POB

SBA OUTLINE - Production

 Guidelines
• This document is to be used to help gather
and brainstorm your thoughts for the various
sections of the SBA (Production).
• Answer the questions in each section.
• Complete each section using essay format
based on the answers you wrote.
 Description of Business
• Name of business and who are the owners of the business?
_______________________________________
• Nature of business - (Sole trader, partnership, company with shares?)
____________________________________________________________
• What good or service will the business produce? Activities of the business?
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
• Objectives / mission statement.
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
• Proposed start date? Opening days and times?
_____________________________________________________________
Example 1 of Description of Business
The researcher will be establishing a new business
called T.A.P which will be an acronym for Techno-
Advanced-Properties. The business will be a sole
trader and its nature will be retail. The business’
objective will be to meet the technological demand
of customers and to become one of the leading
information technology outlets in the island. The
business will begin its sales with mobile phones and
accessories and as more revenue is obtained it will
expand to offer more items such as laptops,
portable USB cables, Memory sticks and portable
keyboards.
 Example 2 of Description of
Business
A design and sewing business will be established as the owners
would have the skills in design and sewing, which were acquired
after leaving secondary school. Mr. John Doe and Ms. Jane Moe
will be the business’ owners. The design part of the business
will be managed by Mr. John Doe, who has a certificate in Art
and Design from the University of Trinidad and Tobago, and the
sewing part will be the responsibility of Ms. Jane Moe. This
Partnership business will go by the name ‘Yut Trenz’ and will
design and manufacture custom-made and made-to-order
clothing designs for young, trendy, males and females. The
business will produce dresses, skirts, pants, blouses, shirts,
uniforms, and other apparel, to meet the demands for retail and
wholesale markets.
The objectives of ‘Yut Trenz’ will be to provide top of the line
affordable, trendy and fashionable quality apparel to young
people making them look and feel at their best.
 Justification of location
• State the location of Where it is?
• Outline at least 3 reasons to justify location Why is it there?
• Good soil, right climate, flat land.
• near to supplies of raw material, special labour
• close to other firms with which you have linkages ( Is your
product used by another company to make or do something
else Is your material input, the product of someone else)
previously located there
• near to good supply of utilities e.g. Electricity, water,
transport, telecommunications
• Industrial estate- providing factory buildings, warehouses,
cheap rent
• Close to the market
 Examples 1 Justification of location
The researcher’s business will be located on Broad
Street, Bridgetown, Barbados. This location will
provide consumers with convenient parking. In
addition, rent will be cheaper in this location
because there are many other stores in the area.
Additionally, the location will provide greater
revenue than other locations because of the
volume of persons who enter Bridgetown
frequently each day.
 Examples 2 Justification of location
This business will require a large space and will be divided into
administration, manufacturing, and display. Due to this, two units will be
rented in the newly constructed mall at Scarborough, located at Garden
Side Street, to accommodate the needs of the business. This location,
while expensive, will be ideal for the following reasons:
Firstly, since the establishment of the mall in December, it has attracted
a lot of young people due to the video gaming centre, youth trendy shoe
stores, and fast food restaurants. This provides a situation of market
pull, as the business will be located where potential customers can be
found.
Secondly, the business will be quite close to the Port of Scarborough, a
main transport hub of the Island, thus ensuring easy access to goods
when shipped from supplies either from Trinidad or abroad, and making
it cost effective in transporting the goods from the port.
A third reason why this location will be ideal, is the fact that all
amenities necessary such as electricity, water, internet, banking,
bathroom, etc., are available and reliable, ensuring the continuity of
business operations at most times.
 Your turn - Justification of Location
• Where is it located?
________________________________________________________
________________________________________________________

• Three reasons why you pick that location:

• ________________________________________________________
________________________________________________________
________________________________________________________
• ________________________________________________________
________________________________________________________
________________________________________________________
• ________________________________________________________
________________________________________________________
________________________________________________________
 Selection of Labour
• Type of labour necessary – skilled labour, semi
skilled labour, unskilled labour
• Number of persons to be employed and their
duties or functions of each type of individual
• Outline one reason why this type of labour is
necessary
• Wages and salaries
• Where will you find the labour you need?
