications into your directory from outside your directory or vice versa without specific permission from a lecturer. This applies to files in another directory, or on a removable storage device. Do not use anyone else's username or directory, and do not let others use yours. Do not send unwanted or offensive mail. Messages should be brief and related to your programme of studies. Keep your own directory tidy and uncluttered. Delete unwanted files, sub-directories, and mail. Never eat or drink in computer labs or classrooms except for water bottles with seals. Help keep labs tidy by looking after your own waste paper and using the recycling bins provided. You may not play games in Unitec labs or take furniture outside. Cell phones must be switched off during all lab and classroom sessions. Your Student ID Card must be placed in the clear plastic holder on the side of the screen or front of the computer unit, during use of the computer.

Assessments/Assignments/Exams During your course you will have several assessments. You will be expected to turn in high quality work, of the same standard that will be expected of you in a work situation. All assessment work for this programme must be each student’s own original work unless group projects are specifically designated by the


Lecturer. Marked assignments not collected within three months of submission will be disposed of.

Examination dates are fixed.

An examination timetable is available prior to the commencement of a semester. When selecting courses it is important to check again the examination dates before semester commences. A student cannot ask for an examination date(s) to be changed to suit his/her particular arrangements.

Special Assessment Circumstances (SAC) Any student who is prevented from completing an assessment item by the due time and date, or whose performance is affected by factors beyond their control, may apply for a SAC under the Institute's provisions outlined in the Academic Statute.

Students should note that such an SAC application must be lodged with the Business Information & Support Centre, Building 180 with the appropriate medical or other documentation within five (5) working days of the due time and date of a test or exam, or before the deadline date and time for an assignment (refer to “Late Assignments” below).

In the case of illness or injury, documentary evidence such as a medical certificate must be dated within 24 hours of the assessment date and must be signed by a New Zealand registered medical practitioner.

Only one SAC application is possible in any one course in each semester.

An SAC application will only be considered if all other assessment items have been completed. NOTE: Students who apply for a SAC for the final examination must take the exam in the following semester.

Where a valid SAC application has been received

For an assignment, the student will usually be granted an extension to the due date, but the SAC application must be submitted before the deadline date and time – refer to “Late Assignments” below; For a test the Programme Committee may assign an assessed mark, based on class ranking and marks achieved in other course assessments and the final exam; or when it is known in advance of the test that special assessment circumstances will apply, it may be arranged for the student to sit the test prior to the test date; For the final exam, the student will then receive a deferred grade and will be required to sit the exam the next time the course is offered, usually the following semester of Summer School. The student is not given an assessed grade; For impaired performance in a test or exam, the Programme Committee may let the mark achieved stand or adjust the mark based on marks and class rankings achieved in other assessments in the course. In such instances the


estimated grade is marked (est.) in the student’s academic record. The application form is available from the Business Information and Support Centre.

What is beneficial assistance when doing assessments?

Study Groups Discussion Sharing reading material

What is unacceptable assistance when doing assessments

Working together on one copy of the assessment and submitting it as own work Giving another student your work Copying someone else’s work. This includes work done by someone not on the course Changing or correcting another student’s work Copying from books, Internet etc, and submitting it as your own work

Assistance to other students

Students themselves can be an excellent resource to assist the learning of fellow students, but there are issues that arise in assessments that relate to the type and amount of assistance given by one student to another. It is important to recognise what types of assistance are beneficial to another’s learning and are acceptable in an assessment. The Unitec Academic Statute governs the conduct of assignments and examinations, and violations of the standards will result in disciplinary action.

Acknowledgement of sources

Referencing is an important part of all academic work. Sources of information should be acknowledged for the following reasons:

To distinguish between your ideas and someone else’s. To show readers the range and quality of your reading. To direct readers to the sources used, if they want further information.

Failure to acknowledge a source of information, or using other people’s ideas as your own, is called plagiarism. Plagiarism is a serious form of academic dishonesty. Use APA referencing style in your assignments. For guidance, refer to the required textbook for all courses for the BBus degree, Manalo et al., and the Blackboard/Moodle BBus site5.


5 Manalo, E., Wong-Toi, G., & Bartlett-Trafford, J. (2009). The business of writing: written communication skills for business students (3rd ed.). North Shore, NZ: Pearson Education New Zealand. See also Turner, K., Ireland, L., Krenus, B., & Pointon, L. (2009). Essential Academic Skills (Revised.). Melbourne, Australia: Oxford University Press. Retrieved from http://openlibrary.org/b/OL10135765M/Essential-Academic-Skills

http://openlibrary.org/b/OL10135765M/Essential-Academic-Skills




Turnitin.com

Turnitin is a software package that identifies plagiarised content in assignments. Lecturers will require students to submit their assignments through Turnitin.com. A user manual for students is available for downloading at: http://turnitin.com/static/training.html if you wish to learn more about Turnitin.com.

Use of Textbooks / Written Materials in Tests and Exams

You will be advised by each Course Co-ordinator of which statutes, text books, notes or other written materials that may be taken into the Assessment Tests and Final Examination. Where the use of such books or materials is permitted there should be no pen or pencil markings of any kind, but the proper use of highlighting with a highlighting pen is acceptable. Any unauthorised material or marking (e.g., writing, extra pages, markers, numbering, arrows, asterisks etc), will be treated as evidence of cheating and will be acted upon and the text book or statute or written materials confiscated and not replaced.

Use of Dictionaries in Tests and Examinations

Unless otherwise advised, students may take into a test or examination a copy of either Collins Pocket English Dictionary or Oxford Pocket English Dictionary. No Dictionary taken into a test or examination may be marked in any way other than with the student's name. This means that there should be no writing, high-lighting or underlining in the dictionary. At the start of the test or examination concerned dictionaries will be checked and may be confiscated from a student for the duration of the test or examination if any marking is found. In circumstances where marking found in a dictionary gives rise to a suspicion of cheating, disciplinary proceedings may follow.

Restrictions on Entry to Examination Room

A student arriving late for a 3 hour test or examination will not be permitted to enter the examination room later than 1½ hours after candidates have commenced writing the test/examination; in the case of a 2 hour test or examination, later than 1 hour after the commencement of the test/examination; in the case of a 1½ hour test or examination, later than 45 minutes after the commencement of the test/ examination.

Unless accompanied by a supervisor, a student is not permitted to leave the examination room before 1½ hours (for a 3 hour test or examination) has elapsed, or 1 hour for a 2 hour test or examination. Students who continue writing after the “STOP WRITING” instruction will have their marks reduced by 5% of the exam marks.

Availability of Marked Assessments

Students shall be entitled to the return of all written work (or a copy thereof) submitted for formal assessment, and to be given access to a copy of the marking schedule used to mark the assessment. Marked work will only be retained until 4 weeks into the following semester. Original examination scripts are available from


http://turnitin.com/static/training.html




the Business Information and Support Centre to students free of charge after grades are approved by the Programme Committee, or copies are available at cost at the end of the academic year. For computer-based examinations a detailed marking schedule only will be provided. If a student uplifts the original examination she/he forgoes the right to apply for a recount of the script or an appeal against the grade.

Recount of Final Examinations

A recount of a final examination will confirm that all questions have been marked and that the marks correctly add to the total mark for that script. A recount may lead to no change or to either a raising or lowering of the grade. The procedure for having a particular final examination recounted shall be as follows:

A written application for recounts, together with the prescribed fee, must be received by the Business Information and Support Centre (BISC) within 15 working days of the mailing of results and prior to the student uplifting his/her original script; The Programme Leader shall arrange for a recount of the marks; The Programme Committee shall confirm the outcome of the recount and advise the student in writing within 5 working days of the confirmation. Appeal against a Grade A student may appeal against the final grade or pass category awarded in any course by applying in writing to the Dean, Faculty of Creative Industries and Business, giving reasons to justify the appeal. Applications for appeal must be received by the Dean 15 working days from the mailing of the results. In exceptional circumstances the Dean may extend the time for receipt of the application for appeal.

Late Assignments

There is a policy of No Late Assignments on this programme. An assessment item submitted after the due time and date will not be marked or graded unless:

The student’s performance has been affected by factors beyond the control of the student (as defined in the Academic Statute); and An application for Special Assessment Circumstances (SAC) has been lodged before the deadline and verified. Application for an SAC is to be made by the student to the Programme Director. Application forms are available from the Business Information and Support Centre, Building 172.

When requesting an SAC for an assignment, the application must be submitted (along with work completed to date) either before the deadline or within the timeframe of the extension requested i.e. if the Doctor's Certificate is for one (1) day, then the SAC and work completed must be submitted within one (1) day of the deadline. Only one SAC application is possible in any one course per semester


Use of the Unitec Logo within your assignment

Use of the Unitec logo is not permitted on assignments. The Unitec logo is for Unitec documents and only for use by Unitec staff.

Lost Assignments

Course lecturers accept NO responsibility for lost assignments. It is the student’s responsibility to retain copies of assignments that are submitted for marking/grading. Copies should be retained either in hard copy or on computer disks/files. Computer-based assignments that require submission of computer files must have a back-up copy stored on the Unitec Student F: Drive.

Collection of Marked/Graded Assignments

It is the student’s responsibility to collect graded/marked assignments. Assignments due in one semester will be kept no longer than four weeks into the following semester.

Misconduct in Assessments / Assignments / Exams

Any student who has plagiarised any work or colluded with another student(s) in any way will be referred to the Programme Leader. The student will be subject to disciplinary action under the Institute’s Academic Statute. Definitions of dishonest practice shall include:

“Cheating”, which is defined as any fraudulent response whatsoever by students to any item of assessment, including any action which may otherwise defeat the purpose of the assessment.

“Plagiarism”, which is defined as the act of taking and using another person’s thoughts, ideas, writings, inventions or work as one’s own without proper acknowledgement and includes: Copying the work of another student; (ii) directly copying any part of another’s work, including information obtained from the internet;

(iii) summarising another’s work;

(xxiv)using experimental results obtained by another.

Submitting work for summative assessment which has been jointly prepared for presentation, in circumstances where this has not been approved by the Programme Leader. The submission of work for summative assessment which has previously been submitted elsewhere, without the prior permission of the Programme Leader. The presentation of fraudulent material as evidence of achievement in an educational or employment context in order to gain entry to a programme or to gain credit within a programme.


A breach of any rules relating to summative assessment.

Penalties for Misconduct

For the first occurrence within the programme, the student will receive a zero mark for the assessment.

For the second occurrence within the programme the student will appear before the Discipline Committee. The Discipline Committee may impose a number of different penalties including suspension from the course, exclusion from the programme or exclusion from UNITEC.

Exclusion from a Programme

Any student who, over the last four semesters of his or her studies, has failed to pass courses equivalent to one half of the credits in which she/he has been enrolled over that period, shall be deemed to be excluded from that programme and shall not be permitted to re-enrol without the prior permission of the Programme Committee.

Exclusion from a Course

A student who has failed the same course on two occasions shall not be enrolled again for that course except with the permission of the Programme Committee.

Course Concerns

If you have any concerns about the way your course is progressing this semester please contact one of the following people to discuss it: - your Course Lecturer -the Course Coordinator or arrange an appointment with the BBus Programme Director or Student Advisor. Anonymous complaints will not be actioned. Please include your name and student number in any correspondence to the Programme Director. Your identity will not be divulged to the lecturer. For official complaints procedure refer to www.unitec.ac.nz. Select The Facts/Rules and Policies and then follow the “Quick Link” to “Students Complaint Policy”.

Information for Students with Disabilities

At UNITEC we are attempting to remove all barriers to learning for people with disabilities. Please make your needs known to your lecturer as soon as possible.UNITEC offers the following resources to students with disabilities:

One-to-one assistance -available in the form of note-takers, readers and writers (for tests and exams) but it is the responsibility of the student to organise. Separate examination rooms and extra time can be arranged. Support networks and individual needs support: contact the Disability Co-ordinator, Wendy Russell, on 815 4321 extension 8606 for more information about any of these services.


http://www.unitec.ac.nz

http://www.unitec.ac.nz

17. Requirements to pass a course and grade standards

Requirement to pass a course is achievement of a minimum of 50% across the sum of all assessment items.

On the New Zealand Diploma in Business the following grade-mark correspondences apply:

Grade Mark

A+ 85 to 100

A 75 to 84

B+ 70 to74

B 60 to 69

C 50 to 59

D 40 to 49

E 0 to 39

P “Pass” Courses cross credited or Assessment of Prior Learning


General guidelines for grade standards

For an A Grade (75% and over)

Content:

An exemplary assignment. Meets comprehensively all stated objectives. Obviously well-planned. Integrates succinctly a range of relevant concepts, principles, practices and theories. All assignment requirements are fully justified and are supported by examples or evidence from the literature, and personal examples. Demonstrates reading of the core text AND seminal academic literature. Extensive citations. Identifies all relevant key issues, processes and contexts. Demonstrates the ability to analyze critically and synthesize a comprehensive range of issues and reach supported conclusions and recommendations. Answer contains no irrelevant material. Obvious originality and creativity.

Communication, Language and Presentation:

Accurate and professional word choice, application of grammatical conventions, sentence fluency, organisation and logic, voice, and overall coherence. See ANNEX C. There are no spelling or grammatical errors. Report professionally written, presented and bound. The assignment is lucid and well structured, including a contents page, page numbers and a properly referenced text and bibliography. Exemplary application of an appropriate House Style such as APA, Harvard, The Economist, or Global English.

For a B Grade (60 – 74%)

Content:A relatively comprehensive assignment that integrates many relevant concepts, principles, practices and theories. Answers are adequately justified and are well supported by some evidence or examples from the literature. Has read reasonably widely of the seminal literature and has many appropriate citations. Demonstrates the ability to analyze critically a smaller range of issues to reach acceptable conclusions and recommendations. Identifies some key issues, processes and contexts. Answer may contain some irrelevant material. Objectives generally met.


Generally accurate and professional word choice, application of grammatical conventions, sentence fluency, organisation and logic, voice, and overall coherence. See ANNEX C. Uses a professional language style guide, such as The Economist/Style Guide or APA. Presentation is very good, but falls short of excellent in several areas.


For a C Grade (50 - 59%)

Content:

Understands the topic and links some concepts, principles, practices, and theories. Answers have little justification and support employing evidence from the literature. Has read some of the seminal literature and cited accordingly. Can demonstrate the ability to analyze some issues, processes and contexts to reach conclusions or recommendations. Answers are descriptive and typically lack any real critical discussion or evaluation. Irrelevant material. Objectives not properly addressed.


Attempts to use an appropriate writing style (Global English, formal or academic English) but with several errors. Typed and placed in a folder. Layout is generally clear, but contains spelling and grammatical errors.

For a D/E Grade (0 - 49%)

Content:

Poor assignment. Shows some understanding of the theory and concepts. Areas missing. Mismatches occur between the theory and integration with the articles being studied. Citation is incorrect or inconsistent and typically not citing some of the answers from the literature or providing supporting material. Has read little or none of the seminal literature. Answer is disjointed and fails to reach conclusions. Objectives not met.


Informal English. Language time-consuming and frustrating to read and decode. Not acceptable, for example, not typed, untidily presented, high level of errors, poor and confusing layout.


