SQ)cPraasor “a Click here to enter text business is just a small portion of industry. It is an undertaking by a person or a group of persons who are partners or of stockholders who own a juridical entity known as a corporation. Its main objactive is to earn profitfor the owners. An industry on the other hand, is the aggregation of the different businesses engaged in the same line of undertaking. 4 Principles in Creating a Business The principles of a business are the driving forces that make it successful. They are the backbone for the organization 7. Scalability Tris the capabilily of a system, network, or process to handle a growing amount of work, or its potential to be enlarged in order to accommodate that growth. In.an economic context, it implies that the underlying business model offers the potential for economic growth 7. Big Ideas The entrepreneur's vision is more important to the life of the business than anything else 3. Systems You must recognize that a small business Is a System in which all parts contribute to the success of failure of the whole. In this system, everything must work together: from employee to president; from equipment to resources, Sustainability | A business must be dynamic—able to thrive through all economic conditions, in all markets, providing meaningful, highly differentiated results to all ofits customers. Such differentiation is key to survival. 5. Growth All businesses need internal growth. A small business is a School in which its employees are students, with the intention, will, and determination to grow. 6. Vision ‘A small business must manifest the Higher Purpose upon which it was seeded, the vision it was meant to exemplify, the mission it was intended to fulfill 7. Purpose ‘Asmall business is the fruit of a Higher. who conceived it. 8. Autonomy A business is not part of the owner's Ife, butis, in faci, iis own entity A small business possesses a life of its own, in the service of God, in whom it finds reason. inthe mind of he person 9. Profitability ‘A small business is an economic entity, driving an economic reality, creating an economic certainty for the communities in which it thrives 10. Standards [A small business creates a Standard against which all small businesses are measured as either successful, or not. All small businesses should aim to thrive beyond the standards that formerly existed,So, there you have it, the ten principles upon which to conceive, grow, and expand your business. Each business needs a shape and structure, and these principles will give your company an outline, which is necessary for it to thrive. Adhering to these principles can lead one in making a decision whether to start a business or not. As guide, below are the steps for effective decision-making. OU TB eeu eet ue) Ese) ee eur) Meany T Steps in Identify Altematives Effective Gather Relevant Information Peep Pee ROMA cists 4 Tools and Techniques in evaluatinglenhancing a business A. Industry Analysis As a form of market assessment, it is crucial because it helps a business understand market conditions. It helps them forecast demand and supply and, consequently, financial returns from the business. It indicates the competitiveness of the industry and costs associated with entering and exiting the industry. It is very important when planning a small business. Analysis helps to identify which stage an industry is ‘currently in; whether itis still growing and there is scope to reap benefits, or has it reached its saturation point.Factors to Consider for Industry Analysis Industry analysis is a tool that many businesses use to assess the market. It is used by market analysts, as well as by business owners, to figure out how the industry dynamics work for the specific industry studied. Industry analysis helps the analyst develop strong sense of what is going an in the industry 4_Competition and Competitors Who are the major businesses in the country? Are there locations close to your proposed business? Have they been long existing or still new entrants. What is the market share of these businesses? It is very important that you know your competitors and be ready for them. Your aim is to win their customers, convince them to buy from you instead, and remain as loyal customers. nN Customers: Who will sell your product to? The target market must be identified. Who exactly will buy your products? What income groups? What age brackets? What gender? What career groups? What type of people will you cater to, based on their preferences, lifestyles, and buying habits? o Suppliers Every retail business needs suppliers from whom one can source raw materials, intermediate products, or even the finished goods one intends to sell. A business may need one or more suppliers. It is important to develop suppliers who are reliable in terms of the quality of what they supply and their dependability in coming up with the things you order from them. It is important to maintain good relationships with one’s suppliers; they are the key to one’s continued access to goods and to raw materials that will be needed for the business. Sources of Suppliers - online shops - yellow pages of telephone directories - direct from manufacturers - from distributors - imports 4. Substitutes These are goods that can be used in place of another. These are goods that may even if partly, satisfy the same needs of a consumer such that the consumer may usé one instead of another. The more differentiated a product is, the greater the edge of its manufacturer because this can convince the customers to buy their product instead of that of the competition.B, ENVIRONMENTAL ANALYSIS. This primarily refers to the extemal forces and conditions on the survival and growth of the business. 