 Example 1 – Selection of Labour
The business will need a mix of skilled and unskilled labour. There will be a total of ten
permanent employees where four will be skilled workers, four will be semi-skilled and two
will be unskilled.
The skilled workers that will be necessary are: two experienced cashiers whose duties will
be to receive monies paid by customers, and operate the cash register on a daily basis. They
will need to know how to use a cash register correctly, portray good customer service and
have at least three CXCs including mathematics.
In addition, two store clerks will be hired to assist cashiers and help customers find what
items they seek to ensure that the best customer service is provided. Experience as a store
clerk will be necessary; they must portray good customer service and have knowledge of
technological accessories. They will be required to have at least three CXCs including
mathematics.
The business will also employ four semi-skilled workers as sales assistants who will keep
track of stock and inspect all incoming stock. Knowledge of inventory control will be
essential. They will be required to have at least 2 CXCs including mathematics.
Last but not least two unskilled workers will be hired as two hygiene technicians whose
duties will be to mop and sweep the entire store including its bathrooms every day which
will ensure that the store is in sanitary condition. No previous experience or CXCs are
required but they must be committed to the success of the business.
These types of labour are all required as a successful business will need workers with
different abilities and qualities in order to progress efficiently. The skilled workers will take
care of the level of customer service at T.A.P and securing the income of the company. The
semi-skilled workers will ensure that the company’s stock is correct and genuine and the
unskilled workers will ensure that the hygiene of the company is maintained. All of the
workers will therefore contribute to T.A.P’s success.
 Example 2 – Selection of Labour
Yut Trenz’ will employ young people who have the same passion as John Doe
and Jane Moe to see the local fashion in Tobago grow and develop. Individuals
will be sourced from the University of Trinidad and Tobago, YTEPP and other
educational institutions offering Fashion and Design, as well as persons with
talent and potential in the fashion world.
To begin this venture three skilled workers will be employed who are formally
qualified in Fashion and Design. These three workers will be responsible for
assisting Ms. Jane Moe in the cutting, sewing, and preparation of the clothing
items. These individuals should be multi-skilled, since they may be operating
in different areas as the need arises.
The owners, having the managerial and professional skills will manage the
establishment, and assist each other in the supervision of the retail
operations.
In addition, two semi –skilled workers will be required in the retail operations,
assisted by one unskilled worker. The semi-skilled workers will take
measurements of potential clients, display clothing and be responsible for
cashing, while the unskilled worker will be responsible for keeping the physical
environment of the business clean at all times.
 Selection of Labour
• Total number of employees to be hired.
_____________________________
• Type of Labour used (skilled, semi skilled, unskilled. The number of skilled, semi skilled and unskilled
workers.
____________________________________________________________________________________
____________________________________________________________________________________
• Role and Responsibility of worker #1
____________________________________________________________________________________
____________________________________________________________________________________
• Role and Responsibility of worker #2
____________________________________________________________________________________
____________________________________________________________________________________
• Role and Responsibility of worker #3
____________________________________________________________________________________
____________________________________________________________________________________
• Role and Responsibility of worker #4
____________________________________________________________________________________
____________________________________________________________________________________
• Role and Responsibility of worker #5
____________________________________________________________________________________
____________________________________________________________________________________
 Source of Capital
• How much does it cost to establish the business?
• Identify the amount of money for Fixed Capital and
how will it source it.
• Identify the amount of money for Working Capital
and how will it source it.
• Identify Items of Fixed Capital that will be used in
the business (sewing machine, filing cabinets,
computers).Where will you these items from?
• Identify what working capital the business will need
(raw materials-e.g. cloth, office supplies e.g.
envelopes, money in the bank, utilities, wages etc)
 Example 1 Source of Capital
The fixed capital of T.A.P will be a start-up capital of a low-
interest loan of $40,000 from Republic Bank, and $30,000 of
personal savings.