18. NZDipBus Programme Structure

VERSION ONE VERSION TWO (LEVEL 6) FROM 2008Completion of 240 credits (12 courses) in the following pattern:

Completion of 240 credits (12 courses) in the following pattern and with no more than 60 credits at level 4:

Six Core Courses (120 credits) Six core courses (120 credits)Six Electives (120 credits)Of which four (80 credits) must be at 200 level (or equivalent)

Six Electives (120 credits) of which 80 credits must be at Level 6

A maximum of 3 courses (60 credits) at level 4

Requirements to Complete NZDipBusDo you wish to Specialise in either Accounting or Management?

If so, select your courses from the appropriate tables below:

Specialise in: Accounting

COMPULSORY COURSESNZ 400 Accounting Principles 20

NZ 510 Introduction to Commercial Law 20

NZ 520 Economic Environment 20

NZ 530 Organisation and Management 20

NZ 560 Business Communication 20

NZ 550 Business Computing 20

CORE ACCOUNTANCY COURSESNZ 501 Accounting Practice 20

NZ 601 Financial Accounting 20

NZ 602 Management Accounting 20

NZ 603 Business Finance 20

NZ 606 Taxation 20

ELECTIVE COURSES PLUS ONE ELECTIVE COURSE


Specialise in: Management

COMPULSORY COURSES

CHOOSE ANY SIX

NZ 400 Accounting Principles 20

NZ 510 Introduction to Commercial Law 20

NZ 520 Economic Environment 20

NZ 530 Organisation and Management 20

NZ 541 Fundamentals of Marketing 20

NZ 560 Business Communication 20

NZ 550 Business Computing 20

CORE MANAGEMENT COURSESNZ 636 Applied Management 20

PLUS FIVE OF THESE NZ 430 Quantitative Business Methods 20

NZ 630 Leadership 20

NZ 632 Operations Management 20

NZ 633 Human Resource Management 20

APMGNZ 635 Employment Relations 20

APMGNZ 648 Marketing Planning and Control 20


19. Credit Recognition and Eligibility for a Unitec Diploma

As the New Zealand Diploma in Business (NZDipBus) is a national qualification it is possible to study courses at other institutions. To be eligible to graduate with a Unitec diploma a student must meet the following requirements:

The student must be enrolled at Unitec at the time the qualification is completed unless permission has been obtained from the Programme Director to complete a final paper at another institution (refer point 3 below).The student must have completed at least 7 of the 12 papers at UnitecThe student must have obtained permission from the NZDipBus Programme Director if he/she wishes to enrol in an NZDipBus course at another institution while at the same time he/she is undertaking the programme at Unitec. Permission to study elsewhere will only be given for exceptional circumstances.

“Fast-tracking” Completion of NZDipBusMotivated capable students can apply to the Programme Director for permission to take an extra course per semester. Extra courses are also offered at Summer School during the December/January period.

If your programme includes a course that is very similar to one you have already successfully completed as part of a different programme, you may be able to have these credits recognised. The School will carefully check and compare the content and level of both courses to determine whether a cross-credit can be granted. There is a $60.00 administration charge per application. Please ensure that you enclose verified evidence of course content to support your application.

A student can be credited with a total of nine prescriptions (180 credits) including maximum of 8 specified* credit transfer plus a minimum of one unspecified** credit transfer. Credit Transfer will be awarded for equivalent study, at the same or a higher level in the context of another programme. Credit Transfer will NOT normally be awarded for successful study that took place more than 5 years prior to the date of first enrolment in the diploma.

There are two types of credit transfer or credit recognition from another qualification into NZDipBus:

* Specified: where there is direct equivalence of the learning outcomes of a completed course and a course in the certificate** Unspecified: where the previous study has taken place in a programme with a similar philosophy but there is no exact match in the programme’s courses.

Specified credit transfers are shown in the following tables:


Credit transfer from BBus to NZDipBus (version One)

BBUS COURSE Minimum Grade NZDipBus COURSE CREDITED

ALAF 5200 Accounting for Business Pass 100 Accounting Principles

ALAF 5206 Accounting Applications Pass 101 Accounting Practice

ALAF 5320 Law of Business Obligation Pass 110 Introduction to Commercial Law

ALAF 5270 Economic Principles Pass 120 Economic EnvironmentCOMM 5430 Professional Communication Pass 140 Business Communication

ALAF 5230 Information Systems and Applications Pass 150 Computer Concepts

ALAF 5401 Business Statistics Pass 160 Quantitative Business Methods

ALAF 6201 Financial Accounting Pass 201 Financial AccountingALAF 6212 Management Accounting Pass 202 Management AccountingALAF 5290 Principles of Managerial

Finance Pass 203 Business Finance

ALAF 6320 Law of Business Entities Pass 210 The Law of Legal EntitiesBSNS 5350 Business Process

Management Pass 232 Operations Management

BSNS5342 Applied Management Pass 236 Applied Management

BSNS 6370 Marketing Planning Pass 248 Marketing Planning & ControlBSNS 5341 Human Resource

Management Pass 233 Human Resource Management

NOTE: Only certain approved BBus courses can cross credit back to the NZDipBus.

Only 18 or more credit courses can cross credit.

The NZDipBus regulations allow for a maximum of 8 prescriptions to be cross credited to NZDipBus, plus maximum of 2 prescriptions to be cross credited as unspecified credits (1 local paper and 1 unspecified credit).


Credit transfer from BBus to NZDipBus (version Two)Only certain approved BBus courses can cross credit back to the NZDipBus.

The NZDipBus regulations allow for a maximum of 8 prescriptions to be cross credited to NZDipBus, plus maximum of 2 prescriptions to be cross credited as unspecified credits (1 local paper and 1 unspecified credit).

BBUS COURSE Minimum Grade NZDipBus COURSE CREDITED

ALAF 5206 Accounting Applications Pass 501 Accounting Practice

ALAF 5320 Law of Business Obligation Pass 510 Introduction to Commercial Law

ALAF 5270 Economic Principles Pass 520 Economic Environment

COMM 5430 Professional Communication Pass 560 Business CommunicationALAF 5230 Information Systems and

Applications Pass 550 Business Computing

ALAF 5401 Business Statistics Pass 430 Quantitative Business Methods

ALAF 6201 Financial Accounting Pass 601 Financial Accounting

ALAF 6212 Management Accounting Pass 602 Management Accounting

BSNS 6370 Marketing Planning Pass 248 Marketing Planning & ControlBSNS 5341 Human Resource

Management Pass 233 Human Resource Management


Credit Transfer to BBus from NZDipBus (version one)

NZDipBus course BBus Course credited to

CourseNo. Course Name

Min. Grade Requir

ed

Course No. Course Name Credits

100Accounting Principles

B ALAF5200 Accounting for Business 18

100and201or202

Accounting PrinciplesAndFinancial Accountingor Management Accounting

Pass

Pass

Pass

ALAF5200 Accounting for Business 18

101 Accounting Practice B ALAF5206 Accounting Applications 18

101and 201

Accounting PracticeAndALAFNZ201Financial Accounting

Pass

PassALAF5206 Accounting Applications 18

110and120

Introduction to Commercial LawAndEconomic Environment

Pass

PassALAF5400 The Business Environment 18

110

110and210or211

Introduction to Commercial LawORIntroduction to Commercial LawAnd eitherCompany and Partnership Law ORBusiness Law

B

Pass

ALAF5320 Law of Business Obligations 18

120 Economic Environment B ALAF5270 Economic Principles 18130and141

Organisation and ManagementAndMarketing Principles

Pass

PassAPMG5340 Management in the Marketplace 18

141Marketing PrinciplesAndany other 200 level management course

Pass


130Organisation and ManagementAndany other 200 level marketing course

Pass


140 Business Communication B COMM5430 Professional Communication 18150or250

Computer ConceptsOR 250 Applied Computing

B

PassALAF5230 Information Systems and

Applications18

160 Quantitative Business Methods B ALAF5401 Business Statistics 18201 Financial Accounting B ALAF6201 Financial Accounting 18202 Management Accounting B ALAF6212 Management Accounting 18203 Business Finance Pass ALAF5290 Principles of Managerial Finance 18232 Operations Management Pass APMG5350 Business Process Management 18233 Human Resource Management Pass APMG5341 Human Resource Management 18

235 Employment Relations B APMG6343Employee Relations and Legislation 18

236 Applied Management Pass APMG5342 Applied Management 18243or248

Marketing PlanningOR Marketing Planning and Control

BB

APMG6370 Marketing Planning 18

100Any 100 Level Course not used above (Note 3) B Level 5 Elective 18

200Any 200 Level Course not used above (Note 3) Pass Level 5 Elective 18

200 Any 200 Level Course not used above B Level 6 Elective 18Key1 A minimum B grade pass in the NZDipBus course is required where an NZDipBus course gains credit to a similar

course at a higher level in the BBus.

2 Only a passing grade (C or better) is required in the NZDipBus course where:a. One or more NZDipBus courses cross credit to a similar course at the same level; or b. Two NZDipBus courses cross credit to a single (and similar) course at a higher level.

3Where two NZDipBus courses have been used to gain credit for a single specific BBus course, credit may also be given for the Level 5 elective provided a minimum B grade is achieved in one of the two course(s).


Credit Transfer from NZDipBus (version two) to BBus

NZDipBus Course M i n i m u m Grade

BBus Course Credited

501 Accounting PracticeOR 601 Financial Accounting

PassPass

ALAF5206 Accounting Applications

510 Introduction to Commercial LawAND 520 Economic Environment

PassPass

ALAF 5400 Business Environment

510 Introduction to Commercial Law Pass ALAF5320 Law of Business Obligations

520 Economic Environment Pass ALAF5270 Economic Principles

530 Organisation and ManagementAND 541 Fundamentals of Marketing

PassPass

APMG5340 Management in the Marketplace

560 Business Communication Pass COMM5430 Professional Communication550 Computer ConceptsOR 650 Applied Computing

PassPass

ALAF5230 Information Systems and Applications

601 Financial Accounting Pass ALAF6201 Financial Accounting602 Management Accounting Pass ALAF6212 Management Accounting603 Business Finance Pass ALAF5290 Principles of Managerial

Finance632 Operations Management Pass ALAF5350 Operations Management633 Human Resource Management Pass APMG5341 Human Resource Management635 Employment Relations Pass APMG6343 Employee Relations and

Legislation636 Applied Management Pass APMG5342 Applied Management648 Marketing Planning and Control Pass APMG6370 Marketing PlanningAny level 5 course not used above Pass Level 5 electiveAny level 6 course not used above Pass Level 6 elective

Notes:1 Where a student has passed 400 Accounting Principles and also completed 501 Accounting Practice, or

601 Financial Accounting or 602 Management Accounting, credit will be given for ALAF5200 Accounting for Business

2 A maximum of 180 credits can be credited into the BBus.

3 NZDipBus students can apply for an exemption to BBus courses from the level 4 course.


20. Other Awards, Memberships and Qualifications

Exit/Milestone Diploma: Diploma in Business Studies (Level 5, 120 Credits)

Students who have completed a total of six NZDipBus courses (120 credits) with a minimum of 80 credits at level 5 or above, as set out in Table 2 or the course equivalency table - Table 3, may apply for and be awarded a Diploma in Business Studies (level 5, 120 credits), provides they:

have gained a minimum of 80 credits required for the award of the exit/milestone diploma from courses studied at Unitec;have gained, before enrolling at another institution, permission from the Programme Director to enrol in New Zealand Diploma of Business courses at another institution should the need arise.

Exit/Milestone Diploma: NZIM Diploma in Management

By completing the SIX NZDipBus courses as specified below, student are eligible to apply for the NZIM Diploma in Management.

Course Description

Students need to complete four core papers and two optional papers from the NZ Diploma in Business. Each paper is worth 20 credits. The NZIM Diploma in Management is an NZQA approved credit level 5 qualification.

Core Papers:130 Organisation and Management 140 Business Communication230 Leadership 236 Applied Management

Optional Papers (select two):100 Accounting Principles or 120 The Economic Environment110 Introduction to Commercial Law115 Small Business Management or 227 Entrepreneurial Planning139 English for Business Studies1

141 Marketing Principles150 Computer Concepts160 Quantitative Business Methods232 Operations Management

1 This option is only for students who have completed the NZIM Certificate in Language, Culture and Management.


Registration with NZIM

To be eligible to receive the NZIM qualifications set out in NZIM booklet students must register their results with NZIM as well as enrolling for their studies with their school or tertiary institution. Where providers do not bulk-register the results of diploma students, the students need to register the results individually with NZIM, using a registration form in the booklet. Registration may take place at any time during the course or at its conclusion. Please send a photocopy of your results as soon as they come to hand, together with the appropriate registration fee.

Accounting Technician (AT)

The New Zealand Institute of Chartered Accountants (NZICA) recognises successful completion of the Accounting Option of NZDipBus as the necessary tertiary study requirement for membership of the NZICA College of Accounting Technicians.

To qualify as an accounting technician and staircase your way up to be an accountant, you must meet the following requirements:

Successfully complete NZDipBus in the Accounting option; andHave two years’ relevant professional experience; andPass the Professional Competence Examination(PCE1)

Financial Service Industry of Australasia Associate Membership (A Fin)

You are eligible to apply A Fin if you are working in the financial industry and have completed NZDipBus.


21. Amendments and suggestions for course improvements

This is an updated course with an updated text, a new teacher, and new learning support media such as this Course Handbook and the Learning Management system. Improvements and amendments will be made during the semester. Please make a record of amendments here, and include your own suggestions for improvements. Submit your suggestions with your Final Assignment.

Date Version and Section

Subsection and Pages

Amendment/Suggestion


22. Passwords and access codes

Online submission of assignments: APMG NZ 435 Innovation & entrepreneurship 2011-1

For students to enroll in this class, you will need both the enrollment password you have chosen and the unique class ID generated by Turnitin:

Home page: http://www.Turnitin.comclass ID: __________Enrollment password: enterpriseClass title: APMG NZ 435 Innovation & entrepreneurship 2011My turnitin user name: _____________My turnitin password: _____________

My Project TeamTeam ID: _____ Name _____________________Project Presentation date ___________Recording duties date ______________

Team members

Name Email Phone


http://www.Turnitin.com

http://www.Turnitin.com

23. Semester-specific calendar and datesStudio Calendar and assignment due dates - 2011 - Semester 1 Hand-in time for Assignments: Latest: On the date specified BEFORE class commencement. Submit immediately BEFORE the START of class, or into physical drop box, Level 4, building 172.CONCURRENTLY submit on-line http://turnitin.com submissions before class.Note. All topics scheduled here will not always be covered in class meetings. You are required to keep up-to-date with this reading schedule to meet the requirements of assignments.


Due

7-Mar

LEARNING OUTCOME ONE: OVERVIEWStudents will describe characteristics of small business.

Key elementsa) Profile:• owner• staffing• turnover• customer focus• equity and asset value.

b) Success factors, • capital• planning• systems• customer relations• product or service development• marketing• other.

c) Owner’s competing demands:• commitments and responsibilities• variety of roles• time demands.

