Fundamentals of Small Business - Course Book For APMG NZ435

Course Handbook
APMG NZ 435 Fundamentals of Small Business
Faculty of Creative Industries and Business
Department of Management and Marketing (DoMM)
Bachelor of Business
(Ver 1.0)
NOTICE
Books, journals, multi-media and other
materials made available by or at Unitec
Institute of Technology are for the
student’s own studies only. Copying or use
of the materials for other purposes is an
infringement of copyright.
Authored by Peter J. Mellalieu, 2010. 1st Ed

February 2011.
The copyright of student materials remains

with the authors.
Printed at The Copy Centre, Unitec Institute

of Technology, Mt Albert, Auckland, New
Zealand.
IMAGE: Reaching for the skies.

AdventureWorks facility at Unitec Institute
of Technology, Auckland. Credit: Peter J.
Mellalieu
http://www.adventureworks.co.nz/
Version Ver 1.0 1 February 2011.
This document is subject to amendments

and improvements in the online version as
the course proceeds. Refer to back page
for a schedule of amendments.
APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

TABLE OF CONTENTS
1. Executive summary ......................................................................................... 1
2. Introduction ....................................................................................................2
3. Course tutor ................................................................................................... 4
4. Course descriptor and assessment matrix .......................................................5
5. Workload overview and assignment sequence ............................................... 11
6. Learning resources ....................................................................................... 13
7. Topics, content, and reading schedule ......................................................... 15
8. Learning model and teaching philosophy ...................................................... 18
9. Contact sessions: Studios and conduct ......................................................... 21
10. Assessment policy ........................................................................................ 22
11. House style: written and oral communication standards ............................... 25
12. Agenda and course material for studio 1 ...................................................... 29
13. Assignment 1: Profile of a small business ..................................................... 39
14. Test .............................................................................................................. 55
15. Assignment 2: Performance measures and controls ...................................... 64
16. General information about Unitec courses .................................................... 70
17. Requirements to pass a course and grade standards .................................... 82
18. NZDipBus Programme Structure ................................................................... 85
19. Credit Recognition and Eligibility for a Unitec Diploma ................................. 87
20. Other Awards, Memberships and Qualifications ............................................ 92
21. Amendments and suggestions for course improvements .............................. 94
22. Passwords and access codes ......................................................................... 95
23. Semester-specific calendar and dates ........................................................... 96

1. Executive summary
Overview
This course handbook is the ‘blueprint’ detailing many elements of the course
APMG NZ 435 Fundamentals of Small Business. The handbook introduces the
course descriptor, assignments, and learning resources for the course. You are
provided with specific guidance for preparing for the first in-class meeting and
first assignment.
Purpose
The purpose of the handbook is to ensure that a student enrolling in the course is
informed comprehensively about:
The aims and learning outcomes of the course

Schedules for reading, personal study, workload, and assignments
The learning resources required for perusal by student, including texts,
lecture notes, on-line resources, and web-based learning support systems
The assignments that help students focus and demonstrate their learning
Agendas for the first few weeks of class, including materials relevant for
preparing for those classes
Specific activities that should be scheduled immediately for starting course
assignments and the course ‘learning adventure’.
Recommendations for your immediate action

Read the Course Handbook Introduction, Section 2
Skim read the Table of Contents and Course Descriptor, Section 4.
Complete the preparation for the first meeting as specified in: Agenda and
Course Material for Studio 1, Section 12.
Skim read the requirements for the course assignments, especially those that
you should commence immediately: Assignment ONE
Acquire the course textbook… and skim read the Preface, Introduction, and
Chapter 1.
Note: Navigating the on-line Course Handbook

Note the navigation hyperlinks in the top left header (TOC) and bottom left
footer (APMG NZ 435) that take the on-line reader directly to the Table of
Contents, and Semester-Specific course calendar.

2. Introduction
Kia ora, bon jour, and welcome to APMG NZ 435 Innovation & Entrepreneurship.
This course introduces you to the systematic processes and skills required to
establish and/or manage an existing small-medium enterprise (SMEs). Although
focussed on SMEs, this course introduces you to the skills of a entrepreneur that
are required as much within a corporate setting as in a stand-alone start-up
venture.
Many small business founders are innovators and entrepreneurs. They

imagine and create the future. They create the future by making new things
happen. They act and think differently compared with most “normal” people.
Sometimes they are the brightest kids at school. They are equally likely to be the
troublemakers who are invited to leave school as early as the ‘laws of the land’
permit! Until recently, they rarely studied formal courses in entrepreneurship! You
will meet many of these kinds of people in this class.
How do the most successful entrepreneurs learn? Many entrepreneurs take
great risks: many fail. Reason: they don’t know what they don’t know. However,
skilled entrepreneurs with “the right stuff” pursue risky, but well-managed
ventures that most “normal” people would avoid. In the long-run, these
entrepreneurs succeed. They succeed creating new venture after new venture. In
consequence, these ‘serial’ entrepreneurs and innovators “do good” for the world
and/or create massive wealth. What is “the right stuff” that entrepreneurs
possess? Can you also acquire “the right stuff” - or recognise it in others? These
are some of the questions we will explore in this course.
New Zealand’s political and business leaders inform us that our country faces two
challenges as a nation to “catch up with Australia by 2025”. First, we must
increase our nation’s productivity. Second, we must increase our rate of
innovation. Most nations are “running hard in the same race”. Can we ever catch
up with the Australians? The Swedish? The Chinese? The Americans? How?
The smartest innovators ask “Can we run in a different race? … a better race? … a
race with rules to our advantage?” These radical innovators join new venture
teams to make their dream come true. In some cases, these teams may be lead by
an entrepreneur.
At the heart of small business success lies innovation and entrepreneurship.
Welcome to APMG NZ 435 Fundamentals of Small Business. If this is the only
business case that you ever study at Level 4, you have made the correct choice.

I thank you for all the
knowledge and
experience I have gained
from your courses.
Without doubt, I have

learnt lots and have
gained more confidence.
In addition, these
courses have also
inspired me to becoming
a successful
entrepreneur. That
ambition is something
that I had never thought
about!
K.T.

3. Course tutor
Peter J MELLALIEU, PhD, BTech(Hons), MPubPol, DipIwiEnvMgt

StrengthsQuest Talents: Strategy. Learner. Ideation. Activation. Intellection. [Input]
Mihi as silk-weavers in a north-east French

village, Malaloy (Nancy).
Ko Tongariro te maunga
Ko Waikato te awa Returning to the Manawatu in 1987,
Peter commenced his tertiary academic
Ko Huguenot te iwi career at Massey University. In 2000,
Ko Geering te rangatira he organised a conference on the
theme ‘strategies for sustainability and
Ko Mellalieu te hap!
success’ in which he engaged thought
Ko Pukawa te marae leader theologian Sir Lloyd Geering as
Ko Boeing te waka keynote speaker. This conference lead
to his current research interests in
Ko Kaiako Jean-Pierre ahau education for sustainability, eco-
innovation, eco-enterprise, and eco-
About
magination.
Associate Professor Peter MELLALIEU
He spends many happy hours walking,
teaches innovation, strategic thinking,
sailing, singing, and skiing with family,
new venture development, and
friends, and learning partners around
sustainable development and at Unitec
Tongariro, Taupo, and Auckland.
Institute of Technology, Auckland.
Contact
Having emigrated from the United
Kingdom in the mid-1960s, Peter grew Department of Management and
up in the Waikato, later studying Marketing
biotechnology and industrial
engineering management at Massey Faculty of Creative Industries &
University (Manawatu). Business
Unitec Institute of Technology
After university graduation he worked
in Wellington as an industrial scientist Office: 172 – 3020
implementing novel Decision Support Mobile: 021 42 0118 (Preferred)
Systems for long-range strategic
Phone: 815 4321 Extension 8108
development in several agribusiness
sectors including the Waikato dairy Email: pmellalieu@unitec.ac.nz
industry. Later, Peter worked in Website: http://nz.linkedin.com/
Belgium in an entrepreneurial new in/petermellalieu
venture information technology (CAD/
CAM) systems company. The Flanders- Journal: http://pogus.tumblr.com
based company was located near his Office Hours: By appointment.
family’s 17th century Huguenot roots

4. Course descriptor and assessment matrix
Course number: APMG NZ435
Name: FUNDAMENTALS OF SMALL BUSINESS1
Elective Prescription
Level 4
Credit 20
Version 1
Introduced 2006
Aim Students will demonstrate knowledge of the characteristics,

options and operation of small business in the New Zealand
context.
Prerequisites Nil
Assessment weightings
Learning outcomes Assessment

weighting
%
Students will describe characteristics of small 15
business.
Students will compare business options, business 20
structures and finance options of small business.
Students will identify sources of advice and 5
assistance available for a small business.
Students will explain the importance of marketing 20
choices for a small business.
Students will describe performance measures and 40
controls used for small business.
TOTAL 100
All learning outcomes must be evidenced; a 10% aggregate variance is allowed.
1 This prescription replaces 115 Small Business Management.

Assessment Notes
Learning outcome five (LO 5) is a core component of this prescription. It is
designed to ensure that students are able to understand the key control factors
when running a small business. Controls should be applied in the running of a
small business to ensure that the effectiveness and success factors can be
monitored. Controls are critical to lower and manage risk.
Learning outcome five (LO 5), key element b) requires student to describe four
government controls for example HASE 1992, taxation requirements, employment
law requirements. An example of a local government control would be the
Resource Management Act 1991. Examples of an operational control would be
quality management requirements such as ISO 9000 2000, zero defect or
minimisation of rework.
LO 1: learning outcome One
Students will describe characteristics of small business.
Key elements
a) Profile:
· owner
· staffing
· turnover
· customer focus
· equity and asset value.
b) Success factors, four of the following:

· capital
· planning
· systems
· customer relations
· product or service development
· marketing
· other.
c) Owner’s competing demands:

· commitments and responsibilities
· variety of roles
· time demands.

LO 2: learning outcome TWO
Students will compare business options, business structures and finance options
of small business.
Key elements
a) Existing versus new start up.
b) Business options:
· independent
· franchise
· co-operative
· e-business.
c) Business structures:
· sole trader
· partnership
· company
· trading trust.
d) Finance options.
LO 3: learning outcome three
Students will identify sources of advice and assistance available for a small
business.
Key elements
a) Specialist services and support:
· financial and non-financial
· governmental and non-governmental.
LO 4: learning outcome four

Students will explain the importance of marketing choices for a small business.
Key elements
a) Research.
b) Promotion.
c) Business environment.
d) Location.
e) Channels of distribution.

LO 5: learning outcome FIVE
Students will describe performance measures and controls used for small
business.
Key elements
a) Financial:
· cash budget
· income statement
· balance sheet
· break-even analysis
· two other types of information (eg debtors).
b) Legal:
· four from central government
· one from local government.
c) Operational, three from the following:

· quality
· waste
· product or service
· hours of operation
· other.
d) Risk management process.

· risk
· eco-sustainable production
Assessments
The following assessments apply to this course:
Assessment 1: 30 % Profile of a small business: assessing: LO 1, LO 2 (50%), LO 3
Mid-term test 40%, Assessing: LO 2 (50%), LO 4, LO 5 (25 %)
Assessment 2: 30 % Performance measures and controls assessing: LO 5 (75%)
The Assessment Matrix shows a detailed breakdown of the components of the

Course Descriptor assessed by each Assessment item.

Assessment Matrix
APMG NZ435 Business Management
Learning outcomes Assessment Assignment 1 Test Assignment 2 Checksum

weighting
%
TOTAL 100 30 40 30 100
1. Students will describe 15 100 15
characteristics of small
business
Profile (33.3%)
Success factors (33.3%)
Owners competing
demands (33.3%)
2. Students will compare 20 50 50 20
business options,
business structures and
finance options of small
business. (Note 1)
Business options
(33.3%)
Business structures
(33.3%)
Finance options (33.3%)
3. Students will identify 5 100 5
sources of advice and
assistance available for a
small business
4. Students will explain the 20 100 20
importance of
marketing choices for a
small business.
Research (20%)
Promotion (20%)
Business environment
(20%)
Location (20%)
Channels of
distribution. (20%)
5. Students will describe 40 25 75 40
performance measures
and controls used for
small business. (Note 2)
Financial (25 %)
Legal (25 %)
Operational (25 %)
Risk (25 %)
Checksum 100 30 40 30
Note 1. All sub-components of LO 2 Introduced in Ass 1; Reinforced and extended in Test
Note 2: Financial component of LO 5 assessed in Test. Legal, operational and Risk components of LO 5
assessed in Ass 2.

WARNING!!! You are required to submit ALL assignments. Failure to submit
an assignment will result in failure of the course. If you fail to resubmit a
failed assignment, then you will also fail the course as a whole.
Learning and teaching approaches

Case studies, self and team assessments will form an important component of
this course, culminating in the student producing a Learning Agenda as a basis
for their future professional development and education. The Team Project
provides students with practice in developing and applying their enterprising
skills in a team-based venture.
A key feature of this course explores how the international and local issues of
sustainable development impact new venture formulation.
Academic learning outcomes

The course focusses on developing the following academic literacies that you will
use elsewhere through your academic studies:
ALO 1: General Academic skills - learning, listening, participating

ALO 2: Collaborative learning and working in teams
ALO 3: Academic writing for case analysis reports; Critical analysis
ALO 4: Advanced learning processes
ALO 5: Develop the project management, quality control skills, team working,
and leadership skills you require to join or establish a new venture or small
enterprise;
ALO 6: Develop investigation and research skills - drawing on both primary
and secondary information sources;
ALO 7: Develop writing and editing skills appropriate for marketing a small
business’ products and services to a global customer audience, and
reviewing a business plan prepared for raising financial resources;

5. Workload overview and assignment sequence
The following two tables suggests how you could allocate your 200 hours
required for the course across all course activities. Workload is based on a your
being a B grade point average student for whom English is your best language.
The workload assessment also EXCLUDES an hourly allowance for your

development of generic academic literacies
The assignments are constructed so that you are REQUIRED to work on ALL
ASSIGNMENTS simultaneously. In some cases, you are required to read ahead in
the text in order to identify the theoretical knowledge required to address an
assignment appropriately. You are advised NOT to wait until the text content is
covered formally in the course contact studios.
The Test is constructed so that you can pursue the work with little need for
engagement with the course studios. You can start immediately! Assignment 1 is
a group project. You will experience all the special challenges of coordination,
leadership, and work-load allocation that occur in such circumstances.
Assignment 2 is a reasonably standard ‘individual’ assignment.
You definitely need to attend class studios to understand and develop the
requirements for all assignments.
You are required to submit ALL assignments. Failure to submit an

assignment will result in failure of the course. If you fail to resubmit a failed
assignment, then you will also fail the course as a whole.
Gannt Chart: Schedule of assignments per week across course semester
Studio 1 2 3 4 5 6 7 8 9 10 11 12 13 14
Ass 1 x
Test x
Ass 2 x
Calendar dates for specific events such as assignments vary each semester. See:
Semester-specific dates and passwords. Mid semester break is USUALLY between Studio
6 and 7.

Break down of assignment weight, workload and sub-component weight
Assignment Week Due Weight Out Work

of hours
Assignment 1 Week 6 30 100 40
Test Week 10 40 100 40
Class work and

other activities
Class attendance 13 studios 40
Personal study 40
Total: 100 200
Calendar dates for specific events such as assignments vary each semester. See:
Semester-specific dates and passwords.

6. Learning resources
You will be disadvantaged relative to other students if you fail to acquire your own
copy of the Course Handbook and Prescribed Text.
Course handbooks and selected readings

Printed copies available from the Unitec Copy Centre
Mellalieu, Peter J. (2011) Course Handbook BSNS NZ 435 Fundamentals of Small

Business, Department of Management and Marketing, Auckland: Unitec
Institute of Technology
Prescribed texts
Copies available from ther Unitec Book Store.
Oliver, L., & English, J. W. (2007). The Small Business Book: A New Zealand Guide
for the 21st Century. Allen & Unwin
Recommended text
Turner, K., Ireland, L., Krenus, B., & Pointon, L. (2009). Essential academic skills.
Oxford, UK: Oxford University Press.
Manalo, E., Wong-Toi, G. & Bartlett-Trafford, J. (2009). The business of writing:

Written communication skills for business students (3rd ed.). North Shore,
NZ: Pearson Prentice Hall.
Reference texts
Bolton, B., & Thompson, J. (2003). The Entrepreneur in Focus. London: Thomson.
Bolton, B., & Thompson, J. (2004). Entrepreneurs: Talent, temperament, technique

(2nd ed.). Oxford: Butterworth Heinemann.
Frederick, H., & Kuratko, D. F. (2010). Entrepreneurship: Theory, Process, Practice

(Asia-Pacific Edition) (2nd ed.). Melbourne: Cengage Learning.
Kawasaki, G. (2004). The art of the start: the time-tested, battle-hardened guide
for anyone starting anything. Portfolio.
Spackman, K. (n.d.). The Winner's Bible: Rewire your brain for permanent change.
Atlanta: The Winner’s Institute

Online resources
Students are required to:
Access the Unitec Learning Management System (LMS) Moodle and Ning
internet sites for materials and communications relevant to this course.
Use http://turnitin.com to submit written components forming parts of all
assignments
Use a citation management system such as Endnote or Zotero to manage
their database of reading. See http://www.zotero.org
Use Unitec library - all prescribed texts and reference texts are placed on
course reserve.
Use Unitec Library databases online
Visit Department of Management and Marketing Blog: http://thedomm.com/
Visit Department of Management and Marketing Facebook Site: http://
www.facebook.com/group.php?gid=104981291451

7. Topics, content, and reading schedule
Note. All topics scheduled here will not always be covered in class meetings. You
are required to keep up-to-date with this reading schedule to meet the
requirements of assignments.
Week/ Assignment
Agenda Reading
Studio Due
LEARNING OUTCOME ONE: OVERVIEW
Students will describe characteristics of small
business.
Key elements
a) Profile:
• owner
• staffing
• turnover
• customer focus
• equity and asset value.
b) Success factors,
• capital
• planning
O&E
• systems
Preface
• customer relations Introduction
1 • product or service development Ch1 - Introduction
• marketing Ch 2 - Business
• other. opportunity
Ch 6 - Business planning
• commitments and responsibilities
• variety of roles
• time demands.
Topics:
• Introduction to entrepreneurial business
• What is small business and
entrepreneurship?
• Small and corporate business in New
Zealand
• Finding business opportunities
• Business planning
LEARNING OUTCOME ONE (continued) Exercise 1: Self-

2 employment assessment
3 LEARNING OUTCOME ONE (continued)

Week/ Assignment
Agenda Reading
Studio Due
LEARNING OUTCOME TWO: START-UP
OPTIONS, STRUCTURE, AND FINANCING
Students will compare business options,
business structures and finance options
of small business.
Key elements
• independent
• franchise
• co-operative
• e-business.
O&E
c) Business structures: Ch 2 Finding a business
• sole trader opportunity
4 • partnership Ch 9 Financing
• company
• trading trust. Ch 4 Legal
d) Finance options. Ch 5 Franchising
Topics:
• Finding a business opportunity
• Small business survival and success
• Learning about small business
• The role of entrepreneurs in creating new
business
• Foundation business structure and legal
issues
• Good business: Ethics, social responsibility
and business character
• Launching an entrepreneurial business
5 LEARNING OUTCOME TWO (continued)
LEARNING OUTCOME THREE: ADVICE
AND ASSISTANCE
Students will identify sources of advice
and assistance available for a small
business.
Key elements
• financial and non-financial
6 • governmental and non- O&E ASS ONE
Ch 3
governmental.
Topic:
• Government Programmes
• Trade Associations
• Chambers of Commerce
• Intellectual Property protection and
management
7 Guest speaker or Field Trip

Week/ Assignment
Agenda Reading
Studio Due
LEARNING OUTCOME FIVE: CONTROL
Students will describe performance
measures and controls used for small
business. O&E
Exercise 2: Trans Crash
Key elements Transport
8 a) Financial: Ch 7 Financial Information
• cash budget Ch 8 Cash Flow
• income statement Ch 9 Financing
Ch 10 Profit Planning
• balance sheet
• break-even analysis
• two other types of information (eg debtors).
LEARNING OUTCOME FOUR:

MARKETING
Students will explain the importance of
marketing choices for a small business.
O&E
Key elements
9 Ch 11 Market strategy
• Research. Ch 12 Advertising, sales
• Promotion. Ch13 Export marketing
• Business environment.
• Location.
• Channels of distribution.
10 LEARNING OUTCOME FOUR (continued) TEST
(continued)
business.
Key elements
a) Financial (Note: this element completed in O&E
earlier weeks) Ch 14 Retail and service
b) Legal: operations
11 Ch 15 Manufacturing
• four from central government
• one from local government. operations
Ch 18 Troubleshooting and
recovery
• quality Additional research
• waste
• product or service
• hours of operation
• other.
d) Risk management process
12 LEARNING OUTCOME FIVE (continued)

13 Study Week ASS TWO
O&E => Chapters from course text: Oliver & English (2010). Other readings listed
above: see ‘Learning Resources’. Calendar dates for specific events such as
assignments vary each semester: See: Semester-specific dates and passwords.

8. Learning model and teaching philosophy
In this course, your learning will be driven by several concurrent and equally
important elements. Combined, they form a ‘learning adventure’.
Textbook and lecture based learning: provide base knowledge, concepts,

ideas. A roadmap for your thinking.
Experiential learning: where you experiment and practice applying your
knowledge in situations that simulate the ‘real world’ of practice
Assessment-based learning: focusses learning on application to a given
personal or professional context.
Reflective learning: where you incorporate your learning from practice and
study into your personal knowledge base, and identify future areas for
strengthening your personal and professional development.
Studio workshop elements: the ALAPA learning process model

Each studio is organised according to elements selected from the ALAPA
workshop learning process model. The process model may differ from
conventional teaching approaches.
In brief, the ALAPA model comprises these elements as a natural sequence There
will be variances from the ALAPA model as time and opportunities for creative
diversions permit.
ASSESSMENT and AGENDA - Activities that raise participants’ interest in the

workshop theme and learning activities that will follow. Examples: short
questionaries, role-plays, group discussion questions, or ice-breaker
exercises. AGENDA - Overview of the workshop.
LEARNING - Overview of learning resources presenting concepts relevant to

concerns and issues raised in the ASSESSMENT phase. Examples: reading,
lecture activities, references to research.
ANALYSIS - Activities that engage participants with the learning activity to

further enhance their learning and discovery. Examination of how others have
behaved in similar situations related to the workshop topic. Examples: role
plays; discussions based on case studies, television shows, or movies.
PRACTICE - Reinforcement of LEARNING through deliberate PRACTICE of

skills in a work-like situation in the classroom. An opportunity for immediate
in-class experimentation, feedback, and reflection.
APPLICATION - ‘Take home’ assignments that provide the opportunity for

the participants to transfer the workshop learning to their real-life personal
or work situations. Examples: Assignments that facilitate both short-term
and long-term experimentation. These assignments are usually conducted by
participants after the workshop has concluded.
(Quinn et al, 2006, Ch 1: Organising the Learning Process; DiPadova 1996, p. 8).

Improving our teaching and learning environment
On a weekly basis we use an instrument to identify the extent to which students in
the class are progressing from, say, worry and anxiety about the course to a state
of creative, high-performance ‘Csikszentmihalyian flow’.
On the basis of feedback from this instrument, the teacher can adapt his teaching
approaches to improve learning outcomes. Furthermore, students can adapt their
learning approaches and/or support each other within their project teams. The
Japanese call this process of continuous innovation, kai-zen. We use an
instrument called the Csikszentmihalian (‘Chicks-send-me-high’) flowmeter,
developed by Mellalieu. See Mellalieu & Emerson (2009) as a basis for timely
conversation with our students to improve learning outcomes.
Mellalieu, P. J., & Emerson, A. (2009). Developing reflective learning in a strategic

thinking class. In Unitec Teaching and Learning Symposium. Presented at the
Unitec Teaching and Learning Symposium, 28 September 2009, Auckland,
NZ: Unitec Institute of Technology. Retrieved from http://web.mac.com/
petermellalieu/Teacher/Blog/Entries/2009/9/29_Symposium
%3A_Developing_reflective_learning_in_a_strategic_thinking_course.html
Introduction to reflective learning

Figure 4.1 shows the usual education practice: you accept an assignment, conduct
the assignment, and sometimes present a report. Subsequently, your tutor
assesses the quality of what you have submitted. You are dependent on their
judgement alone in assessing the quality of your learning.
In our ‘learning adventures’ as part of this course, you are required to extend on
the activities of Figure 4.1 through observing your own performance - perhaps in
relation to your team and other members of the class. Figure 4.2 illustrates how
you continue your experience of the class through recording your observations,
and reflecting on how you might improve your practice and your learning in your
future professional life - Figure 4.2.

Figure 4.1: Traditional learning process
Figure 4.2: Learning process augmented with observation, reflection, and

generalisation of learning for future practice

9. Contact sessions: Studios and conduct
Your learning experience assumes that you will attend class contact studios to
clarify assignment requirements and to participate in extending the learning you
gain from the Required Reading Schedule, Section 4. Accordingly, all studio
sessions are compulsory. Email your team and tutor in advance if you will fail to
attend.
Studio sessions will be the primary time discussions will be held about the
assessments.
Please ensure that before coming to the studio sessions that you are prepared.
Skim read the relevant chapters prior to the relevant class. Prepare questions and/
or case examples you would like to discuss drawn from recent news events.
Follow up classes by reading fully the chapters indicated in the section: Topics/
Content and Reading Schedule.
WARNING!!! All material presented and discussed in class is EXAMINABLE in

the Test. The test includes:
Material presented by students and guests, and required text reading.

Material detailed in the course reading schedule.

10. Assessment policy
We expect that for each assessment, students will spend approximately two
to three weeks duration on each. Heavy emphasis is placed upon the quality
of course work. The section “Workload Overview” suggests when and how
much to allocate time on your assignments.
Schedule several weekly sessions to progress work on your Assessments. All
assignments demand demonstration of ‘deep’ learning rather than shallow
recall of facts. Accordingly, only mediocre results … and low grades … can
be achieved from attempting overnight assignment writing. The assignments
build on the work of previous assignments and text readings. My
expectations are outrageously high.
Some assessments requires
references and theory. I expect I reward excellence!
students to access other scholarly
and professional textbooks and
I reward outrageous
journal articles based upon quality failure!!
research and thinking. I expect But I do not reward
you to extend beyond the course
textbook and a simple-minded mediocrity!!!
Google search. Use Google Peter Mellalieu
Scholar, the Unitec on-line
scholarly databases, and advice
from the Unitec reference
librarians.
When referencing, please reference properly and accurately. Hint: If you use
Zotero or Endnote, you will be able to transfer data from your personal
reading database into APA referencing format instantly, directly and
automatically!
Extensions require a doctor’s certificate without question.
Group free-riders and plagiarists will gain less credit for the marks gained by
the team as a whole..
Submission of all written assessments

Latest hand-in time: On the date specified before class commencement.
Deliver at the start of class or post into the DOMM physical assignment drop
boxes on Level 4, Building 172. See Semester-specific calendar.
This course uses http://www.turnitin.com for all written report Assessment
work and presentations handouts. Submit before the latest hand-in time for
the bound document.
Prepared in a professional report format acceptable to a managerial
audience.
Bound properly and professionally.

Style: 12 pt, 1.5 pt paragraph spacing in a web-optimised font such as
Georgia or Verdana.
Please do not email me your Assessment. In an ABSOLUTE emergency you
may email me a backup copy if you fail to submit to turnitin.com and the
physical delivery box. Ensure the Email Subject line includes: COURSE ID,
Assignment Number, Student Name. Submit directly to my office a bound
copy when you are able.
Requirements for presentations

To be held at studio times in the week and date specified.
To be prepared in a professional format acceptable to a managerial audience.
Presented in Acrobat pdf, DVD, PowerPoint, or (by arrangement) Keynote.
Test out all technology you intend to use at least 60 minutes prior to
commencement.
Blended-Learning students should accompany their presentation with
presentation notes but you do not have to present in person. If you are able
to come and present in person to the class then I welcome this. You are
welcome to attend lectures.
All Assessments grades will include the following grading factors. For some
Assessments these factors may account for up to 50 percent of the allocated
grades:
Argument development (the ability to present evidence-based logical

conclusions)
Professionalism (the ability to deliver high quality standards)
Writing suitable for an international business audience, for whom English is a
second language.
Creating an A+ Assignment
Many students have found the following guide helpful in planning their academic
(and professional) assignments.
Mellalieu, P. J. (2001, October 21). Creating the A+ assignment: A project

management approach. Retrieved July 27, 2009, from http://web.mac.com/
petermellalieu/Teacher/Blog/Entries/2007/10/21_Creating_the_A
%2B_assignment%3A_A_project_management_approach.html.