Fifty thousand dollars ($50,000) of the fixed capital will be
needed to: renovate and refit the premises; purchase glass
casing for the counter, storage drawers and cashier counters.
These items will be purchased from Dacosta Mannings and
Courts.
The source of twenty thousand dollars ($20,000) from
personal savings will be needed for working capital for at
least the first six months of business operations to be able to:
pay salaries; purchase business stock such as business stock
such as mobile phones of brand names: Nokia, Samsung,
Blackberry, Apple, LG and HTC; hard cases and protective
screens for mobile phones which will be shipped in from
overseas suppliers; pay rent and pay water, electricity and
other utilities.
 Example 2 Source of Capital
The owners together, contributed the sum of $375,000 towards the
establishment of the business. The amount of $200,000 will go towards
fixed capital, and $175,000 towards working capital. The total capital will be
obtained from personal savings, loans from parents and other family
members, a grant from the Youth Department and Enterprise Assistance
Fund of the Tobago House of Assembly, and a loan from NEDCO. A current
account and credit card will be opened and obtained from the First Citizens
Bank of Trinidad and Tobago.
Fixed capital items will include sewing machines, cutting tables, display
shelves, equipment & supplies (scissors, markers, measuring tapes, rulers,
glue, irons, etc.), and a point of sale system. These items will be purchased
from Designers International (large machines and related items) and local
businesses such as Buttons Plus (small apparel items such as scissors, glue
guns) in Trinidad. The owners will use their personal computers and
vehicles to assist in the business operations, in the initial stages. Working
capital expenses will include materials (cloth, thread, zips, paint, etc.) which
will be purchased from Jimmy Aboud in Trinidad and Parker Traders in
Tobago, office stationery (from Office Express Limited in Tobago), rental of
space (for the first six months), and workers’ salaries (for the first four
months).
 Role of the entrepreneur
• Define the term entrepreneur.
The person or persons who make the decision to get
into a business venture and puts his personal assets
towards it.
• Outline at least 3 functions of the entrepreneur:
– Organizing-
– Planning – preparing financial budgets.
– Evaluating – determining how well the business is
operating
– Operating the business - Operates the business by
organizing the other factors of production or hires others
to do so
 Example 1 Role of the entrepreneur
The entrepreneur of T.A.P develops a concept plan for
the business’ formation and operation; invests his own
savings and capital income; accepts responsibility of
managing the business and to accept that the business
success can be achieved through enterprise, but also to
accept the possible risk of failure. The entrepreneur will
be actively involved in the running of the business on a
day to day basis but will work as the Customer Service
Manager and Accountant.
Functions of the entrepreneur of T.A.P include:
planning the formation and operation of the business;
accessing the funds by investing personal savings and
capital income; evaluating performance of the
employees and operating successfully as the person
responsible for financial and marketing management.
 Example 2 Role of the entrepreneur
As entrepreneurs, the owners will have the responsibility of ensuring
this business venture gets off the ground with the limited resources
available. In addition, they will have to spend a number of hours
working out details, finalizing the business plan, meeting with loan
officers, interviewing applicants, ironing out problems that may surface
at times, and a host of other activities.
In planning for this business, the owners will share desires and
expectations, decide on policies and procedures so that together they
can look ahead and determine the short and long term goals of the
business.
In organizing for the success of this venture the owners must ensure
that goals will be fulfilled by ensuring that tasks will be clearly defined
and adequate resources (materials and equipment) put in place for the
workers.
The owners will also be responsible for motivating each other and the
workers. The owners and workers will be expected to work hard and
sacrifice valuable time towards this venture. At times discouragement
may occur and steps will have to be taken to find ways of giving
encouragement and being encouraged. Both financial (such as bonuses)
and non-financial incentives (such as employee of the month) may be
provided to help in motivating all concerned.
 Type of production
• Identify and explain the type of production (2 Marks) –
define terms.
• What type of production are you doing? E.g.
