INVESTIGATE MICRO BUSINESS OPPORTUNITIES
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1 INVESTIGATE MICRO BUSINESS OPPORTUNITIES UNIT BSBSMB301A This unit describes the performance outcomes, skills and knowledge required to develop business ideas, and to investigate market needs and factors affecting potential markets. KEY CONCEPTS Describing business ideas Identifying business opportunities Sources of information and assistance Methods of gathering information (market research) Identifying market needs Factors affecting the market 1 1
2 CHAPTER 1 DESCRIBING BUSINESS IDEAS WHAT IS A MICRO BUSINESS? micro business is a type of small business that has fewer that five employees. Broadly A stated, it is a business started with as little capital as possible, or less capital than would be usual for a business. The term is often used in Australia to refer to a business with a single owner-operator, and no employees. According to the Australian Bureau of Statistics, of the total 1,282,000 businesses in Australia, 370,000 of these are micro businesses. These for the backbone of our economy, making a vital contribution to industry gross product, and are a key component of regional Australia. Micro businesses also act a a seedbed for entrepreneurial talent. In recent years they have made a major contribution to employment growth, and are becoming the main source of employment for women, young Australians and employees affected by the downsizing of larger organisations. The nature of the Australian economic environment, in which diversity and private enterprise feature highly, provides great opportunities for those with the innovation, initiative, confidence and motivation to embark on a micro business venture. INDUSTRY SECTORS A way to classify businesses is based on the type of activity they undertake. Businesses conducting similar types of activities can be grouped into an industry sector. There are four main types of industry primary, secondary, tertiary and quaternary, as illustrated below. Agriculture, farming, fishing Mining Manufacturing Construction Wholesale trade Retail trade, entertainment Services Information technology Culture 3 3
3 Chapter 2: Market Research THE SCOPE OF MARKET RESEARCH INFORMATION Regardless of the product/service being sold, the types of decisions that need to be made regarding its marketing tend to be similar. Whether the product is a handcrafted vase or a bulldozer, the marketing considerations involve areas such as: specifications of the product/service relationship of the product/service to customer needs and requirements price structuring and forecast sales levels distribution methods advertising and promotion defining a target market. In order to make effective marketing decisions, information from the marketplace on each of these areas is required. Common information requirements met through marketing research are outlined in the figure below. MARKET STRUCTURE Major players Branding Distribution structure Trends in positions held THE MARKET Total market size Customer profiles Customer needs Market segmentation Trends CUSTOMER PERCEPTIONS Underlying needs Perceptions of brands Perceptions of suppliers Perceptions of retailers PRODUCTS/SERVICES What is available Usage patterns Differentiation Linkage to market Innovation and life cycle Customer satisfaction PRICING Current price structure Past trends Price sensitivity Effects of price changes ADVERTISING/ PROMOTION Campaign planning Creative development Promotion evaluation Sales activity planning Media data DISTRIBUTION/RETAILING Distribution levels Sales at retail level Types of outlets Retailer requirements NEW PRODUCT/SERVICE DEVELOPMENT Unsatisfied needs Acceptance Communication Branding MARKET RESEARCH While the specific information requirements will vary according to the type of business, all market research information gathered will be either quantitative, or qualitative, or a combination of both. Quantitative: concerned with the numerical measurement of various aspects of the market, such as market size, purchase frequencies, distribution levels, and so on. Quantitative information is almost always based on data gathered from a sample of the general population or market, which is then generalised to the total population. The statistics prepared by the Australian Bureau of Statistics would be an example of this
4 Chapter 2: Market Research 50 50
5 CHAPTER 3 FACTORS AFFECTING THE MARKET Any business enterprise cannot function in isolation. There are many factors that can have an impact on how a business is run and its chances of ongoing viability. To achieve long-term success, you as a prospective business owner must be aware of the trends and developments that are taking place in the environment in which the business will operate, and be able to respond to and manage these influences. THE BUSINESS ENVIRONMENT The business environment has three parts the macro, operating and internal environments (see Figure 3.1). A business has different levels of control and influence over each part of the environment. government policies demographics customers suppliers technology culture business culture owners structure bank INTERNAL management employees style local competitors community economy nature laws and regulations OPERATING MACRO social trends FIGURE 3.1: THE THREE BUSINESS ENVIRONMENTS 51 51
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