Fairness in marking - team presentations
Students who present later in the course have both additional time and the
experience of observing and learning from earlier student presentations.
Accordingly, a moderating process will be used to ensure that those students who
present earlier in the course gain an equitable mark compared with those who
present later.
Feedback grades (interim) will be presented at the conclusion of each week of

Presentations. Grades will be moderated subsequently and adjusted if necessary
once all presentations have been complete.
I reward outrageous failure!!!

OPPORTUNITY!!! This course attempts to practice what it preaches: innovation,
creativity, and enterprise. Innovation often means experimentation and the risk of
failure. To make this course safe for YOU to take risks (calculated or intuitive) you
are REWARDED for reflecting CONSTRUCTIVELY on the mistakes, disasters, and
outrageous failures you have experienced during the class. The rewards attach to
your Assignment 3 journal and reflective essay.
WARNING!!! Plagiarism, copying, and turnitin

As a routine policy I shall display for course members the turnitin report for all
assignments submitted in this course WITHOUT EXCEPTION. The turnitin report
displays the degree (from 0 to 100 per cent) to which an assignment has been
copied from other sources.
My purpose in displaying this report is to help teams quickly identify members

who require assistance in correct research and writing techniques, such as those
explained in Turner et al: Ch 4: Basic Academic Writing Skills: paraphrasing,
quoting, summarising, and writing citations.
A turnitin copy-level of greater than 30 per cent usually results in the assignment
gaining zero marks. Harsher penalties could apply such as: full course failure, or
exclusion from the BBus programme. See General Information: Misconduct in
Assessments

11. House style: written and oral communication
standards
The quality of your communication is a CRUCIAL requirement for your success in
this course .. and your future career. Feedback from employers and recruitment
consultants advises me that you can DOUBLE your entry-level salary in a
management position through possessing writing and oral communication
standards that enable your work to be presented directly to an employer’s clients
without ‘hand-holding’.
Accordingly, for this course you are expected to write in a style suitable for an
international business audience for whom English is a second language: Global
English.
All of your assignment writing is assessed according to the Figure ‘Six-trait

method’. The figure specifies the criteria used to assess your writing quality. The
reading resources later in this section explain some of the special writing features
I require: Global English, paragraphing, and sentence sense, for instance.
Haswell’s Minimal marking

To encourage you to seek excellence, and avoid mediocrity, your written
assignment will be marked using the principles of “Minimal Marking” (Haswell,
1983).
You will receive a Contingent Mark for the assignment that you submit on the due
date. If there are errors in the grammar, style, word choice, organisation, fluency,
or layout, a selection of these errors will be indicated to you by a “X”. The errors
will NOT be corrected by the marker.
WARNING!!! If you fail to gain a grade of 24/30 marks for the Professional
Language or Presentation/Format components of your assignment on your
first submission, your document will be returned to you for correction. You
are then required to rewrite the document to achieve a grade of 24/30 for the
Professional Language and Presentation/Format components.
You will be credited with zero marks for this assignment UNTIL you have
corrected the errors to the satisfaction of the course marker. You will have a
maximum of two weeks to re-submit your assignment. If you achieve the required
writing standard, you will receive a grade NO HIGHER than the initial Contingent
Mark allocated by the tutor.
All resubmissions must be made before the end of the Study break period.
WARNING!!! If you fail to resubmit your assignment to the required level, then
you will receive zero marks for the assignment.
If you fail to resubmit a failed assignment, then you will also fail the course as a
whole.

Professional Language: Six-Trait Method for Evaluating Writing Quality
Trait High / 4 - 5 Middle /2 - 3 Low /0 - 1 Mark
Ideas and Focussed, succinct, Some really good Just beginning to

content specific. The ideas and parts. Some parts figure out what
topic keep the reader’s not there yet. you want to say
attention. Argument
logical, persuasive,
and supported with
evidence.
Word choice Extremely succinct, Correct but not Confusing. The

visual, and accurate. striking. The reader is often
You picked the correct words get the asking “What did
words for the correct message across, you mean by this?”
places. Choice of but don’t capture
Global English word the reader’s
attention.
Grammatical Mostly correct. There About halfway Editing not under

conventions are few errors in the there. Several control yet. It
paper. Global English bothersome would take a first
applied. mistakes need reading to decode,
cleaning up. and a second
reading to get the
message.
Organisation Clear and compelling. Some really Not shaped yet.

You have chosen an smooth parts. The order of the
order that works well Other parts need paper is jumbled
and makes the reader work. The order and confused.
want to find out what makes sense most
comes next. of the time.
Voice Individual and Individuality fades Not “you” yet. You

powerful. The paper in and out. What don’t know what
has personality and you truly think and you truly think or
sounds different from feel shows up only feel yet.
the way anyone else sometimes.
writes.
Sentence Varied and natural. Routine and Paper needs work

fluency The sentences in your functional. Some because there isn’t
paper are delightful to sentences are enough sentence
read out loud. choppy and sense yet.
awkward, but most
are clear.
Total Out of 30
Out of
A mark of 24/30 or better is required to AVOID a resubmission under the policy

of Haswell’s Minimal Marking.
Source: Summarised from: Student Friendly Writing Rubric from a School using the
Six Traits of Writing, Discovered by John Norton while traveling in Alabama.
Thanks to teachers at Maryvale Elementary in Mobile! www.middleweb.com

Writing resources
Examine the following guides and examples of the writing style required for this
course.
* WARNING!!! Denotes VERY, VERY HIGHLY RECOMMENDED reading!
About writing in general
Manalo, E., Wong-Toi, G., & Bartlett-Trafford, J. (2009). The business of writing:
written communication skills for business students (3rd ed.). North Shore,
NZ: Pearson Education New Zealand. [See Selected Readings]
Turner, K., Ireland, L., Krenus, B., & Pointon, L. (2009). Essential Academic Skills
(Revised). Melbourne, Australia: Oxford University Press. [See Selected
Readings]
About organisation of writing
Mellalieu, P. J. (n.d.). The essay factory: A collaborative learning adventure.

[Explains principles of five-paragraph essay-writing] Retrieved July 27, 2009,
from http://web.mac.com/petermellalieu/Teacher/Blog/Entries/
2007/6/27_The_essay_factory
%3A_A_collaborative_learning_adventure_.html.
** Mellalieu, P. J. (2007, October 18). Model answer: A “Five Paragraph” essay in

management. Retrieved July 27, 2009, from http://web.mac.com/
petermellalieu/Teacher/Blog/Entries/2007/10/18_Model_answer%3A_A_
%E2%80%9CFive_Paragraph%E2%80%9D_essay_in_management.html.
About word choice and grammatical convention
* McAlpine, R. (1997). Global English for Global Business, Auckland: Longman,

ISBN 0 582 73998 5. [See Selected Readings]
** Mellalieu, P. (2007, July 3). Let’s all learn and teach Global English in our
business schools! [Example of a five-paragraph essay] Retrieved July 27,
2009, from http://web.mac.com/petermellalieu/Teacher/Blog/Entries/
2007/7/3_Let
%E2%80%99s_all_Learn_and_Teach_Global_English_in_our_Business_School!.h
tml.
*** Quality Web Content - From Plain English to Global English [Excellent overview
of the vital need for adopting Global English .. and demonstrating how to
achieve Global English in your writing], Retrieved 3 July 2007 3:32 PM,
http://www.webpagecontent.com/arc_archive/139/5/

References
Haswell, R. H. (1983). Minimal marking. College English, 45, pp. 600-604.
Emerson, L. (1999). A collaborative approach to integrating the teaching of writing

into the sciences in a New Zealand tertiary context (Doctor of Philosophy in
English). Massey University, Palmerston North, NZ.

12. Agenda and course material for studio 1
Aim
Introduce students to the overall course structure, aims, and assignments
LEARNING OUTCOME ONE (LO 1) Students will describe the characteristics of
small business.
Key topics
Introduction
Refer to Course Handbook Section 7: Topics, content, and reading schedule
Class operating principles, values and guidelines.
Safety, health, and risk management of class activities
Class Discussion: David Slack and http://speeches.com
Lecture 1: Introduction and overview of small business in New Zealand
Overview of Course Handbook and Course Textbook
Introduction to Assignment 1: Team Project
Formation of Assignment teams
Lecture 2: Creating a winning enterprise: Your place in the entrepreneurial
process
Definitions of key concepts - small, medium, and large business in New
Zealand.
Preparation
Read the story (‘business case narrative’ in academic-speak) about David
Slack - Speechwriter to the world. Prepare to discuss in small groups your
responses to the questions.
Prepare responses for discussion in class to the questions below:
• Would you prefer to work in a big business, a small business, a not-for loss
organisation, or an entrepreneurial organisation? Why?
• What do the terms innovation, invention, and entrepreneurship mean to
you? Describe examples of your favorite innovators, inventors, entrepreneurs,
and leaders. Discuss the innovations one of your favourites has brought to
success.
• Consider the best team that you have ever observed or worked within. What
do you think made that team ‘the best’? (Your choice of team may be made
from a work team, sports, recreation … or family). Discuss ‘the worst’ team
you have worked with?
• Course relevance: How do you think the course APMG NZ 435 might be
relevant to your other academic studies? … And to your current or future
work life?

Read the Executive Summary and Introduction to this Course Handbook.
Identify aspects of that surprise or intrigue you. Why? What aspects do you
agree with? What aspects do you disagree with or find surprising? Why?
Complete the New Venture Application for Team Assignment in
preparation for your being allocated to an Assignment 1 Project Team in
Studio 2.
Read the Course Descriptor, Reading Schedule for this course
Acquire the course text books Oliver, L., & English, J. W. (2007). The Small
Business Book: A New Zealand Guide for the 21st Century. Allen & Unwin.
Note: Extracts and previews of the course text can be accessed on Google
Books. Click: here
• Examine the textbook table of contents.
• Browse through to the start of each chapter. Read the introductory
paragraphs and chapter objectives.
• Skim read Chapter 1.
Identify the location of the lecture slides to accompany this studio’s
lectures. They are at the end of this Course Handbook in the Lecture Slides
section. Powerpoint versions are also available on the Moodle Learning
Support System.
Science is not the

scarce resource. The
scarce resource is
entrepreneurship.
Geoffrey Moore

Course agenda for studio 1
ID Agenda Start Dur/ End Ref
min
1 Introduction & welcome 0 15 15

• Agenda overview
• Mihi/About the tutor
• Class operating principles, values and
guidelines
• Safety, health, and risk management
2 Class health - start of studio 15 10 25

• Csikszentmihalian flowmeter
3 Class Discussion: David Slack and http:// 25 20 45

speeches.com
4 Questions 45 5 50
5 Break A 50 10 60
6 Overview of Course handbook: Exec Summary 60 15 75
7 Lecture 1: Introduction and overview of small 75 15 90

business in New Zealand
8 Introduction to Assignment ONE 90 10 100
9 Question time 100 10 110
10 Break B 110 10 120
11 Lecture 2: Creating a winning enterprise 120 15 135

• Who wants to be part of a winning team?
• Why do we need winning teams?
• What is required to create a winning team?
• Note: Audio recording here
12 Any other business (AOB) 135 15 150
13 Preparation for the next few weeks of your 150 15 165

learning adventure. Before next studio:
• Complete required reading according to
Reading schedule
• Read Assignment ONE CAREFULLY.
• Plan your next five weeks workload.
• Any other business, questions?
• Learning from ‘outrageous failure’
14 Class health - conclusion of studio 165 5 170 Course

• Csikszentmihalian flowmeter book
15 Conclusion 170 0 170
16 End 170

Preparation prior to class: Case Discussion: David Slack - Speech
writer to the world
Let’s begin with an ice breaker – a warm up exercise – to develop a shared
experience for our journey of learning together. The ice breaker is a case
discussion based around one example of a small business established in New
Zealand by entrepreneur David Slack.
Instructions
Read the following article, and answer these questions:
1. What is David Slack’s business? Why did he set up the business? What was the
moment of conception (or, the “knock on the door”)?
2. What skills did he bring to bear on his new business from his earlier career?
3. How long was the “gestation period” – the number of years it took before David
“gave birth to the enterprise” following the moment of conception?
4. What special challenges did he face in setting up his business? How did he
meet those challenges?
5. What are some of the distinctive features (special capabilities, or competitive
advantages) of the business that David established?
6. Is this a successful business? On what terms?
7. What makes his business valuable? If he sold the business, what could he sell?
Would you buy this business? Why? Why not?
Case 1: David Slack - Speech writer to the world

Source: Brown, Russel, “Speech writer to the world” February 1999, Unlimited, p.
24
Stuck for words, Jewish Americans and British policemen are turning to a
Devonport man with a pencil and a modem.
David Slack is pure uncut knowledge worker. He writes speeches. He'll write them
for almost anyone, including New Zealanders. But 90% of his speeches are for US
citizens- three or four in an average day, all commissioned over the internet and
composed from his home office in Devonport.
"Americans are comfortable with ordering a service remotely ‑ and a service of this
kind," Slack observes. "The inclination in New Zealand is for people to do it
themselves ‑ it's the DIY nation."
Ironically, it's probably that DIY doggedness that got Slack where he is today. A
rising star within DB, he was cut down early by a heart attack. "It changed my
point of view 180 degrees."

Image Right: David Slack.
Source: Speakers, Engage Your Community - a web
conference for community organisations. (n.d.). Retrieved
February 24, 2011, from http://www.eyc.org.nz/past/
wellington08/speakers/
David spent a couple of years rehabilitating and part‑time

consulting on the bar business. Eventually he found himself
in the employ of Geoffrey Palmer, Minister of Justice. When
David Lange resigned, Slack suddenly found himself speech
writer to the prime minister. Briefly at least. Neither stayed long, but the taste of
speech writing had Slack hooked.
After a couple of years in PR he struck out, determined to make a living writing

speeches. It was tough going. First he took up an account with Auckland's first
commercial Internet provider, Iconz, in 1994.
"The thing about speechwriting is that you need to become an instant expert. The
Internet gave me quick access to a reasonable depth of material and meant that I
could turn around a speech reasonably quickly and with fresh material.
"And gradually I thought that this might not be just a way of researching my work,
but of actually extending my network. When you're in a niche business like I am,
you want to be reaching as wide a market as possible."
He contacted a US Internet company and bagged the priceless domain name

http://speeches.com.
There were no how-to-make-a-successful-Web-site books in 1995, so Slack had

to figure it out for himself. He devised some gimmicks to draw people to his site:
free consulting for a second opinion on speech texts, an archive of the great
speeches, and the Automatic Speech Writer, a system of forms on his site that
collects key details from visitors and generates off-the-shelf wedding speeches.
Nuptial punters and others can pay $US10 via an AT&T 900 number to have a
speech auto-written for them in minutes. He hasn't changed or marketed the
service for a while, but the money quietly rolls in.
A different form fields the 30 or 40 enquiries he receives daily, fires off a "semi
automatic" response and has been "absolutely the most effective way I have of
getting specific information that I need from people and motivating them to
actually say 'yes, please help me'."
Slack's other breakthrough was dropping his prices.
"I realised as I built up a base of speeches that I was getting a lot of good material
that I could adapt from one speech to another, and I was getting much faster at
turning these things around," he says.

"I could charge $US100 to $200 for a speech, rather than a corporate rate in the
thousands, turn it around in an hour or two and still have a good return on my
time."
Slack now has a thriving line in Jewish ceremonial occasions and has written
speeches for a bail bondsmen's conference and on institutional racism for a senior
British policeman.
"And I did one for a guy in Florida about sharks and why they're not as dangerous
as you might think," he chuckles. "I almost convinced myself."

New Venture Application for Team Assignment
Team Allocated (Office use
only)
Preferred and Personal
Names
FAMILY NAME (Caps)
A person I most admire is:…

Reason ...
What I aspire to learn and

achieve from this course is
….
Qualification pursuing BBus Diploma (state)
International exchange
Other (state)
Major(s) (Circle) Management Marketing Operations
Human Resources Finance Accounting
Other: state
Best/most preferred
subjects (state up to 3)
Number of level 6 and
higher courses completed
Years worked in NZ
Languages spoken English, Maori, Mandarin, Canton, Hindi,

(State) Spanish, German, French
Countries in which dwelt NZ ( ) China ( ) India ( ) Germany ( ) Sweden ( ) etc
and/or worked (Enter years
in brackets)
I suspect my strongest ( ) Relating— interpersonal bonding and connecting

contributions to a New ( ) Impacting — impact or influence lives of others
Venture Team will be (Rank ( ) Striving— motivate and generate energy
1=top, 4 = least) ( ) Thinking— informational and perceptual (ideas,
creativity, analysis)
The key strengths and

experience I will bring to my
New Venture team are:
I am absolutely, absolutely Mon Tue Wed Thur Fri Sat Sun

ABSOLUTELY NOT available
for team meetings at these
times

Kai-zen: Improving our teaching and learning environment
Csikszentmihalian flowmeter (‘Chicks-send-me-high’)
We use an instrument called the Csikszentmihalian flowmeter on a weekly basis to

identify the extent to which students in the class are progressing from, say, worry
and anxiety about the course to a state of creative, high-performing
‘Csikszentmihalyian flow’.
On the basis of feedback from this instrument, the teacher can adapt his teaching
approaches to improve learning outcomes. Furthermore, students can adapt their
learning approaches and/or support each other within their project teams.
Worry, anxiety, and stress occurs when we perceive that we face a challenge that
is beyond our current skills. We may feel ‘Anxiety’ or Worry’. We can respond to
productively to anxiety (for example) through increasing our skills. We progress
towards ‘Control’ and ‘Flow’. Alternatively we can respond unproductively in a
variety of ways, such as withdrawing from the challenge (to Apathy)), complaining
or blaming. There are other productive responses that we will discuss in class
when appropriate or on request. See Also Frederick & Kuratko (2010, Ch. 2 Stress
& the entrepreneur, pp. 47-51)

Defining your Csikszentmihalyian state
Emotion Value Definition
In flow Performing vigorously and enthusiastically.

5 Operating in the zone of our ‘peak performance’
where our skills just match the challenges presented.
In
control The power to influence or direct [strongly] one’s
4
behavior or the course of events.
Excited
Excited or provoked to a feeling of anger or strong
3
emotions. Aroused to action.
Relaxed
2 Free from tension and anxiety.
Apathy
-2 Lack of interest, enthusiasm, or concern.
Boredom
Weary because one is unoccupied or lacks interest in
-3
one's current activity.
Worry
Give way to unease; allow one's mind to dwell on
-4
difficulty, uncertainty, or troubles
Anxiety
Nervousness, or unease, typically about an imminent
-5
event or something with an uncertain outcome
Note: the above list is not exhaustive. For instance, unrelieved anxiety can lead to
depression, whilst unrelieved flow can lead to mania or burnout. Add your own
definitions of other emotions you regularly face… despair, panic!!!. Learning to
identify a person’s emotional state enables you to self-manage your
temperament: Self-management is a key requirement for successful leadership,
management, and entrepreneurship. Definitions adapted from Apple Dictionary by
Mellalieu.

My Weekly Csikszentmihalian Flow Record
Each class, mark your Csikszentmihalian/emotional state at the START (S) and
FINISH (F) of each class. Note in your journal the conditions that gave rise to your
emotion, the reasons for changes in your emotion, and actions you intend to
undertake..
Emotion Score 1 2 3 4 5 6 7 8 9 10 11 12 13
Class
date
S
In flow
5
F
S
In control 4
F
S
Excited 3
F
S
Relaxed 2
F
S
Apathy -2
F
S
Boredom -3
F
S
Worry -4
F
S
Anxiety -5
F

13. Assignment 1: Profile of a small business

of hours
1 - Scenario
Imagine that you are a new recruit to a small, but growing enterprise, MyndWriters. You
will join to make a team of five new recruits. Your team has been assigned the task of
researching and writing one documents: a speech, a magazine article describing the profile
of a small business.
The remainder of this document presents the instruction that you have received from the
entrepreneur-owner of MyndWriters.
Each team member is expected to contribute 40 +/- 5 hours to all aspects of the
assignment combined. Keep a record of your contributions in a diary or blog.
2 - Learning outcomes
In this assignment you are REQUIRED to demonstrate achievement of the following
course learning outcomes:
! Identify, describe, and assess the stages of development that a new enterprise and its
founding entrepreneur(s) undergo on their journey towards establishing, developing,
and growing, a small business including:
Describe the characteristics of small business (Course LO 1)
Compare business options, business structures, and finance options (Course LO 2),
and
Identify the sources of advice and assistance available for a small business (Course
LO 3).
This assignment is also intended to help you achieve the following professional
development outcomes:
! Develop the project management, quality control skills, team working, and leadership
skills you require to join or establish a new venture or small enterprise;
! Develop investigation and research skills - drawing on both primary and secondary
information sources;
! Develop writing and editing skills appropriate for marketing a small business’ products
and services to a global customer audience, and writing a business plan to raise
financial resources;

3 - Business profile magazine article
You have been commissioned by a magazine to write a profile article about the foundation,
growth, and development of a small business. The text, layout, and writing style must
match the mission and readership of the magazine. You have a choice of writing for 2:
! GMagazine - The Green Lifestyle Magazine - See http://www.gmagazine.com.au/
! Good - New Zealand’s guide to sustainable living - See http://good.net.nz
Select a business that would interest readers of either magazine. For instance, select a
business that has been - or could be - a national or regional winner of the Sustainable
Business Awards. The awards are arranged by the Sustainable Business Network (SBN).
http://www.sustainable.org.nz/cms1/index.php?page=how-to-enter
Conduct the following tasks to produce an example like previous students, or the example:
Trash & Treasure, Nogrady, 2008):
! Assemble your project team
! Devise a Project Plan of responsibilities and deadlines for the remaining tasks.
! Identify an appropriate entrepreneur and/or small-medium business and/or new
venture
! Conduct background research using published documents about the organisation.
! Devise a set of questions to ask the entrepreneur and/or an officer of the organisation.
Ensure that your questions will give you answers to ALL the detail required as indicated
in the course Prescription Matrix for the course Learning Outcomes for this
assignment. (See Section 2 - Learning Outcomes, section 6 - Assessment Criteria, and
Annex D)
! Gain the entrepreneur’s written approval to interview, write, and publish the results of
your writing. Have them sign the official Consent Form, Appendix E.
! Write and edit the article. The article is required to be 875 +/- 50 words long.
! Format the article as a two-page spread for Good or GMagazine, including photographs
and figures. Remember: The text, layout, and writing style must match the mission and
readership of the magazine.
! Prepare a set of discussion class questions and answers based on your article (See
Section 4 - Class Discussion Questions)
! Present a “work in progress” of your assignment to the class TWO WEEKS prior to the
Assignment Due date. Your work will be peer reviewed constructively by the course
participants at this session.
! Submit on the Due Date a copy of all the documents in PRINT and CD-ROM format in
the sequence shown in Section 7: Document submission
2You may suggest writing for another magazine or e-zine. Seek approval from the course tutor. For instance,
Unlimited, Idealong, NZ Business.

4 - Class discussion questions
The articles published in the magazines are used by teachers as a basis for their teaching
about new venture creation, small business management, eco-sustainable business and
green issues. Accordingly, the magazine editors also require that you prepare five
questions that a teacher could use based on the material written in your article, or found
easily by a student using an Internet search.
Write model answers for the questions. Use a style similar to the model answers used in
the David Slack/Speeches.com case discussed in class. Reference each of your answers:
i.e.: Slack, page 2, paragraph 6, or to the internet sources you used, and to relevant theory
in your course textbook.
5 - Assessment criteria
The Assessment Criteria for this assignment are presented in ANNEX A, B, and C.
The Course Learning Outcomes are specified in greater detail in the document: Course
Prescription and Assessment Matrix . See LO 1, LO2, and LO 3 indicated in Section 2
above. You must ensure that your speech, case article, and discussion questions address
ALL the key elements topics specified in the Course Prescription and Assessment Matrix. 3
To accomplish the assignment requirements you need to ensure you cover the learning
outcomes and key elements of LO 1, LO 2, and LO 3.
You must attach a table to you assignment showing the list of LO elements, and
referencing where they occur in your article and/or Question-Answer section. See ANNEX
D: Checklist for Learning Outcomes.
6 - Writing, referencing, and acknowledging assistance

Communicating accurately and succinctly through the written word is a FUNDAMENTAL
skill for any business professional. For example, you need to create web sites for your
products and services, business plans, presentations, correspondence, and pamphlets.
Accordingly, this assignment requires that you seek coaching to develop the writing skills
needed for this assignment, for your future studies, and professional life. Please schedule
time to consult with Unitec’s Student Learning Centre early in your project planning.
The readers of GMagazine and Good are of mixed ethnicities (Croatian, Pasifika,
Lebanese, etc.). They possess a relatively low level of formal education and English-
language capability. Accordingly, you are required to write your assignment in a Global
English style (McAlpine, 1997). Global English is the 'house-style' of MyndWriters. You
are required to achieve a McAlpine EFLAW Readability Score of 22 or less in the first three
and last two paragraphs of your writing ... and ideally throughout ALL your writing!
Calculate the EFLAW rating and state the rating on the Assignment Cover sheet in the
space provided.
Cite and reference your literature in all your products. Use a citation and reference style
guide such as APA.
3 Available on the course BLACKBOARD/ASSIGNMENTS.

The reference and questions sections of your assignment do NOT form part of your word
count.
An extremely useful software tool for keeping track of web material, references, and
your own computer’s material is Zotero. Zotero quickly produces Reference lists in APA
style through simple ‘drag and drop’ mechanism. Zotero is a free, open-source add-on that
you use as part of the Firefox open source web browser. Visit http://www.zotero.org/
Include an ‘Acknowledgements’ section to state briefly the assistance that you have
received for the Unitec Learning Centre, other students, or other coaches in your progress
to produce this assignment. Present your ‘Acknowledgements’ section after the References’
section.
You are advised to keep a personal blog (or diary) of your progress in fulfilling all the
foregoing tasks. Using a blogging tool such as tumblr is useful for this purpose. One
purpose of keeping this journal is to assist the course tutor in resolving any disputes that
might emerge regarding unequal contributions made by team members to the assignment
work. ... It happens!
7 - Document submission
Submit to the Course Tutor a copy of all the following documents in PRINT and CD-ROM
format in the following sequence:
! Assignment cover sheet
! Assignment marking guides (Annex B, C, D)
! Consent form
! Magazine article
! Class discussion questions and answers
! Bibliography
! Interview Questions
! Interview transcript
! Supporting documents, web pages, etc
! Project plan
! Team members project logs of time and activity contribution
Reminder: you are required to submit your assignment in electronic format to

http://turnitin.com, See ASSESSMENT POLICY, SECTION 10.

8 - References
From Plain English to Global English: Quality Web Content, Retrieved 3 July 2007 3:32
PM, http://www.webpagecontent.com/arc_archive/139/5/
Haswell, R. H. (1983). Minimal Marking, College English, 45, 6, pp. 600-604.
McAlpine, R. (1997). Global English for Global Business, Auckland: Longman, ISBN 0 582
73998 5.
McAlpine EFLAW Readability Score, Retrieved 30 July 2007 12:33 PM, http://
www.webpagecontent.com/arc_archive/139/5/#score
Mellalieu, P. J. (2001). Creating the A+ Assignment: A Project Management Framework
Mellalieu, P. J. (2007a). Let’s all Learn and Teach Global English in our Business School!,
Auckland: Unitec Business School Working Paper Series, 6 July 2007 (Version 1.1).
Mellalieu, P. J. (2007b). The Five-Paragraph Persuasive Essay (ANNEX C) in “The
Assignment Factory: A Collaborative Learning Adventure”, Auckland: Unitec Business
School Working Paper Series, 28 August 2007.
Nogrady, B. (2008), Trash and treasure, G: The green lifestyle magazine (GMagazine),
pp. 12-13, Jan-Feb.
The Economist: Research Tools: Style Guide: Introduction, Retrieved 3 July 2007 3:24
PM, http://www.economist.com/research/styleGuide/index.cfm?page=673899
Zotero - Quick Start Guide. (n.d.). . Retrieved February 3, 2009, from http://
www.zotero.org/documentation/quick_start_guide.
71 - Resource access
Examples of previous Assignments and the articles by MELLALIEU are available on the
course MOODLE SITE and from the BLOG ARCHIVE in:
http://web.mac.com/petermellalieu/Teacher/Blog/Archive.html
9 - Acknowledgements
Jeff Marriott, Asoka Gunaratne, and Howard Frederick for advice on the earlier versions of
this assignment.

Assignment Submission Cover Sheet
Course Title APMG NZ435 Fundamentals of small business
Assignment ID Assignment 1: Profile of a small business
Programme NZ Diploma in Business
Department Management & Marketing, Unitec Institute of Technology
Semester:
Date issued:
Due date and time:
Delivery: ! Deliver the assignment (print + CD-ROM) to the tutor before the
start of class
! Or post in the assignment box on Level 4, Building 172.
! You MUST ALSO submit a soft copy to turnitin.com
Total marks: 100 marks
Weighting: 30% of course (approx. 45 hours input per team member)
EFLAW score 22 or less Achieved:
Instructions: ! Complete this cover sheet and attach it to your assignment.