• Primary-fishing, quarrying, mining
• Secondary-baking, canning, manufacturing
• Tertiary-
• personal services e.g. babysitting,
hairdressing, photocopying, secretarial, mechanic OR
• commercial services e.g. transport, insurance,
financing, marketing, retailing/wholesaling
 Example 1 Type of production
T.A.P will be engaged in the tertiary or service
industry business. This business will sell
products to customers at affordable costs and
offer good quality service in order to meet
customer expectations.
 Example 2 Type of production
‘Yut Trenz’ will be involved in both secondary and
tertiary production. The secondary component of
the business will be the designing and
manufacturing of apparel items, with the use of
raw materials such as fabric, ink, thread, etc.,
producing items of clothing for sale. The tertiary
part of the business will be the retail outlet which
will display and make available for wholesale and
retail sale, our designs and fashions to the
general consumer population, and more
specifically to our target market, young trendy
persons.
 Levels of Production
• Identify and explain the level of production
define terms.
• What will be your level of production
• Subsistence – supply for home use
• Domestic - supply for community or national
use
• Export/Surplus – supply for overseas market
 Example 1
Levels of Production
The business will operate at the domestic level of
production. T.A.P will be a small scale business with
minimum staff which will be catering to customers
within the country. The business’ projected income
(based on the value of stock and the volume of
projected sales) does not exceed $1,000,000 per year
as it will only be catering mainly to a particular section
of society; teenagers and young adults. The business
will only have one floor and it will not have much
stock. There will be sufficient demand locally to sell all
items and provide technological services and there will
be no need to sell to a distant or more complex
market.
 Example 2
Levels of Production
In the developing stages of the business, the focus will
be at a small scale and surplus level of production .
Beginning at this level is important so that the business
can establish quality products rather than
concentrating on quantity sales. The high quality will
be instrumental in gaining confidence in the business
by the customers and result in returning customers and
even new customers when the word spreads about the
high quality products that will be offered. There will be
inputs from both the local as well as the international
markets as many materials will be sourced from
overseas.
 Quality Control Measures
• Describe at least 2 quality control measures the business
should adhere to (2 Marks)
• - What is Quality to you-the state of being free from defects
and significant variations, ensuring customer satisfaction.
• - How will you ensure Quality:
• - Set standards for inputs- amounts and quality
• - Set standards for outputs-what does the customer want?
• - What are the standard sizes, colours, shapes, weights,
combination of materials
• Assess output for variation e.g. inspect using one’s eyes, using
machines, assess for performance through tests
• Keep good records, store material properly, maintain
equipment and tools regularly, keep premises and tools clean,
dispose of garbage/waste
• Set standards for workers- wearing caps and masks, proper
clothing e.g. overalls, getting medicals
 Example 1 Quality Control Measures
The store assistants will make a daily quality report
for the entrepreneur; by inspecting every product
on arrival, identifying problems and demands to any
product to ensure that quality is maintained.
In addition, the researcher will only order products
from original distributors ensuring that genuine
products are obtained at the best prices.
 Example 2 Quality Control Measures
In ensuring that there will be a consistent high
quality product, ‘Yut Trenz’ will put measures in
place to maintain high standards. Firstly, the
business will utilize only high quality materials from
reputable suppliers and quality checks on every
item will be carried out before the apparel is made
available to the customers. Secondly, the machines
will be regularly maintained to ensure efficient and
effective operations by Daniel & Edmond, a
specialist machine firm in Trinidad and Tobago.
 Use of Technology
• Identify at least two technologies to be used in
your business. Explain how technology is used to
enhance the efficiency of the business, (benefits
of technology to your business) give examples.
• How will you make use of technology.
REMEMBER TECHNOLOGY IS ANYTHING WHICH
AUTOMATES YOUR BUSINESS.
• Examples of technologies are: computers,
software programs, e-commerce, e-marketing,
CAD, CAM etc.
 Example 1
Use of Technology
The business owner will purchase cash registers with
bar code scanners which will be placed at each cashier
counter. This will allow for accurate calculations and
the barcoding will save time as there will be many
consumers in the store at the same time.
