Business Essentials

Cheatsheet Content

Marketing Plan A marketing plan is a comprehensive document outlining an organization's advertising and marketing efforts for the coming year. It describes business activities involved in accomplishing specific marketing objectives within a set timeframe. Key components include: Executive Summary: Brief overview of the plan. Situational Analysis: SWOT Analysis: Strengths, Weaknesses, Opportunities, Threats. Market Analysis: Customer segments, market size, growth trends. Competitor Analysis: Identification of key competitors, their strategies, and market positioning. Marketing Objectives: Specific, Measurable, Achievable, Relevant, Time-bound (SMART) goals (e.g., increase market share by 5% in 12 months). Marketing Strategy (4 Ps/7 Ps): Product: What is being sold, its features, benefits, and branding. Price: Pricing strategy, discounts, payment terms. Place (Distribution): Channels used to get the product to the customer. Promotion: Advertising, public relations, sales promotions, personal selling, digital marketing. (For services, also: People, Process, Physical Evidence ). Action Programs: Specific tactics and activities to implement the strategy. Budget: Financial resources allocated to marketing activities. Controls: Metrics and procedures for monitoring progress and making adjustments. Location Strategy Location strategy involves deciding where to place business operations to maximize efficiency, effectiveness, and profitability. It's a critical decision with long-term implications. Factors influencing location strategy include: Proximity to Customers: Especially important for retail and service businesses. Proximity to Suppliers: Reduces transportation costs and lead times for manufacturing or businesses reliant on specific inputs. Labor Availability and Cost: Access to skilled labor force and competitive wage rates. Transportation Infrastructure: Access to roads, railways, ports, airports for efficient logistics. Utilities: Availability and cost of electricity, water, internet, etc. Local Laws and Regulations: Zoning laws, environmental regulations, business incentives, and tax policies. Community Attitudes: Local support or resistance to a new business. Site Costs: Purchase or lease costs, construction costs, and property taxes. Competitive Factors: Avoiding oversaturated areas or strategically locating near competitors. Security: Safety and crime rates in the area. Sources of Finance Businesses require finance for various purposes, including start-up costs, working capital, expansion, and research and development. Sources of finance can be broadly categorized as internal or external, and short-term or long-term: Internal Sources: Retained Earnings: Profits reinvested back into the business. Sale of Assets: Selling unused or underutilized assets. Working Capital Management: Efficient management of current assets and liabilities (e.g., reducing inventory, collecting receivables faster). External Sources: Debt Finance: Bank Loans: Term loans, overdrafts, lines of credit. Bonds: Issued by large corporations to raise capital from investors. Trade Credit: Suppliers allowing delayed payment for goods/services. Leasing: Renting assets instead of buying them. Equity Finance: Share Capital: Funds raised by issuing shares to investors (e.g., common stock, preferred stock). Venture Capital: Investment from firms or funds for start-up or expanding businesses with high growth potential. Angel Investors: Wealthy individuals providing capital for a business start-up, usually in exchange for convertible debt or ownership equity. Crowdfunding: Raising small amounts of capital from a large number of individuals, typically via the internet. Government Grants/Subsidies: Funds provided by government for specific projects or industries. Intellectual Property (IP) Intellectual Property refers to creations of the mind, such as inventions, literary and artistic works, designs, symbols, names, and images used in commerce. It grants exclusive rights to creators/owners. Key types include: 1. Copyright: Definition: Legal right granted to the creator of original literary, dramatic, musical, and artistic works, including software, architectural designs, and web content. Protection: Protects the expression of an idea, not the idea itself. Automatic upon creation, though registration (e.g., with the U.S. Copyright Office) offers additional legal benefits. Duration: Typically the life of the author plus 70 years. Rights: Exclusive rights to reproduce, distribute, perform, display, and create derivative works. 2. Trademark: Definition: A word, phrase, symbol, design, or a combination thereof, that identifies and distinguishes the source of goods or services of one party from those of others. (e.g., Nike "swoosh", Coca-Cola logo). Protection: Prevents others from using a confusingly similar mark for related goods/services. Registration is not mandatory but offers stronger legal protection and national rights. Duration: Can last indefinitely as long as it's used in commerce and renewed periodically. Purpose: Helps consumers identify the origin of products and services, builds brand recognition and loyalty. 3. Trade Secret: Definition: Confidential business information that provides an enterprise with a competitive edge. This includes formulas, practices, designs, instruments, patterns, commercial methods, compilations of information. (e.g., Coca-Cola formula, Google's search algorithm). Protection: No formal registration. Protection relies on keeping the information secret through reasonable efforts (e.g., non-disclosure agreements, restricted access). Duration: Can last indefinitely as long as confidentiality is maintained. Risk: If discovered through legitimate means (e.g., reverse engineering), protection is lost. 4. Patents: Definition: A set of exclusive rights granted by a sovereign state to an inventor or assignee for a limited period in exchange for the public disclosure of an invention. Types: Utility Patents: For new and useful processes, machines, articles of manufacture, or compositions of matter. Design Patents: For new, original, and ornamental designs for articles of manufacture. Plant Patents: For new and distinct asexually reproduced plants. Protection: Grants the right to exclude others from making, using, selling, or importing the invention. Requires a rigorous application and examination process. Duration: Typically 20 years from the filing date for utility patents. Disclosure: In return for the exclusive rights, the invention must be fully disclosed to the public.