NTQF Level Ii: TVET Program Tittle: CROP PRODUCTION

ANRS JOB and SKILL
BUREAU
WPTC, Weldia
TVET program tittle: CROP PRODUCTION
NTQF Level II
Unit of Competence: Develop Business Practice

Module Title: Developing Business Practice
Module Code: AGR HCP2 M04 0811
TTLM Code: AGR HCP2 TTLM04 0322
Module Title: Developing Business
Practice
LEARNING OUTCOMES
 At the end of the module the learner should able to:
 Identify business opportunities and personal business
skills
 Plan for the establishment of business operation
 Implement business development plan
 Review implementation process and take corrective
measures
 Establish contact with customers and clarify needs of
customer
 Develop and Maintain Business Relationship
Practice
LO1:
Identify Business Opportunity
LO1:Identify Business Opportunity
1.1 Identifying business ideas and opportunities
• What is a Business idea?
 Business idea is an idea that someone have developed to solve problems and
or start a new business.
 A business idea is the response of a person or persons, or an organization to
solving an identified problem or to meeting perceived needs in the
environment (markets, community, etc.)
 A business idea is any clue or information about, new or improved
products /services.
• Finding a good idea is the first step in transforming the entrepreneur’s
desire and creativity into a business opportunity.
LO1:Identify Business cont.…..
• Sources of business idea
• Hobbies/Personal Interests
• Personal Skills and Experience
• Franchises
• Mass Media (newspapers, magazines, TV etc.)
• Internet
• Business Exhibitions/trade fairs
• Customer/consumer Complaints and suggestions
• Changes in Society
• Brainstorming
• Creativity and innovations
• Research and development
• Existing companies
• Distribution channels
• Government organizations
Methods of generating business ideas
• The common methods of generating business idea include:
1. Focus groups:-
• This method consists of a moderator leading a group of
people through an open, in-depth discussion rather than
simply asking questions to solicit participant response. The
moderator focuses the discussion of the group on new product
area in either a directive or non-directive way.
2. Brainstorming
• Brainstorming is a technique of creativity for problem
solving and generating business ideas. The objective is to
come up with as many ideas as possible.
• Brainstorming usually starts with a key question or problem
statement. Each idea leads to one or more additional ideas.
• Rules of Brainstorming
• Overall rules in using brainstorming method include:
• No criticism is allowed – No negative comment
• Freewheeling is encouraged – The wider the idea the better is the result.
• Quantity of idea is desired – The greater the number, the more the likelihood
of useful idea emerging
• Combination and improvement of ideas is encouraged- ideas of others can be
used to produce still another new idea.
• The brain storming meeting should be fun and playful, not
work oriented with no expert in the field present.
Business ideas
1. Dairy farm 1. Pharmacy
2. Onion production
2. Poultry
3. Metal fabrication
3. Brewery 4. Cereal processing
4. Fattening 5. Chemical storage
5. Beekeeping 6. Electronics sale
7. Shop
6. Cement factory 8. Construction input trade
7. Furniture 9. Textile industry
8. Mirer 10. Milk processing
11. Aluminum factory
9. Hide and skin
12. fertilizer factory
10.Tomato production 13. Maize seed production
11.Floriculture 14. Silk worm production
12.Tractor service 15. Beatification shop
16. Sugar factory
13.Ceramic landing 17. Fish production
14.Cobblestone landing 18. Pig production
15.Jeweler shop 19. Labiajo
16.Garden center 20. Camel production
21. Shoshine
17.Coffee trading
18.Broker
19.Cotton production
20.Hotel
21.Carpenter
Characteristics of a good business ideas
• To be a good business idea, it must fulfill, or be capable of meeting, the
following criteria:
• Real demand
• Return on investment
• Be competitive
• Meet objectives
• Availability of resources and skills
Screening business ideas
• Once the ideas are generated from idea sources, they need further
development, screening and evaluation. There are three basic business
idea screening process. This are
• Macro screening
• Micro screening
• SWOT Analysis.