The business owner will also use the internet by
creating a website allowing consumers to view the
company’s contact information, items sold, the
available stock, and order items online. This will ensure
that the best customer services are provided, by
making it possible to meet customer needs wherever
they are.
 Example 2
Use of Technology
High technology will be used to assist the general
operations of the business. Computers and
Computer Aided Designs (CAD) applications will
assist in laying out and developing designs to
come up with creative and fashionable designs.
The will also be the sewing machines which will
be capable of many varying stitches and
embroidery designs. In addition, the social
networking site, Facebook will be used to help in
posting latest designs, so the customers will be
able to view and order products via telephone,
without having to physically visit the business.
 Linkages
• Define the terms linkage, and forward and backward
linkage.
• an industry which is associated or connected to other
industries in such a way that the existence of one is
dependent on the other, or it enhances the other’s
production process. These industries are also referred to as
‘spin-off’ and ‘screwdriver’ industries) give an example of
forward and backward for your business.
• Forward Linkages"- The finished producer of one industry
becomes the raw materials of another industry.
• Backward linkages" - backward linkages occur when the
demands on an industry lead to the establishment of other
industries to provide for the needs of this industry.
• Outline 1 benefit of that linkage
 Example 1 Linkages
The business will buy accessories from
overseas suppliers such as Shanghai, China
and Tainan, Taiwan. This will be a backward
linkage which will allow the entrepreneur to
minimize delivery time and transport costs
and to maintain a close relationship with
suppliers to ensure product quality.
 Example 2 Linkages
Both forward and backward linkages would be
established with this new business venture. The
government of Trinidad and Tobago has identified the
local fashion industry as an industry that would be
developed in order to assist in diversifying the
economy. This business will form forward linkages with
the fashion houses such as modelling agencies and
other clothing stores in Trinidad catering for young
trendy fashionable persons. Backward linkages will be
formed with local producers and supplies of beads,
leather, cotton, and other local materials, as well as the
foreign businesses from which the specialist sewing
machines will be purchased and the local business
providing the maintenance service for the machines.
These linkages will help ensure the business’ survival,
and eventual growth and development.
 Potential for Growth
• Explain potential for growth internally and externally
• Do you see a large enough market for your products so that
you can grow.
• What can you if your market grows? Hire more labour?
Move to a larger building, buy bigger machinery, offer
additional products, services
• Show evidence of potential for growth; market research
suggesting that there is room for growth in the market.
• Examples of Internal growth
– New product line
– Additional service
– Increase marketing to increase sales
• Examples of external growth
– New branch (local or overseas)
– Franchise
 Example 1 Potential for Growth
The business will begin sales with only mobile phones and
accessories. As time progresses, the company will grow to
meet the wants and needs of consumers more readily and
efficiently. Internally, the business will be looking to
increase its product line. This will entail hiring more people
to handle the increasing volume of items. The increased
product line will include products such as wireless modems,
portable USBs, memory sticks, laptops, anti-virus programs,
blank CDs and blank DVDs.
Externally, the researcher will be looking to establish a new
business outlet outside of its current location. This new
location will be situated in Speightstown, in the north of
the island, thereby allowing consumers to conveniently
access products from any side of the island; from the north
in Speightstown and from the South in Bridgetown.
 Example 2 Potential for Growth
Projections for the business will show an anticipated
growth, both internally and externally, in the business’
operations within the next five years. The internal growth
will be growth in the customer base, as word spreads about
our high quality affordable fashionable clothing designs,
leading to returning customers and new customers on a
regular basis. This will require an increase in the number of
employees, more specialized work operations, and possibly
the incorporation of more technology in the business’
operations to meet the growing needs of the expanding
customer base.
The potential for expansion externally will involve the
opening of branches throughout Trinidad and Tobago, and
even in other Caribbean territories, or possibly even the
purchase of a business such as an on-line distributor or a
supplier of local sewing materials.
 Government Regulations
• State any government regulations that relates to
the business
• - What do you need to know about government
regulations?