! Answer ALL questions.
! Where applicable, show details of your workings.
! This is a team assignment and must be your own team’s work.
! Collusion, copying or plagiarism may result in disciplinary action
! We advise that you keep a copy of this assignment.
Students' Names:
Student ID No:
Lecturer: Peter J. MELLALIEU Class time:

Student declaration: I confirm that:
! This is an original assessment and is entirely our own work.
! Where I have used ideas, tables, diagrams etc of other writers,
! we have acknowledged the source in every case.
! This assignment has not been submitted previously as assessed
work for any academic course.
Signature of
students:
Date of signature:

ANNEX A: Grading schedule
APMG NZ435 Fundamentals of small business
Team members’ names (enrolled FAMILY NAME, personal name, (preferred name), ID):
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
Item – relative emphasis weightings shown in percentages Weight Grade

LO 1: Students will describe characteristics of small business.
! Profile (15)
! Success factors (15) 45
! Owners competing demands (15)
LO 2: Students will compare business options, business structures and finance

options of small business.
! Business options (10) 30
! Business structures (10)
! Finance options (10)
LO 3: Students will identify sources of advice and assistance available for a

small business. 15
Professional language
Word choice, grammatical conventions, sentence fluency, organisation and 10
logic, voice, and overall coherence, EFLAW readability < 22. See ANNEX C.
Penalty
Marks DEDUCTED if your document FAILS to:
! Present in the sequence and style of a magazine article
! Provide questions and answers appendix
-35
! Supply complete documentation: Article, consent form, questions and
answers, interview transcript, research documents, etc (Section 7)
! Fulfill academic conventions: Referencing, layout and presentation,
innovation, and creativity
Final Grade 100
NOTE: The above items indicate relative weighting from each part of the
assignment. See the Assignment Instructions and the ANNEX A: Grading
Criteria and ANNEX D for a complete specification of the requirements for
each section of grading.
The score calculated for Professional Language (above) is 1/3 of the mark
determined using ANNEX C.

ANNEX B: The six-trait method for evaluating writing
quality
Trait 5-4 3-2 1-0 Mark
Ideas and Focussed, succinct, specific. Some really good Just beginning to
content parts. figure out what you
The ideas and topic keep the want to say
reader’s attention Some parts not there
yet.
Argument logical, persuasive,
and supported with evidence.
Word choice Extremely clear, visual, and Correct but not Confusing.
accurate. striking.
The reader is often
You picked the accurate words The words get the asking “What did you
for the correct places. message across, but mean by this?”
don’t capture the
Global English word choice. reader’s attention.
Grammatical Mostly correct. About halfway there. Editing not under

conventions control yet.
There are few errors in the Several bothersome
paper. mistakes need It would take a first
cleaning up. reading to decode,
Global English grammatical and a second reading
structures. to get the message.
Organisation Logical and compelling. Some really smooth Not shaped yet.
parts.
You have chosen an order that The order of the paper
works well and makes the Other parts need work. is jumbled and
reader want to find out what The order makes confused.
comes next. sense most of the
time.
Voice Individual and powerful. Individuality fades in Not “you” yet.

and out.
The paper has personality. It You don’t know what
sounds different from the way What you truly think you truly think or feel
anyone else writes. and feel shows up only yet.
sometimes.
Complies with Global English
style
Sentence Varied and natural. Routine and Paper needs work

fluency functional. because there isn’t
The sentences in your paper enough sentence
are delightful to read out loud. Some sentences are sense yet.
choppy and awkward,
but most are clear.
Total
(Out of 30)
Source: Summarised from: Student Friendly Writing Rubric from a School using the Six Traits of Writing,
Discovered by John Norton while traveling in Alabama. Thanks to teachers at Maryvale Elementary in
Mobile! www.middleweb.com. See also: SIX-TRAIT ANALYTICAL WRITING ASSESSMENT MODEL
Scoring Guide (Rubric) http://www.nwrel.org/assessment/toolkit98/traits/index.html, Accessed: 16
February 2011

ANNEX C: Checklist for Learning Outcomes
Learning outcome and component Page Marks Marks
reference out of
LO 1: learning outcome One:-
Students will describe characteristics of small business:-
Profile: 15
! owner
! staffing
! turnover
! customer focus
! equity and asset value.
Success factors, five of the following: 15
! capital
! planning
! systems
! customer relations
! product or service development
! marketing
! other.
Owner’s competing demands: 15
! commitments and responsibilities
! variety of roles
! time demands.
Sub-Total: LO 1 45

Learning outcome and component Page Marks Marks
reference out of
LO 2: Learning outcome TWO
Students will compare business options, business

structures and finance options of small business.
Business options: 10
! Existing versus new start up.
! independent
! franchise
! co-operative
! e-business.
Business structures: 10
! sole trader
! partnership
! company
! trading trust.
Finance options. 10
Sub-Total: LO 2 30
LO 3: Learning outcome THREE
Students will identify sources of advice and assistance

available for a small business.
! Specialist services and support:
! financial and non-financial
! governmental and non-governmental.
Sub-Total LO 3 15
Professional writing 10
Total 100

ANNEX D: Consent form for interviews
Unitec Department of Management & Marketing
Faculty of Creative Industries & Business
We seek your consent to interview you as part of students’ study for

APMG NZ435 Fundamentals of Small Business.
I have had the project explained to me and I have read and understand the information sheet given
to me.
I understand that I do not have to be part of this project if I request. I may withdraw from the
project at any time by advising the project researcher.
I understand that everything I say will form the basis for an assignment forming part of the
interviewer’s study of Small Business.
I also understand that all the information that I give will be stored securely on a computer at
Unitec for a period of 5 years.
I understand that I will be provided with a copy of the finished assignment.
The finished assignment will be used a basis for future teaching at Unitec.
We do request that we record the interview. The recording will not be used outside the research
team and teaching class. You may decline to be recorded.
I have had time to consider everything and I give my consent to be a part of this project.
Participant Signature: …………………………. Date: ……………………………
Contact details: Phone ............................... Email ...................................
Project Researcher: ……………………………. Date: ……………………………
Contact details: Phone ............................... Email ...................................
This study has been approved by the course teacher, Dr Peter MELLALIEU.
If you have any complaints or reservations about the ethical conduct of this research, you may
contact the teacher (ph: 09 815-4321 ext 8108 or 021 42 01 18). Any issues you raise will be
treated in confidence and investigated fully. You will be informed of the outcome.

Example Assignment: Going Incognito 4
4Assignment created by: Tony Fenwick, Grant Helleur, Lisa Palmer, Vaijayanti Salri, Liebling Tang,
March 2009.

GOING
INCOGN
ITO!
Running the streets of Auckland
can be a dangerous pastime. After
one too many close calls with
Auckland’s traffic Grant Helleur
decided to do something about it.
“I’m not sure if people genuinely
don’t see you, don’t care, or are
just too arrogant to give way”
says Helleur. We talk to this
recidivist entrepreneur and
company founder.
Like many marathon runners Helleur

ran with mid-week groups, weekend
packs and a club. A couple of runners
from a mid-week group sported
orange high visibility tunics brought
back from overseas events like the
New York Marathon.
Frustrated by the lack of safety gear

for runners available in New Zealand
in late 1999 this mad keen runner
spotting an opportunity he decided to
run with it.
He had no business plan, no goal, no

exit strategy. It started through
necessity for self preservation. Helleur
jumped on, held tight and rode the
product development as far as it would
take him.
Initially he looked off shore for Market research into product and Having forged a career in the
suppliers. However, poor quality or the customer demand was limited. construction industry crossing the
high cost of importing made it “Basically I wanted one and if I divide to what could loosely be called
prohibitive. Not satisfied he continued wanted one there must be other the fashion industry was not without
to dig, asking questions. The answers runners out there who wanted one challenges. “It was like stepping of
led him to produce his own range of too. It was as simple as that” the plane in a foreign country for the
reflective vests. confesses Helleur. first time. Where you know nobody

and don’t speak the language” reflects Most running shorts lack pockets for
Helleur “Who would have known there operate business on their terms and keys or emergency money, a clever
were pattern makers, specialist cutters,
pace. Establishing a small business little shoe pocket also featuring a small
and that fabric has a bias” with both partners employed full time reflective strip was soon added to the
meant investing every product line.
Early on Helleur waking hour ensuring
Trading his hammer for a
found an ally with whatever shape the Customer
industry sewing machine ensured business took it would loyalty was
experience and original garment be successful. generated
contacts, Charlie. prototypes were at best through
Charlie was an crude, yet functional. While the creative
angel willing to manufacturing of the marketing.
impart his knowledge and mentor vests was outsourced their spare room For a few
Helleur through his industry transition. resembled a fluorescent warehouse. extra dollars
Helleur was researcher, product they offered
Trading his hammer for a sewing developer and also looked after sales retailers an
machine ensured original garment and marketing, inwards and outward opportunity
prototypes were at best crude, yet goods. His wife took charge of packing, to add their
functional. Influenced by the only dispatch and administration. name or logo to the vests using the
reflective vests on the New Zealand same reflective material as the stripes.
market at the time, the stereotypical They set about marketing the vests. A cost companies such as Shoe Science
orange road workers high visibility “Basically we sat down with the Yellow and Hedgehog Bikes were only to
vest. Early samples evolved thanks to Pages and identified retailers the vests willing to absorb.
commonsense, brutally honest would match” Helleur explains. How do
feedback and the generosity of time you gain market share with a new Twelve months after establishing an
and experience of his mentor. product that has no customer demand? initial need Incognito Sportswear had
You knock on doors and don’t take no reached the market. Within 18 months
Researching material choices, product for an answer. They found supplying of making their first sale they had
limitations, supply continuity, colour product on consignment opened the customers from Whangarei, across
options and quality combined with doors they had knocked on. Within Auckland, through the Waikato and Bay
personal values shaped the product. weeks the retailers were reordering of Plenty, Wellington and as far south
Not content to compromise “whatever I stock. as Christchurch.
put my name to had to do the job I
promised it would and be of high It soon A conscious marketing decision made
quality” Helleur says “I didn’t want to became during brand establishment phase saw
produce something that would fall evident one the company target retail outlets that
apart after just one wash”. product would allow them to maintain
was not reasonable margins. They avoided
At the time there were no standards for going to going down the path of high volume
recreational safety products - Incognito create low margin with retailers like The
Sportswear voluntarily adopted fierce Warehouse.
NZS5839 standards for road working competition
safety equipment, thereby ensuring for the The gamble paid off. While still holding
performance quality and matching likes Nike down full time employment the
industry best practice. or Adidas. momentum gained had forced Helleur
Within a to re-evaluate the business and where
The choice of brand name was a little short period of time the product it was going.
tongue in cheek Helleur reflects breadth had expanded from the basic
“Incognito is hardly what we were vest to include cycle vests. Not It was at this timely juncture Helleur
trying to achieve with a range of satisfied stopping there, recent media and his wife were approached by a
reflective products”. coverage at the time and a chance Manufacturer’s Agent. The reflective
meeting with a duck hunter, saw the qualities of the cycle vests had caught
Taking the advice of their accountant pair start working on a bright orange their eye. They were impressed by the
Helleur and his wife set up a hunting vest. rapid growth of the brand and the
partnership under which to trade the market penetration they had achieved
Incognito name. When you in a short time.
have the
Initial capital came from the sale of a drive, passion An offer provided an unforeseen exit
previous business venture and and you’re strategy for the couple. Incognito was
personal savings. With enough fiscal looking to sold. It has provided them a breather
wherewithal to finance the business expand your for the time being, but we’re sure this
without the need for external product line is not the last we’ll see of this
financial influences gave the couple you simply develop new products. entrepreneur.
freedom to

Supplementary questions for class discussion
1. Why was the decision made to go into business selling this

particular product?
Frustration around the lack of safety products for runners lead Grant
to begin thinking about what type of personal safety products he
requires when running (page 1; paragraph 3). At the time there was very
little on the market to meet the needs of runners so Grant looked into
importation, however, this proved too costly (page 2; paragraph 1).
Grant realised there was a gap in the market, and that if he needed
one of these vests there would be other people out there who needed
them also( page 2;paragraph 2) .
2. What obstacles did Grant have to overcome to set up the

business?
He had no experience in this industry and with he and his wife

working fulltime all there spare time had to go into starting up the
business (page 2; paragraph 3, 9, 17). Another obstacle Grant faced was
sourcing materials, developing prototypes and generating interest via
marketing (page 2; paragraph 5, 6, 11).
3. What types of marketing did Grant do to give his business a

competitive advantage?
Grant would supply stores with his product on consignment which

gave the store manager / owner the ability to trial the product
without too much financial commitment or risk (page 2; paragraph 11).
Grant allowed store logos to be added to his product for a small fee
which proved successful and he purposefully avoided approaching
high volume low margin retailers to maintain what he believed to be a
premium product (page 2; paragraph 14, 16)
4. What assistance did Grant obtain to get the business up and

running?
In the first instance Grant utilized the Yellow Pages as a potential

source of customers (page 2; paragraph 11).
Grant had a mentor “Charlie,” come on board for the product

development stage of the business setup, and was able to use
Charlie’s skills and knowledge to ensure a good product( page2;
paragraph 4,5).
Another significant source of assistance for Grant was that of his wife,
who was responsible for the packing and dispatching of orders as
well as handling the administrative side of the business (page 2;
paragraph 9, 10)

5. Into what other products was Grant able to expand his business?
Once the running vest was successfully launched, Grant expanded his
range to include a cycling vest, a hunting vest, and the development
of a shoe pocket for runners to carry emergency money or keys (page
2; paragraph 12, 13).
Interview Questions
Q 1 - Give us a brief overview of your business.
Q 2 - How did you get involved with this particular business?
Q 3 - What lead you to choose this particular product?
Q 4 - Work did you have to do before you started your business?
Q 5 - Did you design the product or did you import it from overseas?
Q 6 - When you started up was quality a focus?
Did you intend to create a product of high quality?
Q 7 - What goals did you set for yourself and the business?
Q 8 - What sort of obstacles did you overcome to get up and running?
And what was the driving force to get you over these obstacles?
Q 9 - What was your point of difference from other similar products similar
products in the current market?
Q 10 - Did you think of expanding your business into other product ranges?
Q 11 - How did you increase your market profile and customer base?
Q 12 - From your experience what knowledge would you be able to give someone
else
who is starting a business like yours?
Q 13 - What was your business structure?
Q 14 - Why the business not the success that you had hoped it to be?
Q 15 - How did you raise the capital to launch your business?
Q 16 – What sort of turnover was the business doing?
Q 17 - If you were to start the business again what would you do differently?

14. Test
of hours
Test Week 10 40 100 40
The test will comprise TWO sections similar in format to the example presented
on the following pages.
SECTION A: (75 %) Short answers, multiple choice, and numerical

calculations.
SECTION B: (25 %) Financial analysis, based on your analysis of a Financial
Spreadsheet with which you will be provided.
WARNING!!! All material presented and discussed in class is EXAMINABLE in
the Final Test. This includes:
Material presented by students and guests,

Required text reading,
Lectures and lecture notes
Material detailed in the course reading schedule.

Unitec Business School
NZ Diploma in Business
BRIEFING for Test – Semester 1, 2009

Date: Monday, 18 May 2009
Start time: 5:30 pm (1730 hours)
Time allowed: 70 minutes plus 10 minutes reading time
Weighting: 40% of course
Instructions: Answer BOTH Parts

Answer the questions directly in the answer booklet provided.
Read each question carefully. Answer only what is asked for.
Please write clearly.
State your Name and Student ID in the top right hand corner of the Answer
Sheet.
Part A: Multi Choice – CLOSED BOOK
Part B: Financial Analysis.
Summary of paper: (Time in minutes is recommended only for your guidance)

Section Type/Topic Marks Time
(minutes)
A Short answer. Forty (40) questions 75 40
B Financial Analysis 25 30
Total 100 70

PART A: Short answer questions 75 marks
! You have a maximum of 40 minutes for this part.
! Note that this section includes: multiple choice (one answer required), multiple answer (one
or more correct answers), fill in the blank(s), and numerical calculations.
! The questions are drawn from class notes AND your reading of Oliver & English chapters 2,
4, 6, 7, 8, 9, 10, 11,
Example Questions
Q1 Fill in the Blank 1 points
There are several types of small business. The types are: services, retailing, _______, and
wholesaling.
Q2 Multiple Answer 2 points

There are several advantages if you start a new business from scratch. Indicate which of the
following are the advantages stated in your text.
Answer
a. You can match the business to your own goals.
b. It is easier to innovate when you have the flexibility to select your target market
c. It is easier to create an image and build patronage.
d. You can select and train staff you own way
Q3 Calculated Numeric 2 points

You propose to purchase a business. The business earns $75,000 per year after paying all
expenses including your salary, before interest and tax. You assess that the business is half as
safe as placing your investment capital in a bank term deposit. The bank term deposit rate is
currently 5 per cent. Use a capitalisation rate of 10 percent to calculate the capitalisation value
for the business.
Q4 Multiple Choice 2 points

There are several ways of meeting price competition. Which of the following ways does your
text suggest as a method for meeting price competition?
Answer
a. Reducing the range of products
b. Increasing the price
c. Improve the convenience of purchasing the product
d. Increase the expenses associated with using the product

NZ435 Fundamentals of small business
Part B: Financial Analysis 25 marks
! Write all your answers on the Part B: Answer Sheet.

! Attach the Answer Sheet to your Test Booklet
! Ensure you record your name and student id on the Answer Sheet.
You are intending to purchase a company, Trans-Crash Transport Company, TCT.
Your accountant has prepared a ‘business as usual’ profit analysis, and a monthly cash flow
spreadsheet for the company (Exhibits B.1 and B.2).
Exhibit B.2 includes additional details of transactions not detailed in the business as usual
analysis. These details relate to overhauling the trucks, and payment of tax liabilities incurred in
the previous year.
You plan to take over operating the company from 1 January 2010.
Your business partners have presented you with some questions concerning the financial cash
flow and profitability of the company you propose to buy. Compile your answers onto the Answer
Sheet for Part B. Make sure you indicate clearly the Cell Reference from which you have found
the required data.
All revenues received by TCT include GST, Goods and Services Tax.
Page 3 of 5

Student ID Family Name Personal Name
Part B: Question & Answer Sheet for APMG 4840 Entrepreneurial Business – 2009-1
NOTE: The following are EXAMPLES of the questions you will be asked in the test.
Financial Analysis for Angel Investors Cell Answer

identifier
Exhibit B.1: ‘Business as Usual’ Year
B1. In a ‘business as usual’ year, what is TCT’s Total Revenue? ($/year)
B2. In a normal year, what is TCT’s Total Net Revenue per year? (Exclusive
of Provisional taxes)
B3. What is the average monthly contribution to Total Net Revenue earned
by the 2-tonne truck (Total net revenue, $/month)
B4. Which truck contributes most to the Total Net Revenue of the TCT?
B5. What is the Total Revenue that the 2-tonne truck earns for the company
in the month of September?
B6. Calculate the GST to Pay (on sales revenue) for the 2-tonne truck, in
September ($/month)
B7. What is the Breakeven Point (in $/month) for the 6-Tonne Truck
B8. How many kilometres per month must the 6-tonne truck travel in order
to reach its Breakeven Point?
B9. State the months in which the 6-tonne truck travel a distance that is
BELOW its Breakeven Point?
B10. If the 2-tonne truck were to travel 10,000 km/month, what is its
contribution to profit per month (before taxes)?
(10 marks)
Turn over to next page
Page 4 of 5

Financial Analysis for Angel Investors Cell Answer

identifier
Exhibit B.2 (continued): Cash Flow Projections by Month
B11. In what month does TCT first face a “cash flow crisis” (that is, a
negative Ending Cash Balance”)
B12. How much extra cash does TCT require in the month when it has its
most serious cash flow crisis?
B13. What is the Ending Cash Balance in December?
B14. Calculate by how much TCT’s Cash Balance has increased from 1
January to 31 December
B15. In which month does TCT receive a GST refund from the IRD?
B16. How much is the GST refund in that month?
B17. In which month(s) does TCT have its greatest Net Cash Inflow
B18. What is the greatest Net Cash Inflow that TCT receives? ($ per
month)
B19. In which months does TCT make its highest GST payments to the IRD
(Department of Inland Revenue)?
B20. What is the highest monthly GST payment that TCT makes to the
IRD?
(10 marks)
B21
Outline the steps the TCT could take in order to manage its cash flow
“crisis”.
(5 marks)
Page 5 of 5

Exhibit B1
A B C D E F G H I J K
1 Exhibit B1: Trans Cash Transport Company ('Business as Usual' Situation) 2009-1
2 Based on Oliver & English, 2002, pp 184-185
3 Parameters
4 Fixed Interest Term Loan $5,000
5 GST Tax Rate 10.00%
6 GST Divisor 11.00
7 Company Tax Rate 30%
8 Fixed loan interest rate 15.0%
9
10
11 The Bottom Line 2-Tonne 6-Tonne TOTAL TOTAL
12 Truck Per month Per month Per month Per year
13 TOTAL NET REVENUE (GST inc) $8,286 $218 $8,504 102,053
14
15 Revenue (Gross, GST inclusive) 2-Tonne 6-Tonne TOTAL TOTAL
16 Mileage travelled Km/month Km/month Km/month Km/year
17 KM/month - Jul-Dec 10000 3800 13800 82,800
18 Km/month - Jan-Jun 8500 3000 11500 69,000
19 AVERAGE MILEAGE 9250 3400 12650 151,800
20
21
22 Revenue breakdown ($/km) 2.20 5.20
23
24 Total Revenue (GST inclusive) $/month $/month $/month $/year
25 Total Revenue - Jul-Dec 22000 19760 41760 250,560
26 Total Revenue - Jan-Jun 18700 15600 34300 205,800
27 TOTAL: AVERAGE REVENUE (GROSS) 20350 17680 38030 456,360 Divide by 2 to get the average sales per month
28
29 Costs 2-Tonne 6-Tonne
30 Variable Cost Breakdown cents/km cents/km
31 Diesel 8.20 29.68
32 Oil 0.56 1.20
33 Maintenance 2.80 6.40
34 Road Tax (no GST payable) 2.44 6.72
35 TOTAL - cents/km 14.00 44.00
36
37 Variable Costs $ $ $/month $/year
38 Variable cost - Jul-Dec 1,400 1,672 3,072 18,432 Remember to convert from cents to dollars!
39 Variable cost - Jan-Jun 1,190 1,320 2,510 15,060
40 TOTAL - AVERAGE VARIABLE COST 1,295 1,496 2,791 33,492
41
42
43 Fixed Costs ($):
44 Overhead allocation 40% 60% 100% The overhead allocation
45 is NOT given in the O&E data
46 Salaries & wages:
47 Driver 1,900 1,800 3,700 44,400 Note how the MONTHLY costs are apportioned
48 Office Clerk 600 900 1,500 18,000 to each truck, according to the 'overhead allocation'
49 Owner 1,000 1,500 2,500 30,000
50 Subtotal: Salaries 3,500 4,200 7,700 92,400
51
52 Interest
53 Term loan interest 25 38 63 750
54 Sub total: interest 25 38 63 750
55
56 Other:
57 On road costs 400 600 1,000 12,000 …
58 Advertising 1,400 2,100 3,500 42,000
59 Lease on Premises 1,100 1,650 2,750 33,000
60 Other cash expenses 1,940 2,910 4,850 58,200
61 Lease/month 1,200 4,000 5,200 62,400
62 Sub total: Other 6,040 11,260 17,300 207,600
63 TOTAL: FIXED COSTS 9,565 15,498 25,063 300,750
64
65 The Bottom Line 2-Tonne 6-Tonne Per month Per Year
66 Net Revenue
67 TOTAL: REVENUE 20,350 17,680 38,030 456,360
68 TOTAL: VARIABLE COST 1,295 1,496 2,791 33,492
69 TOTAL: FIXED COSTS 9,565 15,498 25,063 300,750
70 GST To Pay 1,204 468 1,672 20,065
71 TOTAL NET REVENUE 8,286 218 8,504 102,053
72
73 GST Calculator
74 GST Paid on Variable Costs 97 115 212 2,549
75 GST Paid on Fixed Costs 549 1,024 1,573 18,873
76 GST to Pay on Revenues (Average) 1,850 1,607 3,457 41,487
77 GST to Pay 1,204 468 1,672 20,065

Exhibit B1 (continued)
A B C D E F G H I J K
78
79 Profit Planning
80 Sales $20,350 $17,680
81 Variable Cost (inc variable GST) $1,295 $1,496 Ignore the impact of GST on variable costs and sales
82 Contribution Margin 93.64% 91.54% See O&E, p.170
83
84 Fixed Cost $9,565 $15,498
85 Breakeven point ($/month) $10,215 $16,930 See O&E, p.170
86 Breakeven point (Km/month) 4643 3256 Divide Breakeven Point ($) by Revenue $/Km
87 Margin of Safety 49.80% 4.24% See O&E, p.171. Use average monthly revenue, per year
88
89 Contribution Margin and Profit-Loss
90 2 Tonne Truck 6 Tonne Truck
91 Km Revenue Contribution Fixed Cost Profit Revenue Contribution Fixed Cost Profit
92 Per month Margin ($) inc GST on FC $/month Per month Margin ($) inc GST on FC $/month
93 0 0 0 9565 ($9,565) 0 0 15498 ($15,498)
94 1000 2200 2060 9565 ($7,505) 5200 4760 15498 ($10,738)
95 2000 4400 4120 9565 ($5,445) 10400 9520 15498 ($5,978)
96 3000 6600 6180 9565 ($3,385) 15600 14280 15498 ($1,218)
97 4000 8800 8240 9565 ($1,325) 20800 19040 15498 $3,543
98 4500 9900 9270 9565 ($295) 23400 21420 15498 $5,923
99 5000 11000 10300 9565 $735 26000 23800 15498 $8,303
100 7500 16500 15450 9565 $5,885 39000 35700 15498 $20,203
101 10000 22000 20600 9565 $11,035 52000 47600 15498 $32,103

A B C D E F G H I J K L M N O
1 Exhibit B2: Trans Cash Transport Company - Cash Flow Projections by Month
2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 12-months
3 Kilometres
4 2-tonne truck 8,500 8,500 8,500 0 8,500 8,500 10,000 10,000 10,000 10,000 10,000 10,000 102,500
5 6-tonne truck 3,000 3,000 3,000 3,000 3,000 3,000 3,800 3,800 0 3,800 3,800 3,800 37,000
6
7 Receipts
8 2-tonne truck 18,700 18,700 18,700 0 18,700 18,700 22,000 22,000 22,000 22,000 22,000 22,000 225,500
9 6-tonne truck 15,600 15,600 15,600 15,600 15,600 15,600 19,760 19,760 0 19,760 19,760 19,760 192,400
10 TOTAL: RECEIPTS 34,300 34,300 34,300 15,600 34,300 34,300 41,760 41,760 22,000 41,760 41,760 41,760 417,900
11
12 Disbursements
13 Variable cost 2TT 1,190 1,190 1,190 0 1,190 1,190 1,400 1,400 1,400 1,400 1,400 1,400 14,350
14 Variable Cost 6TT 1,320 1,320 1,320 1,320 1,320 1,320 1,672 1,672 0 1,672 1,672 1,672 16,280
15 Interest Payments 63 63 63 63 63 63 63 63 63 63 63 63 750
16 Lease Payments 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 5,200 62,400
17 Other Fixed Costs 19,863 19,863 19,863 19,863 19,863 19,863 19,863 19,863 19,863 19,863 19,863 19,863 238,350
18 Overhauls 9,500 3,300 12,800
19 Provisional Tax 12,500 12,500 12,500 37,500
20 GST to IRD 0 0 2,698 0 223 0 3,333 0 2,001 0 3,968 0 12,222
21 TOTAL: Disbursements 27,635 27,635 42,833 35,945 27,858 27,635 44,030 28,197 31,826 28,197 44,665 28,197 394,652
22
23 Cash Flow
Exhibit B2
24 Beginning Cash Balance 5,000 11,665 18,330 9,797 (10,548) (4,106) 2,559 289 13,852 4,027 17,590 14,685
25 Net Cash Inflow 6,665 6,665 (8,533) (20,345) 6,442 6,665 (2,270) 13,563 (9,826) 13,563 (2,905) 13,563
26 Ending Cash Balance 11,665 18,330 9,797 (10,548) (4,106) 2,559 289 13,852 4,027 17,590 14,685 28,248 28,248
27
28 GST Calculator
29 GST to Pay on Receipts 3,118 3,118 3,118 1,418 3,118 3,118 3,796 3,796 2,000 3,796 3,796 3,796 37,991
30 GST Refund on Disbursements1,769 1,769 1,769 2,544 1,769 1,769 1,812 1,812 1,984 1,812 1,812 1,812 22,436
31 Net GST to pay 1,349 1,349 1,349 (1,126) 1,349 1,349 1,984 1,984 17 1,984 1,984 1,984 15,555
32 GST to IRD 2,698 223 3,333 2,001 3,968 12,222
33 Note: There is a LIABILITY to carry forward of next year: GST to be paid in January = 1,984
34 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 12-months
35 Warning: This table is slightly different to that presented in Oliver & English, p. 309.
36 O & E have made incorrect calculations for Net GST in July and Sept.
37

15. Assignment 2: Performance measures and
controls

of hours
1 - Government controls (legislation and regulation)

There are many government controls that influence the manner in which operations are
conducted in a business. Some examples of government controls are:
! Health and Safety in Employment (HSE) Act
! Company Tax, and Goods and Services Tax (GST)
! Resource Management Act (RMA)
! Employment Relations Act
! Own choice from a local government regulation
For EACH of the government controls presented above:
! Describe the purpose of the legislation (or regulation) from the points of view of (a) the
business and (b) the public interest. (Approximately 100 to 150 words for each control)
! Describe an example of how the control achieves its purpose(s) in a small or medium-
sized business. You may draw on the examples presented in class, your own experience,
or previous class assignments (available on Blackboard in Assignments/Examples).
(Approximately 150 - 250 words per example)
2 - Operational measurement and control

There are several systems of operational measurement and control that influence the
manner in which operations are conducted in a business. Some examples of measurement
and control systems are:
! Quality control, eg ISO 9000 series
! Eco-Sustainable production, eg ISO 14000 series and waste management
! Stock control (or Inventory control)
For EACH of the operational measures and controls presented above:
! Describe the purpose of the control from the points of view of the (a) business and (b)
its stakeholders (such as employees and customers) (Approximately 100 to 150 words
for each control)
! Describe an example of how the control achieves its purpose in a small or medium-
sized business. You may draw on the examples presented in class, your own experience,
or previous class assignments from Assignment 1 (available on Blackboard in
Assignments/Examples). (Approximately 200 to 300 words per example)

3 - Risk management
There are several systems of risk management that influence the manner in which
operations are conducted in a business.
For a risk management measure presented above:
! Describe the purpose of the control from the points of view of the (a) business and (b)
its stakeholders (such as employees and customers) (Approximately 100 to 150 words
for each measure)
! Describe an example of how the risk management system achieves its purpose in a
small or medium-sized business. You may draw on the examples presented in class,
your own experience, or previous class assignments from Assignment 1 (available on
Blackboard in Assignments/Examples). (Approximately 200 to 300 words per
example)
4 - Writing, referencing, and acknowledging assistance

Communicating accurately and succinctly through written language is a FUNDAMENTAL
skill for any business professional. For example, you need to create web sites for your
products and services, business plans, presentations, correspondence, and pamphlets.
Accordingly, this assignment requires that you seek coaching to develop the writing skills
needed for this assignment, for your future studies, and professional life. Use Global
English. Please schedule time to consult with Unitec’s Student Learning Centre early in
your project planning.
Cite and reference your literature in all your products. Use a citation and reference style
guide such as APA.
The references do NOT form part of your word count.
An extremely useful software tool for keeping track of web material, references, and
your own computer’s material is Zotero. Zotero quickly produces Reference lists in APA
style through simple ‘drag and drop’ mechanism. Zotero is a free, open-source add-on that
you use as part of the Firefox open source web browser. Visit http://www.zotero.org/
Include an ‘Acknowledgements’ section to state briefly the assistance that you have
received from other students, or other coaches in your progress to produce this
assignment. Present your ‘Acknowledgements’ section after the ‘References’ section.
Reminder: you are required to submit your assignment in electronic format to

http://turnitin.com, See ASSESSMENT POLICY, SECTION 10.