1. Macro screening
• The macro screening refers to screening down ideas from many to 10.
The criteria for selecting ideas in macro screening include the
following:
• Sufficient Demand
• Sufficient Financial Resources
• Competitors
• Knowhow to the idea
2. Micro screening
• The micro screening adds quality to selection process by considering
different parameters related to economic judgments (market, skill
availability, technology etc.).
• In this method the business ideas will be further screened in to three
ideas from ten ideas resulted from macro screening.
• Some of the parameters used in micro screening include the following:
• Marketability
• Availability of qualified personnel:-
• Availability of technology:-
• Availabilities of Row material:-
• Competitors:-
• Critical success factor (CSF)
• CSF means a certain factor particular to the identified project which is
very important for the success of that specific project. If this factor is
missing, is inadequate or is not properly taken in to account, it can
indicate that the project may not be feasible in the long run.
• CSF can be raw materials (seasonal availability, perishability), lack of
standardization, unpredictable availability of supply, infrastructure
problem and weather condition.
3. SWOT Analysis
• It is a simple but very powerful tool which enables individuals to do a
comparison of the last three projects idea.
• This analysis has four quadrants (strength, weakness, opportunity and
threats). The upper two of the four quadrants representing strength and
weakness and the lower quadrants standing for opportunities and threats
which is build in the environment.
• The SWOT Analysis framework
• Positive factors to be Capitalized Negative factors to be
eliminated
STRENGTH WEAKNESS
To make use of them OPPORTUNITY THREAT To avoid them
1. STRENGTH:
• These are positive initial factors that occur at present (not
potential). Strengths are within the control of the entrepreneur
and they occur at present. Strengths should be capitalized and
harnessed to make weaknesses redundant. It includes:-
• Technical expertise
• Good network with customers
• Managerial expertise
• Distribution system
• Comparatively cheap price
• New improvement of products
• Packaging
• Superior technology
• Product features (utility durability)
2. WEAKNESS:
• This are also within the control of the entrepreneur that occur
at present. They are lack of or missing or weak points. As far
as possible weakness should be eliminated.
• These may include:
• No control over raw materials
• Limited product life
• Poor design of product
• Weak selling effort
• Comparatively high price
• No technical exercise of owners
• Lack of promotion experience
• Technological obsolescence
• Inexperienced management or owner
• Lack of working capital
3. OPPORTUNITIES:
• Are positive or favorable factors in the environment which
the entrepreneur should make use of or which make his
project idea potentially viable. Some of this opportunities
are:-
• Few and weak competitors
• Rising income of target market
• Growing demand
• Technical assistance available
• Access to cheap raw material
• No such product in the market
• Scarcity of products in the locality
• Favorable government policy
• Similar products making profit
• Low interest in loans
• Adequate training opportunities
4. THREATS:
These are negative or unfavorable external factors in the
environment and normally beyond the control of the
entrepreneur. Some of these threats are:
• Rising raw material cost
• Lack of skilled labor
• Government chain bureaucracy
• Raw material shortage
• Bribe and corruption
• Changing government regulation
• Insufficient power
• Too much employee competition
• Poor infrastructure
• Restrictive labor force
• Smuggling
1.2 Conducting feasibility study
• Feasibility Studies is an assessment of the
practicality of a proposed business ideas.
• Feasibility study is a comprehensive report that
examines its profitability.
• The Components of a Feasibility Study
1. Description of the Business: The product or services to be
offered and how they will be delivered.
2. Market Feasibility: Includes a description of the industry,
current market, anticipated future market potential,
competition, sales projections, potential buyers, etc.
3. Technical Feasibility: Details how you will deliver a
product or service (i.e., materials, labor, transportation,
where your business will be located, technology needed,
etc.).
4. Financial Feasibility: Projects how much start-up capital is
needed, sources of capital, returns on investment, etc.
