PENTECOSTAL LIFE UNIVERSITY

FACULTY OF BUSINESS AND MANAGEMENT

Level of Study 3rd YEAR
BACHELOR OF ARTS IN BUSINESS MANAGEMENT
Course Name Strategic Entrepreneurship

Course Code MKE 311

Examination number BBM31/06020

Lecturer Steven Msanyama

Mode of Attendance WEEKEND Examination # ONE

Submission Date 09 June 2020 Due Date 09 June 2020

Student Signature Grade

(Official Use)

Question 1: Using the components of a business plan draft a mini business plan of your
choice and explain the components in relation to your business
 BUSINESS PLAN FOR HAIR CARE BEAUTY SALON

1.0 Executive Summary

Hair Care Beauty Salon is a full service beauty salon dedicated to consistently providing high
customer satisfaction by rendering excellent service, quality products, and furnishing an
enjoyable atmosphere at an acceptable price/value relationship. The company will also maintain
a friendly, fair, and creative work environment, which respects diversity, ideas, and hard work.

Mission: To supply services and products that enhances our client’s physical appearance and
mental relaxation.

Vision and goals: It is our vision to be a salon where everyone feels comfortable and welcome.
Our goal is that every client receives an outstanding service from the time they walk in, to the
time they walk out.

To achieve the company's objectives, Hair Care Beauty Salon is seeking grant funding in the
amount of MK500,000.00. This grant will be attained and used to pay for building expenses,
equipment, supplies and inventory of the salon located in Area 47 at Bwandiro in Lilongwe.

1.1 Objectives

Hair Care Beauty Salon’s objectives for the first three years of operation include:

The creation of a unique, upscale, innovative environment that will differentiate Hair Care
Beauty Salon from other local beauty salons.

Educating the community on what the company has to offer.

The formation of an environment that will bring people together in a common forum.

Excellent service and beauty retail items at a reasonable price.

1.2 Mission
Hair Care Beauty Salon always aims to offer excellent and superior service . Close personal
attention to customer is essential to providing a quality experience for customers; therefore,
adequate personnel will be hired to ensure each customer has the proper attention in the Hair
Care Beauty salon.

1.3 Keys to Success

The keys to success in our business are:

Location: providing an easily accessible location for customers.

Environment: providing an environment conducive to giving relaxing and professional service.

Convenience: offering clients a wide range of services in one setting, and extended business
hours.

Reputation: reputation of the owner and other beauticians as providing superior personal service.

2.0 Company Summary

Hair Care Beauty Salon will, upon commencement of operations, sell a wide range of beauty
services and products. The company will provide quality hair services, along with top lines of
beauty products. What will set Hair Care Beauty Salon apart from the competition is the
company's commitment to providing all these services in one convenient location.

2.1 Company Ownership

Hair Care Beauty Salon is a sole proprietorship registered by Nthanda Shumba in Lilongwe,
Malawi. Some thought has been given to incorporating Hair Care Beauty Salon, but a decision
has not yet been reached.

2.2 Start-up Summary

After spending several months searching for a salon to purchase, the owners decided to start a
salon from the ground up. The start-up capital will be used for the design, leasehold
improvements, and equipment of the salon.
3.0 Products and Services

Hair Care Beauty Salon is considered an upscale full-service beauty salon. The company will
offer a wide range of services that include:

Hair: cuts, relaxers, colors, shampoo, conditioning, curling, pedicure, manicure, and weaving.

Skin Care: European facials and body waxing.

Question 2: Entrepreneurship is regarded as one of the economic drivers of a country.
Explain the impact of entrepreneurship on the local and national economy.

Entrepreneurship creates job opportunities

New businesses need to hire employees. They create jobs and these economic opportunities
uplift and support communities through increasing the quality of life and overall standard of
living.

Add to national income

Entrepreneurial ventures literally generate new wealth. Existing businesses may remain confined
to the scope of existing markets and may hit the glass ceiling in terms of income. New and
improved offerings, products or technologies from entrepreneurs enable new markets to be
developed and new wealth created.

Increased Productivity

One of the advantages of increased competition in an economy is that individuals and firms
continue to source methods that can better improve their operations, use resources more
efficiently and most importantly reduce costs while adding value. All this often results in an
increase in productivity in an economy and an increase in the gross domestic product (GDP),
which is indeed a benefit for the economy.

Increased Competition

Another positive impact of entrepreneurship on an economy is the increasing level of

competition as new entrepreneurs join the fray in existing domestic markets. While one may
venture to say that this will only lead to market saturation, the impact of competition is that it
causes all the players in the market to re-evaluate their operational capabilities, increase value
addition, lower costs and become more efficient. It can be stated that competition reduces the
likelihood of monopolies in the marketplace and is beneficial to the customer and the economy.

Create Social Change

Through their unique offerings of new goods and services, entrepreneurs break away from
tradition and indirectly support freedom by reducing dependence on obsolete systems and
technologies. Overall, this results in an improved quality of life, greater morale, and economic
freedom.

For example, the water supply in a water-scarce region will, at times, force people to stop
working to collect water. This will impact their business, productivity, and income. Imagine an
innovative, automatic, low-cost, flow-based pump that can fill in people's home water containers
automatically.

