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1. Read the text and answer the questions.

  1. Why shouldn’t you base your prices on the estimate of your own cost? Give your ideas about it.

  2. Why is it easier to bring prices down than to put them up?

  3. Is it good to charge less than your customers are prepared to pay? Prove your point.

  4. Is the price right if it only covers the overheads? Why? Why not?

  5. What kind of premises can you operate from?

  6. What do you think is the most important when recruiting personnel?

  7. Why is it important to know your own strengths and weaknesses?

  8. What way of advertising your product or service would you choose? Why? Prove your point. What is your attitude to advertising on our television? Do you have any favourite ad?

2. Read the extracts below and decide which section of the checklist they come from.

Business plan checklist.

1. Details of the business

6.Marketing

Name of business

Type of business

What sort of marketing or advertising do you intend to do?

2.

Personal details

7. Premises / machinery / vehicles

Relevant work experience

Where do you intend to locate the business and why?

3.

Personnel

Number of people / job function

What sort and size of premises will you need? What machinery / vehicles do you require?

4.Product / serviceDescription

8.

Objectives What objectives do you have for the business?

5.

.Market

A At first I will be concentrating on getting the business into profit. But if I am successful I would then consider looking for other sites in the city area and expanding the management team. Eventually it might be possible to set up shops in different locations around the country.

E I plan to advertise on local radio and in the local press and free press. This will be complemented by flyers distributed directly through letterboxes to residents in the area.

B The Tea Set. Initially the business will be registered as a limited company with ten shareholders

F I have already worked as an employee in two different companies, where I was involved in both marketing and customer service at junior management level.

C In a street with pedestrian access only, which leads into the main shopping area and market square in a town of 70,000 inhabitants. The shop is also close to the station, which is used by several thousand commuters daily. The surface area is 45 square metres at a rent of 1000 euros per month.

G It is not easy to give a precise estimate but it would seem to be essentially passing trade within the shopping area. The target consumer is middle-aged and with a comfortable income. There is no competition in the area as the concept for this type of shop is new and comparable products are not currently available in other outlets.

D Retail outlet selling a wide range of specialist teas and tea-related giftware. Sales will be made direct to customers and also by mail order.

H Two full-time sales staff for the shop. One personal assistant to do secretarial work and general office administration.

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