5. Organizational Feasibility: Defines the legal and corporate
structure of the business (may also include professional background
information about the founders and what skills they can contribute
to the business).
6. Conclusions: Discusses how the business can succeed. Be honest in
your assessment because investors won’t just look at your
conclusions they will also look at the data and will question your
conclusions if they are unrealistic.
• In general, feasibility studies contain comprehensive, detailed
information about your business structure, your products and
services, the market, logistics of how you will actually deliver a
product or service, the resources you need to make the business
run efficiently, as well as other information about the business.
1.3 Identifying specialist and relevant parties to prepare
feasibility study
• There are a number of professional financial services
available, such as accountants, bookkeepers or
Business Activity Statement (BAS) agents.
• Financial professionals can help you to:
• maintain your books
• create and stick to a budget
• monitor your cash flow
• decide on opportunities like buying new equipment,
expanding your business and leasing or buying a
commercial space.
• The specialist and relevant parties to prepare feasibility
study are:
• Chamber of commerce
• Financial planners and financial institution
representatives, business planning specialists and
marketing specialists
• accountants
• lawyers that provide legal advice
• government agencies
• industry/trade associations
• online gateways business brokers/business
consultants
1.4 Conducting marketing research on product (goods or
service)
• Market Research is a systematic collection and analysis of
data about a particular target market, competition, and/or
environment. It always incorporates some form of data
collection whether it be secondary research (often referred to
as desk research) or primary research which is collected direct
from a respondent.
• Marketing research can help a business do one or more of the
following:
1. Gain more detailed understanding of consumers’ needs
2. Reduce the risk of producing unwanted product
3. Forecast future trends
• The Six Steps in Marketing Research
Step 1. Identifying and defining your problem
Step 2. Developing your approach
Step 3. Research design
Step 4. Collecting the data
Step 5. Performing data analysis
Step 6. Reporting and presentation
1.5 Evaluating impact of emerging or changing technology
on business operation (like e-commerce)
• Technology is constantly changing the demands of
consumers. Businesses use new technologies to produce new
products and services.
• Entrepreneurs should realize that new technological
developments such as the internet and cell phones increase
the exchange of information and may have an effect on the
operations of their business.
• Entrepreneurs may not be aware of the nature and effects of
all new technologies, yet, they must try to determine technical
developments which are likely to have the greatest impact on
their business operations.
1.6 Assessing practicability of business opportunity
• A business opportunity is an attractive business idea which an
entrepreneur has selected to invest his/her resources to create
value on the basis of assumptions of favorable market need
and profit.
• Sources of Business Opportunity;
• Business opportunities can be sourced from:
• The Environment
• Population - occupational pattern, socio economic background;
• Current business Situation
• Target market
• Resources
• Business Opportunities Selection Criteria;
• An entrepreneur’s first task after assessing
himself/herself is to identify and select an attractive
business opportunity. An acceptable business
opportunity should have (selection criteria's):
• Confirmed need in the community
• Capability of an entrepreneur
• Availability of resources to develop the business opportunity.
1.7 Preparing business plan for operation
• The Operations section of a business plan usually comes
before the Financial Plan, but after the marketing section.
• The purpose of the Operations Plan is to describe the
where's and how's of your business,
• To write an operations plan, you'll need to answer the
following questions:
• How will your product be made or how will you serve your
customers
• What regulations and organizations are in place to monitor
your industry?
• Who are your suppliers
• What quality
Self check one
1. What are the different considerations or criteria's
used in micro screening of business ideas?
2. What are the common methods used in
generating business ideas?
3. Mention the different characteristics of good
business idea?
4. Define the term feasibility study?
5. What are the steps to be followed to performing
market research for successful business?