Community Development

Entrepreneurs regularly nurture entrepreneurial ventures by other like-minded individuals. They

also invest in community projects and provide financial support to local charities. This enables
further development beyond their own businesses.

Some famous entrepreneurs, like Bill Gates, have used their money to finance good causes, from
education to public health. The qualities that make one an entrepreneur are the same qualities
that motivate entrepreneurs to take it forward.
Question 3: Discuss the factors that represent potential success or failure of a business and
how to manage the risks of failures

Lack of planning – Businesses fail because of the lack of short-term and long-term planning. A
business plan should include where the business will be in the next few months to the next few
years. Include measurable goals and results.

Leadership failure – Businesses fail because of poor leadership. The leadership must be able to
make the right decisions most of the time. From financial management to employee
management, leadership failures will trickle down to every aspect of the business. The most
successful entrepreneurs learn, study, and reach out to mentors to improve their leadership skills.

No differentiation – It is not enough to have a great product. You also must develop a unique
value proposition, without you will get lost among the competition. What sets a business apart
from the competition? What makes the business unique? It is important to understand what
competitors do better than you. If a business fails to differentiate, they will fail to build a brand.

Ignoring customer needs – Every business will tell you that the customer is number 1, but only
a small percentage acts that way. Businesses that fail lose touch with their customers. Keep an
eye on the trending values of your customers. Find out if they still love your products. Do they
want new features? What are they saying? Are you listening?

Lack of capital – It can lead to the inability to attract investors. Lack of capital is an alarming
sign. It shows that a business might not be able to pay its bills, loan, and other financial
commitments. Lack of capital makes it difficult to grow the business and it may jeopardize day-
to-day operations

Optimism - Maintain a positive attitude rather than an outlook of impending doom. The future
looks brightest for those who look for the bright side.

Risk taking - Sometimes you simply must take a risk to move forward. With all the other factors
solidly established, you should be in position to predict potential success.
Network - Build relationships and connections with a wide variety of people in and out of your
industry. Your network can be a source of ideas, employees, and advice, so take the time to build
it up. Do not miss any opportunity to meet new people who can help, and make sure you are
available to return the favor.

Records - Document the business activities thoroughly. Good records help a business preserve
ideas, establish their credibility, and prove a point when the facts are not clear. This applies to
finances, employees, ideas, and everything else for which you and the business are responsible.

Competition - Study your market and get to know everything you can about other players in
your industry. You do not want to be caught off guard by a rival’s new idea, and you do not want
to always be on the defensive against what the competition is up to.

The risk of failure can be managed by:

Adopt a Forward-Thinking Attitude

Before you plan the business start with a vision. Write the vision down. Use it as a map to create
the business plan.

Even if you have already started your business, you can still look ahead. What outcomes do you
want for your business? Where would you like the company to be in the coming months and
years?

Conduct Frequent SWOT Analyses of Your Business System

A SWOT (strengths, weaknesses, opportunities, and threats) analysis is an examination of the

internal and external areas of your business.

This exercise aims to identify areas that are working and those that are not. Here's a breakdown
on each aspect of a successful SWOT analysis:

Strengths are good internal factors within the business. Things are working in this area.
Therefore, develop this part of your business. Use it as a model to build upon.
Weaknesses are damaging internal factors. Something is not working properly. Look at how to
make immediate changes, work toward something new, or stop what you are doing entirely.

Opportunities come from external factors and represent good prospects for the future.
Capitalize on these ventures and act to make the most of them.

Threats are adverse external factors that pose potential damage to your company. An obvious
example would be your competition. Determine which areas of your business are affected by this
problem and set goals to make improvements that will minimize the potential for harm.

Manage Cash Flow Efficiently

Without consistent cash flow, a business will eventually dry up and die. There is need to have
money coming in, or you won’t be able to pay expenses. First, have a cash flow forecast so you
know what money is coming in and out. Remember, this is only a forecast, but it will give the
business insight into your financial future. Use the forecast to project likely sales and
expenditures (including cash transactions) so that the business knows how much they are likely
to have in the bank account.

Believe in Yourself and Prepare for the bad times

When you are up against unexpected personal trials that breed stress, your mind becomes
muddled. Your self-esteem could take a tumble, affecting the way you see yourself. Safeguard
yourself by developing resilience. Understand that life comes with problems. Assess the situation
objectively. Speak with a trusted friend or family member instead of ignoring the problem. Do
not be hard on yourself and keep believing you can overcome the obstacles you are facing.
Surround yourself with the right support network of people. Do not give up.
Question 4: Describe the process of building an entrepreneur society

Acculturization process – This is where entrepreneurs change their mindsets and build the
culture of entrepreneurship

Entrepreneur society – This is where entrepreneurs take risks to start a venture, show
innovation, became creative and support.

Entrepreneurial capital – This includes human power, applying knowledge, intellectual,

financial capital, and physical capital

Entrepreneurial economy – This is where entrepreneurs create jobs, add value to products and
services, increase productivity of goods and make the venture vibrant and sustainable.

Economic growth – this is where the entrepreneur is fully employed, and his standards of living
change and since the venture is producing a lot and there is higher income per capita.