Topics:• Introduction to entrepreneurial business• What is small business and

entrepreneurship?• Small and corporate business in New

Zealand • Finding business opportunities• Business planning

O&E Preface

Introduction Ch1 - Introduction

Ch 2 - Business opportunity

Ch 6 - Business planning

14-Mar LEARNING OUTCOME ONE (continued) Exercise 1: Self-employment assessment

21-Mar LEARNING OUTCOME ONE (continued)


http://turnitin.com

http://turnitin.com


Due

28-Mar

LEARNING OUTCOME TWO: START-UP OPTIONS, STRUCTURE, AND FINANCINGStudents will compare business options, business structures and finance options of small business.

Key elementsa) Existing versus new start up.b) Business options:• independent• franchise• co-operative• e-business.c) Business structures:• sole trader• partnership• company• trading trust.d) Finance options.

Topics:• Small business survival and success• Learning about small business• The role of entrepreneurs in creating new

business• Foundation business structure and legal

issues• Good business: Ethics, social responsibility

and business character• Launching an entrepreneurial business

O&ECh 2 Finding a business

opportunityCh 4 Legal

Ch 5 FranchisingCh 9 Financing

4-Apr LEARNING OUTCOME TWO (continued)

11-Apr

LEARNING OUTCOME THREE: ADVICE AND ASSISTANCEStudents will identify sources of advice and assistance available for a small business.


• financial and non-financial• governmental and non-

governmental.

Topic:• Government Programmes• Trade Associations• Chambers of Commerce

O&E Ch 3

ASS ONE

18-Apr Break for Study

25-Apr Break for Study



Due2-May Guest speaker or Field Trip

9-May

LEARNING OUTCOME FIVE: CONTROLStudents will describe performance measures and controls used for small business.

Key elementsa) Financial:• cash budget• income statement• balance sheet• break-even analysis• two other types of information (eg debtors).

O&EExercise 2: Trans Crash

TransportCh 7 Financial Information

Ch 8 Cash FlowCh 9 Financing

Ch 10 Profit Planning

16-May

LEARNING OUTCOME FOUR: MARKETINGStudents will explain the importance of marketing choices for a small business.

Key elements• Research.• Promotion.• Business environment.• Location.• Channels of distribution.

O&ECh 11 Market strategy

Ch 12 Advertising, salesCh13 Export marketing

23-May LEARNING OUTCOME FOUR (continued) TEST

30-May

LEARNING OUTCOME FIVE: CONTROL (continued)Students will describe performance measures and controls used for small business.

Key elementsa) Financial (Note: this element completed in earlier weeks)b) Legal:• four from central government• one from local government.c) Operational, three from the following:• quality• waste• product or service• hours of operation• other.d) Risk management process

O&ECh 14 Retail and service

operationsCh 15 Manufacturing

operationsCh 18 Troubleshooting and

recoveryAdditional research

6-Jun Queens Birthday weekend - no class13-Jun LEARNING OUTCOME FIVE (continued)20-Jun Study Week ASS TWO


Unitec principal academic calendar


Lecture SlidesAPMG NZ 435 Fundamentals of Small Business

Faculty of Creative Industries and Business

Department of Management and Marketing (DoMM)

Bachelor of Business

(Ver 1.0)


NOTICEBooks, journals, multi-media and other materials made available by or at Unitec Institute of Technology are for the student’s own studies only. Copying or use of the materials for other purposes is an infringement of copyright.

Authored by Peter J. Mellalieu, 2010. 1st Ed February 2011.

The copyright of student materials remains with the authors.

Printed at The Copy Centre, Unitec Institute of Technology, Mt Albert, Auckland, New Zealand.

IMAGE: Reaching for the skies. AdventureWorks facility at Unitec Institute of Technology, Auckland. Credit: Peter J. Mellalieu

http://www.adventureworks.co.nz/

Version Ver 1.0 1 February 2011.

This document is subject to amendments and improvements in the online version as the course proceeds. Refer to back page for a schedule of amendments.




TABLE OF CONTENTS

................................................LO 1 - Introduction - (Oliver & English Chapter 1) 1

..................................................................LO 1 - Creating a winning enterprise 17

.......................................................................LO 1 - Small business definitions 27

..............................................LO 1 - Survival and success (O&E Ch 1 continued) 35

..................................................................LO 1 - Business planning (O&E Ch 4) 55

...........................................................LO 2 - Finding an opportunity (O&E Ch 2) 69

............................................................LO 2 - Financial planning (O&E Ch 7-10) 81

...LO 2 - Establishing a business; Ethics, responsibility and character (O&E Ch 2) 85

.........................................................LO 2 - The legal environment (O&E Ch 4) 101

..........................................................................LO 2 - Franchising (O&E Ch 5) 107

..............................................................LO 3 - Intellectual property protection 115

..........................................................................LO 4 - Marketing (O&E Ch 11) 119

..................................................................................LO 5 - Risk Management 133

REMINDER!!! All material presented and discussed in class is EXAMINABLE in the Final Test. This includes:

Material presented by students and guests, Required text reading,Lectures and lecture notesMaterial specified in the Course Reading Schedule.


Fundamentals ofSmall Business Management

APMG NZ435

Session 1

This Week

• Introducing the lecturer• Purpose/Aims• Expectations of you• Plagiarism• HELP!• Course topics• Who are you?• What is Business Management?

Purpose• To develop:

– Knowledge of small business opportunities and operations, including ownership options and business structures.

– Knowledge of control techniques, accounting and financial processes, evaluation processes and marketing options for small business operations.

– Skills in analysing information and identifying appropriate solutions for the management of small business operations.

Course Aims

This course is intended for people who:• Seek an introduction to business in New Zealand• Intend to continue studies in commerce• Are working in small-medium business• Are working in new ventures within a science or

corporate business• Aspire to work in business in the future as an

entrepreneur, employer, employee, or advisor• Are studying a professional or technical qualification,

and require an introduction to the elements of business

Topic 1

• Analyse options for self employment • Identify characteristics of successful

small business enterprises• Identify and assess new business

opportunities• Evaluate assistance programmes and

identify specialist services available for small business development.

Topic 2

• Analyse ownership options and business structures

• Assess options for acquiring a small business

• Evaluate small business financing options

• Interpret legal requirements for small business operations

• Evaluate operational requirements for small business operations.

Topic 3

• Manage the day to day accounting function

• Interpret financial and accounting information

• Develop profitability and cash flow budgets and compare operating results to these budgets

• Using basic costing tools to ensure the business is running profitably.

Topic 4

• Select and implement control systems and techniques and evaluate results against business plans.

Topic 5

• Analyse the potential market for products/services and confirm market demand

• Determine the mix of products/services to be provided

• Develop options for effective marketing of the business.

Learning Outcomes • Refer myCourseDetails

Expectations of you1. Read the myCourseDetails

2. Read the cases before coming to class

3. Do readings as applicable

4. Turn off your cell phones before entering class

5. Respect each other

6. Help each other

7. Regular course attendance

8. Attend all lectures on-time

9. If you cannot attend class I want to know by e-mail beforehand (if possible).

PlagiarismPlagiarism is a form of cheating• Plagiarism is using someone else’s ideas or words and saying they are your own.

• If you use material from a text and do not acknowledge the source, you are committing plagiarism.

Several penalties can be imposed if you plagiarise. Zero marks and ultimate

removal from the paper

PlagiarismExamples of plagiarism:• Copying from another student’s assignment with or

without the student’s knowledge.• Submitting the same assignment in two different

papers.• Getting someone else to write an assignment for you.• Paraphrasing or copying directly from a text without

acknowledging the source.• Copying directly from a text, acknowledging the source

but pretending that you are paraphrasing.• You allow other students to copy your work• You write an assignment for another student.

.

HELP!

•Library•Te Tari Awhina•Blackboard

Who are you?•What is your origin?

–Born in NZ–OR arrived in NZ:–Over 10 years ago–5 to 10 years ago–1 to 5 years ago–6 to 12 months–Less 6 months

•You are from: Auckland, or overseas?•Homeland? •First language? •Single language?•Family Background?

Why are you studying this • Seek an introduction to business in New Zealand?

• Intend to continue studies in business? • Work in small-medium-or-BIG business now/or in the future?

• Work on a new business venture?

• Aspire to work in business in the future as an– Entrepreneur? – Employer? – Employee? – Advisor?

• Study a professional or technical qualification, and require an introduction to the elements of business?

Definition: Business

• A commercial or industrial establishment

• Commerce, trade

• Profession, occupation

• Synonyms:– Company, corporation, enterprise, firm,

organisation, venture • Collins Concise Dictionary

Definition: Organisation• A collection of people working together

in a division of labour to achieve a common purpose

• Synonyms:– Association, corporation, federation,

consortium, institution, league, syndicate

– Examples???

Examples: Organisation

• Orchestra• Sports club• School• University• Hospital• Army, Navy, Air Force• Bank

A Business Organisation

An organisation established with the purpose of making a profit for its

shareholders through providing goods and services to its customers

21

Profit• A financial gain, esp. the difference

between the amount earned and the amount spent in buying, operating, or producing something (Apple Dictionary, 2008)

• The means through which an organisation achieves its purpose (Anon)

Questions• Is a one man/or woman business an

organisation?• Do “not-for-profit” organisations need to

make a profit?• Doesn’t the term “not-for-loss”

organisation make more sense?

Definition: Small business• Personally owned and managed, or

• Does not have specialist managerial staff, or

• Is not part of a larger enterprise

• AND ALSO employs fewer than:– 50 people in manufacturing, or– 10 in services– 25 in other sectors– (Bollard, 1988; in Oliver & English, 2002, p. 3)

Key data on NZ small business

• Of the 355,000 businesses in NZ (mainly small and medium sized), – 85% employed 5 or fewer full-time people– 99% employ fewer than 100 workers

(Cameron & Massey, 2002, p iv)

Key data on NZ small business

• Over 50% of all people employed in NZ are employed by enterprises with less than 50 employees.

• 32% are employed in firms with fewer than 10 employees.– (Cameron & Massey, 1999; Fig 1.2)

Definition: Entrepreneur1. A person who attempts to profit by risk

and initiative (Collins)2. To undertake a project that is

especially difficult, complicated, or risky, engaging in daring action, that is a systematically purposeful activity (Caldwell, 2006, p. 76)

3. A ‘person’ who habitually creates and innovates to build something of recognised value around perceived opportunities. (Bolton & Thompson)

Definition: Entrepreneur

Innovation is commonly defined as:– “The act of introducing something new” (Dictionary.com, - Innovation). – Innovation does not imply that an idea, product or

service has been taken to the market, but merely provides a suggested conclusion to a problem.

– Entrepreneurship is best defined as taking a good idea, product or service, and organising, operating and assuming the risk for a new business venture (YourDictionary.com., 2004). This definition can be extended to include taking the idea, product or service to the market for potential (personal and community) wealth creation (QuickMBA.com., 2004; Von Bargert, 1999). Therefore, entrepreneurship is the answer to inactive innovation.

Elaborating ‘Bolton & Thompson’s definition

• ‘Person’ – may be a team, or organisation

• ‘Habitually’ – not just seeking a comfortable lifestyle – “they just cannot stop being entrepreneurs”

• ‘Creates’ – start with nothing and bring into being something that was not there before

• ‘Innovates’ – they overcome obstacles that would stop most people

• ‘Build… recognised value’ – financial, aesthetic, or social capital. Not just an idea

The entrepreneurship growth model

Types of entrepreneurs

• Legendary – Henry Ford, Thomas Edison, Bill Gates, Walt

Disney, Steve Jobs, Sony Co., James Dyson, Richard Branson

• Social – Florence Nightingale, Anita Roddick (Body Shop)

• Aesthetic – Michelangelo Buonarroti, Andrew Lloyd Webber,

Gilbert Tregano (Club Med), Mozart, Peter Jackson

Kiwi entrepreneurs

• Legendary– The Todd Family (industries: automobile, oil

industry-BP).• Sports

– Sir Peter Blake• Business/Social

– Dick Hubbard• Aesthetic/Business

– Peter Jackson• Business

– Michael Hill, Stephen Tindall…others?

David Slack – Speeches.com

• Read the ‘David Slack’ case study and answer these questions:

David Slack – Speeches.com

– What is David Slack’s business? Why did he set up the business? What was the moment of conception?

– What skills did David bring to bear on his new business from his earlier career?

– How long was the “gestation period” – the number of years it took before he “took the plunge” following the moment of conception?

– What special challenges did he face in setting up his business? How did he meet those challenges?

– What are some of the distinctive features of the business that David established?

– Is this a successful business?

Reflections on David Slack

• History• Skills• Attitude• Operations & Technology • Challenges• Competitive advantage • Key skills• Success

Reflections on David Slack• Would you buy this business?• Business value – intellectual property:

– “priceless” domain name– Database of customer contacts– Database of speeches– Proprietary software eg Auto Speechwriter– Distinctive reputation in market niche

• Fixed assets – essentially nil

Your glossary of business terms• Note terms:

– Entrepreneur, small business, organisation, e-commerce, intellectual property

• Find definitions from text (use index), dictionary, commercial dictionary

• Record examples

• WARNING – there may be MORE than one definition!!!

Definition: Small-Medium sized businesses (SMEs’)

• No common accepted definition; however:• Remember that-85% of NZ SMEs’ employ

fewer than 5 full-time people (Cameron and Massey, 2002).

• Examples of small businesses: Family businesses such as - dairies, cafeterias, hair salons, bakeries, garages, restaurants

Facts about entrepreneurial business in NZ

• 1976: 6% of owner managers were women

• 1996: 36% - a 6-fold increase

• There has been a net increase in the number of small business of around 10,000 per year

Facts about entrepreneurial business in NZ

• Many small business founders lack organisation and management skills. They are all too often the BEST people to start a business, but the worst managers of that business– Source: Oliver & English, (1997), p. 7

Questions

• Why is the number of SME’s growing, and the % employed in SME’s growing?

• What other forced career changes (e.g. health status) can you imagine?

• What are some of the reasons that smaller businesses can compete successfully with larger business?

Questions

• Small Business opportunities– What are some options for self

employment? – Define clearly the business purpose and

industry sector – (David Slack)– Examine reasons for founding small

business ventures – (Necessity/Opportunity)

– What are some personal business and other skills, and experiences that you might need for starting a business?

1. Develop natural talent into excellence

Excellence

Managed temperament

Imparted skills and knowledgeDeveloped talent

Bolton & Thompson, 2004, Fig 2.2

structured learning and experiences including

formal education leading to skill sets

Unstructured learning and experiencesNatura

ltalent

Homework for next week - 2

•Follow up reading:–Oliver & English (2002): Preface, Ch 1–Cameron & Massey (2002): Preface, Introduction

•Prepare to discuss in class: –CASE Deron BEAL - Trash & Treasure

Creating a winning enterpriseYour place in the entrepreneurial process

Peter J MELLALIEUUnitec Institute of Technology

+64 21 42 0118

Who wants to be part of a winning enterprise?