6. Write the full word in the abbreviation SWOT?
LO2:Identify Personal Business Skills
2.1 Identifying available • Personnel Practices
financial & business skills • Time Management
• Planning • Calculating
• Organizing • Projecting
• Scheduling • Budgeting
• Assigning/Delegating • Recognizing Problems
• Directing • Solve Problems
• Hiring • Able to Concentrate
• Measuring Production • Handle Detail
• Setting Standards • Work Under Stress
• Work Under Stress • Accounting Principles
• Work with People • Data Processing
• Work as a Team • Operate Business Machines
• Investment Principal • Financial Concepts
LO2:Identify Personal Con…..
2.2 Assessing personal skills and attributes of entrepreneurs
• Personal attributes will also be useful in identifying business
opportunities, establishing the business, managing the business and
initiating its growth.
• Applying talents and attributes to entrepreneurial success
• There are a number of skills needed to succeed as an entrepreneur.
Here are skills needed now or later to help you in business:
• Interpersonal Skills
• Networking Skills
• Leadership Skills
• Management Skills
• Employee Relation Skills
• Team Building Skills
• Marketing and Sales Skills
• Financial Management skills
• Time Management Skills
2.3 Maintaining an entrepreneurial outlook
• If you expect to win you will win and conversely if you
expect to lose you will lose. It is a matter of your attitude.
Attitude is a mental make-up, usual frame of mind.
• All of our feelings, beliefs and knowledge are based on our
internal thoughts, both conscious and subconscious.
2.4 Identifying and assessing business risks
One of the quality of an entrepreneur is risk taking
ability. In business the future is full of uncertainty.
Which means the business may face success or faller.
• Risk assessment is a systematic process for identifying
and evaluating events that could affect the achievement
of business objectives, positively or negatively.
• These events can be identified in the external
environment (e.g., economic trends, regulatory
landscape, and competition) and within an
organization’s internal environment (e.g., people,
process, and infrastructure).
• Risk is defined as the possibility that an event will occur
and adversely affect the achievement of objectives.
• Risk assessment can therefore be conducted at various
levels of the organization.
• Types of Risks Taken By Entrepreneurs
• There are types of risks especially experienced by new entrepreneurs.
These are:
• Environmental risk- fire, riots, weather, thefts, sudden government policy
change;
• Entrepreneur’s Risk – how committed are you to won a business. Many
budding entrepreneurs backslide to job seeking. Lack of experience in the
business is another cause of failure.
• Business Management Risks - poor management of finance, poor marketing
skills, poor planning skills, incorrect pricing are high risks areas for
businesses especially small and medium sized businesses;
• Market Risks – the emergence of competitors in the industry, inflationary
pressures, exchange rate instability, low demand for locally produced goods,
and poor distribution systems are risks areas an entrepreneur should manage.
• Operational risks - staff turnover, sudden change in technology, materials
supply disruptions are some of the risks in the operational arena.
• Financial Risks- loss of cash, loss of a financial investment, high taxes and
high interest rates.
Key principles for effective and efficient risk assessments
• To perform risk assessments meaningful with minimal
burden to the organization, the following key principles
should be considered.
• Govern over the risk assessment process clearly.
• Risk assessment begins and ends with specific objectives.
• Risk rating scales are defined in relation to organizations’
objectives and scope.
• Management forms a portfolio view of risks to support
decision making.
Essential steps for performing a risk assessment
• Identify relevant business objectives.
• Identify events that could affect the achievement of
objectives.
• Determine risk tolerance.
• Assess inherent likelihood and impact of risks.
• Evaluate the portfolio of risks and determine risk
responses.
• Assess residual likelihood and impact of risks.
Risk management process
• Risk identification
• Risk analysis
• Risk response
• Risk controlling
Risk
Identification
Risk Analysis
Risk Controlling
Risk Response
Self check two
1. What are the purposes of personal skill or
attributes?
2. What are the common personal skills needed to
succeed as an entrepreneur?
3. Mention different types of risks especially
experienced by new entrepreneurs?
