SMALL BUSINESS MANAGEMENT - PREPARING A FEASIBILTIY FOR ANY SMALL BUSINESS

SMALL BUSINESS MANAGEMENT

[PREPARING A BRIEF, BUT CONCISE FEASIBILITY FOR ANY SMALL BUSINESS]

INTRODUCTION:

(a)    Background information Abuja the Project and the Industry

While introducing the project, assess the overall atmosphere, market and economic situation of the particular industry.  Examine the existing government regulations affecting the industry.  State whether the product is in popular demand, and examine the economic justification of the project – state the possibility of using local raw materials, as substitution of import to save foreign exchange.

(b)   Objectives of the Study

The objectives of the studies should include the ascertaining of the following

i.                     Contribution of the industry or project to the local and national economic objectives

ii.                    Domestic market environment and potentials

iii.                  Pricing, sales and distribution factors

iv.                  Financing factors

v.                    Availability of the needed raw materials and their supply

vi.                  Availability of the required personnel

vii.                 Availability of the required infrastructure; water, power, transport, etc..

viii.               Considerations regarding machinery, land, building, equipment, process and plant

ix.                  Production in terms of volume, quality, type, design, size, packaging, etc.

x.                    Overall profit potential of the factory

(c)    Method And Extent

State the research methods employed:

Desk research, sample survey – this may involve:

i.                     Manufacturers and suppliers of the requisite machines and equipment

ii.                    Suppliers of the requisite raw materials

iii.                  Ministry officials and offices of statues

iv.                  Marketing and distributorship companies and the individuals dealing in the product

v.                    Confidential and unpolished data on the industry.

(d)   Timing of the Study

State the period – month, year during which the study was undertaken.

PRINCIPAL FINDINGS

Part I.

(a)    Information about the immediate market

Define the immediate target market and examine the size and growth rate of the population and their projection.  Find out the percentage of the urban and rural population – the average number of persons per household, and their consumption habit.  Examine the activity and roles of competitors and the possibility of competing or participating successfully.  

(b)   Proposal

On the basis of above information, propose the initial production capacity, which can be profitably handled.  Then state the steps to be taken to achieve the production target set, in the following sections.

(c)    Procedure

i.                     Factory:  State proposed size and location. Explain whether land has been secured. 

ii.                    Production Plan: This is a very sensitive area.  The aim is to arrive at a carefully mapped out plan of the factory layout necessary for optimum production.  State the number of hours per shift; shift per day; days per annum; and daily volume, evolution of possible waste, and percentage increase.

iii.                  Raw Materials: Describe type of raw materials to be used, whether they are to be imported or produced locally, and reason for choosing the particular type and not alternative.  Examine the delivery price, volume and duration of stock.

iv.                  Personnel Requirement: Evaluate the manpower needs of the project.  State number of staff; describe jobs for key position, qualifications and salaries. Personnel arrangement should convince financiers of how money will be effectively managed.  Indicate total salary.

v.                    Management and Organization: Prescribe an organizational structure showing command hierarchy, administrative procedure and departments.  This should show how management reflects capacity and functions.  Indicate whether a position should be occupied by an indigene or expatriate, where necessary.

vi.                  Marketing:  Evaluate the market situation in terms of the marketing mix and volume of products and pricing; Define zones, distributors and individual company’s order.  Identify competitors, assessing the quality of their products, their prices and method of promotion.  This can be done through market research.  On the basis of all these, recommend a dynamic marketing strategy, laying out sales force management, and indicating the total costs of implementation.

vii.                 Pricing: Determine the average price of the product being envisaged.  To do this effectively, a close study of the prices of competitors should be made and the quality of their products thoroughly examined.  Then, depending on the nature of the industry or firm, and findings about competitors, a standard pricing technique is employed in price determination.  Such techniques include “mark-up”, “going-rate” and of course, “bidding”.  The researcher should have a working knowledge of these techniques under normal circumstances the recommended price expected to allow some reasonable profit margin, which is one of the reasons for undertaking a feasibility study.

Note: I will be bringing you the concluding part of this (Part II and Part III).  I hope you will be able to connect both.   Don’t forget to visit www.okadabooks.com for the book titled “The Other Woman In Marriage”.