• In sports, the coach needs to know:

• rules of the game

• challenges of each position in the team

• goals we are seeking

• talents and interests of each player

1

2

3

Recognition of value

Creativity and

innovation

Motivation to make a

difference

Finding the required

resources

Using networks

extensively

Spotting and exploiting

opportunities

Financial, social or aesthetic capital

Overcoming obstacles

Growing an enterprise that

succeeds

Controlling the business

Putting the customer first

Showing determination in the face of

adversity

Managing risk

The entrepreneurial process

Bolton & Thompson, 2001

2. Grow an enterprise that succeeds

22

The entrepreneurial process:the complete model

Exercise: A winning enterprise? ... ... or a team of winners?

• EXAMINE the pieces of the entrepreneurial process (EP) ‘jigsaw’.

• IDENTIFY the piece(s) of the jigsaw that you can most contribute to your team.

• JUSTIFY your choice to your team in terms of your talents, interests, and/or strengths.


Creativity and

innovation


difference


resources

Using networks

extensively


opportunities




succeeds




adversity

Managing risk




22

The entrepreneurial process: a partial model

4

5

6


Creativity and

innovation


difference


resources

Using networks

extensively


opportunities

Financial, social or aesthetic

capital



succeeds




adversity

Managing risk



Create capital wealth

Create financial, social, or

aesthetic capital

Gain mass uptake of

innovative products or services

Reward investors and

partners

Apply eco-sustainable production

Have fun, do good, make

money

33


Creativity and

innovation


difference


resources

Using networks

extensively


opportunities


capital



succeeds




adversity

Managing risk



Create capital wealth

Create financial, social, or

aesthetic capital

Gain mass uptake of

innovative products or services

Reward investors and

partners

Apply eco-sustainable production

Have fun, do good, make

money

33


Creativity and

innovation


difference


resources

Using networks

extensively


opportunities


capital



succeeds




adversity

Managing risk



Exploit opportunities


opportunities

New services

New products

New production methods

New product & service delivery methods

24

7

8

9


Creativity and

innovation


difference


resources

Using networks

extensively


opportunities


capital



succeeds




adversity

Managing risk



Exploit opportunities


opportunities

New services

New products

New production methods

New product & service delivery methods

24

?

Source: http://brainz.org/media/uploads/2009/02/3237757930_5393324981_m.jpg

Biomimicry

Source: http://brainz.org/media/uploads/2009/02/3237757930_5393324981_m.jpg

10

11

12

Sources ofentrepreneurial opportunities

Opportunity source Scope Example

New knowledge Biomimicry Velcro

Climate change Green consumersim Eco-kettle

Economy Fashion Second-hand clothing;Re-created clothing

Demographic change War, migration, medical technology

Home help for DINKS and elderly

Why? What if? ... do people smoke? What if we could invent a safe substitute

Risk into opportunity Living on a volcano Adventure tourism

Source: Mellalieu; Frederick & Kuratko (2010); Drucker, (1985)


Creativity and

innovation


difference


resources

Using networks

extensively


opportunities


capital



succeeds




adversity

Managing risk



Put the customer first


Product and service improvement

Order fulfilment

Market feedback and

research

Sales and market planning

30

Growing an enterprise that succeeds

13

14

15


Creativity and

innovation


difference


resources

Using networks

extensively


opportunities


capital



succeeds




adversity

Managing risk



Put the customer first


Product and service improvement

Order fulfilment

Market feedback and

research

Sales and market planning

30

Growing an enterprise that succeeds


Creativity and

innovation


difference


resources

Using networks

extensively


opportunities




succeeds




adversity

Managing risk




22

Overcome obstacles


Creativity and

innovation


difference


resources

Using networks

extensively


opportunities


capital



succeeds




adversity

Managing risk



Find resources

Finding the required resources

Lead customers

Investment finance

Methods, equipment, and

materials

Skilled employees and

partners

26

16

17

18


Creativity and

innovation


difference


resources

Using networks

extensively


opportunities


capital



succeeds




adversity

Managing risk



Find resources

Finding the required resources

Lead customers

Investment finance

Methods, equipment, and

materials

Skilled employees and

partners

26


Creativity and

innovation


difference


resources

Using networks

extensively


opportunities


capital



succeeds




adversity

Managing risk



Use networks

Using networks

Exchange contact details

“Press the flesh”

Build a contacts database

Ask and offer advice

29


Creativity and

innovation


difference


resources

Using networks

extensively


opportunities


capital



succeeds




adversity

Managing risk



Use networks

Using networks

Exchange contact details

“Press the flesh”

Build a contacts database

Ask and offer advice

29

19

20

21

Motivation to make a difference

Make a difference

Organisational mission, purpose,

and values


Creativity and

innovation


difference


resources

Using networks

extensively


opportunities


capital



succeeds




adversity

Managing risk



23

Why create an enterprise?

Motivation to make a difference

Make a difference

Organisational mission, purpose,

and values


Creativity and

innovation


difference


resources

Using networks

extensively


opportunities


capital



succeeds




adversity

Managing risk



23

Why create an enterprise?

Profit is the MEANS through which an enterprise achieves its OBJECTIVES

22

23

24


Creativity and

innovation


difference


resources

Using networks

extensively


opportunities




succeeds




adversity

Managing risk




22

The entrepreneurial process:the complete model

Exercise: A winning enterprise? ... ... or a team of winners?

• EXAMINE the pieces of the entrepreneurial process (EP) ‘jigsaw’.

• IDENTIFY the piece(s) of the jigsaw that you can most contribute to your team.

• JUSTIFY your choice to your team in terms of your talents, interests, and/or strengths.

• NEGOTIATE the best allocation of the pieces of the jigsaw to create a ‘winning team’.

• IDENTIFY how you will address weaknesses in your team’s talents and/or interests.

Further reading• Bolton, B., & Thompson, J. (2003). The Entrepreneur in Focus. London:

Thomson. Retrieved from http://books.google.com/books?id=KxTN68uZKGkC&printsec=copyright&dq=book+bolton+thompson+the+entrepreneur+in+focus#PPR5,M1

• Bolton, B., & Thompson, J. (2004). Entrepreneurs: Talent, temperament, technique (2nd ed.). Oxford: Butterworth Heinemann. Frederick, H., & Kuratko, D. F. (2010). Entrepreneurship: Theory, Process, Practice (Asia-Pacific Edition) (2nd ed.). Melbourne: Cengage Learning.

• Kawasaki, G. (n.d.). Art of the Start - website. Retrieved September 30, 2009, from http://www.guykawasaki.com/books/art-of-the-start.shtml

• Quotes by Richard Branson. (n.d.). Retrieved March 9, 2010, from http://www.gaia.com/quotes/richard_branson

25

26

27

Other sources• Biomimicry - burrs and velcro. (n.d.). . Retrieved from http://

media.brainz.org/uploads/2009/02/3237757930_5393324981_m.jpg

• Extreme Backpackers, Turangi - Peter Mellalieu

• Multimedia – Album – Sir Richard Branson | Virgin Galactic. (n.d.). . Retrieved March 10, 2010, from http://www.virgingalactic.com/multimedia/album/sir-richard-branson/ Velcro Hooks.jpg - Wikipedia, the free encyclopedia. (n.d.). . Retrieved March 10, 2010, from http://en.wikipedia.org/wiki/File:Velcro_Hooks.jpg

• The 15 Coolest Cases of Biomimicry. (n.d.). Retrieved March 10, 2010, from http://brainz.org/15-coolest-cases-biomimicry/

28

APMG8132 Strategies for Commercialising Innovation 1

Entreprneurship v’s Small Business

Paul Woodfield

Main Sources

• Timmons, J. A., & Spinelli, D. (2003). New venture creation: Entrepreneurship for the 21st century. (6th ed.). New York: McGraw-Hill. • Schaper, M., & Volery, T. (2004). Entrepreneurship and

small business: A Pacific Rim perspective. Milton, Australia: John Wiley & sons.

Entrepreneurship

•  Entrepreneurship—a way of thinking, reasoning, and acting that is opportunity obsessed, holistic in approach, and leadership balanced

(This definition of entrepreneurship has evolved over the past two decades from research at Babson College and the Harvard Business School and has recently been enhanced by Stephen Spinelli, Jr., and John H. Muller, Jr., Term Chair at Babson College.)


Defining entrepreneurship

•  Entrepreneurship as a term was first used during the Industrial Revolution.

•  It described the new phenomenon of the individual who formulated a venture idea, developed it, assembled resources and created a new business venture.

Defining entrepreneurship

•  The entrepreneur has thus emerged as a pivotal figure who operates within a market.

Dimensions of entrepreneurship

•  There are three generally agreed conditions that are necessary for entrepreneurship to occur: 1) an individual who 2) performs an act that 3) involves innovation (properly defined)


Dimensions of entrepreneurship

•  But there is substantial disagreement whether the creation of an economic entity is a necessary condition to entrepreneurship.

Towards a definition of entrepreneurship

•  Entrepreneurship: The process brought about by individuals of identifying new opportunities and converting them into marketable products or services.

Summary

•  Entrepreneurship is the process brought about by individuals of identifying new opportunities and converting them into marketable products or services.

•  There are many possible outcomes to the entrepreneurial process. E.g. independent start-ups, corporate ventures, franchises and business acquisitions.


Summary

•  At a macro-level, entrepreneurs create new business ventures, jobs and wealth, but they also force out of the marketplace the enterprises which failed to innovate.

•  What is a small business then???

A general definition

•  Small business: a small-scale, independent firm, which is usually managed, funded and operated by its owners, and whose staff size, financial resources and assets are comparatively limited in scale.

•  Most definitions are a mixture of both qualitative and quantitative measures.

Definitions of a small business

In a general sense, a business can be regarded as small if it has the following characteristics:

•  independently owned and operated (not part of a larger corporation)

•  the business has a small market share



•  the owners make most decisions and are not answerable to anyone else

•  the owners contribute most of the capital •  the owners bear the risk •  …and they are entitled to the profits


Some common quantitative variables which are used to categorise and sort businesses include:

•  the number of staff •  wages and salaries expenditure •  legal structure


•  total annual turnover (sales revenue) •  value of firm assets •  share of ownership that is held by the owner/manager(s)


International definitions of small business (Source: Schaper & Volery 2004, p73)

Entrepreneurs & small business owners compared (Source: Schaper & Volery, 2004, p88)

Classic Entrepreneurship: The Startup

•  Raw startup company—an innovative idea that develops into a high growth company •  Qualities of a startup company

•  Strong leadership from the main entrepreneur •  Complementary talents and outstanding teamwork of team

members •  Skill and ingenuity to find and control resources •  Financial backing to chase opportunity


•  Time for new technologies to reach 25% of the U.S. Population •  Household electricity (1873)—46 years •  Telephone (1875)—35 years •  Automobile (1885)—55 years •  Airplane travel (1903)—54 years •  Radio (1906)—22 years

New Technology

New Technology

•  Time for new technologies to reach 25% of the U.S. Population •  Television (1925)—26 years •  Videocassette recorder (1952)—34 years •  Personal computer (1975)—15 years •  Cellular phone—13 years •  World Wide Web—7 years

The Entrepreneurial Process

•  It is opportunity driven •  It is driven by a lead entrepreneur and an entrepreneurial

team •  It is resource parsimonious and creative •  It depends on the fit and balance among these •  It is integrated and holistic

2/23/11

1

Small Business Management

APMG NZ115 Paul Woodfield

Session 2

2

Recap… •  A Business Organisation - An organisation

established with the purpose of making a profit for its shareholders through providing goods and services to its customers

•  David Slack Case

•  Entrepreneurship - ‘person’ who habitually creates and innovates to build something of recognised value around perceived opportunities. (Bolton & Thompson)

Small business survival and success

2/23/11

2

4

Our agenda for today

•  What’s the chance of small business failure?

•  How can we reduce the odds of failure? •  How can we learn to be successful?

5

6

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3

7

Do most small businesses fail?

•  “It is not true that 80% of small businesses fail within five years.

•  The figures are: –  20% fail –  20% stop when the owners find it just ‘isn’t them’ –  20% stop and restart when partners part –  20% sell to another owner-manager –  20% keep going.”

–  (Higham & Williams, p. 12)

8

Lack of organisation and management skills

•  “Many small business founders lack organisation and management skills.

•  They are all too often the best people to start a business, but the worst managers of that business.

–  (Oliver & English, p. 7)”

9

Running out of money…

•  “Small, new businesses tend to be under-capitalised and frequently experience shortages of working capital and credit.”

–  (Oliver & English, p. 6)

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10

What size is best?

•  Businesses which are started up with a size of between 6 and 9 employees are 50% more likely to survive the first few years of business than those started up with a size of 5 or fewer employees.

–  (Cameron & Massey, Figure 1.7)

11

What size is best?

•  Firms with 1, 2, or 3 employees at birth have a much lower survival rate than larger firms.

•  Firms with 5 employees at birth have the same survival rate as those starting with 10, 20 or more employees

– Kirchoff in Bygrave (1997, p 461)

12

What size is best?

•  It is probable that the number of employees at birth is actually a surrogate measure for the extent of resources at birth.

•  In other words: –  More start-up capital –  Wider variety of knowledge and skills –  More realistic assessment of chance of success

•  Kirchoff in Bygrave (1997, p 461) •  Mellalieu

2/23/11

5

13

Sustainable competitive advantage

•  How do we build a business that provides either better products and services – More cheaply and/or – More quickly …

•  Than anyone else can achieve … •  … On an ongoing basis

14


•  Does Speeches.com have a sustainable competitive advantage?

15

The secret

•  Develop a business that is… – Based around a market ripe for

development – Uses skills, products, or knowledge that you

can readily acquire

2/23/11

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16

The initial seeds of the business concept

•  Define the ideal market •  “Broad brush” definition of product •  Price •  WHY the product will sell? •  HOW will you make the product? •  HOW MUCH you will sell?

17

Six key issues at start-up

•  Number and nature of associates who will found the business

•  Decision making structures •  Initial financial capital •  How to keep the distinction between the

business and your personal life •  Your ambitions for the business

– Oliver & English

18

Exercise •  While many business may fail, there are

a number that are successful….

•  Class Exercise – Jot down several key ‘ingredients’ that you

think are important to the success of a business.

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19

•  Market research •  Capital •  Product •  Management •  Pricing of product/service •  Consumer interest •  Stakeholders •  Distribution •  Innovation •  Cashflow •  Passion •  Drive and energy •  Communication •  Charisma •  Commitment •  Advertising •  Marketing •  People (HR) •  Technical skills •  Understanding Product cycle

20

Exercise

•  Class Exercise – Make a list of what you think might be the

pros & cons of self employment

21

• Pros • Being your own boss • Doing something you like • Profits • Flexibility • Hours • Satisfaction • Creativity • Sense of accomplishment/ pride

• Cons • Having full responsibility • Erratic income • Financial pressured • Overworked • Can’t afford to be sick • No holidays • Own book keeping • Financial risk • Family risk

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22

•  Funding •  Future market •  Research •  Raw materials •  Marketing and promotion •  Business •  Support eg. Mentor, partners, consultants •  Risk management •  Premise •  Accountants, lawyers •  Employees •  Sustainable •  Culture •  social, environmental •  Innovation •  Growth •  People skills eg. Relationships with co-workers, suppliers,

clients, customers

23

Exercise

•  Question??? – What challenges/issues do you think are

facing businesses today?