Practice
LO2:
Plan for establishment

of business operation
LO2: Plan for establishment of business operation
3.1. Determining business structure and operations
• The common forms of business structure are
described as follows:
1. Sole proprietorship
• Sole proprietorship or individual entrepreneurship is a
business concern owned and operated by one person.
Features of a sole proprietorship
1. Single ownership
2. One man control
3. Undivided risk
4. Unlimited liability
5. No separate entity of the business
6. Less government regulation
LO2: Plan for establishment cont.….
• Advantages: In general, sole proprietorship is suitable in
i. Simplicity the following cases:
ii. Quick decision 1. Where small amount of capital is required
iii. High secrecy 2. Where quick decisions are very important
iv. Direct motivation 3. Where limited risk is involved
4. Where personal attention to individual tastes
v. Personal touch
and fashion of customer is required.
vi. Flexibility
5. Where the demand is local, seasonal or
• Disadvantage temporary
i. Limited funds 6. Where fashions change quickly
ii. Limited skills 7. Where the operation is simple and does not
iii. Unlimited liability require skill management.
iv. Uncertain life
2. Partnership
• It is formed through an agreement among two or more persons to carry on
jointly a legalized business as co-owners.
• Like the sole proprietorship, it is not a separate legal entity from its owners.
• It is recommended to have a partnership agreement, called the Articles of
Co-partnership or Memorandum of Association, be prepared in writing by a
competent attorney.
• The Memorandum of Association should contain at least the following
provisions:
1. Name of the firm
2. Name and address of all partners
3. Nature of the firm’s business
4. Date of the agreement
5. Principal place of the firms business
6. Duration of partnership, if any
7. Amount of capital contributed by each partner
8. The proportion in which the profit and losses are to be shared etc.
• Persons who enter into such agreement are partners.
Advantages: Disadvantages:
1. Unlimited liability
1. Ease of formation
2. Limited resources
2. Larger financial resources 3. Risk of implied agency
3. Specialization and balanced approach 4. Lack of harmony
4. Flexibility of operation 5. Lack of continuity
5. Protection of minority interest 6. Non-transferability of interest
7. Public distrust
6. Personal incentives and direct supervision
 Criteria’s to be considered in a
7. Capacity for survival selecting a partner includes:
8. Better human and public relation 1. Ability and willingness to assume
9. Business secrecy. unlimited liability
2. Willingness to be active in management
3. Willingness to be known to the public
4. Willingness to be actually involved in
partnership
5. Share of the partnerships profit or loss .
3. Corporations
• It is an association of shareholders that has been established to allow a group
of entrepreneurs to act as one.
• The officials of the share company must file a special document, called the
Articles of Incorporation/Charter.
• It is essentially an "artificial person" created and operated with the permission
of the state where it is incorporated.
• It's a person like you, but only "on paper.’’
• Characteristics:
• Has a separate and legal personality distinct from owners
• Continuity, unaffected by debt or transfer of stock shares
• Income tax on corporate profit and dividend
• Professional managers as distinct from the shareholders mostly manage a corporation.
• The choice of the this types of organizations depends on
• Objectives of the entrepreneur, such as his
• Managerial and technical expertise,
• Size of investment,
• Desire for financial and management control,
• Ability to attract financing,
• Protection of organization’s secret and liability.
4. Cooperatives
• Cooperative can be defined as an association of persons, who have
common bond of interest, voluntarily joined together to achieve a lawful
common social or economic end, making equitable contributions to the
capital required and accepting a fair share of the risks and benefits of
the undertaking in accordance with the universally accepted principles
of cooperation, which include the following:
1. Open and voluntary membership
2. Democratic control
3. Limited interest on capital
4. Division of net surplus
5. Cooperative education
6. Cooperation with other cooperatives
• Objectives of Cooperatives
1. To encourage saving among the members;
2. To generate funds and extend credit to the members for productive and provident
purposes;
3. To encourage among members systematic production and marketing;
4. To provide goods and services and other requirements to the members;
5. To develop expertise and skills among its members;
6. To acquire lands and provide housing benefits for the members;
7. To promote and advance the economic, social and educational status of the
members;
8. To establish, own, lease or operate cooperative banks, cooperative wholesale and
retail complexes, insurance and agricultural/industrial processing enterprises, and
public markets.