5 - References
From Plain English to Global English: Quality Web Content, Accessed 3 July 2007 3:32
PM, http://www.webpagecontent.com/arc_archive/139/5/
McAlpine, R. (1997). Global English for Global Business, Auckland: Longman, ISBN 0 582
73998 5.
Mellalieu, P. J. (2001). Creating the A+ Assignment: A Project Management Framework
Mellalieu, P. J. (2007a). Let’s all Learn and Teach Global English in our Business School!,
Auckland: Unitec Business School Working Paper Series, 6 July 2007 (Version 1.1).
Mellalieu, P. J. (2007b). The Five-Paragraph Persuasive Essay (ANNEX C) in “The
Assignment Factory: A Collaborative Learning Adventure”, Auckland: Unitec Business
School Working Paper Series, 28 August 2007.
The Economist: Research Tools: Style Guide: Introduction, Accessed 3 July 2007 3:24
PM, http://www.economist.com/research/styleGuide/index.cfm?page=673899
Zotero - Quick Start Guide. (n.d.). . Retrieved February 3, 2009, from http://
www.zotero.org/documentation/quick_start_guide.
6 - Resources
The articles by MELLALIEU are available from the BLOG ARCHIVE in:
http://web.mac.com/petermellalieu/Teacher/Blog/Archive.html

ANNEX A: Assignment Submission Cover Sheet
Course Title APMG NZ435 Fundamentals of small business
Assignment ID Assignment 2: Performance measures and controls
Programme NZ Diploma in Business
Department Management & Marketing, Unitec Institute of Technology
Semester:
Date issued:
Due date and time:
Delivery: ! Deliver the assignment (print + CD-ROM) to the tutor before the
start of class
! Or post in the assignment box on Level 4, Building 172.
! You MUST ALSO submit a soft copy to turnitin.com
Weighting: 30% of course
EFLAW score 22 or less Achieved:
Instructions: ! Complete this cover sheet and attach it to your assignment.

! Where applicable, show details of your workings.
! This is a team assignment and must be your own team’s work.
! Collusion, copying or plagiarism may result in disciplinary action
! We advise that you keep a copy of this assignment.
Students' Names:
Student ID No:
Lecturer: Peter J. MELLALIEU Class time:

Student declaration: I confirm that:
! This is an original assessment and is entirely our own work.
! Where I have used ideas, tables, diagrams etc of other writers,
! we have acknowledged the source in every case.
! This assignment has not been submitted previously as assessed
work for any academic course.
Signature of
students:
Date of signature:

ANNEX B: Grading schedule
Enrolled FAMILY NAME, personal name, (preferred name), ID:

………………………………………………………………………………..…….
Item – relative emphasis weightings shown in percentages Weight Grade
Government controls
! Health and Safety in Employment (HSE) Act 1992 (5)
! Resource Management Act (RMA) (5)
! Company Tax, and Goods and Services Tax (GST) (5) 25
! Employment Relations Act (5)
! Own choice from Local Government regulations (5)
! Descriptions: 1/2 of available marks. Examples: 1/2 of available marks
Operational measurement and control

! Quality control (12.5)
! Stock control (or Inventory Control) (12.5) 37.5
! Sustainable production and waste management (12.5)
Risk management
! Risk management (12.5) 12.5
Professional language
10
Word choice, grammatical conventions, sentence fluency, organisation and logic, voice, and
overall coherence, EFLAW readability < 22. See ANNEX C
Penalty
Marks DEDUCTED if your document FAILS to:
! Unsatisfactory professional language (-35)
! Fulfill academic conventions: Referencing, layout and presentation, innovation, and
creativity
Final Grade
85
NOTE: The above items indicate relative weighting from each part of the assignment. See
the Assignment Instructions and the ANNEX A: Grading Criteria for a complete specification
of the requirements for each section of grading.
The score calculated for Professional Language (above) is 1/3 of the mark determined using
ANNEX C.

ANNEX C: The six-trait method for evaluating writing
quality
Trait 5-4 3-2 1-0 Mark
Ideas and Focussed, succinct, specific. Some really good Just beginning to figure
content parts. out what you want to
The ideas and topic keep the say
reader’s attention Some parts not there
yet.
Word choice Extremely clear, visual, and Correct but not striking. Confusing.
accurate.
The words get the The reader is often
You picked the accurate words message across, but asking “What did you
for the correct places. don’t capture the mean by this?”
reader’s attention.
Global English word choice.
Grammatical Mostly correct. About halfway there. Editing not under

conventions control yet.
There are few errors in the Several bothersome
paper. mistakes need It would take a first
cleaning up. reading to decode, and
Global English grammatical a second reading to
structures. get the message.
Organisation Logical and compelling. Some really smooth Not shaped yet.
parts.
You have chosen an order that The order of the paper
works well and makes the Other parts need work. is jumbled and
reader want to find out what The order makes confused.
comes next. sense most of the time.
Voice Individual and powerful. Individuality fades in Not “you” yet.

and out.
The paper has personality. It You don’t know what
sounds different from the way What you truly think you truly think or feel
anyone else writes. and feel shows up only yet.
sometimes.
Complies with Global English
style
Sentence Varied and natural. Routine and functional. Paper needs work
fluency because there isn’t
The sentences in your paper Some sentences are enough sentence
are delightful to read out loud. choppy and awkward, sense yet.
but most are clear.
Total
(Out of 30)
Source: Summarised from: Student Friendly Writing Rubric from a School using the Six Traits of Writing,
Discovered by John Norton while traveling in Alabama. Thanks to teachers at Maryvale Elementary in
Mobile! www.middleweb.com. See also: SIX-TRAIT ANALYTICAL WRITING ASSESSMENT MODEL
Scoring Guide (Rubric) http://www.nwrel.org/assessment/toolkit98/traits/index.html, Accessed: 16
February 2011

16. General information about Unitec courses
Key Staff
Dr. Robert Davis, Head of Department: Management & Marketing (DoMM),
Tel. 815 4321, Ext 7418 rdavis@gw.unitec.ac.nz
Dr. Liz Rainsbury, Head of Department: Accounting & Finance, Tel. 815 4321,
Ext 8803, erainsbury@gw.unitec.ac.nz
Andrew Slessor, Programme Director — BBus, Tel 815 4321 Ext,
mholden@gw.unitec.ac.nz
Jeff Marriott, Programme Director — NZ DipBus, Tel. 815 4321, Ext 8131.
jmarriott@gw.unitec.ac.nz
Rose Coveny, Programme Director—DipProfAcc, Tel. 815 4321, Ext 8084,
rcoveny@gw.unitec.ac.nz
Soynya Stuart, Programme Administrator - BBus, DipMgt, DipProfAcc, Tel.
815 4321, Ext 8282, sstuart@gw.unitec.ac.nz
Malama Solomona, Lecturer/Pacific Advisor, msolomona@unitec.ac.nz, or
pacific@unitec.ac.nz
Ngaire Molyneux, Lecture/Maori Advisor, nmolyneaux@unitec.ac.nz, 815
4321 Ext 7065
Hiroko Hodge,Programme Administrator, Tel. 815 4321, Ext. 8937,
hhodge@unitec.ac.nz
Emma Brown, Student Advisor, Tel 815 4321, Ext 8286 ebrown@unitec.ac.nz
Dr. Peter Mellalieu, Curriculum po-ffessor, Tel 021 42 0118,
pmellalieu@unitec.ac.nz
Key Contacts
The Unitec Counseling Service, Tel. 815 4321, Ext 8605
Maia Māori Development Staff, Tel. 815 4321 Ext 8695
Unitec Campus Bookstore, Tel. 815 4321 Ext 7490 or Ext 8437
Te Puna Ako - Learning Support Centre, Tel. 815 4321 Ext 8611
Unitec Library Front Desk, Tel. 815 4185
Pasifika Student Support, Tel. 815 4321 Ext 8782
Student Loans and Allowances Administrators Tel. 815 4321 Ext 8545
USU Students’ Association at Unitec, www.usu.co.nz

Policies and Procedures
Please read these policies specific to the Bachelor of Business in conjunction with
the Unitec publication, “Your Guide to Unitec’s Rules and Policies”
Unitec’s Commitment and Expectations of Students:
Unitec is committed to providing you with:
Lecturers who are well prepared and organised

Display a thorough knowledge of their subject
Good communicators
Provide you with useful feedback on your performance
Responsive to your learning needs
Qualifications that are credible and portable
A quality education in a climate of continuous improvement
Accurate information about your programme
Assessment that is fair, valid and timely
The opportunity to evaluate courses and teaching in confidence
A learning environment that is safe and one that enables you to achieve your
full potential.
We expect students to:
Be punctual and reliable in attendance

Be well organised and prepared for each class
Be committed to your own learning
Participate actively in group work and other learning activities associated
with their programme.
Abide by Unitec statutes and regulations
Respect the rights of your fellow students and Unitec staff
Provide useful feedback to courses and teaching to assist us in improving our
programmes and services.
Cellphones
Cell phones must be turned off during class. Students who leave cell phones on
during class time may be asked to leave for the duration of that session, or have
the phone confiscated until the end of class.

What is a programme?
A programme leads to a qualification such as a degree, diploma or certificate and

consists of a number of courses. When you complete a course in a programme,
you achieve a certain number of credits. In the case of a BBus student you would
receive 15 credits for each course successfully passed.
What is a course?
A course is a module of study within a programme that is usually taken over a

semester. In this time you may be required to attend lectures and tutorials,
sometimes a lecture/tutorial, complete with assignments as well as exams. In
some programmes all courses, sometimes called papers, are compulsory, while in
others there may be elective courses.
Study Options
You can study full-time over three years or part-time over a longer period. You
have to complete the Bachelor of Business within TEN years. Each course is one
semester long. Selected courses are also offered during Unitec’s Summer School,
which is held in December and January.
Full-time classes are scheduled Monday to Friday, with a range of times during
the day for you to choose from. Typically you will spend between 12 to 16 hours
per week in the classroom and at least 20 to 24 hours per week on study,
assignments and other class work.
Learning Support
If you have any difficulty understanding information given in lectures, you should
in the first instance speak with your lecturer. Also ensure that you attend the
tutorials for the course. If you continue to have a problem with a particular
concept or skill you should make an appointment with the Te Puna Ako Learning
Centre situated in The Hub, Building 180. Te Puna Ako provides a range of
learning support services, including workshops. They can also provide help on
how to write essays, reports etc, and help you to understand the requirements of
assignments.

Staff Support
To Get Help with: Contact:
A particular subject: The Course Lecturer
Your studies in general: Student Advisor or BBus Programme Director
Problems about assessments: The Course Lecturer first, then the Business
Information & Support Centre, or Programme
Administrator
Enrolling, Cross Credits, Exemptions:
Business Information & Support Centre or
Programme Administrator
Planning Your Programme: Student Advisor or BBus Programme
Administrator
Personal Matters Affecting Your Studies:
Any of the above staff or Unitec Counselling
Service
Financial Matters: Unitec Student Financial Advisor or Unitec
Counselling Service
Scholarships: Unitec Student Financial Advisor, Maia staff,
Student Advisor, or email
scholarships@unitec.ac.nz
Centre for Pacific

The Centre for Pacific was established to meet the needs of Pacific communities
and to enhance and increase the participation, completion and progression rates
of Pacific students.
The Centre currently provides the following services:
Academic support; general and content specific
Careers advice
Course and programme enquiries
Financial/Scholarship advice
Pastoral care
Mentoring
Pacific lecture series

Pacific events: Orientation, Graduation, Pacific Leadership Fono (Secondary
Schools), student and staff events, Fanau evenings, KavalUP – Quarterly
newsletter.
Computer Laboratory Rules

You will be provided with a username and a directory for storing files, as well as
access to a range of software in our computer labs (your username is the same in
each lab where you work). Inform your lecturer immediately if the equipment is
faulty. Professional and ethical behaviour is expected of our students, just as it
would be in a work situation. These rules are needed to make it possible for a
large number of people to co-operate in using the laboratories. Breaches of the
rules may lead to penalties ranging from loss of access to labs to exclusion from
the programme.
Do not do anything that will interfere with the normal operation of the equipment,
other users, and networks.
Do not password protect files, otherwise virus checkers may be impeded. Do

not connect your lap top to the Unitec network.
Respect the laws of copyright. No private material is to be used on Unitec
equipment. No copying of Unitec software is permitted.
Do not copy files or applications into your directory from outside your
directory or vice versa without specific permission from a lecturer. This
applies to files in another directory, or on a removable storage device.
Do not use anyone else's username or directory, and do not let others use
yours.
Do not send unwanted or offensive mail. Messages should be brief and
related to your programme of studies.
Keep your own directory tidy and uncluttered. Delete unwanted files, sub-
directories, and mail.
Never eat or drink in computer labs or classrooms except for water bottles
with seals. Help keep labs tidy by looking after your own waste paper and
using the recycling bins provided.
You may not play games in Unitec labs or take furniture outside.
Cell phones must be switched off during all lab and classroom sessions.
Your Student ID Card must be placed in the clear plastic holder on the side of
the screen or front of the computer unit, during use of the computer.
Assessments/Assignments/Exams
During your course you will have several assessments. You will be expected to
turn in high quality work, of the same standard that will be expected of you in a
work situation. All assessment work for this programme must be each student’s
own original work unless group projects are specifically designated by the

Lecturer. Marked assignments not collected within three months of submission
will be disposed of.
Examination dates are fixed.
An examination timetable is available prior to the commencement of a semester.

When selecting courses it is important to check again the examination dates
before semester commences. A student cannot ask for an examination date(s) to
be changed to suit his/her particular arrangements.
Special Assessment Circumstances (SAC)

Any student who is prevented from completing an assessment item by the due
time and date, or whose performance is affected by factors beyond their control,
may apply for a SAC under the Institute's provisions outlined in the Academic
Statute.
Students should note that such an SAC application must be lodged with the
Business Information & Support Centre, Building 180 with the appropriate medical
or other documentation within five (5) working days of the due time and date of a
test or exam, or before the deadline date and time for an assignment (refer to
“Late Assignments” below).
In the case of illness or injury, documentary evidence such as a medical certificate

must be dated within 24 hours of the assessment date and must be signed by a
New Zealand registered medical practitioner.
Only one SAC application is possible in any one course in each semester.
An SAC application will only be considered if all other assessment items have
been completed. NOTE: Students who apply for a SAC for the final examination
must take the exam in the following semester.
Where a valid SAC application has been received
For an assignment, the student will usually be granted an extension to the

due date, but the SAC application must be submitted before the deadline
date and time – refer to “Late Assignments” below;
For a test the Programme Committee may assign an assessed mark, based on
class ranking and marks achieved in other course assessments and the final
exam; or when it is known in advance of the test that special assessment
circumstances will apply, it may be arranged for the student to sit the test
prior to the test date;
For the final exam, the student will then receive a deferred grade and will be
required to sit the exam the next time the course is offered, usually the
following semester of Summer School. The student is not given an assessed
grade;
For impaired performance in a test or exam, the Programme Committee may
let the mark achieved stand or adjust the mark based on marks and class
rankings achieved in other assessments in the course. In such instances the

estimated grade is marked (est.) in the student’s academic record. The
application form is available from the Business Information and Support
Centre.
What is beneficial assistance when doing assessments?
Study Groups
Discussion
Sharing reading material
What is unacceptable assistance when doing assessments
Working together on one copy of the assessment and submitting it as own

work
Giving another student your work
Copying someone else’s work. This includes work done by someone not on
the course
Changing or correcting another student’s work
Copying from books, Internet etc, and submitting it as your own work
Assistance to other students
Students themselves can be an excellent resource to assist the learning of fellow

students, but there are issues that arise in assessments that relate to the type and
amount of assistance given by one student to another. It is important to recognise
what types of assistance are beneficial to another’s learning and are acceptable in
an assessment. The Unitec Academic Statute governs the conduct of assignments
and examinations, and violations of the standards will result in disciplinary action.
Acknowledgement of sources
Referencing is an important part of all academic work. Sources of information

should be acknowledged for the following reasons:
To distinguish between your ideas and someone else’s.

To show readers the range and quality of your reading.
To direct readers to the sources used, if they want further information.
Failure to acknowledge a source of information, or using other people’s ideas as
your own, is called plagiarism. Plagiarism is a serious form of academic
dishonesty. Use APA referencing style in your assignments. For guidance, refer to
the required textbook for all courses for the BBus degree, Manalo et al., and the
Blackboard/Moodle BBus site5.
5 Manalo, E., Wong-Toi, G., & Bartlett-Trafford, J. (2009). The business of writing: written
communication skills for business students (3rd ed.). North Shore, NZ: Pearson Education New
Zealand. See also Turner, K., Ireland, L., Krenus, B., & Pointon, L. (2009). Essential Academic Skills
(Revised.). Melbourne, Australia: Oxford University Press. Retrieved from http://openlibrary.org/b/
OL10135765M/Essential-Academic-Skills

Turnitin.com
Turnitin is a software package that identifies plagiarised content in assignments.

Lecturers will require students to submit their assignments through Turnitin.com.
A user manual for students is available for downloading at: http://turnitin.com/
static/training.html if you wish to learn more about Turnitin.com.
Use of Textbooks / Written Materials in Tests and Exams
You will be advised by each Course Co-ordinator of which statutes, text books,
notes or other written materials that may be taken into the Assessment Tests and
Final Examination. Where the use of such books or materials is permitted there
should be no pen or pencil markings of any kind, but the proper use of
highlighting with a highlighting pen is acceptable. Any unauthorised material or
marking (e.g., writing, extra pages, markers, numbering, arrows, asterisks etc),
will be treated as evidence of cheating and will be acted upon and the text book
or statute or written materials confiscated and not replaced.
Use of Dictionaries in Tests and Examinations
Unless otherwise advised, students may take into a test or examination a copy of
either Collins Pocket English Dictionary or Oxford Pocket English Dictionary. No
Dictionary taken into a test or examination may be marked in any way other than
with the student's name. This means that there should be no writing, high-
lighting or underlining in the dictionary. At the start of the test or examination
concerned dictionaries will be checked and may be confiscated from a student for
the duration of the test or examination if any marking is found. In circumstances
where marking found in a dictionary gives rise to a suspicion of cheating,
disciplinary proceedings may follow.
Restrictions on Entry to Examination Room
A student arriving late for a 3 hour test or examination will not be permitted to
enter the examination room later than 1½ hours after candidates have
commenced writing the test/examination; in the case of a 2 hour test or
examination, later than 1 hour after the commencement of the test/examination;
in the case of a 1½ hour test or examination, later than 45 minutes after the
commencement of the test/ examination.
Unless accompanied by a supervisor, a student is not permitted to leave the

examination room before 1½ hours (for a 3 hour test or examination) has elapsed,
or 1 hour for a 2 hour test or examination. Students who continue writing after
the “STOP WRITING” instruction will have their marks reduced by 5% of the exam
marks.
Availability of Marked Assessments
Students shall be entitled to the return of all written work (or a copy thereof)
submitted for formal assessment, and to be given access to a copy of the marking
schedule used to mark the assessment. Marked work will only be retained until 4
weeks into the following semester. Original examination scripts are available from

the Business Information and Support Centre to students free of charge after
grades are approved by the Programme Committee, or copies are available at cost
at the end of the academic year. For computer-based examinations a detailed
marking schedule only will be provided. If a student uplifts the original
examination she/he forgoes the right to apply for a recount of the script or an
appeal against the grade.
Recount of Final Examinations
A recount of a final examination will confirm that all questions have been marked
and that the marks correctly add to the total mark for that script. A recount may
lead to no change or to either a raising or lowering of the grade. The procedure
for having a particular final examination recounted shall be as follows:
A written application for recounts, together with the prescribed fee, must be
received by the Business Information and Support Centre (BISC) within 15
working days of the mailing of results and prior to the student uplifting his/
her original script;
The Programme Leader shall arrange for a recount of the marks;
The Programme Committee shall confirm the outcome of the recount and
advise the student in writing within 5 working days of the confirmation.
Appeal against a Grade
A student may appeal against the final grade or pass category awarded in any
course by applying in writing to the Dean, Faculty of Creative Industries and
Business, giving reasons to justify the appeal. Applications for appeal must
be received by the Dean 15 working days from the mailing of the results. In
exceptional circumstances the Dean may extend the time for receipt of the
application for appeal.
Late Assignments
There is a policy of No Late Assignments on this programme. An assessment item

submitted after the due time and date will not be marked or graded unless:
The student’s performance has been affected by factors beyond the control
of the student (as defined in the Academic Statute); and
An application for Special Assessment Circumstances (SAC) has been lodged
before the deadline and verified. Application for an SAC is to be made by the
student to the Programme Director. Application forms are available from the
Business Information and Support Centre, Building 172.
When requesting an SAC for an assignment, the application must be submitted
(along with work completed to date) either before the deadline or within the
timeframe of the extension requested i.e. if the Doctor's Certificate is for one (1)
day, then the SAC and work completed must be submitted within one (1) day of
the deadline. Only one SAC application is possible in any one course per semester

Use of the Unitec Logo within your assignment
Use of the Unitec logo is not permitted on assignments. The Unitec logo is for
Unitec documents and only for use by Unitec staff.
Lost Assignments
Course lecturers accept NO responsibility for lost assignments. It is the student’s

responsibility to retain copies of assignments that are submitted for marking/
grading. Copies should be retained either in hard copy or on computer disks/files.
Computer-based assignments that require submission of computer files must
have a back-up copy stored on the Unitec Student F: Drive.
Collection of Marked/Graded Assignments
It is the student’s responsibility to collect graded/marked assignments.

Assignments due in one semester will be kept no longer than four weeks into the
following semester.
Misconduct in Assessments / Assignments / Exams
Any student who has plagiarised any work or colluded with another student(s) in
any way will be referred to the Programme Leader. The student will be subject to
disciplinary action under the Institute’s Academic Statute. Definitions of dishonest
practice shall include:
“Cheating”, which is defined as any fraudulent response whatsoever by students

to any item of assessment, including any action which may otherwise defeat the
purpose of the assessment.
“Plagiarism”, which is defined as the act of taking and using another person’s
thoughts, ideas, writings, inventions or work as one’s own without proper
acknowledgement and includes:
Copying the work of another student;
(ii) directly copying any part of another’s work, including information
obtained from the internet;
(iii) summarising another’s work;
(xxiv)using experimental results obtained by another.
Submitting work for summative assessment which has been jointly prepared
for presentation, in circumstances where this has not been approved by the
Programme Leader.
The submission of work for summative assessment which has previously
been submitted elsewhere, without the prior permission of the Programme
Leader.
The presentation of fraudulent material as evidence of achievement in an
educational or employment context in order to gain entry to a programme or
to gain credit within a programme.

A breach of any rules relating to summative assessment.
Penalties for Misconduct
For the first occurrence within the programme, the student will receive a zero
mark for the assessment.
For the second occurrence within the programme the student will appear before
the Discipline Committee. The Discipline Committee may impose a number of
different penalties including suspension from the course, exclusion from the
programme or exclusion from UNITEC.
Exclusion from a Programme
Any student who, over the last four semesters of his or her studies, has failed to
pass courses equivalent to one half of the credits in which she/he has been
enrolled over that period, shall be deemed to be excluded from that programme
and shall not be permitted to re-enrol without the prior permission of the
Programme Committee.
Exclusion from a Course
A student who has failed the same course on two occasions shall not be enrolled
again for that course except with the permission of the Programme Committee.
Course Concerns
If you have any concerns about the way your course is progressing this semester
please contact one of the following people to discuss it: - your Course Lecturer -
the Course Coordinator or arrange an appointment with the BBus Programme
Director or Student Advisor. Anonymous complaints will not be actioned. Please
include your name and student number in any correspondence to the Programme
Director. Your identity will not be divulged to the lecturer. For official complaints
procedure refer to www.unitec.ac.nz. Select The Facts/Rules and Policies and
then follow the “Quick Link” to “Students Complaint Policy”.
Information for Students with Disabilities
At UNITEC we are attempting to remove all barriers to learning for people with
disabilities. Please make your needs known to your lecturer as soon as possible.
UNITEC offers the following resources to students with disabilities:
One-to-one assistance -available in the form of note-takers, readers and

writers (for tests and exams) but it is the responsibility of the student to
organise.
Separate examination rooms and extra time can be arranged.
Support networks and individual needs support: contact the Disability Co-
ordinator, Wendy Russell, on 815 4321 extension 8606 for more information
about any of these services.

17. Requirements to pass a course and grade
standards
Requirement to pass a course is achievement of a minimum of 50% across the
sum of all assessment items.
On the New Zealand Diploma in Business the following grade-mark

correspondences apply:
Grade Mark
A+ 85 to 100
A 75 to 84
B+ 70 to74
B 60 to 69
C 50 to 59
D 40 to 49
E 0 to 39
P “Pass” Courses cross credited or Assessment of Prior Learning

General guidelines for grade standards
For an A Grade (75% and over)

Content:
An exemplary assignment. Meets comprehensively all stated objectives.