1. Economic Forces These include economic factors such as income of the people, specifically the target market, econamic conditions such as the inflation, recession, prosperity, demand, and supply in the market 2. Physical Environment This includes a look at the population size, the geography of the place where business will be located, land distribution, climate, and in today's global warming situation, whether or nat the area is prone to flood or earthquake. 3 Political Factors These include the type of government, the ability and strength of the government, and good leadership. 4. Cultures and Lifestyles These include cultural practices such as fiestas, celebration of the Christmas. season, trends in consumption patterns, as a means to identify the goods and services that will fit into these celebrations and spending behavior. 5. Competition This is something that needs to be studied as the degree of competition in the market and the extent and strength of competition are all very vital in determining the success or failure of a business.41. The SWOT Analysis How to Use a SWOT Analysis A. Internal Factors ‘What occurs within the company serves as a great source of information for the strengths and weaknesses categories of the SWOT analysis. Examples of internal factors include financial and human resources, tangible and intangible (brand name) assets, and operational efficiencies. Potential questions to list internal factors are: (Strength) What are we doing well? (Strength) What is our strongest asset? (Weakness) What are our detractors? (Weakness) What are our lowest-performing product lines? B. Extemal Factors What happens outside of the company is equally as important to the success of a company as intemal factors, External influences, such as monelary policies, market changes, and access to suppliers, are categories to pull from to create a list of opportunities and weaknesses.1 Potential questions to list external factors are. (Opportunity) What trends are evident in the marketplace? (Opportunity) What demographics are we nat targeting? (Threat) How many competitors exist, and what is their market share? (Threat) Are there new regulations that potentially could harm our operations or products? How to Conduct a SWOT Analysis for Your Small Business BET wnare 0 @ oe a WU ses A ere ‘oan S wiatenetacis your gasis? - oo you face? iia etatancesmns comvauns, acai trae nse 7 17D : Hilhop Read, nome Numbers: +6349 723 1446 | BBD 004412. Porter's Five Forces of Competitive Position Analysis ‘The Five Forces primary purpose is to determine the attractiveness of an industry. However, the analysis also provides a starting point for formulating strategy and understanding the competitive landscape in which a company operates. Threat of potential entrants Power of complementary goodiservice providers Bargaining power of buyers Intensity of industry rivalry Threat of substitute Bargaining power goods/services ‘of suppliers The framework for the Five Forces Analysis consists of these competitive forces. 1. Industry rivalry (degree of competition among existing firms)—intense competition leads to reduced profit potential for companies in the same industry 2. Threat of substitutes (products or services)—availability of substitute products will limit your ability to raise prices 3. Bargaining power of buyers—powertul buyers have a significant impact on prices 4. Bargaining power of suppliers—powerful suppliers can demand premium prices and limit your profit 5. Barriers to entry (threat of new entrants)—act as a deterrent against new competitors The Porter's Five Forces Analysis is a significant tool for organizations to understand the factors affecting the profitability in a specific industry and can help to form decisions. Under this theory, as business becomes more attractive, the greater the supplier's power to drive prices up, the less the buyer's pewer to drive prices dewn, the less the number of competitors in the market, the more differentiated the product or service is, the less the substitutability of the products for similar goods, and the more difficult it is for new entrants to participate in the market (Chartered Global Management Accountant, 2015).3. PESTLE Analysis PESTLE analysis sometimes referred to as PEST analysis, is a concept in marketing principles. Itis often used as a broad fact-finding activity. It helps an organization establish the external factors that could impact decisions made inside the organization. By understanding the impact these external factors can have on an organization, it becomes handy for organizations to plan better. They can form strategies to minimize the threats and maximize opportunities for themselves E nwvironmental Responsiiaty