Slides - Insight – University of Gloucestershire

The Jigsaw
Scott Harvey
• To consider some real life management issues
you need to think about as part of building a
• The purpose of a business
• The audience for a business plan
• Consider some key business processes
A Jigsaw?
• Watch that you don’t destroy something you
really like by turning it into a business that
gives you an 18 hour day
• And remember if you are REALLY successful,
someone may want to buy it so it will not be
yours any more!
The key purpose of any business
• To make money ie profit (loss equates to going
out of business)!
• To repay with interest (or simply pay a
commission on the ongoing lendings used by
the business eg shareholder profit bonus)
• To continue to operate (to employ owners or
people to allow an ongoing income)
Key considerations about the business
• Marketing programmes (7 Ps)
Product (ie what is it?)
Price (premium, niche, everyday)
Promotion (advertising and location of knowledge about the product)
Place (of sale, does it go through distributors or do they come to you eg
– Packaging (brand image, logo, colour scheme – even for business cards)
– Positioning (in customer mind)
– People (who’s involved in it)
What’s it going to be called (in what language)?
What’s the market for it and which sectors – is it international (cultures)
Maintaining and growing the customer base (emotional link)
Distribution and suppliers (who and where)
Use of discounts and incentives (eg Ice cream in Winter)
Ease of others to copy you
How long will it last?
Strong Intangibles
Quality of product or service (Rolls Royce or Fiat)
Reputation (notably in service sector)
Goodwill (and maintaining it)
Problem response
Customer relations (by all in the business)
Public perception of the product/service sector
(eg of banks)
• Good enough is not good enough (eg Ofsted)
• Aim must be repeat sales!
Sources of Money
Investment companies
Family and friends
Own capital (eg re-mortgage)
Other loans (eg government incentives, small
business start-up or regional funds etc)
• Primary audience for the Plan
Good money management
Credit control (cash flow)
Reduction of borrowings
Investment policy (return on investments)
Cash days/ working capital needs (how much
is locked away)
• Think about where to invest (cash cows, dogs
Optimum use of assets
• Money, Property, People and increasingly
• Depreciation and equipment investment
• Gearing (Loans to owned capital)
• Interest levels for loans (and cost of early
• Stock (and cost of holding/ aging assets)
• Capacity and utilisation rates
1% principle (or small steps work)
So who are the groups involved
• Customers now and future/markets
• Shareholders/ Investors/ Banks
• Members of staff/ partners
• Owners
• Competitors (watching how you do things)
• But also legal, tax and government and international
standards and authorities eg CIPS EU UN etc.
• eg the university answers to you as students, to HEFCE on behalf
government, to Council as the senior body in the Institution and
many others.
Key People Issues
Culture (all friends together or structure)
Change and how it’s managed
Trust and honesty (how much)
Leadership Skills (even in a simple
• Planning of resources (and loss of them)
• Retention of key employees (is it just money?)
• HR policies (eg holidays)
Best use of employees
• Clear business goals (mission-vision-strategybusiness plan)
• Organisation structure (see Mintzberg models)
• Roles and responsibilities
• Information flow
• Resource planning and scheduling
• Evaluation/ training
• Pay and incentives (eg performance bonus)
Be clear what the offer is
Have a clear difference from others
Generate income
Stop money going out
Make the best use of people
Optimum use of assets
Good money management
Strong intangibles