The business plan (part II)
Yvonne Harvey, Contributor

As promised, this week we will complete our look at the business plan. The final two sections are the marketing plan and the financial plan. In addition, there are some ethical issues to be considered when one is about to embark on any type of business.

The marketing plan

This plan may include:

• A description of the good or service and a statement of what makes it different from others already on the market
• Justification of the location of the business
• Market area
• Main customers
• Total demand
• Market share
• Selling price (note current price (competitors), customers' ability to pay and advertising costs)
• Sales forecast over a set period of time
• Promotional activities
• Marketing strategies, including advertising, sales promotions, etc.
• Potential buyers - who they are, what their motivation to buy will be, expected annual purchase, whether the product will be seasonal and, if so, what times of the year the product will be purchased.

The financial plan

This part of the business plan may include:

• A statement of how much capital is required, how it will be obtained and the terms of repayment, if any
• Security for loan if one will be sought
• How the funds obtained will be used (a budget can be created)
• Cash-flow statement
• Projection of operation costs
• Profit-and-loss statement
• Balance sheet
• Break-even point (estimate about how long it will take to reach there)
• Return on investment (percentage projected)

Ethical issues

Ethics has to do with right and wrong, good and bad. The ethical issues include:

• Ensuring that if a licence, permit or registration is required for the operation of the business, everything is taken care of. If there is no proof of the legality of the business or if the business has not been given approval to proceed, the Government can shut it down.
• Refraining from money laundering. This is when money from illegal or underground economy is used in the legal business, for example to purchase assets. When this is done, it distorts the national economy.
• Steering clear of cartels, example wine and drug cartels and OPEC. These restrict quantity and increase prices.
• Reporting extortion, which is illegal.
• Making sure there is no document falsification, in terms of figures or information
• Avoiding of poor labeling
• Resisting price gouging. This is the practice of increasing prices when the supply is low and the demand is high, for example in times of natural disaster. At such times, the supplier has the upper hand.
• Using standard accounting procedures.
• Paying all required taxes. Tax evasion is illegal and cheats the Government of much-needed revenue.
• Disposing of waste properly. Dumping waste in rivers and seas causes pollution and ill-health.
• Providing quality materials. Inferior raw materials must not be used as they can result in poor quality and, perhaps, dangerous goods that may shorten lifespan or cause accidents.
• Adhering to business standards set by the Bureau of Standards Jamaica and the Government
• Broadcasting misleading advertisements. They should be fair, truthful and should not prejudice any group of persons.
• Making truthful declarations. False declarations must be avoided, for example saying juice is 100 per cent natural, contains 100 per cent vitamin C, with no preservatives, when this is not so.
• Avoiding double ticketing, that is, putting new, higher price tags on products already priced.
• Falsely writing cheques for money not in the bank. These cheques will be dishonoured and the business' credibility will be lessened.

Consequences of unethical and illegal practices

Misleading advertisements - Unfair and fraudulent practices on the population.

Withholding of tax - Cheating the Government of revenue

Unethical disposal of waste - Pollution and ill-health, even death

Money laundering - Distortions in the national economy

Make a list of some of the other unethical and illegal practices and the possible consequences, as done above.

See you all next week, when we will outline the regulatory practices instituted by the Government for the establishment of different types of businesses.

William Clarke (left), former president and chief executive officer at Scotiabank, reasons with a grade-10 student of Kingston College (KC) after a special conflict-resolution and motivational session, held at the school on Teachers' Day. The session, which was taken by senior executives, volunteers and KC old boys, was organised by Scotiabank. More than 285 Scotiabankers acted as substitute teachers in 100 schools across the island, conducting sessions on conflict resolution. The intervention at KC was as a result of a recent violent incident between students from that school and others from nearby St George's College. - Contributed

Yvonne Harvey teaches at Glenmuir High School.