• Types of Cooperatives
• Credit cooperative
• Consumers cooperative
• Producers cooperative
• Marketing cooperative
• Service cooperative
• Multipurpose cooperative
3.2. Developing procedures to guide business operations
A standard operating procedures manual is a written document that
lists the instructions, step-by-step, on how to complete a job task or
how to handle a specific situation when it arises in the workplace.
Steps to develop operating procedure are:
• Step 1. Create an outline of all of the standard operating
procedures (SOPs)
• Step 2. Write an introduction that speaks directly to the people
who will use the manual.
• Step 3. List the first task.
• Step 4. Give the SOP to someone else to read and evaluate.
• Step 5. Refine the SOP based on the feedback.
• Step 6. Write the next SOP, repeating Steps 3 to 5 for each.
• Step 7. Compile all of the SOPs into a binder or bound manual.
• Step 8. Make copies and distribute to employees.
3.3. Securing financial requirement of business operation
• Small businesses can get money through equity financing or debt financing.
• Money that the owner puts into the business is called equity capital. It is the
owner’s investment in the business.
• Borrowing needed capital for the business is called credit or debt financing.
• Equity capital can be obtained
• Personal savings
• Friends and relatives
• Partners
• Corporation. a company or a corporation sell stock to raise equity capital
• Credit or debt financing can be obtained
• Banks and Finance companies
• Governments agencies (with loan schemes)
• Grade credit. Suppliers extending credit terms for equipment, inventory, etc.
• Microfinance institutions small businesses.
LO2: Plan for establishment cont.…..
3.5. Determining financial, human and physical resources
• Resources are things that a business needs to put in place to pursue its
chosen strategy. Business resources can usefully be grouped under
several categories:
1. Financial Resources
• Financial resources concern the ability of the business to "finance" its chosen
strategy.
2. Human Resources
• The heart of the issue with Human Resources is the skills-base of the
business.
3. Physical Resources
• The category of physical resources covers wide range of operational
resources concerned with the physical capability to deliver a
strategy. These include:
• Production facilities
• Marketing facilities
• Information technology
4. Time
3.6. Developing and implementing recruitment strategies
• Recruitment a process of finding and attracting capable applicants for
employment. It is the activity that links the employers and the job seekers.
• The level of performance of an organization depends on the effectiveness of
its recruitment function.
• Organizations have developed and follow recruitment strategies to hire the
best talent for their organization and to utilize their resources optimally. An
effective and successful recruitment strategy covers the following elements:
• Identifying and prioritizing jobs
• Identify target candidates
• Performance level required
• Experience level required
• Category of the candidate
• Sources of recruitment ( internal and/or external)
• Trained recruiters
• Employee Selection
• Employee Selection is the process of putting right men on
right job. It is a procedure of matching organizational
requirements with the skills and qualifications of people.
• The Employee selection Process takes place in following
order-
• Preliminary Interviews
• Application blanks
• Written Tests
• Employment Interviews
• Medical examination
• Appointment Letter- A reference check is made about the candidate
selected and then finally he is appointed by giving a formal
appointment letter.
Self check three
1. What are the purposes of personal skill or attributes?
2. What are the common personal skills needed to succeed as
an entrepreneur?
3. Mention different types of risks especially experienced by
new entrepreneurs?
4. What are the different types of business resources?
5. What are the orders to be followed in employee selection
process?
6. __________ and ____________ are common source of
finance for business operation?
7. What are the common forms of business structure/legal
form of business?
8. Which legal form or business structure is best for you?
Why?