24

•  IRD •  Competition

–  Similar products –  Global market

•  Getting finance •  Legislation •  Economy •  Interest rates •  Staff •  Market regulation •  Pressure groups •  Political party •  Inflation •  $

2/23/11

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25

Challenges/Issues •  Exporting/importing – also not so much NZ made

products being bought •  Environmental impacts eg. Carbon credits •  Social impacts •  Health and safety •  Resource management •  Human resources •  Council by-laws •  ACC •  Size of market •  Location eg. Isolated •  Government •  Knowledge

26

Exercise

•  Research studies have attempted to identify personal characteristics of a successful small business operator.

•  Make a list of at least five characteristics you believe are common to successful business operators

27

Pros and cons of self-employment – Advantages

•  Be your own boss – be independent – BUT you may underestimate the

commitment required •  A chance to make money

– BUT the risk of loosing everything •  Achieve feeling of personal worth,

accomplishment, recognition

2/23/11

10

28

Advantages

•  Develop your own ideas, products, services

•  Work/succeed at something you enjoy – BUT must appeal to a large enough market

•  Achieve economic security

29

Disadvantages

•  Hard work – up to 15 hours/day •  Uncertain and fluctuating income •  Unrelenting pressure to make decisions •  Your ‘boss’ becomes your customer,

your suppliers, your banker, •  You may come to hate the business

30

….summary Pros •  Own work hours •  No boss •  Treated better by customers •  In charge of own income •  Fire people •  Lifestyle •  Get known in industry •  Vision – you know where the business is going Cons •  Unreliable income •  Stress •  Take your problems home •  Long hours •  Housekeeping/paperwork •  Getting a mortgage •  Hard jobs eg debt collection •  Making sure there is enough income for employees

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31

What is associated with successful small business operators?

•  Independence •  Strong sense of enterprise •  Dislike of conformity and routine

–  Drive, energy, involvement; goal setting; risk taking; use feedback; tolerate uncertainty; innovative; recognise opportunities; competitive; resourceful; task oriented; self confident; persistent; deal with failure; manage time; take initiative; use outside resources; assertive; ambitious; optimistic

32

What is associated with successful small business operators?

•  BUT •  A tremendous diversity in the

characteristics and motives of people who successfully own and operate businesses

33

What skills and experience are required?

•  Well-rounded management skills –  Marketing

•  Product lifecycle; market research; product positioning; store layout; pricing; sales forecasting, personal selling, advertising, ….

–  Financial •  Profit planning, budgeting; book-keeping; payroll; using

an accountant, … –  Operating

•  Purchasing; stock control; recruitment; quality control; scheduling; computer systems; …

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34

Do you have the skills?

•  Gain work experience using the skills you need

•  Or in the business you intend to create •  Attend training programmes •  Employ people with complimentary skills •  Engage outside consultants, advisors

35

*Start-up sequence

•  1. Examine your motivation for entering business –  Must be based on your objectives, your talents,

your personality •  2. Choose a business that suits

–  Capitalise on your talents, interests, experience •  3. Evaluate the feasibility of the chosen

business –  Demand? Market research? How long can you

survive until breakthrough into profit? –  Could you cope with the worst possible events?

36

*Start-up sequence

•  4. List all start-up requirements – Legal form; premises; permits; licences;

suppliers; records; compliance; risks and insurance;

•  5. Develop a business plan – Your strategy for the development and

operation of the business: research, thinking; vision for expected results.

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37

Mistakes to avoid

•  Avoid thinking your accountant will do your planning

•  Avoid informal, verbal partnerships •  Avoid paying for licences, contracts until

financial planning is complete •  Avoid discovering that everything takes

longer, costs more than you expected.

38

Reasons for abandoning a small business

•  Lack of hard-nosed business advice – –  Drawing on advice from friends and family

•  Exhaustion: –  Over 50% of small business owners work more

than 60 hours per week •  Family – business pressure: time and money •  Market place knowledge:

–  Overestimation of market size, underestimation of competitors’ strength; underestimation of how to target sales to the market

•  Timely and accurate financial information

39

The challenge of family businesses

•  25% of new (2 + person) small businesses in NZ have one or more ‘family’ members owning and controlling more than 50% of the business. – Compares with: Brazil: 14%, USA 26%;

Singapore 35%; Australia 23%. Average 24%

– GEM 2002

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40

Succession…

•  Only 20% of new business start-ups expect other family members to be involved in the business over the next 5 years.

•  The statistics of the ownership of family businesses from generation to generation also identifies threats.

•  According to Kets de Vries (1993), about 3 out of 10 family businesses make it past the first generation and only 1 in 10 make it through the third generation.

41

Family conflicts •  Business goals

–  Hire most competent –  Allocate salaries

according to performance

–  Promote high performers

–  Train to meet business needs

•  Family goals –  Hire relatives in need –  Allocate salaries

according to needs

–  Promote siblings equally

–  Train for individual development

42

Family objectives

•  Conservative financial practices •  Comfortable, but not extravagant

lifestyle •  Protect financial security of future

generations •  Maintain family relationships, loyalty and

trust

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43

Successful family businesses

•  Strong sense of belonging •  Common purpose and commitment •  Intimate understanding of:

–  the mechanics of the business operations –  How decisions are made –  How each individual contributes –  The delicate balance between family and business

life •  Loyalty, reliability and pride

44

Women in small business

•  1976: 6% of owner managers were women (in NZ)

•  1996: 36% - a 6-fold increase – Source: Cameron & Massey (1999), Fig 1.2

45

Women may be more successful…

•  Keep debts and overheads low •  Prepare more thoroughly before starting •  More likely to seek professional

guidance

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46

Women’s choice to enter SME

–  Resolve competing demands of work and family –  Avoid career limitations of corporate sector –  Needs careful establishment of priorities and time

management –  Start before having children – or once they are not

so dependent –  Some discrimination against women – but barriers

disappearing –  Join women’s business help networks http://www.womens-business.org.nz

47

Learning about small business

•  The volume of documented information is doubling every 8 years

•  By 2010, the volume will be doubling every 11 hours!

People who succeed in business…

Don’t do so because of what they know… But because of their insatiable need to know

more… – Michael Gerber

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49

The ability to learn faster and deeper…

•  … than your competitors may be the only sustainable competitive advantage

– De Geus, Royal Dutch Shell

50

Trial and error….

•  … is an expensive way of achieving a business education.

– Oliver and English

51

If you think EDUCATION is expensive…

•  You should try IGNORANCE!!!

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52

Learn about…

•  Our products •  Our customers •  Our profession •  About similar businesses •  About business management

53

Learn from…

•  Books •  Education and training courses •  People •  Groups, networks •  Seminars •  Suppliers •  Information services •  The internet •  Consultants and advisors

54

Key references

•  Oliver & English, Chapter 1 •  Cameron & Massey, 1999, ch 1.

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55

Next Week

•  Finding an opportunity •  Sources of business ideas •  Reality Testing your Business Idea •  Buying or Establishing a New Business

56

Homework for next week

•  Read Chapter 2 of Oliver & English

•  Do the “Self Employment Test”. End of Ch 6 “Business Planning” in Oliver & English. Complete and bring along next week to discuss

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1

Foundation Business Planning and Strategy

Oliver & English, Business, Ch 6.

2

This Week •  What is an investor looking for? •  Foundation Business Planning and

Strategy •  Oliver & English, Chapter 6

3

Assignment Questions

•  What is a Niche?

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4

What is an Investor looking for?

5

Dragons Den

6

Dragons Den

•  Discussion Questions •  What were the strengths and flaws in the

presentation pitch? •  What is main value for an investor in this

opportunity? •  What were the main reasons that the Dragons

chose the investment proposal? •  Do you agree with the decisions made by 'the

Dragons'. Why? Why not? •  How would you have improved on the pitch

delivered?

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7

What an investor is looking for…

• Determine the characteristics of – The industry and – This particular company.

•  What other publicly held similar companies are there? •  Is there a larger company that is extremely successful? •  Is the company in a 'glamour field'? (important to ensure a good public offering)

–  Source: http://www.1000ventures.com/venture_financing/bp_evaluationbyinvestors_byvpa.html

8


• Determine the terms of the deal. – How much of the company is being sold for what price? – What is the form of debt or equity being requested? – How will the funds be used? – To retire old debt (bad idea)? – To undertake new activities that will, in turn, increase

profitability? –  Source:

http://www.1000ventures.com/venture_financing/bp_evaluationbyinvestors_byvpa.html

9


• Review the bottom line with special emphasis on years three through five.

– Earnings or potential earnings are reviewed to determine company's valuation.

– Sensitivity analysis, or what if analysis to see how the business model adjusts to changing prices, expenses and competition.


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10


• Determine the calibre of the people in the deal. (The most important aspect of the business plan!)

– What is the track record of the founders and managers?

– How much balance and experience does the inner management team possess?

– How long have the members worked together? – Who are the banker and accountant, and what are

their credentials? –  Source:

http://www.1000ventures.com/venture_financing/bp_evaluationbyinvestors_byvpa.html

11


• The marketing plan is reviewed with careful consideration to current and future threats.

– Is the product or service in demand now or will it be in the near future?

– What is the Unique Selling Proposition for the product?

– What other company or companies are already in this space that could leap frog this business?

– Can the customer be easily identified and marketed to successfully?


12

Different types of plans

•  Audience (for whom is the document being prepared?)

•  Timeframe (how far in advance does the plan cover?)

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13

Types of plans

•  Marketing plans –  Identifying and satisfying market segments –  Creating strong competitive advantage

•  Operating plans –  Production plans – derived from marketing plan –  Operating processes, procedures, workflow and efficiency

•  Financial plans –  Financial quantification of marketing and operating plans –  Budgeting –  Support applications for finance

14

Why planning is important

•  Helps you work smarter rather than harder •  Keeps you future-oriented •  Keeps you motivated to achieve results you

want •  Helps you identify the commitments you need

to make •  Increases chances of survival and prosperity

15

Planning focuses attention on

•  Realism – fact-based optimism •  The need for outside advice •  Recognising changes in customer

needs and markets •  Balancing growth with capital availability •  Results against goals and standards •  Obtaining finance from financiers

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16

Myths and realities

•  MYTH: – Planning is a guarantee of success

•  REALITY: – A plan is NECESSARY but NOT

SUFFICIENT for success

17

Myths and realities

•  MYTH: – Small businesses cannot afford the time

and expense of formal planning

•  REALITY: – A failure to plan is a plan for failure! – A significant proportion of small businesses

DO plan

18

Myths and realities

•  MYTH: – Small businesses can use the same

planning processes as larger businesses

•  REALITY: – Small businesses plan in a different way

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19

Myths and realities

•  MYTH: –  You can pay someone else to do your plan

•  REALITY: –  Your plan is a reflection of YOUR vision and

aspirations. –  No one else (such as your accountant) will have

the commitment YOU have to your business

20

Guidelines for small business planning

•  Use a planning period of 2 to 3 years •  Write it down •  Keep it simple and short (KISS!) •  Integrate marketing and operational planning •  Review and update your plan every quarter •  A realistic plan may help you abandon a bad

idea while your mistakes are still on paper

21

The structure of a business plan

•  1. Introduction •  2. Marketing plan •  3. Operations plan •  4. Financial plan •  5. Conclusions •  6. Supporting exhibits

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22

The structure of a business plan

•  1. Introduction –  An overview of the business and the people who run it

•  2. Marketing plan –  Demonstrates that your business can achieve the sales indicated in

the financial forecast •  3. Operations plan

–  Shows HOW you intend to get everything done •  4. Financial plan

–  The most likley estimates of future financial performance •  5. Conclusions

–  Summary of business’ strengths and how known weaknesses will be managed

•  6. Supporting exhibits –  Documentary evidence to substantiate your claims

23

1. Introduction

•  1.1 Objectives of the document –  Operating guide? –  Financing proposal?

•  Who wants the finance •  How much money is required •  How the money will benefit the business

•  1.2 The industry –  Present status and prospects –  New products, markets, customers –  National, regional, economic trends

24

Introduction

•  1.3 The business –  Business name –  Legal organisation

•  Proprietorship, partnership, or company

–  Main activities •  Retail, service, manufacturing, wholesale, or combination

–  Status of business •  Start-up, expansion, purchase of exising operation

–  Location and facilities

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25

Introduction

•  1.4 Management –  Capacity of the management team and advisers –  Personal histories of principals –  Work experience relevant to the business –  Duties, responsibilities, and salaries

•  1.5 The product or service –  Description –  Primary and important secondary uses –  Unique and/or superior features –  Opportunities for expansion of product line or related

products and services –  Product design and development activities and costs

26

2. Marketing plan

•  2.1 Customer profile –  Customer characteristics –  Basic buying motives

•  2.2 Market size –  Potential customers in the trading area –  How much will they spend –  Expansion possibilities? (Why?)

•  2.3 Competition –  Who are the nearest competitors –  Their operations and market share –  Why you will capture their market –  How you will defend your market share

•  2.4 Sales estimates

27

2. Marketing plan

•  2.5 Product or service –  Specific characteristics and unique features –  Backup services and guarantees to be offered

•  2.6 Price –  Price, compared with market prices –  Discounts to retailers or agents –  Discounts for fast payment or bulk purchase

•  2.7 Place –  Characteristics of the place of business –  Location, size, image, style, parking, visibility, –  Proximity to main roads and main markets

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28

2. Marketing plan

•  2.8 Positioning –  Ideal market position –  How customers’ perceptions will be influenced

•  2.9 Promotion strategy –  Advertising media –  Calendar of promotional events

29

3. Operations Plan

•  3.1 Competitive priorities –  Cost, quality, flexibility, and/or delivery –  How excellence will be achieved

•  3.2 Plant and machinery –  Types of machinery and capacities needed –  Functions required to be provided by the premises

•  Space, facilities, other features

•  3.3 Staff –  Current and future staffing needs –  Skills required –  Availability of skilled staff –  Permanent ore casual, full time or part time

•  3.4 Processes and procedures –  Special technologies and proprietary systems –  Routines and cycles for production and/or service delivery

30

4. Financial plan

•  4.1 Current financial position –  (If an existing business)

•  4.2 Statement of how funds will be used –  (If a funding proposal)

•  4.3 Set-up or new development costs

•  4.4 Funding required –  Amount and source of funds

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31

4. Financial plan

•  4.5 Product costing, pricing and breakeven –  How product costs have been calculated –  Breakeven analysis in relation to seling prices or chargeout rates

•  4.6 Forecast cash flow –  Monthly forecasts of cash flow, over 12 months –  Quarterly forecasts of cashflow for 2 years

•  4.7 Forecast profit and loss –  Monthly forecasts of profit or loss, over 12 months –  Quarterly forecasts of profit or loss for 2 years

•  4.8 Forecast balance sheet –  Opening and forecast closong balance sheets for three years.