Obviously well-planned. Integrates succinctly a range of relevant concepts,
principles, practices and theories. All assignment requirements are fully justified
and are supported by examples or evidence from the literature, and personal
examples. Demonstrates reading of the core text AND seminal academic
literature. Extensive citations. Identifies all relevant key issues, processes and
contexts. Demonstrates the ability to analyze critically and synthesize a
comprehensive range of issues and reach supported conclusions and
recommendations. Answer contains no irrelevant material. Obvious originality and
creativity.
Communication, Language and Presentation:
Accurate and professional word choice, application of grammatical conventions,

sentence fluency, organisation and logic, voice, and overall coherence. See ANNEX
C. There are no spelling or grammatical errors. Report professionally written,
presented and bound. The assignment is lucid and well structured, including a
contents page, page numbers and a properly referenced text and bibliography.
Exemplary application of an appropriate House Style such as APA, Harvard, The
Economist, or Global English.
For a B Grade (60 – 74%)
Content:
A relatively comprehensive assignment that integrates many relevant concepts,
principles, practices and theories. Answers are adequately justified and are well
supported by some evidence or examples from the literature. Has read
reasonably widely of the seminal literature and has many appropriate citations.
Demonstrates the ability to analyze critically a smaller range of issues to reach
acceptable conclusions and recommendations. Identifies some key issues,
processes and contexts. Answer may contain some irrelevant material. Objectives
generally met.
Generally accurate and professional word choice, application of grammatical

conventions, sentence fluency, organisation and logic, voice, and overall
coherence. See ANNEX C. Uses a professional language style guide, such as The
Economist/Style Guide or APA. Presentation is very good, but falls short of
excellent in several areas.

For a C Grade (50 - 59%)
Content:
Understands the topic and links some concepts, principles, practices, and
theories. Answers have little justification and support employing evidence from
the literature. Has read some of the seminal literature and cited accordingly. Can
demonstrate the ability to analyze some issues, processes and contexts to reach
conclusions or recommendations. Answers are descriptive and typically lack any
real critical discussion or evaluation. Irrelevant material. Objectives not properly
addressed.
Attempts to use an appropriate writing style (Global English, formal or academic

English) but with several errors. Typed and placed in a folder. Layout is generally
clear, but contains spelling and grammatical errors.
For a D/E Grade (0 - 49%)

Content:
Poor assignment. Shows some understanding of the theory and concepts. Areas
missing. Mismatches occur between the theory and integration with the articles
being studied. Citation is incorrect or inconsistent and typically not citing some
of the answers from the literature or providing supporting material. Has read little
or none of the seminal literature. Answer is disjointed and fails to reach
conclusions. Objectives not met.
Informal English. Language time-consuming and frustrating to read and decode.

Not acceptable, for example, not typed, untidily presented, high level of errors,
poor and confusing layout.

18. NZDipBus Programme Structure
VERSION ONE VERSION TWO (LEVEL 6) FROM 2008

Completion of 240 credits (12 courses) in the Completion of 240 credits (12 courses) in the
following pattern: following pattern and with no more than 60 credits
at level 4:
Six Core Courses (120 credits) Six core courses (120 credits)
Six Electives (120 credits) Six Electives (120 credits) of which 80 credits
Of which four (80 credits) must be at 200 level must be at Level 6
(or equivalent)
A maximum of 3 courses (60 credits) at level 4
Requirements to Complete NZDipBus

Do you wish to Specialise in either Accounting or Management?
If so, select your courses from the appropriate tables below:
Specialise in: Accounting
COMPULSORY COURSES
NZ 400 Accounting Principles 20
NZ 510 Introduction to Commercial Law 20
NZ 520 Economic Environment 20
NZ 530 Organisation and Management 20
NZ 560 Business Communication 20
NZ 550 Business Computing 20
CORE ACCOUNTANCY COURSES

NZ 501 Accounting Practice 20
NZ 601 Financial Accounting 20
NZ 602 Management Accounting 20
NZ 603 Business Finance 20
NZ 606 Taxation 20
ELECTIVE COURSES
PLUS ONE ELECTIVE COURSE

Specialise in: Management
COMPULSORY COURSES
CHOOSE ANY SIX
NZ 400 Accounting Principles 20
NZ 510 Introduction to Commercial Law 20
NZ 520 Economic Environment 20
NZ 530 Organisation and Management 20
NZ 541 Fundamentals of Marketing 20
NZ 560 Business Communication 20
NZ 550 Business Computing 20
CORE MANAGEMENT COURSES

NZ 636 Applied Management 20
PLUS FIVE OF THESE

NZ 430 Quantitative Business Methods 20
NZ 630 Leadership 20
NZ 632 Operations Management 20
NZ 633 Human Resource Management 20
APMGNZ 635 Employment Relations 20
APMGNZ 648 Marketing Planning and Control 20

19. Credit Recognition and Eligibility for a Unitec
Diploma
As the New Zealand Diploma in Business (NZDipBus) is a national qualification it is
possible to study courses at other institutions. To be eligible to graduate with a
Unitec diploma a student must meet the following requirements:
The student must be enrolled at Unitec at the time the qualification is

completed unless permission has been obtained from the Programme
Director to complete a final paper at another institution (refer point 3 below).
The student must have completed at least 7 of the 12 papers at Unitec
The student must have obtained permission from the NZDipBus Programme
Director if he/she wishes to enrol in an NZDipBus course at another
institution while at the same time he/she is undertaking the programme at
Unitec. Permission to study elsewhere will only be given for exceptional
circumstances.
“Fast-tracking” Completion of NZDipBus

Motivated capable students can apply to the Programme Director for permission
to take an extra course per semester. Extra courses are also offered at Summer
School during the December/January period.
If your programme includes a course that is very similar to one you have already
successfully completed as part of a different programme, you may be able to have
these credits recognised. The School will carefully check and compare the content
and level of both courses to determine whether a cross-credit can be granted.
There is a $60.00 administration charge per application. Please ensure that you
enclose verified evidence of course content to support your application.
A student can be credited with a total of nine prescriptions (180 credits) including
maximum of 8 specified* credit transfer plus a minimum of one unspecified**
credit transfer. Credit Transfer will be awarded for equivalent study, at the same
or a higher level in the context of another programme. Credit Transfer will NOT
normally be awarded for successful study that took place more than 5 years prior
to the date of first enrolment in the diploma.
There are two types of credit transfer or credit recognition from another
qualification into NZDipBus:
* Specified: where there is direct equivalence of the learning outcomes of a

completed course and a course in the certificate
** Unspecified: where the previous study has taken place in a programme
with a similar philosophy but there is no exact match in the programme’s
courses.
Specified credit transfers are shown in the following tables:

Credit transfer from BBus to NZDipBus (version One)
Minimum
BBUS COURSE NZDipBus COURSE CREDITED
Grade
ALAF 5200 Accounting for Business Pass 100 Accounting Principles
ALAF 5206 Accounting Applications Pass 101 Accounting Practice
ALAF 5320 Law of Business Obligation Pass 110 Introduction to Commercial Law
ALAF 5270 Economic Principles Pass 120 Economic Environment
COMM 5430 Professional
Pass 140 Business Communication
Communication
ALAF 5230 Information Systems and
Pass 150 Computer Concepts
Applications
ALAF 5401 Business Statistics Pass 160 Quantitative Business Methods
ALAF 6201 Financial Accounting Pass 201 Financial Accounting
ALAF 6212 Management Accounting Pass 202 Management Accounting
ALAF 5290 Principles of Managerial
Pass 203 Business Finance
Finance
ALAF 6320 Law of Business Entities Pass 210 The Law of Legal Entities
BSNS 5350 Business Process
Pass 232 Operations Management
Management
BSNS5342 Applied Management Pass 236 Applied Management
BSNS 6370 Marketing Planning Pass 248 Marketing Planning & Control
BSNS 5341 Human Resource
Pass 233 Human Resource Management
Management
NOTE: Only certain approved BBus courses can cross credit back to the NZDipBus.
Only 18 or more credit courses can cross credit.
The NZDipBus regulations allow for a maximum of 8 prescriptions to be cross credited to NZDipBus, plus
maximum of 2 prescriptions to be cross credited as unspecified credits (1 local paper and 1 unspecified
credit).

Credit transfer from BBus to NZDipBus (version Two)
Only certain approved BBus courses can cross credit back to the NZDipBus.
The NZDipBus regulations allow for a maximum of 8 prescriptions to be cross

credited to NZDipBus, plus maximum of 2 prescriptions to be cross credited as
unspecified credits (1 local paper and 1 unspecified credit).
Minimum
BBUS COURSE NZDipBus COURSE CREDITED
Grade
ALAF 5206 Accounting Applications Pass 501 Accounting Practice
ALAF 5320 Law of Business Obligation Pass 510 Introduction to Commercial Law
ALAF 5270 Economic Principles Pass 520 Economic Environment
COMM 5430 Professional Communication Pass 560 Business Communication

ALAF 5230 Information Systems and
Pass 550 Business Computing
Applications
ALAF 5401 Business Statistics Pass 430 Quantitative Business Methods
ALAF 6201 Financial Accounting Pass 601 Financial Accounting
ALAF 6212 Management Accounting Pass 602 Management Accounting
BSNS 6370 Marketing Planning Pass 248 Marketing Planning & Control
BSNS 5341 Human Resource
Pass 233 Human Resource Management
Management

Credit Transfer to BBus from NZDipBus (version one)
NZDipBus course BBus Course credited to

Min.
Course Grade Course
No. Course Name Course Name Credits
Requir No.
ed
Accounting Principles
100 B ALAF5200 Accounting for Business 18
100 Accounting Principles Pass
and And
201 Financial Accounting Pass ALAF5200 Accounting for Business 18
or or
202 Management Accounting Pass
101 Accounting Practice B ALAF5206 Accounting Applications 18
Accounting Practice
101 Pass
And
and ALAF5206 Accounting Applications 18
ALAFNZ201
201 Pass
Financial Accounting
110 Introduction to Commercial Law Pass
and And ALAF5400 The Business Environment 18
120 Economic Environment Pass
110 Introduction to Commercial Law
OR
B
and And either ALAF5320 Law of Business Obligations 18
210 Company and Partnership Law
Pass
or OR
211 Business Law
120 Economic Environment B ALAF5270 Economic Principles 18
130 Organisation and Management Pass
and And APMG5340 Management in the Marketplace 18
141 Marketing Principles Pass
Marketing Principles Pass
141 And APMG5340 Management in the Marketplace 18
any other 200 level management course Pass
Organisation and Management Pass
130 And APMG5340 Management in the Marketplace 18
any other 200 level marketing course Pass
140 Business Communication B COMM5430 Professional Communication 18
150 Computer Concepts B
Information Systems and
or OR ALAF5230 18
Applications
250 250 Applied Computing Pass
160 Quantitative Business Methods B ALAF5401 Business Statistics 18
201 Financial Accounting B ALAF6201 Financial Accounting 18
202 Management Accounting B ALAF6212 Management Accounting 18
203 Business Finance Pass ALAF5290 Principles of Managerial Finance 18
232 Operations Management Pass APMG5350 Business Process Management 18
233 Human Resource Management Pass APMG5341 Human Resource Management 18
Employee Relations and
235 Employment Relations B APMG6343 18
Legislation
236 Applied Management Pass APMG5342 Applied Management 18
243
Marketing Planning B
or APMG6370 Marketing Planning 18
OR Marketing Planning and Control B
248
Any 100 Level Course not used above
100 B Level 5 Elective 18
(Note 3)
Any 200 Level Course not used above
200 Pass Level 5 Elective 18
(Note 3)
200 Any 200 Level Course not used above B Level 6 Elective 18
Key
1 A minimum B grade pass in the NZDipBus course is required where an NZDipBus course gains credit to a similar
course at a higher level in the BBus.
2 Only a passing grade (C or better) is required in the NZDipBus course where:

a. One or more NZDipBus courses cross credit to a similar course at the same level; or
b. Two NZDipBus courses cross credit to a single (and similar) course at a higher level.
3Where two NZDipBus courses have been used to gain credit for a single specific BBus course, credit may also be given for
the Level 5 elective provided a minimum B grade is achieved in one of the two course(s).

Credit Transfer from NZDipBus (version two) to BBus
NZDipBus Course M i n i m u m BBus Course Credited

Grade
501 Accounting Practice Pass ALAF5206 Accounting Applications
OR 601 Financial Accounting Pass
510 Introduction to Commercial Law Pass ALAF 5400 Business Environment
AND 520 Economic Environment Pass
510 Introduction to Commercial Law Pass ALAF5320 Law of Business Obligations
520 Economic Environment Pass ALAF5270 Economic Principles
530 Organisation and Management Pass APMG5340 Management in the

AND 541 Fundamentals of Marketing Pass Marketplace
560 Business Communication Pass COMM5430 Professional Communication
550 Computer Concepts Pass ALAF5230 Information Systems and
OR 650 Applied Computing Pass Applications
601 Financial Accounting Pass ALAF6201 Financial Accounting
602 Management Accounting Pass ALAF6212 Management Accounting
603 Business Finance Pass ALAF5290 Principles of Managerial
Finance
632 Operations Management Pass ALAF5350 Operations Management
633 Human Resource Management Pass APMG5341 Human Resource Management
635 Employment Relations Pass APMG6343 Employee Relations and
Legislation
636 Applied Management Pass APMG5342 Applied Management
648 Marketing Planning and Control Pass APMG6370 Marketing Planning
Any level 5 course not used above Pass Level 5 elective
Any level 6 course not used above Pass Level 6 elective
Notes:
1 Where a student has passed 400 Accounting Principles and also completed 501 Accounting Practice, or
601 Financial Accounting or 602 Management Accounting, credit will be given for ALAF5200 Accounting
for Business
2 A maximum of 180 credits can be credited into the BBus.
3 NZDipBus students can apply for an exemption to BBus courses from the level 4 course.

20. Other Awards, Memberships and Qualifications
Exit/Milestone Diploma: Diploma in Business Studies (Level 5, 120

Credits)
Students who have completed a total of six NZDipBus courses (120 credits) with a
minimum of 80 credits at level 5 or above, as set out in Table 2 or the course
equivalency table - Table 3, may apply for and be awarded a Diploma in Business
Studies (level 5, 120 credits), provides they:
have gained a minimum of 80 credits required for the award of the exit/
milestone diploma from courses studied at Unitec;
have gained, before enrolling at another institution, permission from the
Programme Director to enrol in New Zealand Diploma of Business courses at
another institution should the need arise.
Exit/Milestone Diploma: NZIM Diploma in Management
By completing the SIX NZDipBus courses as specified below, student are eligible to
apply for the NZIM Diploma in Management.
Course Description
Students need to complete four core papers and two optional papers from the NZ
Diploma in Business. Each paper is worth 20 credits. The NZIM Diploma in
Management is an NZQA approved credit level 5 qualification.
Core Papers:
130 Organisation and Management
140 Business Communication
230 Leadership
236 Applied Management
Optional Papers (select two):

100 Accounting Principles or 120 The Economic Environment
115 Small Business Management or 227 Entrepreneurial Planning
139 English for Business Studies1
141 Marketing Principles

150 Computer Concepts
160 Quantitative Business Methods
232 Operations Management
1 This option is only for students who have completed the NZIM Certificate in Language, Culture and Management.

Registration with NZIM
To be eligible to receive the NZIM qualifications set out in NZIM booklet students
must register their results with NZIM as well as enrolling for their studies with
their school or tertiary institution. Where providers do not bulk-register the
results of diploma students, the students need to register the results individually
with NZIM, using a registration form in the booklet. Registration may take place
at any time during the course or at its conclusion. Please send a photocopy of
your results as soon as they come to hand, together with the appropriate
registration fee.
Accounting Technician (AT)
The New Zealand Institute of Chartered Accountants (NZICA) recognises

successful completion of the Accounting Option of NZDipBus as the necessary
tertiary study requirement for membership of the NZICA College of Accounting
Technicians.
To qualify as an accounting technician and staircase your way up to be an

accountant, you must meet the following requirements:
Successfully complete NZDipBus in the Accounting option; and

Have two years’ relevant professional experience; and
Pass the Professional Competence Examination(PCE1)
Financial Service Industry of Australasia Associate

Membership (A Fin)
You are eligible to apply A Fin if you are working in the financial industry and have
completed NZDipBus.

21. Amendments and suggestions for course
improvements
This is an updated course with an updated text, a new teacher, and new learning
support media such as this Course Handbook and the Learning Management
system. Improvements and amendments will be made during the semester. Please
make a record of amendments here, and include your own suggestions for
improvements. Submit your suggestions with your Final Assignment.
Date Version Subsection and Amendment/Suggestion

and Pages
Section

22. Passwords and access codes
Online submission of assignments:

APMG NZ 435 Innovation & entrepreneurship 2011-1
For students to enroll in this class, you will need both the enrollment password
you have chosen and the unique class ID generated by Turnitin:
Home page: http://www.Turnitin.com

class ID: __________
Enrollment password: enterprise
Class title: APMG NZ 435 Innovation & entrepreneurship 2011
My turnitin user name: _____________
My turnitin password: _____________
My Project Team
Team ID: _____ Name _____________________
Project Presentation date ___________
Recording duties date ______________
Team members
Name Email Phone

23. Semester-specific calendar and dates
Studio Calendar and assignment due dates - 2011 - Semester 1
Hand-in time for Assignments: Latest: On the date specified BEFORE class
commencement.
Submit immediately BEFORE the START of class, or into physical drop box, Level 4,
building 172.
CONCURRENTLY submit on-line http://turnitin.com submissions before class.
Note. All topics scheduled here will not always be covered in class meetings. You
are required to keep up-to-date with this reading schedule to meet the
requirements of assignments.
Week/ Assignment
Agenda Reading
Studio Due
LEARNING OUTCOME ONE: OVERVIEW
Students will describe characteristics of small
business.
Key elements
a) Profile:
• owner
• staffing
• turnover
• customer focus
• equity and asset value.
b) Success factors,
• capital
• planning O&E
• systems Preface
• customer relations Introduction
7-Mar • product or service development Ch1 - Introduction
• marketing
• other. Ch 2 - Business
opportunity
Ch 6 - Business planning
• commitments and responsibilities
• variety of roles
• time demands.
Topics:
• Introduction to entrepreneurial business
• What is small business and
entrepreneurship?
• Small and corporate business in New
Zealand
• Finding business opportunities
• Business planning
Exercise 1: Self-
14-Mar LEARNING OUTCOME ONE (continued) employment assessment
21-Mar LEARNING OUTCOME ONE (continued)

Week/ Assignment
Agenda Reading
Studio Due
LEARNING OUTCOME TWO: START-UP
OPTIONS, STRUCTURE, AND FINANCING
Students will compare business options,
business structures and finance options
of small business.
Key elements
• independent
• franchise
• co-operative
• e-business. O&E
c) Business structures: Ch 2 Finding a business
28-Mar • sole trader opportunity
• partnership Ch 4 Legal
• company Ch 5 Franchising
• trading trust. Ch 9 Financing
d) Finance options.
Topics:
• Small business survival and success
• Learning about small business
• The role of entrepreneurs in creating new
business
• Foundation business structure and legal
issues
• Good business: Ethics, social responsibility
and business character
• Launching an entrepreneurial business
4-Apr LEARNING OUTCOME TWO (continued)
LEARNING OUTCOME THREE: ADVICE
AND ASSISTANCE
Students will identify sources of advice
and assistance available for a small
business.
Key elements
11-Apr • financial and non-financial O&E ASS ONE
Ch 3
• governmental and non-
governmental.
Topic:
• Government Programmes
• Trade Associations
• Chambers of Commerce
18-Apr
Break for Study
25-Apr Break for Study

Week/ Assignment
Agenda Reading
Studio Due
2-May Guest speaker or Field Trip
business. O&E
Exercise 2: Trans Crash
Key elements Transport
9-May a) Financial: Ch 7 Financial Information
• cash budget Ch 8 Cash Flow
• income statement Ch 9 Financing
Ch 10 Profit Planning
• balance sheet
• break-even analysis
• two other types of information (eg debtors).
LEARNING OUTCOME FOUR:

MARKETING
Students will explain the importance of
marketing choices for a small business.
O&E
Key elements
16-May Ch 11 Market strategy
• Research. Ch 12 Advertising, sales
• Promotion. Ch13 Export marketing
• Business environment.
• Location.
• Channels of distribution.
23-May LEARNING OUTCOME FOUR (continued) TEST
(continued)
business.
Key elements
a) Financial (Note: this element completed in O&E
earlier weeks) Ch 14 Retail and service
operations
30-May b) Legal: Ch 15 Manufacturing
• four from central government
• one from local government. operations
Ch 18 Troubleshooting and
recovery
• quality Additional research
• waste
• product or service
• hours of operation
• other.
d) Risk management process
6-Jun Queens Birthday weekend - no class

13-Jun LEARNING OUTCOME FIVE (continued)
20-Jun Study Week ASS TWO

Unitec principal academic calendar

Lecture Slides
APMG NZ 435 Fundamentals of Small Business
Faculty of Creative Industries and Business
Department of Management and Marketing (DoMM)
Bachelor of Business
(Ver 1.0)

NOTICE
Books, journals, multi-media and other
materials made available by or at Unitec
Institute of Technology are for the
student’s own studies only. Copying or use
of the materials for other purposes is an
infringement of copyright.
Authored by Peter J. Mellalieu, 2010. 1st Ed

February 2011.
The copyright of student materials remains

with the authors.
Printed at The Copy Centre, Unitec Institute

of Technology, Mt Albert, Auckland, New
Zealand.
IMAGE: Reaching for the skies.

AdventureWorks facility at Unitec Institute
of Technology, Auckland. Credit: Peter J.
Mellalieu
http://www.adventureworks.co.nz/
Version Ver 1.0 1 February 2011.
This document is subject to amendments

and improvements in the online version as
the course proceeds. Refer to back page
for a schedule of amendments.

TABLE OF CONTENTS
LO 1 - Introduction - (Oliver & English Chapter 1) ................................................ 1
LO 1 - Creating a winning enterprise .................................................................. 17
LO 1 - Small business definitions .......................................................................

27
LO 1 - Survival and success (O&E Ch 1 continued) .............................................. 35
LO 1 - Business planning (O&E Ch 4) .................................................................. 55
LO 2 - Finding an opportunity (O&E Ch 2) ........................................................... 69
LO 2 - Financial planning (O&E Ch 7-10) ............................................................ 81
LO 2 - Establishing a business; Ethics, responsibility and character (O&E Ch 2) ...85
LO 2 - The legal environment (O&E Ch 4) ......................................................... 101
LO 2 - Franchising (O&E Ch 5) .......................................................................... 107
LO 3 - Intellectual property protection .............................................................. 115
LO 4 - Marketing (O&E Ch 11) .......................................................................... 119
LO 5 - Risk Management .................................................................................. 133
REMINDER!!! All material presented and discussed in class is EXAMINABLE in

the Final Test. This includes:
Material presented by students and guests,

Required text reading,
Lectures and lecture notes
Material specified in the Course Reading Schedule.

Fundamentals of
Small Business Management
APMG NZ435
Session 1
This Week
• Introducing the lecturer

• Purpose/Aims
• Expectations of you
• Plagiarism
• HELP!
• Course topics
• Who are you?
• What is Business Management?
Purpose
• To develop:
– Knowledge of small business opportunities
and operations, including ownership
options and business structures.
– Knowledge of control techniques,
accounting and financial processes,
evaluation processes and marketing
options for small business operations.
– Skills in analysing information and
identifying appropriate solutions for the
management of small business operations.
Course Aims
This course is intended for people who:

• Seek an introduction to business in New Zealand
• Intend to continue studies in commerce
• Are working in small-medium business
• Are working in new ventures within a science or
corporate business
• Aspire to work in business in the future as an
entrepreneur, employer, employee, or advisor
• Are studying a professional or technical qualification,
and require an introduction to the elements of
business
Topic 1
• Analyse options for self employment

• Identify characteristics of successful
small business enterprises
• Identify and assess new business
opportunities
• Evaluate assistance programmes and
identify specialist services available for
small business development.
Topic 2
• Analyse ownership options and

business structures
• Assess options for acquiring a small
business
• Evaluate small business financing
options
• Interpret legal requirements for small
business operations
• Evaluate operational requirements for
small business operations.
Topic 3
• Manage the day to day accounting

function
• Interpret financial and accounting
information
• Develop profitability and cash flow
budgets and compare operating results
to these budgets
• Using basic costing tools to ensure the
business is running profitably.
Topic 4
• Select and implement control systems

and techniques and evaluate results
against business plans.
Topic 5
• Analyse the potential market for

products/services and confirm market
demand
• Determine the mix of products/services
to be provided
• Develop options for effective marketing
of the business.
Learning Outcomes
• Refer myCourseDetails
Expectations of you
1. Read the myCourseDetails
2. Read the cases before coming to class
3. Do readings as applicable
4. Turn off your cell phones before entering class
5. Respect each other
6. Help each other
7. Regular course attendance
8. Attend all lectures on-time
9. If you cannot attend class I want to know by e-mail beforehand

(if possible).
Plagiarism
Plagiarism is a form of cheating
• Plagiarism is using someone else’s ideas or
words and saying they are your own.
• If you use material from a text and do not
acknowledge the source, you are committing
plagiarism.
Several penalties can be imposed if you

plagiarise. Zero marks and ultimate
removal from the paper
Plagiarism
Examples of plagiarism:
• Copying from another student’s assignment with or
without the student’s knowledge.
• Submitting the same assignment in two different
papers.
• Getting someone else to write an assignment for you.
• Paraphrasing or copying directly from a text without
acknowledging the source.
• Copying directly from a text, acknowledging the source
but pretending that you are paraphrasing.
• You allow other students to copy your work
• You write an assignment for another student.
HELP!
•Library
•Te Tari Awhina
•Blackboard
Who are you?

•What is your origin?
–Born in NZ
–OR arrived in NZ:
–Over 10 years ago
–5 to 10 years ago
–1 to 5 years ago
–6 to 12 months
–Less 6 months
•You are from: Auckland, or overseas?
•Homeland?
•First language?
•Single language?
•Family Background?
Why are you studying this
• Seek an introduction to business in New Zealand?
• Intend to continue studies in business?
• Work in small-medium-or-BIG business now/or in the future?
• Work on a new business venture?
• Aspire to work in business in the future as an

– Entrepreneur?
– Employer?
– Employee?
– Advisor?
• Study a professional or technical qualification, and require an

introduction to the elements of business?
Definition: Business
• A commercial or industrial establishment
• Commerce, trade
• Profession, occupation
• Synonyms:
– Company, corporation, enterprise, firm,
organisation, venture
• Collins Concise Dictionary
Definition: Organisation
• A collection of people working together
in a division of labour to achieve a
common purpose
• Synonyms:
– Association, corporation, federation,
consortium, institution, league, syndicate
– Examples???
Examples: Organisation
• Orchestra
• Sports club
• School
• University
• Hospital
• Army, Navy, Air Force
• Bank
A Business Organisation
An organisation established with the

purpose of making a profit for its
shareholders through providing
goods and services to its customers
Profit
• A financial gain, esp. the difference
between the amount earned and the
amount spent in buying, operating,
or producing something (Apple
Dictionary, 2008)
• The means through which an
organisation achieves its purpose
(Anon)
21
Questions
• Is a one man/or woman business an
organisation?
• Do “not-for-profit” organisations need to
make a profit?
• Doesn’t the term “not-for-loss”
organisation make more sense?
Definition: Small business

• Personally owned and managed, or
• Does not have specialist managerial staff, or
• Is not part of a larger enterprise
• AND ALSO employs fewer than:

– 50 people in manufacturing, or
– 10 in services
– 25 in other sectors
– (Bollard, 1988; in Oliver & English, 2002, p. 3)
Key data on NZ small business
• Of the 355,000 businesses in NZ

(mainly small and medium sized),
– 85% employed 5 or fewer full-time people
– 99% employ fewer than 100 workers
(Cameron & Massey, 2002, p iv)
Key data on NZ small business
• Over 50% of all people employed in NZ

are employed by enterprises with less
than 50 employees.
• 32% are employed in firms with fewer

than 10 employees.
– (Cameron & Massey, 1999; Fig 1.2)
Definition: Entrepreneur
1. A person who attempts to profit by risk
and initiative (Collins)
2. To undertake a project that is
especially difficult, complicated, or
risky, engaging in daring action, that is
a systematically purposeful activity
(Caldwell, 2006, p. 76)
3. A ‘person’ who habitually creates and
innovates to build something of
recognised value around perceived
opportunities. (Bolton & Thompson)
Definition: Entrepreneur
Innovation is commonly defined as:

– “The act of introducing something new”
(Dictionary.com, - Innovation).
– Innovation does not imply that an idea, product or

service has been taken to the market, but merely provides
a suggested conclusion to a problem.
– Entrepreneurship is best defined as taking a good idea,
product or service, and organising, operating and
assuming the risk for a new business venture
(YourDictionary.com., 2004). This definition can be
extended to include taking the idea, product or service to
the market for potential (personal and community) wealth
creation (QuickMBA.com., 2004; Von Bargert, 1999).
Therefore, entrepreneurship is the answer to inactive
innovation.
Elaborating ‘Bolton & Thompson’s definition
• ‘Person’ – may be a team, or organisation
• ‘Habitually’ – not just seeking a comfortable

lifestyle – “they just cannot stop being
entrepreneurs”
• ‘Creates’ – start with nothing and bring into being

something that was not there before
• ‘Innovates’ – they overcome obstacles that would

stop most people
• ‘Build… recognised value’ – financial, aesthetic,

or social capital. Not just an idea
The entrepreneurship growth model
Types of entrepreneurs
• Legendary
– Henry Ford, Thomas Edison, Bill Gates, Walt
Disney, Steve Jobs, Sony Co., James Dyson,
Richard Branson
• Social
– Florence Nightingale, Anita Roddick (Body Shop)
• Aesthetic
– Michelangelo Buonarroti, Andrew Lloyd Webber,
Gilbert Tregano (Club Med), Mozart, Peter
Jackson
Kiwi entrepreneurs
• Legendary
– The Todd Family (industries: automobile, oil
industry-BP).
• Sports
– Sir Peter Blake
• Business/Social
– Dick Hubbard
• Aesthetic/Business
– Peter Jackson
• Business
– Michael Hill, Stephen Tindall…others?
David Slack – Speeches.com
• Read the ‘David Slack’ case

study and answer these
questions:
David Slack – Speeches.com

– What is David Slack’s business? Why did he set up the
business? What was the moment of conception?
– What skills did David bring to bear on his new business from
his earlier career?
– How long was the “gestation period” – the number of years it

took before he “took the plunge” following the moment of
conception?
– What special challenges did he face in setting up his

business? How did he meet those challenges?
– What are some of the distinctive features of the business that

David established?
– Is this a successful business?