• - regulations about Dangerous Drugs, Fair trade,
payment of taxes e.g. Land And Buildings Tax and
VAT , collecting VAT from customers, Health and
Safety of workers, Consumer rights of exchange
and redress, paying rates e.g. water rates,
insurance on vehicles, paying National Insurance
Example 1 Government Regulations
The government regulations, National Insurance
(NIS), PAYE, and Value Added Tax (VAT) will have
a financial effect on the company. The business
will need to register with the relevant authorities.
The National Insurance policy is designed to
benefit employees e.g. if they become sick
National Insurance would provide an income,
however it is an expense to the business as the
employee only pays a portion of the NIS earnings
while the company has to pay a portion as well.
The entrepreneur will develop a system to make
the required payments and to claim refunds of
VAT on imports.
 Example 2 Government Regulations
‘Yut Trenz’ will abide by all government regulations and
guidelines established for businesses doing business in Trinidad
and Tobago, and more so the Partnership Act. Firstly, the owners
will register the business as a partnership with the Registrar of
Business so that the partnership will be legally recognised as a
legitimate business. In addition, income taxes will be paid by the
owners and all employees to the Board of Inland Revenue, as well
as contributions made to the National Insurance Scheme and
Health Surcharge. The business will ensure that Health and Safety
Standards will be maintained by having a Health and Safety
Officer contracted to the firm, ensuring that employees will be
working in an environment that will be safe and healthy. The
business will also be guided in its employment practices, in
ensuring that there will be no discrimination in hiring, providing
the necessary vacation and other leave, in offering fair wages
that exceed the minimum wage established by the government,
and providing employees with the require break times, such as a
one hour lunch period.
 Ethical Issues
• Discuss any ethical issue of production that
relates to the business environment
• What are ethical issues?
• Problems which require choice of either right way
or wrong way.
• Examples of ethical issues
– Improper waste disposal, littering and pollution,
Bribing officials, not providing true reports to other
owners, giving customers poor quality products or bad
service
 Example 1 - Ethical Issues
There is an ethical issue regarding the quality of the
products which T.A.P will sell. Customers like to know
that they are getting good quality and long lasting
products for their money. T.A.P will aim to ensure that
all products bought for sale will be authentic and of
good quality at a fair price.
Also, another ethical issue that must be highlighted is
the fact of selling what is advertised. Fake advertising is
a high concern in the retail industry. The company will
aim to prevent misleading advertising, so customers
will trust this business and want to purchase more
products from it and they will want to advertise the
company verbally to their friends and families which
will increase the company’s total customers.
 Example 2 - Ethical Issues
All designs, while some may be inspired by other designers, will be unique
and original. No other designer’s work will be copied and branded as the
property of the business. In this way, the business will be known for its
integrity and always have the trust and confidence of its suppliers and
customers. This will help ensure its survival and future growth as the market
will continue to support the business in its endeavours.
The materials to be used will always be original and authentic and never to
be substituted for inferior or imitations, especially in circumstances when
original high quality materials may be difficult to acquire. This again will
help to promote the business as a quality business, always delivering quality
products to its customers, and will consequently ensure its survival and
continued growth.
Any price increases will be done based on economics and not the personal
feelings of the owners. This will help to its customers to fully understand
and appreciate price increases and continue their support to the business.
All waste material will be disposed of in the appropriate manner, either
through the garbage collection service or the owners arranging to have it
delivered to the dump site, and never carelessly thrown into the
environment. This will promote the business as environmental friendly and
encourage its support by its customers and lead to an increase in its
customer base, especially those who are environmentally friendly.
 Bibliography
• A bibliography is always in alphabetical order.
• A bibliography is the final page in a document.

Books
• Include these details: Author´s name: Surname first,
then first name or initials
• Year of Publication (in brackets)
• Title of Book in ITALICS or underlined if handwritten
• Publisher
• Place of Publication
•
Example: Smith, Kate (1998), Life in Asia, Collins,
Melbourne