32

5. Conclusion

•  5.1 Summary of business’ strengths

•  5.2 Acknowledgement of business’ weaknesses, and how they will be managed

•  5.3 Brief view of the longer term

•  5.4 Contingency plan for withdrawal –  (If a high risk venture)

33

6. Supporting exhibits

•  6.1 Detailed resumes of the principals •  6.2 Credit information •  6.3 Quotations or estimates •  6.4 Leases or buy/sell agreements •  6.5 Legal documents •  6.6 Census or demographic data

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34

The Business Planning Process (Schaper & Volery 2004)

1.  Set preliminary goals 2.  Conduct initial secondary research 3.  Confirm goals 4.  Conduct subsequent detailed research 5.  Develop draft business plan 6.  Critically assess the proposed plan 7.  Implement it 8.  Evaluate the plan

35

SWOT Analysis

•  Strengths •  Weaknesses •  Opportunities •  Threats

36

SWOT Analysis

•  Usually included in the Marketing section of business plan

•  Helps assess the competitive position of a business •  Should demonstrate the unique characteristics of the

business •  Aims are to help evaluate strategies that build

matching the business’ strengths to opportunities in the marketplace, and ….

•  … to isolate or minimise weaknesses and threats

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37

Small business life cycle

Phase Startup Take-off Harvest Renewal

Goal Survival Sales Profits Revival

Role Initiator Innovator Organiser

Developer Implementer Delegator

Administrator Manager Leader

Successor Reorganiser Revitaliser

Typical crises

Confidence Cash flow

Cash flow Delegation

Leadership Complacency

Inertia Succession

38

Next Week

•  Assignment hand-in •  Financial planning for a start-up

39

Homework for next week

•  Assignments!

1

Finding an Opportunity

Oliver & English Ch. 2

2

This Week

•  Self Employment test •  Finding an Opportunity •  Sources of business ideas •  Reality Testing your Business Idea •  Assignment 1

3

A business opportunity

•  Is MORE than a good idea •  Is it COMPATIBLE with YOUR personal

characteristics, skills experience? •  Does it instil CONFIDENCE and

ENTHUSIASM in you? •  Is there concrete EVIDENCE of a viable target

MARKET? •  Can it be done with the FINANCIAL

RESOURCES you can acquire? •  Can it generate the INCOME you need?

2

4

Types of business

•  Services •  Retailing •  Manufacturing •  Wholesaling

•  Examples of each???

5

Services

•  Performs a task for a customer •  Often requires specialised training,

experience or equipment •  Examples

–  Hotels, Accountants, Appliance repairers, House painters, Translation services, Childcare centres

•  Often only needs a modest investment eg Speeches.com

•  Service delivery depends largely on skills of the owner

•  2/3 of small business sector •  Greatest rate of growth

6

Retailing

•  Buys goods from manufacturer or wholesaler, and resells them to consumers

•  Examples – Groceries stores, Car dealers, Sport shops,

Butchers, Chemists, Clothing stores •  1/5 of small business sector

3

7

Manufacturing

•  Makes a consumer product that is sold to the public, OR

•  Makes an industrial product that is sold to other businesses

•  Examples –  Boat builders, Furniture makers, Wineries, Cheese

makers, Wholesale nurseries •  Dominated by larger firms •  Less than 1/10 of the small business sector

8

Manufacturing

•  Special issues – Supply of raw materials – Location of plant with respect to raw

materials, labour, transport, customers – Product quality control – Changes in consumer tastes – Competition from foreign manufacturers – Cost and productivity of labour

9

Wholesaling

•  Buys goods from MANUFACTURERS and sells them to RETAILERS

•  Also called: distributors, manufacturers’ agents

•  Do not normally sell direct to public •  Examples

–  Building products; Beer, wine and spirits; Plumbing supplies; Hardware; Petroleum products

•  Smallest segment of small business sector

4

10

Wholesaling

•  Provide retailers with – Warehousing capacity close by – Credit – so retailers can carry wider range

of products – Joint sales promotions – Advice on market research, merchandising,

new product lines

11

Dragons Den •  The product has to be doing something unique. If

you're opening a sandwich shop, remember there are a thousand other sandwich shops. What makes you different? If you can't say, in one single sentence, what makes you different, then you don't have a difference. If it's too complex to explain then it's probably too complex to understand. Know what makes you different. The Impact you have to have a nose for an opportunity. What's an opportunity? When you can sell to someone else and make a profit. So know the price of your product. Know the market that you're planning to sell it to. Have a way to prove all of this to the investor that you're pitching to. In doing this, you aim to show them that there is an opportunity and that you know the size of it. The size of the opportunity will translate directly, to that investor, the value of your company.

12

Dragons Den Discussion Questions •  What were the strengths and flaws in James

Brown's presentation pitch? E.g. His passion. His detailed knowledge of all aspects of his project. His composure (he did not 'loose his cool')

•  What is main value for an investor in this opportunity?

•  What were the main reasons that the Dragons rejected James Brown's investment proposal?

•  Do you agree with the decisions made by 'the Dragons'. Why? Why not?

•  How would you have improved on the pitch delivered by James Brown?

5

13

Dragons Den Discussion Questions •  Examine the website for James Brown's

Baltersan Castle. What are the strengths and weaknesses of the site from the point of view of (a) a potential investor (b) a purchaser of a timeshare 'lot'?

•  How would you have spent James Brown's UKP 125,000 to get this opportunity 'investment ready'?

Sources of business ideas

15

Myths… It is NOT TRUE that

•  There is a procedure you can use to search out all good business ideas

•  No – but you must understand consumer needs

6

16


•  You must discover a unique idea or new invention

•  No - Vast majority of small business ideas are excellent copies

17


•  A good idea will ensure success

•  No - Thousands of good ideas have gone bankrupt

•  Needs time, effort and good strategy to succeed

18


•  Any competent manager can manage any small business

•  No - Needs to be something you enjoy •  Enjoyment gives you energy and

enthusiasm for the tasks

7

19

Product/service and market ideas

Existing markets

New markets

Existing products or services

Market penetration ideas

Market diversification ideas

New products or services

Product or service diversification ideas

Innovation ideas

20


• Sell more of an EXISTING product (or service) to an EXISTING market • How can we increase consumption by our current customers? • How can we attract customers away from competitors? • LOWEST RISK – greatest number of known factors

Existing markets

New markets






Innovation ideas

21


• Existing product to new market • Example

– Exporting, – Internet sales – New class of customer

• MEDIUM RISK – experience with existing product

Existing markets

New markets






Innovation ideas

8

22

Product and service diversification ideas

• Develop (or import) new product for existing market

• HIGHER RISK – little experience with the product

Existing markets New markets






Innovation ideas

23

Innovative ideas

• New product or service for yet-to-be-created market • RISKS EXTREMELY HIGH

• Sources of ideas – Patents Office – Trade associations – Trade shows – Export departments of foreign embassies – Trade journals – Overseas visits – Research laboratories

Existing markets

New markets






Innovation ideas

24

Spotting market trends

•  Identify IMPACT of trends on consumer spending •  Examples

9

25

Spotting market trends

•  Identify IMPACT of trends on consumer spending •  Examples

–  People aged over 65 increasing rapidly –  Number of one-parent families rising –  People with formal educational qualifications is rising –  Proportion of women in the workforce is rising –  Consumer interest in environmentally-friendly products is

growing –  Increasing demand for convenience and time-saving –  Streamlining of company operations

Reality Testing your Business Idea

Oliver & English, Ch. 2

27

42 Below

10

28

Reality testing check list

•  Sector characteristics •  Personal fit •  Essential strategic factors •  Financial feasibility

29

Sector characteristics

•  Understand the business:- •  What sector? •  Nature of the product and/or service? •  What customer need does it fulfil? •  What skills are needed to offer the product or

service? •  How easy to enter the kind of business? •  What level of investment is required? •  How long until you can expect to make a

profit?

30

Personal fit

•  The fit between YOU and THE IDEA:- •  What personal characteristics, skills,

experience can you bring to the business?

•  Does OPERATING the business represent an extension of your own goals, values and capabilities?

11

31

Essential strategic factors

•  The elements that are ABSOLUTELY NECESSARY for the business to succeed

•  Vary ENORMOUSLY from business to business

•  Some are SFs are beyond your control – Usually external to our business

•  Others are under your control – Usually internal to the business

32


•  Factors beyond our control… –  Extent of competition –  State of the economy –  Social and cultural trends –  Developments in technology –  Legal restrictions –  Government regulations –  Taxation –  Industrial relations

33


•  Factors under our control: – Purchasing – Production – Staffing – Marketing – Finance – Products/services

12

34

Financial feasibility

•  Can the business produce the level of income we require?

•  Based on: –  Your living expenses –  Tax rate –  Your financial investment in the business

•  … and the rate of return you should expect –  Typical net profit per sales –  Sales potential

•  See Oliver & English, Chapter 2

35

Other topics

•  Buying or Establishing a New Business •  Attitudes, Values, Ethics, and Culture:

The Manager as a Person

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Unit 2.4: Financial Planning for Start-up

Oliver & English, Ch 7-10 Financial Management

Reasons for discontinuance of business

!  … in shopping malls !  36% failed to realise a profit !  16% to prevent further losses !  7% bankruptcy

Watson & Everett (1992) in Cameron & Massey, 1999, p. 72

Failure rates in small business

!  … are high in the first three years, then lessen considerably

!  The four main reasons for failure are: !  No support structures for advice and finance !  New owner-managers can’t learn quickly enough the

functional business skills – marketing, finance, operations, &c

!  Sales margins are not high enough to cover expenses !  Profitable, BUT - insufficient capital to cope with set-up

costs, and working capital Cameron & Massey, 1999, p. 74

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Financial information

!  A bad situation can be made WORSE if there is inadequate financial information, especially lack of attention to … cash flow forecasts.

!  Cameron & Massey, 1999, p. 74

Why planning is important

!  Helps you work smarter rather than harder !  Keeps you future-oriented !  Keeps you motivated to achieve results you

want !  Helps you identify the commitments you need

to make !  Increases chances of survival and prosperity

Types of plans !  Marketing plans

!  Identifying and satsifying market segments !  Creating strong competitive advantage

!  Operating plans !  Production plans !  Operating processes, procedures, workflow and efficiency

!  Financial plans !  Financial quantification of marketing and operating plans !  Budgeting !  Support applications for finance

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The structure of a business plan/1

!  1. Introduction !  2. Marketing plan !  3. Operations plan !  4. Financial plan

!  The most likely estimates of future financial performance

!  5. Conclusions !  6. Supporting exhibits

4. Financial plan

!  4.5 Product costing, pricing and breakeven !  How product costs have been calculated !  Breakeven analysis in relation to selling prices or chargeout rates

!  4.6 Forecast cash flow !  Monthly forecasts of cash flow, over 12 months !  Quarterly forecasts of cashflow for 2 years

!  4.7 Forecast profit and loss !  Monthly forecasts of profit or loss, over 12 months !  Quarterly forecasts of profit or loss for 2 years

!  4.8 Forecast balance sheet !  Opening and forecast closing balance sheets for three years.

Topics to come…

!  Goods and Services Tax – GST !  Tutorial Exercise: Trans-Crash Transport Company

(See Oliver & English, pp 184-185)

!  TCTC: The ‘pot of gold’ or ‘back of the envelope’ calculations

!  Introduction to spreadsheet analysis !  TCTC: Detailed profit and breakeven analysis !  Reading financial reports !  TCTC: Cash-flow forecasting !  Recovering or avoiding cash flow crises

2/23/11

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Trans-Crash Transport Company – Part I

!  Part I: The ‘pot of gold’ or ‘back of the envelope’ calculations (See Oliver & English, pp 184-185)

!  Calculate the following data for a 12-month period: (IGNORE the ‘additional information’.) !  Total Annual Distance travelled by each of the 2 trucks !  Total Annual Revenue earned by each truck !  Total Annual Variable Costs paid to run each truck !  Total Annual Fixed Costs to operate the business !  Gross Profit = Add up the Annual Revenues, subtract the Annual

Variable Costs, subtract the Annual Fixed Costs

!  Do you think TCTC is worth buying?

Peter MELLALIEU

Once you have attempted this exercise, examine the sample Test in the Course Handbook that presents the use of a spreadsheet for investigating this problem.

Peter MELLALIEU

1

Buying or Establishing a New Business

Chapter 2

2

Establishing a New Business

Of an EXISTING type: YES, only if EITHER :

Market has expanded AND Market not adequately served

OR Existing suppliers not meeting needs of customers

3

Establishing a New Business

•  A NEW type of business –  YES, if you have a product or service that

customers WILL buy.

•  High risk option •  Ensure that there are IDENTIFIABLE HIGH

GAINS if you are successful – but not guaranteed!

•  How easy is it for a competitor to COPY you?

2

4

Advantages and disadvantages ADVANTAGES DISADVANTAGES

5

Advantages and disadvantages ADVANTAGES • Match business to YOUR goals • Easier to innovate • Design the business YOUR way • Avoids paying for ‘goodwill’ • Avoids unknown liabilities and ill-will of customers, suppliers, employees

DISADVANTAGES • Less certainty about market demand • Takes time to create image, build patronage, eliminate system ‘bugs’, reach break-even • Find new staff, suppliers • Access to finance • Response of competitors

6

Buying an existing business

•  You are buying someone else’s: •  Location •  Premises •  Equipment •  Stock •  Customers •  Staff •  Goodwill

3

7

Advantages and Disadvantages ADVANTAGES • Immediate income from sales • Saves time equipping and stocking • Proven location • Established relationships • Easier to finance

DISADVANTAGES • Stuck with previous owner’s bad decisions • Unwanted stock? • Outmoded equipment? • Unsuitable staff? • Poor location? • Reputation? • Morale of employees?

8

Advantages and Disadvantages ADVANTAGES DISADVANTAGES

9

Valuation of business to buy

•  Price you offer depends on ability to earn a profit… And the risk associated with the business

•  Assess financial statements •  Income tax and GST records •  Sales and profit increases? •  Rate of return on owner’s investment •  Compare with industry profile •  Identify operating problems

4

10


Capitalised value = EBIT/R

•  R = Capitalisation Rate •  EBIT = Net earnings after expenses, before

interest and tax

Example: •  $25,000 / 5% = $500,000

•  $25,000 / 20% = $125,000

11


Appraised value (of Tangible Assets): •  Net value of assets to be transferred •  Using current market value of assets •  Stock – Ensure saleable! •  Sales and office supplies •  Fixtures and equipment •  Debtors – those who owe the business money

– collectible?

12

Goodwill

5

13

Goodwill

Goodwill = an intangible asset •  Represents the ability of the business to earn

greater profits (now) than if you start the business from scratch

G = Sellers Asking Price – Appraised value of Tangible Assets

Should be G <= Capitalised Value – Appraised Value

PowerPoint Presentation by Charlie Cook © Copyright The McGraw-Hill Companies, Inc., 2003. All rights reserved.

Attitudes, Values, Ethics, and Culture:

The Manager as a Person

15

Ethics • Exercise

– Virtue – Values – Morals – Legal

6

16

Ethics

• Organizational Stakeholders – Shareholders, employees, customers, suppliers,

and others who have an interest, claim, or stake in an organization and in what it does

• Each group of stakeholders wants a different outcome and managers must work to satisfy as many as possible.

• Managers have the responsibility to decide which goals an organization should pursue to most benefit stakeholders—decisions that benefit some stakeholder groups at the expense of others.

17

Ethics •  Clarifying Business Ethics

–  Legality –  Social Responsibility –  Morality

18

Ethics

• Ethics – Moral principles or beliefs about what is right or

wrong – Ethics guide managers in their dealings with

stakeholders and others when the best course of action is unclear.