Reflections on David Slack
• History
• Skills
• Attitude
• Operations & Technology
• Challenges
• Competitive advantage
• Key skills
• Success
Reflections on David Slack

• Would you buy this business?
• Business value – intellectual property:
– “priceless” domain name
– Database of customer contacts
– Database of speeches
– Proprietary software eg Auto Speechwriter
– Distinctive reputation in market niche
• Fixed assets – essentially nil
Your glossary of business terms

• Note terms:
– Entrepreneur, small business, organisation,
e-commerce, intellectual property
• Find definitions from text (use index),
dictionary, commercial dictionary
• Record examples
• WARNING – there may be MORE

than one definition!!!
Definition: Small-Medium sized businesses (SMEs’)
• No common accepted definition; however:

• Remember that-85% of NZ SMEs’ employ
fewer than 5 full-time people (Cameron and
Massey, 2002).
• Examples of small businesses: Family
businesses such as - dairies, cafeterias, hair
salons, bakeries, garages, restaurants
Facts about entrepreneurial business in NZ
• 1976: 6% of owner managers were women
• 1996: 36% - a 6-fold increase
• There has been a net increase in the number

of small business of around 10,000 per year
Facts about entrepreneurial business in NZ
• Many small business founders lack

organisation and management skills. They are
all too often the BEST people to start a
business, but the worst managers of that
business
– Source: Oliver & English, (1997), p. 7
Questions
• Why is the number of SME’s growing,

and the % employed in SME’s growing?
• What other forced career changes (e.g.

health status) can you imagine?
• What are some of the reasons that

smaller businesses can compete
successfully with larger business?
Questions
• Small Business opportunities

– What are some options for self
employment?
– Define clearly the business purpose and
industry sector – (David Slack)
– Examine reasons for founding small
business ventures – (Necessity/
Opportunity)
– What are some personal business and
other skills, and experiences that you might
need for starting a business?
1. Develop natural talent into excellence
ing
clud
n ces in ts
erie skill se
exp
n ing
and ding to
a
Excellen
ar n le
ed le atio
stru
ctur al educ ce
f or m en t
al
ed t
e lo p
Dev en t
ram
mpe e
ed t e edg
nag owl
Ma n d kn
Natura d sk
ills a
ar te ces
l Imp rien e
exp
and
ning
talent ctur
ed le
ar
Un stru Bolton & Thompson, 2004, Fig 2.2

Homework for next week - 2
•Follow up reading:
–Oliver & English (2002): Preface, Ch 1
–Cameron & Massey (2002): Preface, Introduction
•Prepare to discuss in class:

–CASE Deron BEAL - Trash & Treasure
Creating a winning enterprise
Your place in the entrepreneurial process
Peter J MELLALIEU
+64 21 42 0118
Who wants to be
part of a winning
enterprise?
• In sports, the coach needs to know:
• rules of the game
• challenges of each position in the team
• goals we are seeking
• talents and interests of each player
3
The entrepreneurial process:
2. Grow an enterprise that succeeds
theThe
complete model
entrepreneurial process
Finding the Using

required networks
resources extensively
Putting the
customer first
Financial,
Motivation to Spotting and Creativity Growing an
Overcoming Recognition social or
make a exploiting and enterprise that
obstacles of value aesthetic
difference opportunities innovation succeeds
capital
Controlling the
business
Showing
determination
Managing risk
in the face of
adversity
Bolton & Thompson, 2001
22
4
Exercise: A winning enterprise? ...

... or a team of winners?
• EXAMINE the pieces of the entrepreneurial process (EP) ‘jigsaw’.
• IDENTIFY the piece(s) of the jigsaw that you can most contribute
to your team.
• JUSTIFY your choice to your team in terms of your talents,

interests, and/or strengths.

The entrepreneurial process
a partial model
Finding the Using
required networks
Putting the
customer first
Financial,
capital
Controlling the
business
Showing
determination
Managing risk
in the face of
adversity
6
22
Create capital wealth
Reward
investors and
partners
Gain
mass uptake of Finding the Using
innovative products
required networks
or services Create Putting the

customer first
financial, social, or
Financial,
capital
aesthetic capital
Controlling the
business
Apply eco-
sustainable
Showing
determination
Managing risk
in the face of
adversity
production
Have fun, do
good, make
money
33
7
Create capital wealth
Reward
investors and
partners
Gain
mass uptake of Finding the Using
innovative products
required networks
or services Create Putting the

customer first
financial, social, or
Financial,
capital
aesthetic capital
Controlling the
business
Apply eco-
sustainable
Showing
determination
Managing risk
in the face of
adversity
production
Have fun, do
good, make
money
33
8
Exploit opportunities
New products
New services Finding the

required
resources
Using
networks
extensively
Spotting and Putting the

customer first
exploiting
Financial,
capital
Controlling the
opportunities
business
New
production
Showing
determination
Managing risk
in the face of
adversity
methods
New
product & service
delivery methods
24
9
Exploit opportunities
New products
New services Finding the

required
resources
Using
networks
extensively
Spotting and Putting the

customer first
exploiting
Financial,
capital
Controlling the
opportunities
business
New
production
Showing
determination
Managing risk
in the face of
adversity
methods
New
product & service
delivery methods
24
10
Source: http://brainz.org/media/uploads/
2009/02/3237757930_5393324981_m.jpg 11
Biomimicry
Source: http://brainz.org/media/uploads/
2009/02/3237757930_5393324981_m.jpg 12
Sources of
entrepreneurial opportunities
Opportunity source Scope Example
New knowledge Biomimicry Velcro
Climate change Green consumersim Eco-kettle
Second-hand clothing;
Economy Fashion
Re-created clothing
War, migration, medical Home help for DINKS and
Demographic change
technology elderly
What if we could invent a
Why? What if? ... do people smoke?
safe substitute
Risk into opportunity Living on a volcano Adventure tourism
Source: Mellalieu; Frederick & Kuratko (2010); Drucker, (1985)

13
14
GrowingPut
an the
enterprise
customerthat
firstsucceeds
Order fulfilment

Product and service Finding the Using
improvement
required networks
Putting the
Putting the
customer first
Financial,
customer first
capital
Controlling the
business
Market
feedback and
Showing
determination
Managing risk
in the face of
adversity
research
Sales and market

planning
30
15
GrowingPut
an the
enterprise
customerthat
firstsucceeds
Order fulfilment

Product and service Finding the Using
improvement
required networks
Putting the
Putting the
customer first
Financial,
customer first
capital
Controlling the
business
Market
feedback and
Showing
determination
Managing risk
in the face of
adversity
research
Sales and market

planning
30
16
Overcome
2. Grow obstacles
an enterprise that succeeds
Finding the Using

required networks
Putting the
customer first
Financial,
capital
Controlling the
business
Showing
determination
Managing risk
in the face of
adversity
22
17
Find resources
Investment finance
Lead customers Finding the

required
resources
Using
networks
extensively
Finding the Motivation to Spotting and Creativity

Overcoming
Putting the
customer first
Growing an
Recognition
Financial,
social or
required
capital
Controlling the
business
Methods, resources
equipment, and
Showing
determination
Managing risk
in the face of
adversity
materials
Skilled
employees and
partners
26
18
Find resources
Investment finance
Lead customers Finding the

required
resources
Using
networks
extensively
Finding the Motivation to Spotting and Creativity

Overcoming
Putting the
customer first
Growing an
Recognition
Financial,
social or
required
capital
Controlling the
business
Methods, resources
equipment, and
Showing
determination
Managing risk
in the face of
adversity
materials
Skilled
employees and
partners
26
19
Use networks
“Press the flesh”

Exchange contact Finding the Using
details
required networks
Putting the
customer first
Using networks
Financial,
capital
Controlling the
business
Build a contacts Showing

determination
in the face of
Managing risk
database
adversity
Ask and offer

advice
29
20
Use networks
“Press the flesh”

Exchange contact Finding the Using
details
required networks
Putting the
customer first
Using networks
Financial,
capital
Controlling the
business
Build a contacts Showing

determination
in the face of
Managing risk
database
adversity
Ask and offer

advice
29
21
Why create
Make aan enterprise?
difference
Finding the Using

required networks
Organisational Motivation to Putting the

customer first
Financial,
mission, purpose,
make a difference
capital
Controlling the
business
and values
Showing
determination
Managing risk
in the face of
adversity
23
22
Why create
Make aan enterprise?
difference
Finding the Using

required networks
Organisational Motivation to Putting the

customer first
Financial,
mission, purpose,
make a difference
capital
Controlling the
business
and values
Showing
determination
Managing risk
in the face of
adversity
23
23
Profit is the MEANS through which an

enterprise achieves its OBJECTIVES
24
theThe
complete model
entrepreneurial process
Finding the Using

required networks
Putting the
customer first
Financial,
capital
Controlling the
business
Showing
determination
Managing risk
in the face of
adversity
22
25
Exercise: A winning enterprise? ...

... or a team of winners?
• EXAMINE the pieces of the entrepreneurial process (EP) ‘jigsaw’.
• IDENTIFY the piece(s) of the jigsaw that you can most contribute
to your team.
• JUSTIFY your choice to your team in terms of your talents,

interests, and/or strengths.
• NEGOTIATE the best allocation of the pieces of the jigsaw to

create a ‘winning team’.
• IDENTIFY how you will address weaknesses in your team’s

talents and/or interests.
26
Further reading
• Bolton, B., & Thompson, J. (2003). The Entrepreneur in Focus. London:
Thomson. Retrieved from http://books.google.com/books?
id=KxTN68uZKGkC&printsec=copyright&dq=book+bolton+thompson
+the+entrepreneur+in+focus#PPR5,M1
• Bolton, B., & Thompson, J. (2004). Entrepreneurs: Talent, temperament,

technique (2nd ed.). Oxford: Butterworth Heinemann. Frederick, H., &
Kuratko, D. F. (2010). Entrepreneurship: Theory, Process, Practice (Asia-
Pacific Edition) (2nd ed.). Melbourne: Cengage Learning.
• Kawasaki, G. (n.d.). Art of the Start - website. Retrieved September 30, 2009,
from http://www.guykawasaki.com/books/art-of-the-start.shtml
• Quotes by Richard Branson. (n.d.). Retrieved March 9, 2010, from http://

www.gaia.com/quotes/richard_branson
27
Other sources
• Biomimicry - burrs and velcro. (n.d.). . Retrieved from http://
media.brainz.org/uploads/2009/02/3237757930_5393324981_m.jpg
• Extreme Backpackers, Turangi - Peter Mellalieu
• Multimedia – Album – Sir Richard Branson | Virgin Galactic. (n.d.). .

Retrieved March 10, 2010, from http://www.virgingalactic.com/
multimedia/album/sir-richard-branson/ Velcro Hooks.jpg -
Wikipedia, the free encyclopedia. (n.d.). . Retrieved March 10, 2010,
from http://en.wikipedia.org/wiki/File:Velcro_Hooks.jpg
• The 15 Coolest Cases of Biomimicry. (n.d.). Retrieved March 10, 2010,

from http://brainz.org/15-coolest-cases-biomimicry/
28
Entreprneurship v’s Small Business
Paul Woodfield
Main Sources
•  Timmons, J. A., & Spinelli, D. (2003). New venture creation:

Entrepreneurship for the 21st century. (6th ed.). New York:
McGraw-Hill.
•  Schaper, M., & Volery, T. (2004). Entrepreneurship and
small business: A Pacific Rim perspective. Milton, Australia:
John Wiley & sons.
Entrepreneurship
•  Entrepreneurship—a way of thinking, reasoning, and

acting that is opportunity obsessed, holistic in approach,
and leadership balanced
(This definition of entrepreneurship has evolved over the past two decades from
research at Babson College and the Harvard Business School and has recently been
enhanced by Stephen Spinelli, Jr., and John H. Muller, Jr., Term Chair at Babson
College.)
APMG8132 Strategies for Commercialising

Innovation 1
Defining entrepreneurship
•  Entrepreneurship as a term was first used during the

Industrial Revolution.
•  It described the new phenomenon of the individual who
formulated a venture idea, developed it, assembled
resources and created a new business venture.
Defining entrepreneurship
•  The entrepreneur has thus emerged as a pivotal figure

who operates within a market.
Dimensions of entrepreneurship
•  There are three generally agreed conditions that are

necessary for entrepreneurship to occur:
1) an individual who
2) performs an act that
3) involves innovation (properly defined)

Innovation 2
Dimensions of entrepreneurship
•  But there is substantial disagreement whether the creation

of an economic entity is a necessary condition to
entrepreneurship.
Towards a definition of entrepreneurship
•  Entrepreneurship:
The process brought about by individuals of identifying
new opportunities and converting them into marketable
products or services.
Summary
•  Entrepreneurship is the process brought about by
individuals of identifying new opportunities and
converting them into marketable products or services.
•  There are many possible outcomes to the
entrepreneurial process. E.g. independent start-ups,
corporate ventures, franchises and business
acquisitions.

Innovation 3
Summary
•  At a macro-level, entrepreneurs create new business

ventures, jobs and wealth, but they also force out of the
marketplace the enterprises which failed to innovate.
•  What is a small business then???
A general definition
•  Small business: a small-scale, independent firm, which is

usually managed, funded and operated by its owners, and
whose staff size, financial resources and assets are
comparatively limited in scale.
•  Most definitions are a mixture of both qualitative and
quantitative measures.
Definitions of a small business
In a general sense, a business can be regarded as small if

it has the following characteristics:
•  independently owned and operated (not part of a larger

corporation)
•  the business has a small market share

Innovation 4
•  the owners make most decisions and are not answerable

to anyone else
•  the owners contribute most of the capital
•  the owners bear the risk
•  …and they are entitled to the profits

Some common quantitative variables which are used
to categorise and sort businesses include:
•  the number of staff

•  wages and salaries expenditure
•  legal structure
•  total annual turnover (sales revenue)

•  value of firm assets
•  share of ownership that is held by the owner/manager(s)

Innovation 5
International definitions of
small business (Source: Schaper & Volery 2004, p73)
Entrepreneurs & small business owners compared

(Source: Schaper & Volery, 2004, p88)
Classic Entrepreneurship: The Startup
•  Raw startup company—an innovative idea that

develops into a high growth company
•  Qualities of a startup company
•  Strong leadership from the main entrepreneur
•  Complementary talents and outstanding teamwork of team
members
•  Skill and ingenuity to find and control resources
•  Financial backing to chase opportunity

Innovation 6
New Technology
•  Time for new technologies to reach 25% of the U.S.

Population
•  Household electricity (1873)—46 years
•  Telephone (1875)—35 years
•  Automobile (1885)—55 years
•  Airplane travel (1903)—54 years
•  Radio (1906)—22 years
New Technology
•  Time for new technologies to reach 25% of the U.S.

Population
•  Television (1925)—26 years
•  Videocassette recorder (1952)—34 years
•  Personal computer (1975)—15 years
•  Cellular phone—13 years
•  World Wide Web—7 years
The Entrepreneurial Process
•  It is opportunity driven
•  It is driven by a lead entrepreneur and an entrepreneurial
team
•  It is resource parsimonious and creative
•  It depends on the fit and balance among these
•  It is integrated and holistic

Innovation 7
2/23/11
Small Business
Management
APMG NZ115
Paul Woodfield
Session 2
Recap…
•  A Business Organisation - An organisation
established with the purpose of making a
profit for its shareholders through providing
goods and services to its customers
•  David Slack Case
•  Entrepreneurship - ‘person’ who

habitually creates and innovates to build
something of recognised value around
perceived opportunities. (Bolton &
Thompson)
Small business survival and

success
1
2/23/11
Our agenda for today
•  What’s the chance of small business

failure?
•  How can we reduce the odds of failure?
•  How can we learn to be successful?
2
2/23/11
Do most small businesses fail?
•  “It is not true that 80% of small businesses fail

within five years.
•  The figures are:
–  20% fail
–  20% stop when the owners find it just ‘isn’t them’
–  20% stop and restart when partners part
–  20% sell to another owner-manager
–  20% keep going.”
–  (Higham & Williams, p. 12)
Lack of organisation and management skills
•  “Many small business founders lack

organisation and management skills.
•  They are all too often the best people to
start a business, but the worst managers
of that business.
–  (Oliver & English, p. 7)”
Running out of money…
•  “Small, new businesses tend to be

under-capitalised and frequently
experience shortages of working capital
and credit.”
–  (Oliver & English, p. 6)
3
2/23/11
What size is best?
•  Businesses which are started up with a

size of between 6 and 9 employees are
50% more likely to survive the first few
years of business than those started up
with a size of 5 or fewer employees.
–  (Cameron & Massey, Figure 1.7)
10
What size is best?
•  Firms with 1, 2, or 3 employees at birth

have a much lower survival rate than
larger firms.
•  Firms with 5 employees at birth have the
same survival rate as those starting with
10, 20 or more employees
–  Kirchoff in Bygrave (1997, p 461)
11
What size is best?
•  It is probable that the number of employees at

birth is actually a surrogate measure for the
extent of resources at birth.
•  In other words:
–  More start-up capital
–  Wider variety of knowledge and skills
–  More realistic assessment of chance of success
•  Kirchoff in Bygrave (1997, p 461)
•  Mellalieu
12
4
2/23/11
Sustainable competitive advantage
•  How do we build a business that

provides either better products and
services
–  More cheaply and/or
–  More quickly …
•  Than anyone else can achieve …
•  … On an ongoing basis
13
•  Does Speeches.com have a sustainable

competitive advantage?
14
The secret
•  Develop a business that is…

–  Based around a market ripe for
development
–  Uses skills, products, or knowledge that you
can readily acquire
15
5
2/23/11
The initial seeds of the business concept
•  Define the ideal market

•  “Broad brush” definition of product
•  Price
•  WHY the product will sell?
•  HOW will you make the product?
•  HOW MUCH you will sell?
16
Six key issues at start-up
•  Number and nature of associates who

will found the business
•  Decision making structures
•  Initial financial capital
•  How to keep the distinction between the
business and your personal life
•  Your ambitions for the business
–  Oliver & English
17
Exercise
•  While many business may fail, there are
a number that are successful….
•  Class Exercise
–  Jot down several key ‘ingredients’ that you
think are important to the success of a
business.
18
6
2/23/11
•  Market research
•  Capital
•  Product
•  Management
•  Pricing of product/service
•  Consumer interest
•  Stakeholders
•  Distribution
•  Innovation
•  Cashflow
•  Passion
•  Drive and energy
•  Communication
•  Charisma
•  Commitment
•  Advertising
•  Marketing
•  People (HR)
•  Technical skills
•  Understanding Product cycle
19
Exercise
•  Class Exercise
–  Make a list of what you think might be the
pros & cons of self employment
20
• Pros • Cons
• Being your own • Having full
boss responsibility
• Doing something • Erratic income
you like • Financial pressured
• Profits • Overworked
• Flexibility • Can’t afford to be
• Hours sick
• Satisfaction • No holidays
• Creativity • Own book keeping
• Sense of • Financial risk
accomplishment/ • Family risk
pride
21
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2/23/11
•  Funding
•  Future market
•  Research
•  Raw materials
•  Marketing and promotion
•  Business
•  Support eg. Mentor, partners, consultants
•  Risk management
•  Premise
•  Accountants, lawyers
•  Employees
•  Sustainable
•  Culture
•  social, environmental
•  Innovation
•  Growth
•  People skills eg. Relationships with co-workers, suppliers,
clients, customers
22
Exercise
•  Question???
–  What challenges/issues do you think are
facing businesses today?
23
•  IRD
•  Competition
–  Similar products
–  Global market
•  Getting finance
•  Legislation
•  Economy
•  Interest rates
•  Staff
•  Market regulation
•  Pressure groups
•  Political party
•  Inflation
•  $
24
8
2/23/11
Challenges/Issues
•  Exporting/importing – also not so much NZ made
products being bought
•  Environmental impacts eg. Carbon credits
•  Social impacts
•  Health and safety
•  Resource management
•  Human resources
•  Council by-laws
•  ACC
•  Size of market
•  Location eg. Isolated
•  Government
•  Knowledge
25
Exercise
•  Research studies have attempted to

identify personal characteristics of a
successful small business operator.
•  Make a list of at least five characteristics

you believe are common to successful
business operators
26
Pros and cons of self-employment – Advantages
•  Be your own boss – be independent

–  BUT you may underestimate the
commitment required
•  A chance to make money
–  BUT the risk of loosing everything
•  Achieve feeling of personal worth,
accomplishment, recognition
27
9
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Advantages
•  Develop your own ideas, products,

services
•  Work/succeed at something you enjoy
–  BUT must appeal to a large enough market
•  Achieve economic security
28
Disadvantages
•  Hard work – up to 15 hours/day

•  Uncertain and fluctuating income
•  Unrelenting pressure to make decisions
•  Your ‘boss’ becomes your customer,
your suppliers, your banker,
•  You may come to hate the business
29
….summary
Pros
•  Own work hours
•  No boss
•  Treated better by customers
•  In charge of own income
•  Fire people
•  Lifestyle
•  Get known in industry
•  Vision – you know where the business is going
Cons
•  Unreliable income
•  Stress
•  Take your problems home
•  Long hours
•  Housekeeping/paperwork
•  Getting a mortgage
•  Hard jobs eg debt collection
•  Making sure there is enough income for employees
30
10
2/23/11
What is associated with successful small business

operators?
•  Independence
•  Strong sense of enterprise
•  Dislike of conformity and routine
–  Drive, energy, involvement; goal setting; risk

taking; use feedback; tolerate uncertainty;
innovative; recognise opportunities; competitive;
resourceful; task oriented; self confident;
persistent; deal with failure; manage time; take
initiative; use outside resources; assertive;
ambitious; optimistic
31
What is associated with successful small business

operators?
•  BUT
•  A tremendous diversity in the
characteristics and motives of people
who successfully own and operate
businesses
32
What skills and experience are required?
•  Well-rounded management skills

–  Marketing
•  Product lifecycle; market research; product positioning;
store layout; pricing; sales forecasting, personal selling,
advertising, ….
–  Financial
•  Profit planning, budgeting; book-keeping; payroll; using
an accountant, …
–  Operating
•  Purchasing; stock control; recruitment; quality control;
scheduling; computer systems; …
33
11
2/23/11
Do you have the skills?
•  Gain work experience using the skills

you need
•  Or in the business you intend to create
•  Attend training programmes
•  Employ people with complimentary skills
•  Engage outside consultants, advisors
34
*Start-up sequence
•  1. Examine your motivation for entering

business
–  Must be based on your objectives, your talents,
your personality
•  2. Choose a business that suits
–  Capitalise on your talents, interests, experience
•  3. Evaluate the feasibility of the chosen
business
–  Demand? Market research? How long can you
survive until breakthrough into profit?
–  Could you cope with the worst possible events?
35
*Start-up sequence
•  4. List all start-up requirements

–  Legal form; premises; permits; licences;
suppliers; records; compliance; risks and
insurance;
•  5. Develop a business plan
–  Your strategy for the development and
operation of the business: research,
thinking; vision for expected results.
36
12
2/23/11
Mistakes to avoid
•  Avoid thinking your accountant will do

your planning
•  Avoid informal, verbal partnerships
•  Avoid paying for licences, contracts until
financial planning is complete
•  Avoid discovering that everything takes
longer, costs more than you expected.
37
Reasons for abandoning a small business
•  Lack of hard-nosed business advice –

–  Drawing on advice from friends and family
•  Exhaustion:
–  Over 50% of small business owners work more
than 60 hours per week
•  Family – business pressure: time and money
•  Market place knowledge:
–  Overestimation of market size, underestimation of
competitors’ strength; underestimation of how to
target sales to the market
•  Timely and accurate financial information
38
The challenge of family businesses
•  25% of new (2 + person) small

businesses in NZ have one or more
‘family’ members owning and controlling
more than 50% of the business.
–  Compares with: Brazil: 14%, USA 26%;
Singapore 35%; Australia 23%. Average
24%
–  GEM 2002
39
13
2/23/11
Succession…
•  Only 20% of new business start-ups expect

other family members to be involved in the
business over the next 5 years.
•  The statistics of the ownership of family

businesses from generation to generation also
identifies threats.
•  According to Kets de Vries (1993), about 3 out

of 10 family businesses make it past the first
generation and only 1 in 10 make it through
the third generation.
40
Family conflicts
•  Business goals •  Family goals
–  Hire most competent –  Hire relatives in need
–  Allocate salaries –  Allocate salaries
according to according to needs
performance
–  Promote high –  Promote siblings
performers equally
–  Train to meet –  Train for individual
business needs development
41
Family objectives
•  Conservative financial practices

•  Comfortable, but not extravagant
lifestyle
•  Protect financial security of future
generations
•  Maintain family relationships, loyalty and
trust
42
14
2/23/11
Successful family businesses
•  Strong sense of belonging

•  Common purpose and commitment
•  Intimate understanding of:
–  the mechanics of the business operations
–  How decisions are made
–  How each individual contributes
–  The delicate balance between family and business
life
•  Loyalty, reliability and pride
43
Women in small business
•  1976: 6% of owner managers were

women (in NZ)
•  1996: 36% - a 6-fold increase
–  Source: Cameron & Massey (1999), Fig 1.2
44
Women may be more successful…
•  Keep debts and overheads low

•  Prepare more thoroughly before starting
•  More likely to seek professional
guidance
45
15
2/23/11
Women’s choice to enter SME

–  Resolve competing demands of work and family
–  Avoid career limitations of corporate sector
–  Needs careful establishment of priorities and time
management
–  Start before having children – or once they are not
so dependent
–  Some discrimination against women – but barriers
disappearing
–  Join women’s business help networks
http://www.womens-business.org.nz
46
Learning about small business
•  The volume of documented information

is doubling every 8 years
•  By 2010, the volume will be doubling
every 11 hours!
47
People who succeed in

business…
Don’t do so because of what they know…

But because of their insatiable need to know
more…
– Michael Gerber
16
2/23/11
The ability to learn faster and deeper…
•  … than your competitors may be the

only sustainable competitive advantage
–  De Geus, Royal Dutch Shell
49
Trial and error….
•  … is an expensive way of achieving a

business education.
–  Oliver and English
50
If you think EDUCATION is expensive…
•  You should try IGNORANCE!!!
51
17
2/23/11
Learn about…
•  Our products
•  Our customers
•  Our profession
•  About similar businesses
•  About business management
52
Learn from…
•  Books
•  Education and training courses
•  People
•  Groups, networks
•  Seminars
•  Suppliers
•  Information services
•  The internet
•  Consultants and advisors
53
Key references
•  Oliver & English, Chapter 1

•  Cameron & Massey, 1999, ch 1.
54
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2/23/11
Next Week
•  Finding an opportunity
•  Sources of business ideas
•  Reality Testing your Business Idea
•  Buying or Establishing a New Business
55
Homework for next week
•  Read Chapter 2 of Oliver & English

•  Do the “Self Employment Test”. End of
Ch 6 “Business Planning” in Oliver &
English. Complete and bring along next
week to discuss
56
19
2/23/11
Foundation Business
Planning and Strategy
Oliver & English, Business, Ch 6.
This Week
•  What is an investor looking for?
•  Foundation Business Planning and
Strategy
•  Oliver & English, Chapter 6
Assignment Questions
•  What is a Niche?
1
2/23/11
What is an Investor
looking for?
Dragons Den
Dragons Den
•  Discussion Questions
•  What were the strengths and flaws in the
presentation pitch?
•  What is main value for an investor in this
opportunity?
•  What were the main reasons that the Dragons
chose the investment proposal?
•  Do you agree with the decisions made by 'the
Dragons'. Why? Why not?
•  How would you have improved on the pitch
delivered?
2
2/23/11
What an investor is looking for…
• Determine the characteristics of

– The industry and
– This particular company.
•  What other publicly held similar companies are there?
•  Is there a larger company that is extremely successful?
•  Is the company in a 'glamour field'? (important to ensure a
good public offering)
–  Source:
http://www.1000ventures.com/venture_financing/bp_evaluationbyinvestors_byvpa.html
•  Determine the terms of the deal.