Practice
LO3:
Implement establishment
plan
LO3: Implement establishment plan
3.1 Concept of marketing and marketing management
• Marketing is the practice of creating, promoting, and distributing
products in accordance with the present or potential customers’ demand
and the firm’s ability to produce.
Marketing management
• The management process responsible for identifying, anticipating and
satisfying customer requirements profitably.
Principles of marketing management
• Active attitude
• Importance
Marketing Techniques
• The management is required to control the application of a range of
skills and techniques in marketing generally derived from practical
industrial experience and from modern social services such as
economics, statistics and applied psychology.
LO3: Implement cont.….
3.2 Carrying out marketing of business operation
Some of the activities to be performed in business marketing
includes;
• Market Research
• Product Planning
• Pricing
• Advertising
• Sales Promotion
• Distribution
• Marketing Strategy
• Marketing Strategy – is the art of selecting the appropriate market
techniques. Choice of techniques depends on:
• Type of product
• Size of the firm
• Market
• Resources of the firm
3.3 Developing and implementing
monitoring/controlling process
•Controlling consists of verifying whether
everything occurs in conformities with the plans
adopted, instructions issued and principles
established.
•Controlling ensures that there is effective and
efficient utilization of organizational resources so
as to achieve the planned goals.
•Controlling measures the deviation of actual
performance from the standard performance,
discovers the causes of such deviations and helps
in taking corrective actions.
• Controlling has got two basic purposes
1. It facilitates co-ordination
2. It helps in planning
• Features of Controlling Function
1. Final phase
2. Internal function
3. Forward looking
4. Dynamic process
5. Related with planning.
• Controlling as a management function involves
following steps/process
1. Establishment of standards - the criterions for
judging the performance. Standards generally
are classified into two-
• Measurable or tangible
• Non-measurable or intangible
2. Measurement of performance
3. Comparison of actual and standard
performance
4. Taking remedial actions
Self check one
1. What are steps/process to be followed in
controlling business activity?
2. What are the different activities performed in
business marketing operation?
3. Define the term marketing?
Practice
LO4:
Review implementation
process
LO4. Review implementation process
4.1 Developing and applying performance
measures/appraisal
• Performance Appraisal is the systematic evaluation of the performance of
employees and to understand the abilities of a person for further growth
and development.
1. The supervisors measure the role of employees and compare it with targets and plans.
2. The supervisor analyses the factors behind work performances of employees.
3. The employers are in position to guide the employees for a better performance
• Objectives of Performance Appraisal
1. To maintain records in order to determine compensation packages, wage structure,
salaries raises, etc.
2. To identify the strengths and weaknesses of employees to place right men on right
job.
3. To maintain and assess the potential present in a person for further growth and
development.
4. To provide a feedback to employees regarding their performance and related status.
5. To provide a feedback to employees regarding their performance and related status.
6. It serves as a basis for influencing working habits of the employees.
7. To review and retain the promotional and other training programme.
LO4. Review cont.….
• Advantages of Performance Appraisal
1. Promotion Following are the tools used by the
organizations for Performance Appraisals of
2. Compensation their employees.
3. Employees Development 1. Ranking
4. Selection Validation 2. Paired Comparison
3. Forced Distribution
5. Communication 4. Confidential Report
6. Motivation: 5. Essay Evaluation
6. Critical Incident (strength and weakness)
7. Checklists
8. Graphic Rating Scale
9. Bars
10. Field Review Technique
11. Performance Test
4.4. Completing and keeping necessary
records/documents
• Micro and Small Enterprises (MSEs) often face problems with
regard to recording their daily transactions. Eventually they
don’t know whether they have lost or profited from their
business activities.
• The absence of recording has impact on
• handling customer needs
• Reasonable taxation
• Source document
• A source document is any form of paper record which is
produced as a direct consequence of a financial transaction, and
as a result, is evidence for the transaction has taken place.