– Managers often experience an ethical dilemma in choosing between the conflicting interests of stakeholders.

7

19

Ethics

“The law often allows what honor forbids” Bernard Joseph Saurin (French dramatist)

“The most important human endeavour is the striving for morality in our actions” Albert Einstein

20

Legality vs Ethics

•  Just because something is legal, does not necessarily make it ethical

•  Examples?

21

On December 3rd 1984 accidental leakage of methal isocyanate gas in the Indian City of Bhopal killed some 2,400 Indians and injured a further 200,000, yet no laws of the State of Pradesh were violated

An example from history…

8

22

Morality

•  In his book, “Death in the Afternoon”, Ernest Hemingway wrote, “What is moral is what you feel good after, and what is immoral is what you feel bad after”

23

Morality

•  Morality relates to principles of right and wrong behaviour

•  Moral standards have a number of different sources - family, society, church, one’s organisation

•  Ethics is the study of morality, the discipline of dealing with what is ‘good and bad’

24

Morality Essentially, morality has to do primarily with

what is right and wrong, while ethics examines whether something is good or bad. It reflects on the moral standards of society.

Ethics could, therefore, be described as the practice of morality…

Business ethics is the study of morality as it applies to business behaviour

9

25

Ethical Decision Models

• Utilitarian Model – An ethical decision is one that produces the greatest

good for the greatest number of people.

• Moral Rights Model – An ethical decision is one that best maintains and

protects the fundamental rights and privileges of the people affected by it.

• Justice Model – An ethical decision is one that distributes benefits

and harms among stakeholders in a fair, equitable, or impartial way.

26

Practical Guide to Ethical Decisions

• Does the manager’s decision fall within usual and accepted standards?

•  Is the manager willing to personally and openly communicate the decision to all affected stakeholders?

• Does the manager believe that his friends would approve?

•  If the answer is “Yes” to all of the above, the decision is probably an ethical decision.

27

Ethical versus Unethical Decisions

• Ethical Decision – A decision that is reasonable or typical and that

stakeholders would find acceptable because it aids stakeholders, the organization, or society.

• Unethical Decision – A decision that a manager would prefer to disguise

or hide from other people because it enables the company or a particular individual to gain at the expense of society or other stakeholders.

10

28

Sources of An Organization’s Code of Ethics

Figure 3.7

29

Ethical Decisions and Dilemmas

• A key ethical issue is how to disperse harm and benefits among stakeholders. – If a firm has been very profitable for two years, who

should receive the profits? Employees, managers and stockholders all will want a share.

– Should the firm keep the cash for future slowdowns? What is the ethical decision?

– What about the reverse, when firms must layoff workers?

– If stockholders are the legal owners of the firm, shouldn’t they alone decide these questions?

30

Ethical Decisions and Dilemmas (cont’d)

• Some other issues managers must consider. – Should a firm withhold payment to suppliers as long

as possible to benefit the firm? •  This will harm its supplier who is a stakeholder.

– Should a firm provide severance pay to its laid off workers?

•  This will decrease the owners’ (the stockholders return).

– Should goods be bought from overseas firms that employ children?

•  If they aren’t bought, the children might not earn enough money to eat.

11

31

Why Behave Ethically?

32

Why Behave Ethically?

• Managers should behave ethically to avoid harming others. – Managers are responsible for protecting and

nurturing resources of the firm

• Unethical managers run the risk for loss of reputation. – This is a valuable asset to any manager; reputation

is critical to long term management success.

33

Social Responsibility

•  Social Responsibility –  A manager’s duty or

obligation make decisions that promote the welfare and well-being of stakeholders and society as a whole.

12

34

NZ Examples of Social Responsibility?

•  Warehouse – Tindall Foundation •  Hubbard’s •  Westpac Rescue Helicopter •  America’s Cup ‘Family’ •  Variety Club •  Carter Holt Harvey ‘Zero Tolerance’ for

accidents at work

35

Approaches to Social Responsibility

Figure 3.8 Source:

36

Approaches to Social Responsibility (cont’d)

• Obstructionist response – Managers choose not to be socially responsible. – They behave illegally and unethically; hiding and

covering up problems.

13

37


• Defensive response – Managers stay within the law but make no attempt

to exercise additional social responsibility. – Managers place shareholder interests above those

of all other stakeholders. – Managers argue that society should pass laws and

create rules if change is needed.

38


• Accommodative response – Managers acknowledge the need to support social

responsibility and try to balance the interests of different stakeholders against one another.

• Proactive response – Managers actively embrace the need to behave in

socially responsible ways and go out of their way to learn about needs of different stakeholders.

– They are willing to utilize organizational resources for both stockholders and stakeholders.

39

Johnson & Johnson Credo

Figure 3.9 Source: Johnson & Johnson Annual Report.

14

40

Ethical Issues in Business •  Inaccurate record keeping •  Exploitation of employees •  Misrepresentation •  Deceptive pricing •  Quality violations •  Lying to customers •  Pollution & environmental violation •  Bribery and corruption •  Deceptive gaining of competitive

information •  Insider trading •  Falsifying reports •  Unethical sales practices •  Violation of privacy •  Theft •  Inappropriate gift giving •  Endangering consumer welfare •  Exhibiting favouritism •  Collusion

•  Unsafe working conditions •  Inaccurate external reporting •  Nepotism •  Sexual harassment •  Inappropriate market research •  Exhibiting prejudice •  Betraying confidences •  Reneging on one’s duty •  Not adhering to technical standards •  Non disclosure of conflict of interest •  Double billing •  Taking personal advantage •  Exercising self-interest •  Inequitable treatment of employees •  Deceptive labelling/advertising •  Competitor collusion •  Abuse of power •  Not adhering to safety •  Endangering consumer welfare •  Violating personal privacy

41

TOP 10 Ethical Problems

•  Sexual harassment •  Lying on reports/falsifying records •  Conflicts of interest •  Stealing/theft •  Lying to supervisors •  Discrimination •  Abusing drugs/alcohol •  Improper accounting practices •  Violating environmental laws/regulations •  Gifts/entertainment in violation of policy

(American Management Association International July/August 1998)

42

Selected Ethical Issues

1. Loss of objectivity 2. Constraining whistle blowers 3. Bribery 4. Environmental challenges 5. Cyber ethics 6. Price fixing 7. Fraud

15

43

Top Ten Factors that trigger workers to act unethically

•  Balancing work and family •  Poor internal communication •  Poor leadership •  Work hours; work load •  Lack of management support •  Need to meet sales budget or profit goals •  Little or no recognition of achievements •  Company politics •  Personal financial worries •  Insufficient resources

44

Person most likely to consult when confronted with an ethical dilemma?

In New Zealand: 1. Spouse 2. Boss 3. Colleague 4. Friend

In Hong Kong: 1. Boss 2. Friend 3. Spouse 4. Legal Adviser

45

Factors which dissuade managers from unethical conduct

In New Zealand 1. Effect on personal business reputation 2. Contradicts personal values 3. Family disappointment

In Hong Kong 1. Effect on personal business reputation 2. Fear of punishment 3. Organisation consequences 4. Family disappointment

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THE LEGAL ENVIRONMENT

PG 41, CHPT 4 OLIVER & ENGLISH

LEGAL FORMS OF ORGANISATIONS

SOLE TRADER - simple; easy to set up; least expensive

ADVANTAGES

Ease of information Low start up costs More freedom from regulation Owner is in direct control All profits go to the owner Maximum privacy Easy to change legal structure

DISADVANTAGES

Unlimited personal liability Narrow management base Lack of continuity Difficult in raising capital


•  involves two or more people

•  The Partnership Act defines the relationship

•  Partnership is a private agreement between the parties

•  Legally partnership is not a separate entity

- is simply two or more individuals

•  equal rights and equal liabilities

PARTNERSHIP

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ADVANTAGES

Ease of information

Low start up costs

More sources of capital

Broader Management base

Privacy of affairs

Limited outside regulation

Easy to change legal structure

PARTNERSHIP

DISADVANTAGES

Unlimited personal liability

Divided authority

Lack of continuity

Potential for friction between partners

Limitations on size

Less flexibility in transferring ownership interest


LIMITED LIABILITY COMPANY

ADVANTAGES

•  Risk is limited to amount of capital shareholders hold in the company

•  Management is centralised in Board of Directors , permitting selection of manager

•  Enterprise has a continual existence

•  Interest shares can be bought and sold allowing owner to withdraw without jeopardising continuity of business

•  Capital to be attracted in larger amounts than if a sole trader or partnership


LIMITED LIABILITY COMPANY

DISADVANTAGES •  More regulation by Governments and Courts

•  More expensive to organise and maintain

•  Management maybe restricted by constitution

•  Statutory reporting requirements – more bookkeeping

•  Less privacy overall

•  Directors duties – heavy responsibility

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ADVANTAGES DISADVANTAGES

Flexibility Costly to set up Continuity can be preserved More complicated to administer Limited Liability possible Limited to the life of the Trust Deed Minimises taxation Trustee subject to Trustee Act More privacy than a company Powers restricted to Trust Deed

TRUSTS

•  Not a legal entity •  Trustees to administer trust – have wide discretionary powers

REGISTERING A BUSINESS NAME

•  Name should be distinctive (and protected)

•  If not a registered company then no legal ownership of the name

•  If registered similar names could be challenged

•  Can look up names online – Companies Office

•  Could register name by trademark

ESTABLISHING A SHOP OR FACTORY

•  Should be registered – central and local Government compliance / requirements.

•  Need to be aware of planning and zoning.

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LICENCES AND PERMITS

Certain Types of businesses require permits and licenses to operate

INSURANCE

Provides financial protection against losses – fire, theft, burglary, on the job accidents, public liability

INSURANCE

Fire & Property – damage to real property; i.e. buildings, equipment; furniture; fittings and goods, etc.

ACC – payable both as an employer and employee

Public Liability – harming customers & Members of the public due to unsafe practices (OSH) (not having PL Ins can be seen as negligible).

Business Continuation – Loss of profits; Partnership; key person

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TAXATION

INLAND REVENUE DEPARTMENT “Ignorance is no defense”

Need an IRD number – individual and company

Register for GST (Goods & Services Tax) – turnover > $40,000

Keep records – at least 7 years

Produce annual accounts and file annual returns – be aware of Dates or face penalties!! PAY ON TIME

PAYE / PROVISIONAL GST FBT

EMPLOYMENT LEGISLATION

Employment Relations Act 2000

Offers of employment – Human Rights Act 1993

Misleading or deceptive advertising of employment – Fair Trading Act 1986

Individual or collective agreements

Minimum Wage - Equal Pay - Wage and Time Records

LEAVE – parental; holiday; sick and bereavement; special;

THE FAIR TRADING ACT 1986

Prohibits •  Deceptive and

Misleading conduct •  False representation •  Unfair trade

practices

ACT is administered by Commerce Commission

Enforcement of act is by way of criminal and civil penalties

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THE CONSUMER GUARANTEES ACT 1993

Establishes standards for sale of goods and

services

Goods must be of acceptable quality and fit for purpose of which

They were designed

Goods must match samples and demonstrations

THE CONSUMER GUARANTEES ACT 1993

•  Performed with reasonable care and skill

•  Fit the purpose and achieve expected results

•  Completed in a reasonable time where the time is not settled

•  Reasonably priced where the price is not settled

Services – four generic guarantees

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Unit 3: Launching an Entrepreneurial Business

Oliver & English, Ch 5:Franchising

Launching an entrepreneurial business

!  3.0 Taking on a franchise !  3.1 Launching the business operation !  3.2 Intellectual property management !  3.3 Ethics, social responsibility and

business culture !  3.4 Financial management at the launch

stage

Alternative launch approaches !  Creating a new business

!  Doug and Mike Tamaki - Tamaki Tours !  David Slack - Speeches.com

!  Toe-dipping !  Lesley Immink and 3 others - NZET

!  Buying a business ‘off the peg’ !  John Hughes - Manawatu Knitting Mills

!  Taking on a franchise !  Chris Tollemache - Arano

!  Creating a franchise !  Peter Leitch - The Mad Butcher

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Taking on a franchise

!  What is a franchisE !  Advantages of being a franchisEE !  Disadvantages of being a franchisEE !  Becoming a franchisOR !  Evaluating a franchisE system !  Evaluating a franchisE agreement

!  Oliver & English, ch. 5

Definitions !  A franchisOR creates a business format which

s/he makes available to the franchisEE(s) for various fees and charges

!  FranchisOR !  FranchisEE-1 FranchisEE-2 … FranchisEE-n

Company unit –1…. Company Unit-n

!  Example !  Macdonalds (Fast food), Mitre-10 (Hardware)

Franchising !  A franchise is a pre-packaged business

that you (the franchisEE) can operate in accordance with an agreement with a franchisOR

!  A continuing relationship between a parent company (the franchisor) and an individual operator (the franchisee) in which the franchisor’s knowledge, market position, and operating techniques are made available to the franchisee.

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The appeal of franchising

If you can’t find a business idea yourself If you consider the risks of setting up or

running an independent business are too great

You can draw on the expertise of a franchising organisation to help you

Franchising in NZ !  Over 200 franchisors !  More than 45,000 people working in

franchised businesses !  4,900 franchised business units !  Huge range of business sectors

!  Acomodation Retail books !  Building products !  Financial servies

Types of franchise !  Product and trade name

!  FranchisEE licensed to sell products manufactured by the franchisOR

!  In some case, franchisEE may also be licensed to manufacture

!  Business format !  FranchisOR provides product, service, trademark, entire

business formnat: !  Marketing plan and support !  Operating methods and manuals !  Training and quality control !  Backup services !  MAY include distinctive shop front or building design

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Franchise performance !  Strongest growth in ‘business format’ type !  75% are ‘kiwi-grown’ !  30% are involved in exporting the system to

other countries !  Survival rate over first 5 years: 75-80%

across all industries !  Average return: 30 – 35% !  Finance relatively easy to obtain !  (O & E, p. 62)

Advantages of being a franchisee

!  Reduced risk of failure !  Overcoming limited experience !  Proven market position !  Access to training and assistance !  Buying power – bulk purchasing !  Location and layout !  Financial assistance

Disadvantages of being a franchisee

!  Franchisor failure !  Franchisee failures !  Loss of independence !  Contractual disadvantages !  Competitive restrictions !  Increased cost

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Becoming a franchisOR/1 !  Run a pilot system !  Develop the system into a saleable

condition !  Market the system

Becoming a franchisOR/2

!  Advantages !  Rapid expansion !  Low capital risk !  Highly motivated owner/managers !  Group marketing and purchasing power

Becoming a franchisOR/3

!  Disadvantages !  Profit distribution !  Loss of control !  Disruptive franchisEEs

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Typical fee structure !  Premium – franchise entry fee

!  Reputation, accrued goodwill, initial services – training, operations manual, site selection, shop design, fit-out, opening

!  Royalties !  Percentage of sales turnover – 3 to 10%

!  Advertising levy !  Percentage of sales turnover

!  Other fees !  Initial equipment, goods and services, site leasing !  Transfer and renewal fees

Evaluating a franchise system/1

!  Franchise Association of New Zealand !  FANZ Code of Practice

!  Disclosure document – makes the franchise system ‘transparent’ for the buyer

!  Disclosure document IS NOT the franchise agreement

!  You and your solicitor need to read and understand everything in the disclosre document and the franchise agreement before you sign


!  FANZ Disclosure Document !  Franchsor’s name and office !  Resume of business experience !  Viability stament – balance sheet !  Debts, bankrupticies, insolvencies !  Main features !  Components – fees, stock, fittings !  Financial requirements of the franchisee !  Existing franchises and company outlets !  Termination of franchise agreements !  Current unresolved litigation !  Projections of business performance !  History of trading in the territory !  Directors’ Certificate of Solvency

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Evaluating a franchise system/3 !  Your own investigation

!  The franchise organisation !  Exisiting franchisees !  FANZ !  Retail traders’ associations !  Franchise New Zealand magazine !  Newspaers, magazines !  Franchise departments of banks !  Specialist franchise consulting firms !  NZ Securities Commission !  Companies Office !  Chambers of Commerce !  Consumers’ Institute

Evaluating a franchise system/4 !  Your own investigation

!  Product or service !  What exactly are the products or services !  Who are the customers that buy !  Are the products reputable? !  Talk to knowledgeable people!