–  How much of the company is being sold for what price?
–  What is the form of debt or equity being requested?
–  How will the funds be used?
–  To retire old debt (bad idea)?
–  To undertake new activities that will, in turn, increase
profitability?
–  Source:
•  Review the bottom line with special emphasis on years

three through five.
–  Earnings or potential earnings are reviewed to determine
company's valuation.
–  Sensitivity analysis, or what if analysis to see how the
business model adjusts to changing prices, expenses and
competition.
–  Source:
3
2/23/11
• Determine the calibre of the people in the deal.

(The most important aspect of the business
plan!)
– What is the track record of the founders and
managers?
– How much balance and experience does the inner
management team possess?
– How long have the members worked together?
– Who are the banker and accountant, and what are
their credentials?
–  Source:
http://www.1000ventures.com/venture_financing/
bp_evaluationbyinvestors_byvpa.html
10
• The marketing plan is reviewed with careful

consideration to current and future threats.
– Is the product or service in demand now or will it be
in the near future?
– What is the Unique Selling Proposition for the
product?
– What other company or companies are already in
this space that could leap frog this business?
– Can the customer be easily identified and marketed
to successfully?
–  Source:
http://www.1000ventures.com/venture_financing/
bp_evaluationbyinvestors_byvpa.html
11
Different types of plans
•  Audience (for whom is the document

being prepared?)
•  Timeframe (how far in advance does the
plan cover?)
12
4
2/23/11
Types of plans
•  Marketing plans
–  Identifying and satisfying market segments
–  Creating strong competitive advantage
•  Operating plans
–  Production plans – derived from marketing plan
–  Operating processes, procedures, workflow and efficiency
•  Financial plans
–  Financial quantification of marketing and operating plans
–  Budgeting
–  Support applications for finance
13
Why planning is important
•  Helps you work smarter rather than harder

•  Keeps you future-oriented
•  Keeps you motivated to achieve results you
want
•  Helps you identify the commitments you need
to make
•  Increases chances of survival and prosperity
14
Planning focuses attention on
•  Realism – fact-based optimism

•  The need for outside advice
•  Recognising changes in customer
needs and markets
•  Balancing growth with capital availability
•  Results against goals and standards
•  Obtaining finance from financiers
15
5
2/23/11
Myths and realities
•  MYTH:
–  Planning is a guarantee of success
•  REALITY:
–  A plan is NECESSARY but NOT
SUFFICIENT for success
16
Myths and realities
•  MYTH:
–  Small businesses cannot afford the time
and expense of formal planning
•  REALITY:
–  A failure to plan is a plan for failure!
–  A significant proportion of small businesses
DO plan
17
Myths and realities
•  MYTH:
–  Small businesses can use the same
planning processes as larger businesses
•  REALITY:
–  Small businesses plan in a different way
18
6
2/23/11
Myths and realities
•  MYTH:
–  You can pay someone else to do your plan
•  REALITY:
–  Your plan is a reflection of YOUR vision and
aspirations.
–  No one else (such as your accountant) will have
the commitment YOU have to your business
19
Guidelines for small business planning
•  Use a planning period of 2 to 3 years

•  Write it down
•  Keep it simple and short (KISS!)
•  Integrate marketing and operational planning
•  Review and update your plan every quarter
•  A realistic plan may help you abandon a bad
idea while your mistakes are still on paper
20
The structure of a business plan
•  1. Introduction
•  2. Marketing plan
•  3. Operations plan
•  4. Financial plan
•  5. Conclusions
•  6. Supporting exhibits
21
7
2/23/11
The structure of a business plan
•  1. Introduction
–  An overview of the business and the people who run it
•  2. Marketing plan
–  Demonstrates that your business can achieve the sales indicated in
the financial forecast
•  3. Operations plan
–  Shows HOW you intend to get everything done
•  4. Financial plan
–  The most likley estimates of future financial performance
•  5. Conclusions
–  Summary of business’ strengths and how known weaknesses will
be managed
•  6. Supporting exhibits
–  Documentary evidence to substantiate your claims
22
1. Introduction
•  1.1 Objectives of the document

–  Operating guide?
–  Financing proposal?
•  Who wants the finance
•  How much money is required
•  How the money will benefit the business
•  1.2 The industry

–  Present status and prospects
–  New products, markets, customers
–  National, regional, economic trends
23
Introduction
•  1.3 The business

–  Business name
–  Legal organisation
•  Proprietorship, partnership, or company
–  Main activities
•  Retail, service, manufacturing, wholesale, or combination
–  Status of business
•  Start-up, expansion, purchase of exising operation
–  Location and facilities
24
8
2/23/11
Introduction
•  1.4 Management
–  Capacity of the management team and advisers
–  Personal histories of principals
–  Work experience relevant to the business
–  Duties, responsibilities, and salaries
•  1.5 The product or service

–  Description
–  Primary and important secondary uses
–  Unique and/or superior features
–  Opportunities for expansion of product line or related
products and services
–  Product design and development activities and costs
25
2. Marketing plan
•  2.1 Customer profile

–  Customer characteristics
–  Basic buying motives
•  2.2 Market size
–  Potential customers in the trading area
–  How much will they spend
–  Expansion possibilities? (Why?)
•  2.3 Competition
–  Who are the nearest competitors
–  Their operations and market share
–  Why you will capture their market
–  How you will defend your market share
•  2.4 Sales estimates
26
2. Marketing plan
•  2.5 Product or service

–  Specific characteristics and unique features
–  Backup services and guarantees to be offered
•  2.6 Price
–  Price, compared with market prices
–  Discounts to retailers or agents
–  Discounts for fast payment or bulk purchase
•  2.7 Place
–  Characteristics of the place of business
–  Location, size, image, style, parking, visibility,
–  Proximity to main roads and main markets
27
9
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2. Marketing plan
•  2.8 Positioning
–  Ideal market position
–  How customers’ perceptions will be influenced
•  2.9 Promotion strategy

–  Advertising media
–  Calendar of promotional events
28
3. Operations Plan
•  3.1 Competitive priorities

–  Cost, quality, flexibility, and/or delivery
–  How excellence will be achieved
•  3.2 Plant and machinery
–  Types of machinery and capacities needed
–  Functions required to be provided by the premises
•  Space, facilities, other features
•  3.3 Staff
–  Current and future staffing needs
–  Skills required
–  Availability of skilled staff
–  Permanent ore casual, full time or part time
•  3.4 Processes and procedures
–  Special technologies and proprietary systems
–  Routines and cycles for production and/or service delivery
29
4. Financial plan
•  4.1 Current financial position

–  (If an existing business)
•  4.2 Statement of how funds will be used

–  (If a funding proposal)
•  4.3 Set-up or new development costs
•  4.4 Funding required

–  Amount and source of funds
30
10
2/23/11
4. Financial plan
•  4.5 Product costing, pricing and breakeven

–  How product costs have been calculated
–  Breakeven analysis in relation to seling prices or chargeout rates
•  4.6 Forecast cash flow
–  Monthly forecasts of cash flow, over 12 months
–  Quarterly forecasts of cashflow for 2 years
•  4.7 Forecast profit and loss
–  Monthly forecasts of profit or loss, over 12 months
–  Quarterly forecasts of profit or loss for 2 years
•  4.8 Forecast balance sheet
–  Opening and forecast closong balance sheets for three years.
31
5. Conclusion
•  5.1 Summary of business’ strengths
•  5.2 Acknowledgement of business’ weaknesses, and

how they will be managed
•  5.3 Brief view of the longer term
•  5.4 Contingency plan for withdrawal

–  (If a high risk venture)
32
6. Supporting exhibits
•  6.1 Detailed resumes of the principals

•  6.2 Credit information
•  6.3 Quotations or estimates
•  6.4 Leases or buy/sell agreements
•  6.5 Legal documents
•  6.6 Census or demographic data
33
11
2/23/11
The Business Planning Process

(Schaper & Volery 2004)
1.  Set preliminary goals

2.  Conduct initial secondary research
3.  Confirm goals
4.  Conduct subsequent detailed research
5.  Develop draft business plan
6.  Critically assess the proposed plan
7.  Implement it
8.  Evaluate the plan
34
SWOT Analysis
•  Strengths
•  Weaknesses
•  Opportunities
•  Threats
35
SWOT Analysis
•  Usually included in the Marketing section of business

plan
•  Helps assess the competitive position of a business
•  Should demonstrate the unique characteristics of the
business
•  Aims are to help evaluate strategies that build
matching the business’ strengths to opportunities in
the marketplace, and ….
•  … to isolate or minimise weaknesses and threats
36
12
2/23/11
Small business life cycle
Phase Startup Take-off Harvest Renewal
Goal Survival Sales Profits Revival
Role Initiator Developer Administrator Successor

Innovator Implementer Manager Reorganiser
Organiser Delegator Leader Revitaliser
Typical Confidence Cash flow Leadership Inertia

crises Cash flow Delegation Complacency Succession
37
Next Week
•  Assignment hand-in
•  Financial planning for a start-up
38
Homework for next week
•  Assignments!
39
13
Finding an Opportunity
Oliver & English Ch. 2
This Week
•  Self Employment test

•  Finding an Opportunity
•  Sources of business ideas
•  Reality Testing your Business Idea
•  Assignment 1
A business opportunity
•  Is MORE than a good idea

•  Is it COMPATIBLE with YOUR personal
characteristics, skills experience?
•  Does it instil CONFIDENCE and
ENTHUSIASM in you?
•  Is there concrete EVIDENCE of a viable target
MARKET?
•  Can it be done with the FINANCIAL
RESOURCES you can acquire?
•  Can it generate the INCOME you need?
1
Types of business
•  Services
•  Retailing
•  Manufacturing
•  Wholesaling
•  Examples of each???
Services
•  Performs a task for a customer

•  Often requires specialised training,
experience or equipment
•  Examples
–  Hotels, Accountants, Appliance repairers, House
painters, Translation services, Childcare centres
•  Often only needs a modest investment eg
Speeches.com
•  Service delivery depends largely on skills of
the owner
•  2/3 of small business sector
•  Greatest rate of growth
5
Retailing
•  Buys goods from manufacturer or

wholesaler, and resells them to
consumers
•  Examples
–  Groceries stores, Car dealers, Sport shops,
Butchers, Chemists, Clothing stores
•  1/5 of small business sector
2
Manufacturing
•  Makes a consumer product that is sold to the

public, OR
•  Makes an industrial product that is sold to
other businesses
•  Examples
–  Boat builders, Furniture makers, Wineries, Cheese
makers, Wholesale nurseries
•  Dominated by larger firms
•  Less than 1/10 of the small business sector
Manufacturing
•  Special issues
–  Supply of raw materials
–  Location of plant with respect to raw
materials, labour, transport, customers
–  Product quality control
–  Changes in consumer tastes
–  Competition from foreign manufacturers
–  Cost and productivity of labour
Wholesaling
•  Buys goods from MANUFACTURERS and

sells them to RETAILERS
•  Also called: distributors, manufacturers’
agents
•  Do not normally sell direct to public
•  Examples
–  Building products; Beer, wine and spirits; Plumbing
supplies; Hardware; Petroleum products
•  Smallest segment of small business sector
3
Wholesaling
•  Provide retailers with

–  Warehousing capacity close by
–  Credit – so retailers can carry wider range
of products
–  Joint sales promotions
–  Advice on market research, merchandising,
new product lines
10
Dragons Den
•  The product has to be doing something unique. If
you're opening a sandwich shop, remember there are
a thousand other sandwich shops. What makes you
different? If you can't say, in one single sentence,
what makes you different, then you don't have a
difference. If it's too complex to explain then it's
probably too complex to understand. Know what
makes you different. The Impact you have to have a
nose for an opportunity. What's an opportunity?
When you can sell to someone else and make a
profit. So know the price of your product. Know the
market that you're planning to sell it to. Have a way to
prove all of this to the investor that you're pitching to.
In doing this, you aim to show them that there is an
opportunity and that you know the size of it. The size
of the opportunity will translate directly, to that
investor, the value of your company.
11
Dragons Den
Discussion Questions
•  What were the strengths and flaws in James
Brown's presentation pitch? E.g. His passion.
His detailed knowledge of all aspects of his
project. His composure (he did not 'loose his
cool')
•  What is main value for an investor in this
opportunity?
•  What were the main reasons that the Dragons
rejected James Brown's investment proposal?
•  Do you agree with the decisions made by 'the
Dragons'. Why? Why not?
•  How would you have improved on the pitch
delivered by James Brown?
12
4
Dragons Den
Discussion Questions
•  Examine the website for James Brown's
Baltersan Castle. What are the strengths
and weaknesses of the site from the
point of view of (a) a potential investor
(b) a purchaser of a timeshare 'lot'?
•  How would you have spent James
Brown's UKP 125,000 to get this
opportunity 'investment ready'?
13
Sources of business ideas
Myths… It is NOT TRUE that
•  There is a procedure you can use to

search out all good business ideas
•  No – but you must understand

consumer needs
15
5
•  You must discover a unique idea or new

invention
•  No - Vast majority of small business

ideas are excellent copies
16
•  A good idea will ensure success
•  No - Thousands of good ideas have

gone bankrupt
•  Needs time, effort and good strategy to
succeed
17
•  Any competent manager can manage

any small business
•  No - Needs to be something you enjoy

•  Enjoyment gives you energy and
enthusiasm for the tasks
18
6
Product/service and market ideas
Existing New markets

markets
Existing Market Market
products or penetration diversification
services ideas ideas
New products Product or Innovation
or services service ideas
diversification
ideas
19
Market penetration ideas
• Sell more of an EXISTING product

(or service) to an EXISTING
market
• How can we increase
consumption by our current
customers?
• How can we attract customers
away from competitors?
• LOWEST RISK – greatest number Existing

markets
Market Market
of known factors products

or
penetration
ideas
diversification
ideas
services
New Product or Innovation
products service ideas
or diversification
services ideas
20
Market diversification ideas
• Existing product to new market

• Example
– Exporting,
– Internet sales
– New class of customer
• MEDIUM RISK – experience with
existing product

markets
products penetration diversification
or ideas ideas
services

or diversification
services ideas
21
7
Product and service diversification ideas
• Develop (or import) new

product for existing market
• HIGHER RISK – little

experience with the
product
Existing markets New markets

products or penetration ideas diversification
services ideas

products or service ideas
services diversification
ideas
22
Innovative ideas
• New product or service for yet-to-be-
created market
• RISKS EXTREMELY HIGH
• Sources of ideas
– Patents Office
– Trade associations
– Trade shows
– Export departments of foreign embassies
– Trade journals
– Overseas visits
– Research laboratories
markets
products penetration diversification
or ideas ideas
services
or diversification
services ideas
23
Spotting market trends
•  Identify IMPACT of trends on consumer spending

•  Examples
24
8
Spotting market trends
•  Identify IMPACT of trends on consumer spending

•  Examples
–  People aged over 65 increasing rapidly
–  Number of one-parent families rising
–  People with formal educational qualifications is rising
–  Proportion of women in the workforce is rising
–  Consumer interest in environmentally-friendly products is
growing
–  Increasing demand for convenience and time-saving
–  Streamlining of company operations
25
Reality Testing your Business

Idea
Oliver & English, Ch. 2
42 Below
27
9
Reality testing check list
•  Sector characteristics
•  Personal fit
•  Essential strategic factors
•  Financial feasibility
28
Sector characteristics
•  Understand the business:-

•  What sector?
•  Nature of the product and/or service?
•  What customer need does it fulfil?
•  What skills are needed to offer the product or
service?
•  How easy to enter the kind of business?
•  What level of investment is required?
•  How long until you can expect to make a
profit?
29
Personal fit
•  The fit between YOU and THE IDEA:-

•  What personal characteristics, skills,
experience can you bring to the
business?
•  Does OPERATING the business
represent an extension of your own
goals, values and capabilities?
30
10
Essential strategic factors
•  The elements that are ABSOLUTELY

NECESSARY for the business to
succeed
•  Vary ENORMOUSLY from business to
business
•  Some are SFs are beyond your control
–  Usually external to our business
•  Others are under your control
–  Usually internal to the business
31
•  Factors beyond our control…

–  Extent of competition
–  State of the economy
–  Social and cultural trends
–  Developments in technology
–  Legal restrictions
–  Government regulations
–  Taxation
–  Industrial relations
32
•  Factors under our control:

–  Purchasing
–  Production
–  Staffing
–  Marketing
–  Finance
–  Products/services
33
11
Financial feasibility
•  Can the business produce the level of income

we require?
•  Based on:
–  Your living expenses
–  Tax rate
–  Your financial investment in the business
•  … and the rate of return you should expect
–  Typical net profit per sales
–  Sales potential
•  See Oliver & English, Chapter 2
34
Other topics
•  Buying or Establishing a New Business

•  Attitudes, Values, Ethics, and Culture:
The Manager as a Person
35
12
2/23/11
Unit 2.4: Financial Planning for

Start-up
Oliver & English, Ch 7-10

Financial Management
Reasons for discontinuance of

business
!  … in shopping malls
!  36% failed to realise a profit
!  16% to prevent further losses
!  7% bankruptcy
Watson & Everett (1992)

in Cameron & Massey, 1999, p. 72
Failure rates in small business

!  … are high in the first three years, then
lessen considerably
!  The four main reasons for failure are:

!  No support structures for advice and finance
!  New owner-managers can’t learn quickly enough the
functional business skills – marketing, finance, operations,
&c
!  Sales margins are not high enough to cover expenses
!  Profitable, BUT - insufficient capital to cope with set-up
costs, and working capital
Cameron & Massey, 1999, p. 74
1
2/23/11
Financial information
!  A bad situation can be made WORSE if
there is inadequate financial
information, especially lack of attention
to … cash flow forecasts.
!  Cameron & Massey, 1999, p. 74
Why planning is important

!  Helps you work smarter rather than harder
!  Keeps you future-oriented
!  Keeps you motivated to achieve results you
want
!  Helps you identify the commitments you need
to make
!  Increases chances of survival and prosperity
Types of plans
!  Marketing plans
!  Identifying and satsifying market segments
!  Creating strong competitive advantage
!  Operating plans
!  Production plans
!  Operating processes, procedures, workflow and efficiency
!  Financial plans
!  Financial quantification of marketing and operating plans
!  Budgeting
!  Support applications for finance
2
2/23/11
The structure of a business plan/1

!  1. Introduction
!  2. Marketing plan
!  3. Operations plan
!  4. Financial plan
!  The most likely estimates of future
financial performance
!  5. Conclusions
!  6. Supporting exhibits
4. Financial plan
!  4.5 Product costing, pricing and breakeven
!  How product costs have been calculated
!  Breakeven analysis in relation to selling prices or chargeout rates
!  4.6 Forecast cash flow
!  Monthly forecasts of cash flow, over 12 months
!  Quarterly forecasts of cashflow for 2 years
!  4.7 Forecast profit and loss
!  Monthly forecasts of profit or loss, over 12 months
!  Quarterly forecasts of profit or loss for 2 years
!  4.8 Forecast balance sheet
!  Opening and forecast closing balance sheets for three years.
Topics to come…
!  Goods and Services Tax – GST
!  Tutorial Exercise: Trans-Crash Transport Company
(See Oliver & English, pp 184-185)
!  TCTC: The ‘pot of gold’ or ‘back of the envelope’
calculations
!  Introduction to spreadsheet analysis
!  TCTC: Detailed profit and breakeven analysis
!  Reading financial reports
!  TCTC: Cash-flow forecasting
!  Recovering or avoiding cash flow crises
3
2/23/11
Trans-Crash Transport Company – Part I

!  Part I: The ‘pot of gold’ or ‘back of the envelope’ calculations
(See Oliver & English, pp 184-185)
!  Calculate the following data for a 12-month period: (IGNORE

the ‘additional information’.)
!  Total Annual Distance travelled by each of the 2 trucks
!  Total Annual Revenue earned by each truck
!  Total Annual Variable Costs paid to run each truck
!  Total Annual Fixed Costs to operate the business
!  Gross Profit = Add up the Annual Revenues, subtract the Annual
Variable Costs, subtract the Annual Fixed Costs
!  Do you think TCTC is worth buying?
Once you have attempted this exercise, examine the sample Test in the Course Handbook that
presents the use of a spreadsheet for investigating this problem.
4
Buying or Establishing a New
Business
Chapter 2
Establishing a New Business
Of an EXISTING type:
YES, only if
EITHER :
Market has expanded
AND
Market not adequately served
OR
Existing suppliers not meeting needs of customers
Establishing a New Business
•  A NEW type of business

–  YES, if you have a product or service that
customers WILL buy.
•  High risk option

•  Ensure that there are IDENTIFIABLE HIGH
GAINS if you are successful – but not
guaranteed!
•  How easy is it for a competitor to COPY you?
1
Advantages and disadvantages
ADVANTAGES DISADVANTAGES
Advantages and disadvantages

• Match business to YOUR • Less certainty about
goals market demand
• Easier to innovate • Takes time to create
image, build patronage,
• Design the business eliminate system ‘bugs’,
YOUR way reach break-even
• Avoids paying for • Find new staff, suppliers
‘goodwill’ • Access to finance
• Avoids unknown liabilities • Response of competitors
and ill-will of customers,
suppliers, employees
Buying an existing business
•  You are buying someone else’s:

•  Location
•  Premises
•  Equipment
•  Stock
•  Customers
•  Staff
•  Goodwill
2
Advantages and Disadvantages
• Immediate income from • Stuck with previous
sales owner’s bad decisions
• Saves time equipping and • Unwanted stock?
stocking • Outmoded equipment?
• Proven location • Unsuitable staff?
• Established relationships • Poor location?
• Easier to finance • Reputation?
• Morale of employees?
Advantages and Disadvantages

Valuation of business to buy
•  Price you offer depends on ability to earn a

profit… And the risk associated with the
business
•  Assess financial statements
•  Income tax and GST records
•  Sales and profit increases?
•  Rate of return on owner’s investment
•  Compare with industry profile
•  Identify operating problems
3
Capitalised value = EBIT/R
•  R = Capitalisation Rate
•  EBIT = Net earnings after expenses, before
interest and tax
Example:
•  $25,000 / 5% = $500,000
•  $25,000 / 20% = $125,000
10
Appraised value (of Tangible Assets):

•  Net value of assets to be transferred
•  Using current market value of assets
•  Stock – Ensure saleable!
•  Sales and office supplies
•  Fixtures and equipment
•  Debtors – those who owe the business money
– collectible?
11
Goodwill
12
4
Goodwill
Goodwill = an intangible asset

•  Represents the ability of the business to earn
greater profits (now) than if you start the
business from scratch
G = Sellers Asking Price – Appraised value of

Tangible Assets
Should be G <=
Capitalised Value – Appraised Value
13
Attitudes, Values, Ethics, and

Culture:
The Manager as a Person
PowerPoint Presentation by Charlie Cook

© Copyright The McGraw-Hill Companies, Inc., 2003. All rights reserved.
Ethics
• Exercise
– Virtue
– Values
– Morals
– Legal
15
5
Ethics
•  Organizational Stakeholders
– Shareholders, employees, customers, suppliers,
and others who have an interest, claim, or stake in
an organization and in what it does
•  Each group of stakeholders wants a different outcome and
managers must work to satisfy as many as possible.
•  Managers have the responsibility to decide which goals an
organization should pursue to most benefit stakeholders—
decisions that benefit some stakeholder groups at the
expense of others.
16
Ethics
•  Clarifying Business Ethics
–  Legality
–  Social Responsibility
–  Morality
17
Ethics
•  Ethics
– Moral principles or beliefs about what is right or
wrong
– Ethics guide managers in their dealings with
stakeholders and others when the best course of
action is unclear.
– Managers often experience an ethical dilemma in
choosing between the conflicting interests of
stakeholders.
18
6
Ethics
“The law often allows what honor forbids”

Bernard Joseph Saurin (French dramatist)
“The most important human endeavour is the

striving for morality in our actions”
Albert Einstein
19
Legality vs Ethics
•  Just because something is legal, does

not necessarily make it ethical
•  Examples?
20
An example from history…
On December 3rd 1984 accidental leakage of

methal isocyanate gas in the Indian City of
Bhopal killed some 2,400 Indians and injured a
further 200,000, yet no laws of the State of
Pradesh were violated
21
7
Morality
•  In his book, “Death in the

Afternoon”, Ernest Hemingway
wrote, “What is moral is what
you feel good after, and what
is immoral is what you feel bad
after”
22
Morality
•  Morality relates to principles of right and

wrong behaviour
•  Moral standards have a number of
different sources - family, society,
church, one’s organisation
•  Ethics is the study of morality, the
discipline of dealing with what is ‘good
and bad’
23
Morality
Essentially, morality has to do primarily with
what is right and wrong, while ethics examines
whether something is good or bad. It reflects
on the moral standards of society.
Ethics could, therefore, be described

as the practice of morality…
Business ethics is the study of morality as it

applies to business behaviour
24
8
Ethical Decision Models
•  Utilitarian Model
– An ethical decision is one that produces the greatest
good for the greatest number of people.
•  Moral Rights Model
– An ethical decision is one that best maintains and
protects the fundamental rights and privileges of the
people affected by it.
•  Justice Model
– An ethical decision is one that distributes benefits
and harms among stakeholders in a fair, equitable,
or impartial way.
25
Practical Guide to Ethical Decisions
•  Does the manager’s decision fall within usual

and accepted standards?
•  Is the manager willing to personally and openly
communicate the decision to all affected
stakeholders?
•  Does the manager believe that his friends
would approve?
•  If the answer is “Yes” to all of the above, the
decision is probably an ethical decision.
26
Ethical versus Unethical Decisions
•  Ethical Decision
– A decision that is reasonable or typical and that
stakeholders would find acceptable because it aids
stakeholders, the organization, or society.
•  Unethical Decision
– A decision that a manager would prefer to disguise
or hide from other people because it enables the
company or a particular individual to gain at the
expense of society or other stakeholders.
27
9
Sources of An Organization’s Code of Ethics
Figure 3.7
28
Ethical Decisions and Dilemmas
•  A key ethical issue is how to disperse harm

and benefits among stakeholders.
– If a firm has been very profitable for two years, who
should receive the profits? Employees, managers
and stockholders all will want a share.
– Should the firm keep the cash for future slowdowns?
What is the ethical decision?
– What about the reverse, when firms must layoff
workers?
– If stockholders are the legal owners of the firm,
shouldn’t they alone decide these questions?
29
Ethical Decisions and Dilemmas (cont’d)
•  Some other issues managers must consider.