• Accounting source documents come in many different forms
for example: source document.docx
• Some common documents are illustrated here under
1. Cashbook format (cashbook.docx)
• The cashbook is very important to show the situation of the business at
any moment in time, as it provides both the charges and credits for a
any given period.
2. Records for maintenance services maintenance.docx
• This format helps to record items that are brought to the operator for
maintenance purposes.
3. Receipt format recipt form.docx
4. Sales on credit sales.docx
• The format is intended for recording all credit sales so that the operator
is reminded of the remaining cash to be collected from customers and
who took credit service.
5. Format for raw material inventory inventory.docx
• This format helps to have record of inventory of raw materials in order
to account for raw material used in the calculation of expenses.
Self check one
1. What are the advantages of doing performance
appraisal business operation?
2. What are the purposes of completing and
keeping necessary records/documents of
business operation?
3. Define the term performance appraisal?
Practice
LO5:
Develop one’s own business
plan
LO5: Develop one’s own business plan
 What Is a Business Plan?
 A document which spells out the goals and objective of
a business and clearly outlines how and when they will
be achieved.
 A structured guideline to achieve a business goal.
 A road map to owning and operating a business.
 A proposal that describes a business opportunity for
financing agencies or investors.
 A detailed action programme outlining every
conceivable aspect of the proposed business venture.
LO5: Develop one’s own business plan
5.1 Process of preparing/ writing a business plan
A business plan should not be something you prepare once,
then put on a shelf and forget. Dynamic planning should be an
integral part of managing your business. Most successful
ventures prepare a three-to-five year business plan every year.
5.2 Standard structure and format of a business plan
I. Title/cover page:
• Name and address of the business
• Name (s) and address (s) of principals
LO5: Develop one’s cont.….
II. Executive summary: - one to three, summarizing the
complete Business plan.
III. Marketing plan
A. Pricing
B. Distribution
C. Product/service
D. promotion
IV. Production plan:
E. Manufacturing process (amount subcontracted).
F. Physical plant
G. Machinery and equipment
H. Names of suppliers of raw materials
V. Organizational and management plan
A. Form of ownership
B. Organizational structure
C. Management team back ground
D. Role and responsibility of members of organizations
E. Layout
VI. Financial plan
F. Source and application of funds.
G. Sale plan
H. Cost plan
I. Income statement
J. Cash flow projection
K. Balance sheet
L. Break even analysis
5.4 Arising problems when starting a business
• Starting a business can be exhilarating and wildly
fulfilling. However, it can be quite complicated, and
challenge you. Knowing the challenges and problems
may encounter in start-up can help to prepare for the
unexpected and help avoid common pitfalls. Some of
the common problems are;
• Money Problems
• Poor Marketing
• Managing Work and Home
• Trying to Do It Alone
• Poorly Priced Products, Services
5.5 Identifying sources of information and
assistance
1. Data and information come from many
sources/multiple sources - both internal (inside
the business) and external. The challenge for a
business is to capture and use information that is
relevant and reliable. What are the purposes of
personal skill or attributes?
Self check for the whole Lo’s
1. Which business legal form is owed and operated by one person.
A. Partnership B. sole proprietorship C. corporate D. cooperative
E. all
2. Which of the following is/are not business resource.
A. Time B. Finance C. Human D. Material E. None
3. Personal skills has a great role to succeed as an entrepreneur. (True or
False)
4. Mention different types of risks especially experienced by new
entrepreneurs?
5. What are the orders to be followed in employee selection process?
6. What are the different activities performed in business marketing
operation?
7. _______ and _______are common source of finance for business
operation?
8. Which legal form or business structure is best for you? Why?
9. Define the term performance appraisal?
10. What are the advantages of doing performance appraisal business
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NTQF Level Ii: TVET Program Tittle: CROP PRODUCTION

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ANRS JOB and SKILL

Unit of Competence: Develop Business Practice

Plan for establishment

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