!  The distribution system !  Exlusive or non-exlusive

!  Advertising and promotional !  Material available !  Packaged programmes !  Opening Public relations campaign

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Evaluating a franchise system/6 !  Most franchisors are honest and reputable. BUT…

!  Warning signs! !  Job vacancies turn out to be franchise offers !  Offers to sell manufacturing equipment with guaranteed buyers for

product !  Deferred advertising programmes !  Vague system operation details !  No interest in YOUR business experience !  Claims that the scheme is approved by a public agency !  Rights to recruit sub-distributors, rather than rights to sell products !  Post office box numbers for addresses !  Refusal to show audited financial statements !  High pressure tactics to get you to sign a contract

Evaluating the franchise agreement/1

!  You must have a written agreement – defines the relations

!  Your solicitor, accountant, and specialist franchise adviser review and explain the terms and conditions

!  Do not sign until you are completely satisfied that you have a viable relationship

Evaluating the franchise agreement/2

!  Undertakings !  All the promises and undertaking made to each other during

negotiations !  Rights and obligations !  Franchise fees

!  Premium, royalties, advertising levy, Other fees

!  Site !  Expiry term !  Termination conditions and remedies !  Assignment – (selling on) !  Financial forecasts and risk assessments

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Intellectual property protection: Beating the pirates

Williams, S. and Higham, R. (1990) New Zealand small business guide. Auckland:Penguin

What to do with an invention

1953 Patents Act Registration “any manner of new

manufacture and any new method or process” Novelty, inventive step, have industrial application

Patent

!  Granted by Govt body !  Can take legal action to protect commercial

advantage

!  Complete disclosure

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Steps

!  1. Provisional specification - 12 months Unpublished

!  2. Complete specification Claims of novelty, right to make use

and sell invention in NZ, protects from importing.

!  3. Per country Costs can be high

Design

!  1953 Designs Act !  Shape, configuration, pattern or ornament !  Provisional !  Photographs drawings !  5 years, renew to 15 years !  Same protection as patent

Copyright Act 1962 ©

!  Automatic on the creation of an original work !  16 years industrially applied artistic works !  50 years beyond the life of the author

!  Powerful

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1953 Trademarks act

!  Registered, but unregistered are still protected under Fair Trading Act 1986

HELP

!  Patent attorney !  Inventors organisations

Strongest protection

!  Effective marketing !  Build up a reputation or image !  Be vigilant to protect your rights !  Keep quiet about them

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Professional Advice

!  Accountant !  Solicitor !  Surveyor, Estate agent !  Designer !  Business advisor

1

1

Marketing strategy

Oliver & English, Ch 11: Marketing Management

2

The aim of marketing strategy

•  Create a sustainable competitive advantage for the business …

•  Through devising and implementing a marketing plan …

•  Which minimises wasted effort, and maximises results…

•  Through a customer-driven focus on … •  Basic buying motives, target market

segmentation, competitive market positioning, and investment in the marketing mix

3

Topic overview

•  The context of the marketing plan •  Sustainable competitive advantage •  Distinctive competencies (Value drivers) •  Target market segment •  The Marketing Mix

–  Marketing objectives –  Product Strategy –  Pricing Strategy

•  Meeting Price Competition –  Place

•  Competitive position •  Promotion strategy •  Harmonising the Marketing Mix •  Revising the Business Plan

2

4

The context of the marketing plan

•  Marketing plans –  Demonstrates that your business can achieve the sales indicated in

the financial forecast –  Identifying and satisfying market segments –  Creating strong competitive advantage

•  Operating plans –  Production plans – derived from marketing plan –  Operating processes, procedures, workflow and efficiency

•  Financial plans –  Financial quantification of marketing and operating plans –  Budgeting –  Support applications for finance

5


•  In order to… –  Satisfy customers’ buying motives better than

competitors

•  We need to… –  … do some ‘special thing’ particularly well… –  … that is NOT easily copied by competitors

•  These ‘special things’ are called: –  Distinctive competencies, or –  Value drivers

6


•  A strong competitive advantage (CA) is THE key to survival and prosperity

•  CA is a magnet to draw customers •  Once established, competitors have

great difficulty in challenging customers’ perceptions of your business

3

7

Discussion case – Dawn Raid

8

Distinctive competencies (Value drivers)

9

Distinctive competencies (Value drivers)

•  Lower costs … lower prices •  Broader or deeper product lines •  Unique products or services •  Better product quality •  Better product availability •  Superior skills and experience •  More effective marketing •  Better personal networks connected to target

market segment

4

10

Which distinctive competencies to develop?

•  … We must know our customers’ basic buying motives

11

How did Dawn Raids’ competitive advantage develop?

12

Target market segment

•  A market segment defines a group of customers with similar buying motives

5

13

The ‘Marketing Mix’

•  Product – range •  Price – how established •  Place – where products sold •  Position – in relation to competition •  Promotion – getting customers to find us

14

15

Marketing mix

•  Imagine a cake… –  We choose different kinds of ingredients, and different quantities of ingredient depending on the kind of cake we want to bake

–  Our ‘cake mix’ •  We choose our ‘marketing mix’ …

–  Depending on our marketing objectives – what kind of customer we want

6

16

Marketing objectives

•  1. Market penetration – Greater customer usage e.g. repeats – Attract competitors’ customers to us.

•  2. Market development – Sell SAME product to new customer

17

Marketing objectives

•  3. Product development – NEW products to EXISTING customers

•  4. Diversification – NEW products to NEW customers – NEW business

18

Marketing Objectives

•  The choice of marketing objective should build on the business’ Competitive Strengths (i.e. distinctive competencies, competitive advantage)

7

19

Product Strategy

•  Product line – Group of products with similar

characteristics e.g. DVD Recorders •  Your product lines can be

– Deep (e.g. at Sony Store) – Shallow (e.g. The Warehouse)

•  Depth relates to the assortment of products available in the product line

20

Product Strategy

•  Product Mix = – The number of product lines you offer – The Product Breadth (of your Mix) is

either… •  Narrow

–  E.g. Consumer Electronics Store: Sony Store •  Broad

–  The Warehouse – Electronics, clothes, Music, furniture

21

Pricing Strategy

•  How to establish your prices •  Going rate

–  Meet the standard market price •  Full cost

–  materials + labour + overhead + profit margin •  Supplier suggested

–  Use price recommended by supplier •  Penetration

–  Low price, to build volume quickly •  Skim

–  High price for short time (with new product)

8

22

Meeting Price Competition

•  You don’t need to cut your prices!!! – Differentiate the product – More personal service – Align with new trends – Prestigious image – Extra services – delivery, install, alterations – Convenience – parking, opening hours – Reduce expenses

23

Place

•  Location of the business •  Layout of the premises •  Managing of store traffic •  Interior display •  Lighting

24

Competitive Position

•  Meet the competition – Copy to cancel their competitive advantage

•  Beat – Go beyond competition – risks counter-

attack •  Counter

– You dictate the grounds for competition – Eg Obo – product design features

9

25

Competitive Position

•  Matching Image to customer ‘shopping style’: – Economic – price, quality, selection,

efficiency of service – Personal – warm relationships –  Indifferent – shopping is a necessary

nuisance – location, parking, hours open – Recreational – leisure, entertainments,

displays, innovation

26

Competitive Positioning

•  Image – the “personality” of your business •  Image must reflect basic buying motives of

customers •  Image (for retail customers) based on:

–  Price, Quality, Assortment, –  Fashion –  Personal selling, Service, –  Atmosphere, Displays –  Location, Convenience, Parking, –  Advertising

27

Competitive Positioning

•  The overall strength of your IMAGE depends on the VALUE placed on each FACTOR by your customers

•  Therefore, emphasise the factors your customers most value,

•  … so that your IMAGE represents exactly the BENEFITS they want

•  (Oliver & English, p. 203)

10

28

Promotion Strategy

•  Aims: –  Create an Image –  Stimulate sales

•  Components: –  Methods of communicating to customers:

•  Advertising •  Publicity •  Merchandising techniques (displays, shelf location, &c) •  Personal selling

29

Promotion Strategy

•  Decision process: 1.  Determine the IMAGE you want to create 2.  Determine your geographical MARKET AREA 3.  Decide WHAT goods, services and/or image

features you want to promote 4.  Decide WHICH MEDIA to use for the promotion 5.  Decide WHEN to promote 6.  Decide HOW MUCH to spend 7.  COORDINATE all the Marketing Mix ingredients

so they work together perfectly

Lets look at these closer…

30

Decide WHAT goods, services and/or image features you want to promote

•  Basic buying motives. One (or more) from: –  Safety – protection from harm –  Savings – initial price, plus operating costs,

maintenance, replacement –  Health –  Status – to be recognised –  Pleasure –  Convenience

•  … Then develop a ‘promotional theme’

11

31

Decide WHICH MEDIA to use for the promotion

•  Depends on: –  Nature of the merchandise –  How much for sale –  How much money you propose to spend

•  Inside the business –  Window displays, Interior displays, Signs, Blow-ups of

advertisements –  Manufacturers’ literature, Gift novelties, –  Tags and labels

•  Outside the businress –  Newspapers, Magazines –  Direct mail, Handbills –  Outdoor signs –  Cinemas, Radio, Television

•  Your staff!

32

Decide WHEN to promote

•  Timing is essential •  Develop a promotional calendar of events •  Factors:

–  Climatic E.g. Winter and Summer clothes –  Calendar E.g. Mother’s Day, Chinese New Year,

Easter –  Special Events Graduation, Back to school,

Country shows, Community days

33

Decide HOW MUCH to spend

•  A key element in the cost part of your profit budget

•  Review results of last year’s plan => what sales were produced?

•  What factors have changed? •  What are your sales targets?

12

34

Decide HOW MUCH to spend

•  Age – New stores need more promotion •  Products – Shoes need more than Baked

goods •  Size in community •  Location – Neighbourhood bookstore >>

Airport bookstore •  Size of trading area – Farm equipment > Car

repair garage •  Competition

35

Harmonising the Marketing Mix

Market Position Product Price Place Positioning Promotion

Exclusive monopoly highest personal superiority extensive services

Specialty narrow and deep

higher distinctive uniqueness quality, expertise

Standard regular lines going-rate central reliability product availability

Discount broad lowest accessible, inexpensive

lowest prices convenience, price

36

Revising the Business Plan

•  Oliver & English, Chapter 6.

•  1 INTRODUCTION •  1.1 Objectives of the document •  1.2 The industry

–  Present status and prospects –  New products, markets, customers –  National, regional, economic trends

•  1.3 The business •  1.4 Management •  1.5 The product or service

–  Description –  Primary and important secondary uses –  Unique and/or superior features –  Opportunities for expansion of product line or related products and services –  Product design and development activities and costs

13

37

2. Marketing plan

•  2.1 Customer profile –  Customer characteristics –  Basic buying motives

•  2.2 Market size –  Potential customers in the trading area –  How much will they spend –  Expansion possibilities? (Why?)

•  2.3 Competition –  Who are the nearest competitors –  Their operations and market share –  Why you will capture their market –  How you will defend your market share

•  2.4 Sales estimates

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2. Marketing plan

•  2.5 Product or service –  Specific characteristics and unique features –  Backup services and guarantees to be offered

•  2.6 Price –  Price, compared with market prices –  Discounts to retailers or agents –  Discounts for fast payment or bulk purchase

•  2.7 Place –  Characteristics of the place of business –  Location, size, image, style, parking, visibility, –  Proximity to main roads and main markets

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2. Marketing plan

•  2.8 Positioning –  Ideal market position –  How customers’ perceptions will be influenced

•  2.9 Promotion strategy –  Advertising media –  Calendar of promotional events

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•  In order to … satisfy customers’ buying motives better than competitors

•  We need to… – … do something particularly well… – … that is NOT easily copied by competitors – … AND make sure our potential customers

KNOW that we are the best!!!

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The aim of marketing strategy

•  To create a sustainable competitive advantage for the business …

•  Through devising and implementing a marketing plan …

•  Which minimises wasted effort, and maximises results…

•  Through a customer-driven focus on … •  Basic buying motives, target market

segmentation, competitive market positioning, and investment in the marketing mix

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The firm’s entire environment and marketing program

Insert Fig 2.4 p54

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1

Potentialities that stand between the

ambitions and goals of an individual or

organisation and those goals actually being

realised.

(Definition from http://www.risksociety.org.nz)

! Attached to every current action or situation

! Inevitable associate of change

! Can be potentially beneficial or costly for a

business.

Degree of risk can be measured by

Risk= Probability x Consequence

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The culture, processes and structures which are

directed towards the effective management of

potential opportunities and adverse effects

(Standards New Zealand definition of Risk Management)

All things you need to do to make the future

sufficiently certain.

Assessing the potential of future events that can

cause undesirable affects.

Implementing cost-effective strategies that can

manage risks.

Rational process that allows risks to be managed

well.

Used by individuals on a daily basis.

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Risks can either help or prevent achieving goals that are set by a business.

Small Businesses generally decide to take risks to achieve some advantage over the competitors.

Purchasing Smuggler Boat Moulds

Change in name David Pringle Boat Builders to Smuggler Marine

Expanding the business

27 Degree deep V Hull

Purchasing Smuggler Boat Moulds

!  Change in business direction

!  New Product Range

Name Change

!  Potential customers not knowing David still owned the company

!  Existing customers unsure if Smuggler Marine had the same vision/focus as David Pringle.

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Expanding the Business !  Increasing Costs (Hiring Staff, New Equipment, New Factory)

!  Training for Staff

Deep V Hull !  Major advantage over other boat builders, puts them one step

ahead of the industry.

!  Means that Smuggler product range is safe, comfortable, very fast and can handle rough water conditions with ease.

Information from

"  http://en.wikipedia.org/wiki/Risk_management

"  http://www.risksociety.org.nz

"  http://www.smuggler.co.nz

Fundamentals of Small Business - Course Book for APMG NZ435

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