– Should a firm withhold payment to suppliers as long
as possible to benefit the firm?
•  This will harm its supplier who is a stakeholder.
– Should a firm provide severance pay to its laid off
workers?
•  This will decrease the owners’ (the stockholders return).
– Should goods be bought from overseas firms that
employ children?
•  If they aren’t bought, the children might not earn enough
money to eat.
30
10
Why Behave Ethically?
31
Why Behave Ethically?
•  Managers should behave ethically to avoid

harming others.
– Managers are responsible for protecting and
nurturing resources of the firm
•  Unethical managers run the risk for loss of

reputation.
– This is a valuable asset to any manager; reputation
is critical to long term management success.
32
Social Responsibility
•  Social Responsibility
–  A manager’s duty or
obligation make decisions
that promote the welfare
and well-being of
stakeholders and society
as a whole.
33
11
NZ Examples of Social Responsibility?
•  Warehouse – Tindall Foundation

•  Hubbard’s
•  Westpac Rescue Helicopter
•  America’s Cup ‘Family’
•  Variety Club
•  Carter Holt Harvey ‘Zero Tolerance’ for
accidents at work
34
Approaches to Social Responsibility
Source: Figure 3.8

35
Approaches to Social Responsibility (cont’d)
•  Obstructionist response
– Managers choose not to be socially responsible.
– They behave illegally and unethically; hiding and
covering up problems.
36
12
•  Defensive response
– Managers stay within the law but make no attempt
to exercise additional social responsibility.
– Managers place shareholder interests above those
of all other stakeholders.
– Managers argue that society should pass laws and
create rules if change is needed.
37
•  Accommodative response
– Managers acknowledge the need to support social
responsibility and try to balance the interests of
different stakeholders against one another.
•  Proactive response
– Managers actively embrace the need to behave in
socially responsible ways and go out of their way to
learn about needs of different stakeholders.
– They are willing to utilize organizational resources
for both stockholders and stakeholders.
38
Johnson &
Johnson
Credo
Source: Johnson & Johnson Annual Report. Figure 3.9

39
13
Ethical Issues in Business
•  Inaccurate record keeping •  Unsafe working conditions
•  Exploitation of employees •  Inaccurate external reporting
•  Misrepresentation •  Nepotism
•  Deceptive pricing •  Sexual harassment
•  Quality violations •  Inappropriate market research
•  Lying to customers •  Exhibiting prejudice
•  Pollution & environmental violation •  Betraying confidences
•  Bribery and corruption •  Reneging on one’s duty
•  Deceptive gaining of competitive •  Not adhering to technical standards
information •  Non disclosure of conflict of interest
•  Insider trading •  Double billing
•  Falsifying reports •  Taking personal advantage
•  Unethical sales practices •  Exercising self-interest
•  Violation of privacy •  Inequitable treatment of employees
•  Theft •  Deceptive labelling/advertising
•  Inappropriate gift giving •  Competitor collusion
•  Endangering consumer welfare •  Abuse of power
•  Exhibiting favouritism •  Not adhering to safety
•  Collusion •  Endangering consumer welfare
•  Violating personal privacy
40
TOP 10 Ethical Problems

•  Sexual harassment
•  Lying on reports/falsifying records
•  Conflicts of interest
•  Stealing/theft
•  Lying to supervisors
•  Discrimination
•  Abusing drugs/alcohol
•  Improper accounting practices
•  Violating environmental laws/regulations
•  Gifts/entertainment in violation of policy
(American Management Association International July/August 1998)
41
Selected Ethical Issues
1.  Loss of objectivity

2.  Constraining whistle blowers
3.  Bribery
4.  Environmental challenges
5.  Cyber ethics
6.  Price fixing
7.  Fraud
42
14
Top Ten Factors that trigger workers to act unethically
•  Balancing work and family

•  Poor internal communication
•  Poor leadership
•  Work hours; work load
•  Lack of management support
•  Need to meet sales budget or profit goals
•  Little or no recognition of achievements
•  Company politics
•  Personal financial worries
•  Insufficient resources
43
Person most likely to consult when confronted with an ethical

dilemma?
In New Zealand:
1. Spouse
2. Boss
3. Colleague
4. Friend
In Hong Kong:
1. Boss
2. Friend
3. Spouse
4. Legal Adviser
44
Factors which dissuade managers from unethical conduct
In New Zealand
1. Effect on personal business reputation
2. Contradicts personal values
3. Family disappointment
In Hong Kong
1. Effect on personal business reputation
2. Fear of punishment
3. Organisation consequences
4. Family disappointment
45
15
2/23/11
THE LEGAL ENVIRONMENT
PG 41, CHPT 4
OLIVER & ENGLISH
LEGAL FORMS OF
ORGANISATIONS
SOLE TRADER - simple; easy to set up;
least expensive
Ease of information Unlimited personal liability

Low start up costs Narrow management base
More freedom from regulation Lack of continuity
Owner is in direct control Difficult in raising capital
All profits go to the owner
Maximum privacy
Easy to change legal structure
LEGAL FORMS OF
ORGANISATIONS
PARTNERSHIP
•  involves two or more people
•  The Partnership Act defines the relationship

•  Partnership is a private agreement between the parties
•  Legally partnership is not a separate entity
- is simply two or more individuals
•  equal rights and equal liabilities
1
2/23/11
LEGAL FORMS OF
ORGANISATIONS
PARTNERSHIP
ADVANTAGES
DISADVANTAGES
Ease of information
Unlimited personal liability
Low start up costs
Divided authority
More sources of capital Lack of continuity
Broader Management base Potential for friction between partners
Privacy of affairs Limitations on size

Less flexibility in transferring
Limited outside regulation
ownership interest
Easy to change legal structure
LEGAL FORMS OF
ORGANISATIONS
LIMITED LIABILITY COMPANY
ADVANTAGES
•  Risk is limited to amount of capital shareholders hold in the company
•  Management is centralised in Board of Directors , permitting selection

of manager
•  Enterprise has a continual existence
•  Interest shares can be bought and sold allowing owner to withdraw

without jeopardising continuity of business
•  Capital to be attracted in larger amounts than if a sole trader or

partnership
LEGAL FORMS OF
ORGANISATIONS
LIMITED LIABILITY COMPANY
DISADVANTAGES
•  More regulation by Governments and Courts
•  More expensive to organise and maintain
•  Management maybe restricted by constitution
•  Statutory reporting requirements – more bookkeeping
•  Less privacy overall
•  Directors duties – heavy responsibility
2
2/23/11
LEGAL FORMS OF ORGANISATIONS

TRUSTS
•  Not a legal entity
•  Trustees to administer trust – have wide discretionary powers
Flexibility Costly to set up

Continuity can be preserved More complicated to administer
Limited Liability possible Limited to the life of the Trust Deed
Minimises taxation Trustee subject to Trustee Act
More privacy than a company Powers restricted to Trust Deed
REGISTERING A BUSINESS
NAME
•  Name should be distinctive (and
protected)
•  If not a registered company then no
legal ownership of the name
•  If registered similar names could be
challenged
•  Can look up names online –
Companies Office
•  Could register name by trademark
ESTABLISHING A SHOP OR
FACTORY
•  Should be registered – central

and local Government
compliance / requirements.
•  Need to be aware of planning
and zoning.
3
2/23/11
LICENCES AND PERMITS
Certain Types of
businesses require
permits and licenses
to operate
INSURANCE
Provides financial
protection against
losses – fire, theft,
burglary, on the job
accidents, public
liability
INSURANCE
ACC – payable both as
an employer and
employee
Public Liability – harming
customers & Members of the public
due to unsafe practices (OSH) (not
having PL Ins can be seen as
negligible).
Fire & Property – damage to real

property; i.e. buildings,
equipment; furniture; fittings
and goods, etc.
Business Continuation – Loss of profits;

Partnership; key person
4
2/23/11
TAXATION
INLAND REVENUE DEPARTMENT
“Ignorance is no defense”
Need an IRD number – individual and company
Register for GST (Goods & Services Tax) – turnover > $40,000
Keep records – at least 7 years
Produce annual accounts and file annual returns – be aware of

Dates or face penalties!! PAY ON TIME
PAYE / PROVISIONAL GST FBT
EMPLOYMENT LEGISLATION
Employment Relations
Act 2000
Offers of employment – Human Rights Act 1993
Misleading or deceptive advertising of employment

– Fair Trading Act 1986
Individual or collective agreements
Minimum Wage - Equal Pay - Wage and Time Records
LEAVE – parental; holiday; sick and bereavement; special;
THE FAIR TRADING ACT 1986

Prohibits ACT is administered by
•  Deceptive and Commerce Commission
Misleading conduct
•  False representation
•  Unfair trade
practices
Enforcement of act is by way of criminal and civil penalties
5
2/23/11
THE CONSUMER GUARANTEES

ACT 1993
Establishes standards
for sale of goods and
services
Goods must be of acceptable quality and
fit for purpose of which
They were designed
Goods must match samples and

demonstrations
THE CONSUMER GUARANTEES

ACT 1993
Services – four generic guarantees
•  Performed with
reasonable care and skill
•  Fit the purpose and
achieve expected results
•  Completed in a
reasonable time where
the time is not settled
•  Reasonably priced where
the price is not settled
6
2/23/11
Unit 3: Launching an
Entrepreneurial Business
Oliver & English, Ch 5:Franchising
Launching an entrepreneurial business
!  3.0 Taking on a franchise

!  3.1 Launching the business operation
!  3.2 Intellectual property management
!  3.3 Ethics, social responsibility and
business culture
!  3.4 Financial management at the launch
stage
Alternative launch approaches

!  Creating a new business
!  Doug and Mike Tamaki - Tamaki Tours
!  David Slack - Speeches.com
!  Toe-dipping
!  Lesley Immink and 3 others - NZET
!  Buying a business ‘off the peg’
!  John Hughes - Manawatu Knitting Mills
!  Taking on a franchise
!  Chris Tollemache - Arano
!  Creating a franchise
!  Peter Leitch - The Mad Butcher
1
2/23/11
Taking on a franchise
!  What is a franchisE
!  Advantages of being a franchisEE
!  Disadvantages of being a franchisEE
!  Becoming a franchisOR
!  Evaluating a franchisE system
!  Evaluating a franchisE agreement
!  Oliver & English, ch. 5
Definitions
!  A franchisOR creates a business format which
s/he makes available to the franchisEE(s) for
various fees and charges
!  FranchisOR
!  FranchisEE-1 FranchisEE-2 … FranchisEE-n
Company unit –1…. Company Unit-n
!  Example
!  Macdonalds (Fast food), Mitre-10 (Hardware)
Franchising
!  A franchise is a pre-packaged business
that you (the franchisEE) can operate in
accordance with an agreement with a
franchisOR
!  A continuing relationship between a parent
company (the franchisor) and an individual
operator (the franchisee) in which the
franchisor’s knowledge, market position, and
operating techniques are made available to
the franchisee.
2
2/23/11
The appeal of franchising
If you can’t find a business idea yourself

If you consider the risks of setting up or
running an independent business are
too great
You can draw on the expertise of a
franchising organisation to help you
Franchising in NZ
!  Over 200 franchisors
!  More than 45,000 people working in
franchised businesses
!  4,900 franchised business units
!  Huge range of business sectors
!  Acomodation Retail books
!  Building products
!  Financial servies
Types of franchise
!  Product and trade name
!  FranchisEE licensed to sell products manufactured by the
franchisOR
!  In some case, franchisEE may also be licensed to
manufacture
!  Business format
!  FranchisOR provides product, service, trademark, entire
business formnat:
!  Marketing plan and support
!  Operating methods and manuals
!  Training and quality control
!  Backup services
!  MAY include distinctive shop front or building design
3
2/23/11
Franchise performance
!  Strongest growth in ‘business format’ type
!  75% are ‘kiwi-grown’
!  30% are involved in exporting the system to
other countries
!  Survival rate over first 5 years: 75-80%
across all industries
!  Average return: 30 – 35%
!  Finance relatively easy to obtain
!  (O & E, p. 62)
Advantages of being a franchisee

!  Reduced risk of failure
!  Overcoming limited experience
!  Proven market position
!  Access to training and assistance
!  Buying power – bulk purchasing
!  Location and layout
!  Financial assistance
Disadvantages of being a franchisee

!  Franchisor failure
!  Franchisee failures
!  Loss of independence
!  Contractual disadvantages
!  Competitive restrictions
!  Increased cost
4
2/23/11
Becoming a franchisOR/1
!  Run a pilot system
!  Develop the system into a saleable
condition
!  Market the system
!  Advantages
!  Rapid expansion
!  Low capital risk
!  Highly motivated owner/managers
!  Group marketing and purchasing power
!  Disadvantages
!  Profit distribution
!  Loss of control
!  Disruptive franchisEEs
5
2/23/11
Typical fee structure

!  Premium – franchise entry fee
!  Reputation, accrued goodwill, initial services –
training, operations manual, site selection, shop
design, fit-out, opening
!  Royalties
!  Percentage of sales turnover – 3 to 10%
!  Advertising levy
!  Percentage of sales turnover
!  Other fees
!  Initial equipment, goods and services, site leasing
!  Transfer and renewal fees
Evaluating a franchise system/1

!  Franchise Association of New Zealand
!  FANZ Code of Practice
!  Disclosure document – makes the franchise
system ‘transparent’ for the buyer
!  Disclosure document IS NOT the franchise
agreement
!  You and your solicitor need to read and
understand everything in the disclosre document
and the franchise agreement before you sign

!  FANZ Disclosure Document
!  Franchsor’s name and office
!  Resume of business experience
!  Viability stament – balance sheet
!  Debts, bankrupticies, insolvencies
!  Main features
!  Components – fees, stock, fittings
!  Financial requirements of the franchisee
!  Existing franchises and company outlets
!  Termination of franchise agreements
!  Current unresolved litigation
!  Projections of business performance
!  History of trading in the territory
!  Directors’ Certificate of Solvency
6
2/23/11

!  Your own investigation
!  The franchise organisation
!  Exisiting franchisees
!  FANZ
!  Retail traders’ associations
!  Franchise New Zealand magazine
!  Newspaers, magazines
!  Franchise departments of banks
!  Specialist franchise consulting firms
!  NZ Securities Commission
!  Companies Office
!  Chambers of Commerce
!  Consumers’ Institute

!  Your own investigation
!  Product or service
!  What exactly are the products or services
!  Who are the customers that buy
!  Are the products reputable?
!  Talk to knowledgeable people!

!  The distribution system
!  Exlusive or non-exlusive
!  Advertising and promotional
!  Material available
!  Packaged programmes
!  Opening Public relations campaign
7
2/23/11

!  Most franchisors are honest and reputable. BUT…
!  Warning signs!
!  Job vacancies turn out to be franchise offers
!  Offers to sell manufacturing equipment with guaranteed buyers for
product
!  Deferred advertising programmes
!  Vague system operation details
!  No interest in YOUR business experience
!  Claims that the scheme is approved by a public agency
!  Rights to recruit sub-distributors, rather than rights to sell products
!  Post office box numbers for addresses
!  Refusal to show audited financial statements
!  High pressure tactics to get you to sign a contract
Evaluating the franchise agreement/1

!  You must have a written agreement – defines the
relations
!  Your solicitor, accountant, and specialist franchise

adviser review and explain the terms and
conditions
!  Do not sign until you are completely satisfied that

you have a viable relationship
Evaluating the franchise agreement/2

!  Undertakings
!  All the promises and undertaking made to each other during
negotiations
!  Rights and obligations
!  Franchise fees
!  Premium, royalties, advertising levy, Other fees
!  Site
!  Expiry term
!  Termination conditions and remedies
!  Assignment – (selling on)
!  Financial forecasts and risk assessments
8
2/23/11
Intellectual property protection:

Beating the pirates
Williams, S. and Higham, R.

(1990) New Zealand small
business guide.
Auckland:Penguin
What to do with an invention
1953 Patents Act

Registration “any manner of new
manufacture and any new method or
process”
Novelty, inventive step, have industrial
application
Patent
!  Granted by Govt body

!  Can take legal action to protect commercial
advantage
!  Complete disclosure
1
2/23/11
Steps
!  1. Provisional specification - 12 months

Unpublished
!  2. Complete specification
Claims of novelty, right to make use
and sell invention in NZ, protects from
importing.
!  3. Per country
Costs can be high
Design
!  1953 Designs Act

!  Shape, configuration, pattern or ornament
!  Provisional
!  Photographs drawings
!  5 years, renew to 15 years
!  Same protection as patent
Copyright Act 1962 ©
!  Automatic on the creation of an original work

!  16 years industrially applied artistic works
!  50 years beyond the life of the author
!  Powerful
2
2/23/11
1953 Trademarks act
!  Registered, but unregistered are still

protected under Fair Trading Act 1986
HELP
!  Patent attorney
!  Inventors organisations
Strongest protection
!  Effective marketing
!  Build up a reputation or image
!  Be vigilant to protect your rights
!  Keep quiet about them
3
2/23/11
Professional Advice
!  Accountant
!  Solicitor
!  Surveyor, Estate agent
!  Designer
!  Business advisor
4
Marketing strategy
Oliver & English, Ch 11:

Marketing Management
The aim of marketing strategy
•  Create a sustainable competitive advantage

for the business …
•  Through devising and implementing a
marketing plan …
•  Which minimises wasted effort, and
maximises results…
•  Through a customer-driven focus on …
•  Basic buying motives, target market
segmentation, competitive market positioning,
and investment in the marketing mix
Topic overview
•  The context of the marketing plan
•  Sustainable competitive advantage
•  Distinctive competencies (Value drivers)
•  Target market segment
•  The Marketing Mix
–  Marketing objectives
–  Product Strategy
–  Pricing Strategy
•  Meeting Price Competition
–  Place
•  Competitive position
•  Promotion strategy
•  Harmonising the Marketing Mix
•  Revising the Business Plan
3
1
The context of the marketing plan
•  Marketing plans
–  Demonstrates that your business can achieve the sales indicated in
the financial forecast
–  Identifying and satisfying market segments
–  Creating strong competitive advantage
•  Operating plans
–  Production plans – derived from marketing plan
–  Operating processes, procedures, workflow and efficiency
•  Financial plans
–  Financial quantification of marketing and operating plans
–  Budgeting
–  Support applications for finance
•  In order to…
–  Satisfy customers’ buying motives better than
competitors
•  We need to…
–  … do some ‘special thing’ particularly well…
–  … that is NOT easily copied by competitors
•  These ‘special things’ are called:

–  Distinctive competencies, or
–  Value drivers
•  A strong competitive advantage (CA) is

THE key to survival and prosperity
•  CA is a magnet to draw customers
•  Once established, competitors have
great difficulty in challenging customers’
perceptions of your business
2
Discussion case – Dawn Raid
Distinctive competencies (Value drivers)
Distinctive competencies (Value drivers)
•  Lower costs … lower prices

•  Broader or deeper product lines
•  Unique products or services
•  Better product quality
•  Better product availability
•  Superior skills and experience
•  More effective marketing
•  Better personal networks connected to target
market segment
3
Which distinctive competencies to develop?
•  … We must know our customers’ basic

buying motives
10
How did Dawn Raids’ competitive advantage develop?
11
Target market segment
•  A market segment defines a group of

customers with similar buying motives
12
4
The ‘Marketing Mix’
•  Product – range
•  Price – how established
•  Place – where products sold
•  Position – in relation to competition
•  Promotion – getting customers to find us
13
14
Marketing mix
•  Imagine a cake…
–  We choose different kinds of ingredients, and different
quantities of ingredient depending on the kind of cake we
want to bake
–  Our ‘cake mix’
•  We choose our ‘marketing mix’ …
–  Depending on our marketing objectives – what kind of
customer we want
15
5
Marketing objectives
•  1. Market penetration
–  Greater customer usage e.g. repeats
–  Attract competitors’ customers to us.
•  2. Market development
–  Sell SAME product to new customer
16
Marketing objectives
•  3. Product development
–  NEW products to EXISTING customers
•  4. Diversification
–  NEW products to NEW customers
–  NEW business
17
Marketing Objectives
•  The choice of marketing objective

should build on the business’
Competitive Strengths (i.e. distinctive
competencies, competitive advantage)
18
6
Product Strategy
•  Product line
–  Group of products with similar
characteristics e.g. DVD Recorders
•  Your product lines can be
–  Deep (e.g. at Sony Store)
–  Shallow (e.g. The Warehouse)
•  Depth relates to the assortment of
products available in the product line
19
Product Strategy
•  Product Mix =
–  The number of product lines you offer
–  The Product Breadth (of your Mix) is
either…
•  Narrow
–  E.g. Consumer Electronics Store: Sony Store
•  Broad
–  The Warehouse – Electronics, clothes, Music,
furniture
20
Pricing Strategy
•  How to establish your prices
•  Going rate
–  Meet the standard market price
•  Full cost
–  materials + labour + overhead + profit margin
•  Supplier suggested
–  Use price recommended by supplier
•  Penetration
–  Low price, to build volume quickly
•  Skim
–  High price for short time (with new product)
21
7
Meeting Price Competition
•  You don’t need to cut your prices!!!

–  Differentiate the product
–  More personal service
–  Align with new trends
–  Prestigious image
–  Extra services – delivery, install, alterations
–  Convenience – parking, opening hours
–  Reduce expenses
22
Place
•  Location of the business

•  Layout of the premises
•  Managing of store traffic
•  Interior display
•  Lighting
23
Competitive Position
•  Meet the competition

–  Copy to cancel their competitive advantage
•  Beat
–  Go beyond competition – risks counter-
attack
•  Counter
–  You dictate the grounds for competition
–  Eg Obo – product design features
24
8
Competitive Position
•  Matching Image to customer ‘shopping

style’:
–  Economic – price, quality, selection,
efficiency of service
–  Personal – warm relationships
–  Indifferent – shopping is a necessary
nuisance – location, parking, hours open
–  Recreational – leisure, entertainments,
displays, innovation
25
Competitive Positioning
•  Image – the “personality” of your business

•  Image must reflect basic buying motives of
customers
•  Image (for retail customers) based on:
–  Price, Quality, Assortment,
–  Fashion
–  Personal selling, Service,
–  Atmosphere, Displays
–  Location, Convenience, Parking,
–  Advertising
26
Competitive Positioning
•  The overall strength of your IMAGE

depends on the VALUE placed on each
FACTOR by your customers
•  Therefore, emphasise the factors your
customers most value,
•  … so that your IMAGE represents
exactly the BENEFITS they want
•  (Oliver & English, p. 203)
27
9
Promotion Strategy
•  Aims:
–  Create an Image
–  Stimulate sales
•  Components:
–  Methods of communicating to customers:
•  Advertising
•  Publicity
•  Merchandising techniques (displays, shelf location, &c)
•  Personal selling
28
Promotion Strategy
•  Decision process:
1.  Determine the IMAGE you want to create
2.  Determine your geographical MARKET AREA
3.  Decide WHAT goods, services and/or image
features you want to promote
4.  Decide WHICH MEDIA to use for the promotion
5.  Decide WHEN to promote
6.  Decide HOW MUCH to spend
7.  COORDINATE all the Marketing Mix ingredients
so they work together perfectly
Lets look at these closer…
29
Decide WHAT goods, services and/or image features you want to

promote
•  Basic buying motives. One (or more) from:

–  Safety – protection from harm
–  Savings – initial price, plus operating costs,
maintenance, replacement
–  Health
–  Status – to be recognised
–  Pleasure
–  Convenience
•  … Then develop a ‘promotional theme’
30
10
Decide WHICH MEDIA to use for the promotion
•  Depends on:
–  Nature of the merchandise
–  How much for sale
–  How much money you propose to spend
•  Inside the business

–  Window displays, Interior displays, Signs, Blow-ups of
advertisements
–  Manufacturers’ literature, Gift novelties,
–  Tags and labels
•  Outside the businress

–  Newspapers, Magazines
–  Direct mail, Handbills
–  Outdoor signs
–  Cinemas, Radio, Television
•  Your staff!
31
Decide WHEN to promote
•  Timing is essential
•  Develop a promotional calendar of events
•  Factors:
–  Climatic E.g. Winter and Summer clothes
–  Calendar E.g. Mother’s Day, Chinese New Year,
Easter
–  Special Events Graduation, Back to school,
Country shows, Community days
32
Decide HOW MUCH to spend
•  A key element in the cost part of your

profit budget
•  Review results of last year’s plan =>
what sales were produced?
•  What factors have changed?
•  What are your sales targets?
33
11
Decide HOW MUCH to spend
•  Age – New stores need more promotion

•  Products – Shoes need more than Baked
goods
•  Size in community
•  Location – Neighbourhood bookstore >>
Airport bookstore
•  Size of trading area – Farm equipment > Car
repair garage
•  Competition
34
Harmonising the Marketing Mix
Market
Position Product Price Place Positioning Promotion
Exclusive monopoly highest personal superiority extensive
services
Specialty narrow and higher distinctive uniqueness quality,

deep expertise
Standard regular lines going-rate central reliability product

availability
Discount broad lowest accessible, lowest prices convenience,

inexpensive price
35
Revising the Business Plan

•  Oliver & English, Chapter 6.
•  1 INTRODUCTION
•  1.1 Objectives of the document
•  1.2 The industry
–  Present status and prospects
–  New products, markets, customers
–  National, regional, economic trends
•  1.3 The business
•  1.4 Management
•  1.5 The product or service
–  Description
–  Primary and important secondary uses
–  Unique and/or superior features
–  Opportunities for expansion of product line or related products and services
–  Product design and development activities and costs
36
12
2. Marketing plan
•  2.1 Customer profile
–  Customer characteristics
–  Basic buying motives
•  2.2 Market size
–  Potential customers in the trading area
–  How much will they spend
–  Expansion possibilities? (Why?)
•  2.3 Competition
–  Who are the nearest competitors
–  Their operations and market share
–  Why you will capture their market
–  How you will defend your market share
•  2.4 Sales estimates
37
2. Marketing plan
•  2.5 Product or service

–  Specific characteristics and unique features
–  Backup services and guarantees to be offered
•  2.6 Price
–  Price, compared with market prices
–  Discounts to retailers or agents
–  Discounts for fast payment or bulk purchase
•  2.7 Place
–  Characteristics of the place of business
–  Location, size, image, style, parking, visibility,
–  Proximity to main roads and main markets
38
2. Marketing plan
•  2.8 Positioning
–  Ideal market position
–  How customers’ perceptions will be influenced
•  2.9 Promotion strategy

–  Advertising media
–  Calendar of promotional events
39
13
•  In order to … satisfy customers’ buying

motives better than competitors
•  We need to…
–  … do something particularly well…
–  … that is NOT easily copied by competitors
–  … AND make sure our potential customers
KNOW that we are the best!!!
40
The aim of marketing strategy
•  To create a sustainable competitive

advantage for the business …
•  Through devising and implementing a
marketing plan …
•  Which minimises wasted effort, and
maximises results…
•  Through a customer-driven focus on …
•  Basic buying motives, target market
segmentation, competitive market positioning,
and investment in the marketing mix
41
The firm’s entire environment and marketing program
Insert Fig 2.4 p54
42
14
2/23/11
Potentialities that stand between the

ambitions and goals of an individual or
organisation and those goals actually being
realised.
(Definition from http://www.risksociety.org.nz)
!  Attached to every current action or situation
!  Inevitable associate of change
!  Canbe potentially beneficial or costly for a

business.
Degree of risk can be measured by

Risk= Probability x Consequence
1
2/23/11
The culture, processes and structures which are

directed towards the effective management of
potential opportunities and adverse effects
(Standards New Zealand definition of Risk Management)
All things you need to do to make the future

sufficiently certain.
Assessing the potential of future events that can

cause undesirable affects.
Implementing cost-effective strategies that can

manage risks.
Rational process that allows risks to be managed

well.
Used by individuals on a daily basis.
2
2/23/11
Risks can either help or prevent achieving

goals that are set by a business.
Small Businesses generally decide to take

risks to achieve some advantage over the
competitors.
Purchasing Smuggler Boat Moulds
Change in name David Pringle Boat Builders to

Smuggler Marine
Expanding the business
27 Degree deep V Hull
Purchasing Smuggler Boat Moulds

!  Change in business direction
!  New Product Range
Name Change
!  Potential customers not knowing David still owned the
company
!  Existing customers unsure if Smuggler Marine had the same
vision/focus as David Pringle.
3
2/23/11
Expanding the Business

!  Increasing Costs (Hiring Staff, New Equipment, New Factory)
!  Training for Staff
Deep V Hull
!  Major advantage over other boat builders, puts them one step
ahead of the industry.
!  Means that Smuggler product range is safe, comfortable, very
fast and can handle rough water conditions with ease.
Information from
"  http://en.wikipedia.org/wiki/Risk_management
"  http://www.risksociety.org.nz
"  http://www.smuggler.co.nz

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Course Handbook

APMG NZ 435 Fundamentals of Small Business

Faculty of Creative Industries and Business

Department of Management and Marketing (DoMM)

Authored by Peter J. Mellalieu, 2010. 1st Ed

The copyright of student materials remains

Printed at The Copy Centre, Unitec Institute

IMAGE: Reaching for the skies.

Version Ver 1.0 1 February 2011.

This document is subject to amendments

APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

The aims and learning outcomes of the course

Recommendations for your immediate action

Note: Navigating the on-line Course Handbook

APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

Many small business founders are innovators and entrepreneurs. They

APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

Without doubt, I have

APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

Peter J MELLALIEU, PhD, BTech(Hons), MPubPol, DipIwiEnvMgt

Mihi as silk-weavers in a north-east French

APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

Name: FUNDAMENTALS OF SMALL BUSINESS1

Aim Students will demonstrate knowledge of the characteristics,

Learning outcomes Assessment

All learning outcomes must be evidenced; a 10% aggregate variance is allowed.

1 This prescription replaces 115 Small Business Management.

APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

LO 1: learning outcome One

Students will describe characteristics of small business.

b) Success factors, four of the following:

c) Owner’s competing demands:

APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

LO 3: learning outcome three

LO 4: learning outcome four

APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

c) Operational, three from the following:

d) Risk management process.

Assessment 1: 30 % Profile of a small business: assessing: LO 1, LO 2 (50%), LO 3

Mid-term test 40%, Assessing: LO 2 (50%), LO 4, LO 5 (25 %)

Assessment 2: 30 % Performance measures and controls assessing: LO 5 (75%)

The Assessment Matrix shows a detailed breakdown of the components of the

APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

Learning outcomes Assessment Assignment 1 Test Assignment 2 Checksum

APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

Learning and teaching approaches

Academic learning outcomes

ALO 1: General Academic skills - learning, listening, participating

APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

The workload assessment also EXCLUDES an hourly allowance for your

You are required to submit ALL assignments. Failure to submit an

Gannt Chart: Schedule of assignments per week across course semester

APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

Assignment Week Due Weight Out Work

Assignment 1 Week 6 30 100 40

Test Week 10 40 100 40

Class work and

Class attendance 13 studios 40

Total: 100 200

APMG NZ 435 | UNITEC Institute of Technology | Department of Management and Marketing

Course handbooks and selected readings

Mellalieu, Peter J. (2011) Course Handbook BSNS NZ 435 Fundamentals of Small