SUBJECT: GRADE: DATE: WEEK: CAPS SECTION:

EMS 7 8 9 Term 3: Week 6 Term 3: Week 6 Entrepreneurship

Learners must be able to: Taken from Amended / Trimmed CAPS - with clear Cognitive verbs
AIMS OF 1. Explain / Discuss / Describe / Classify the components of the SWOT analysis
LESSON: 2. Identify / Name / List / Give the components of the financial plan
3. Calculate the profit percentage
PAPER BASED RESOURCES:
DIGITAL RESOURCES:
RESOURCES • Text books
• WCED ePortal
• It is important to compile a SWOT-analysis for your business idea to determine if the business idea is viable and will be
INTRODUCTION sustainable.
• A good financial plan must be included in your Business Plan. We will discuss the components of the financial plan below.

Sustainable Sustainability focuses on meeting the needs of the present without compromising the ability of
future generations to meet their needs
TERMINOLOGY Viable The viability of a business is measured by its long-term survival and its ability to sustain profits over
a period of time. The longer a company can stay profitable, the better it's viability.
Financial Statements Financial Statements represent a formal record of the financial activities of an entity. These are
written reports that quantify the financial strength, performance and liquidity of a company
Income Statement Income Statement, also known as the Profit and Loss Statement, reports the company's financial
performance in terms of net profit or loss over a specified period.
Cash Flow statement Cash Flow Statement, presents the movement in cash and bank balances over a period
Balance Sheet A balance sheet is a financial statement that reports a company's assets, liabilities and
shareholders' equity at a specific point in time
 SWOT ANALYSIS
Definition:
A method used by an organisation to analyse their environment by identifying its internal strengths and weaknesses, as well
as its external opportunities and threats
The components of the SWOT analysis is:
S – Strengths
W – Weaknesses
O- Opportunities
T - Threats
Components of the
Financial Plan
STRENGTHS WEAKNESSES

• Governed by internal • Caused by internal

factors factors
• Strong and positive • Any areas that hinder
CONCEPTS
and/or characteristics growth of a company
SKILLS • E.g. company culture, • E.g. less skilled
human resources workforce Remember you
must be able to
identify the
THREATS strengths,
OPPORTUNITIES
weaknesses,
• Depend on external • Controlled by external opportunities and
factors factors threats from given
• Circumstances that • Factors that could scenarios
help company expand pose a risk to the
its size and revenue company’s success
• E.g. increase in • E.g. low economic
demand development
1. Start-up costs • List the fixed assets, e.g. machinery you will need
• List the quantities and price of raw material and stock you will need
2. Details of Own Capital • Mention the time period and interest of the loan
and borrowed capital
3. Fixed Costs • Costs that stay the same no matter how many items are produced, e.g. rent expense
4. Variable costs • Costs that will change depending on the number of items produced, raw materials
5. Total costs • Total costs = fixed costs + variable costs
6. Selling price • Must cover all the costs and include a reasonable profit
7. Break-even point • The point where the income from sales are just enough to cover the expenses
• The point where the business is not making a profit or a loss
• The break-even analysis helps an entrepreneur to set sales targets
Example:
Antoinette sells cupcakes at the flea market for R6 each at the fleamarket. Her expenses
per cupcake amounts to R3. The fleamarket charge R40 per day. She pays her sister R50
per day to help her at the stall. The rent and wage if known as overheads. How many
cupcakes must Antoinette sell to cover the overheads.
Breakeven point: Overheads = R40 + R50
Profit R6 – R3
= 90
3
= 30 cupcakes must be sold to cover her costs
8. Mark-up on sales / Profit The difference in what a product cost and what you are selling it for
margin
Mark-up percentage would be:
= Sales – cost of sales x 100
Cost of sales 1
= 6-3 x 100
3 1
= 300
3
= 100%
9. Projected financial • Projected income statement
statements • Projected balance sheet
• Projected cash flow statement
 Activity 1

Read the case study below and compile a SWOT analysis for Claudine Hair and Beauty

CLAUDINE HAIR AND BEAUTY (CHB)

Claudine started her Hair and Beauty salon in Parow in 2012. She decided to expand her business to include manicures,
pedicures and eyelash extensions. She can hire a bigger space in her current building at R2 500 per month. She has the
added bonus that the location of her business is close to her home. The building is also close to the primary school and a
daycare facility is located on the same premises. Most of her clients drop their children off at the school or daycare
centre. She entends hiring a qualified nail care technician to ease the demand for manicures and pedicures.

Many of her clients mentioned that her business would be convenient as they will be able to do their hare and nails at
the same time. Her talent and creativity with hair is well known in the area. She does not have enough savings to pay for
nail products and for the training course, and will have to borrow money.
CONSOLIDATION
There are many other businesses rendering the same service in the area. During the winter months there is no demand
ACTIVITIES
for pedicures, as ladies wear closed shoes and boots. She plans to distribute flyers at the nearby Primary school and Day
care centre to attract more clients. From August to December she can almost double her monthly income because of
matric farewell balls, weddings and year-end functions of companies.

Activity 2

Indicate whether each of the following is an example of a strength, weakness, opportunity or threat for a Tuck Shop.

2.1 Skilled and experienced entrepeneur

2.2 Decrease in VAT rate
2.3 Insufficient capital and equipment
2.4 Increase in the fuel price
2.5 A new mobile shop opened in the same street, selling the same products
2.6 A new school was built opposite the tuck shop.
 Activity 3

Read the scenario below and answer the questions that follow:

You applied to have a stall selling hot dogs at the market day at your school. The hiring of the stall is R45 for the day. The
costs of the hotdogs, rolls, and lunch wrap is R250 for 100 hotdogs. You plan to sell the hotdogs @ R6 each. Your brother
will help you in the stall and you agreed to pay him R60 for the day.

3.1 Calculate the break-even point

3.2 Calculate the profit margin (mark-up on sales)

Activity 1

STRENGTHS WEAKNESSES
• Can hire a bigger space for R2 500 per month • She does not have enough capital to buy nail products
• Her talent and creativity is well known and pay for training
MEMORANDUM • She plans to hire a qualified nail technician • Must take out loan
OF ACTIVITIES OPPORTUNITIES THREATS
• She can double her monthly income from August to • Many hair and nail salons in the area – competition
December because of matric farewells, end of year • Winter months no demand for pedicures as ladies wear
parties closed shoes and boots
• Her premises is situated near a primary school and a
day care centre
• She can attract more clients by distributing flyers to
potential customers
Activity 2

2.1 Strength
2.2 Opportunity
2.3 Weakness
2.4 Threat
2.5 Threat
2.6 Opportunity

Activity 3

3.1 Overheads
Profit
= 45+60
3.50
= 30 hotdogs must be sold to break even

3.2 Profit margin

= Sales – cost of sales x 100 Sales – cost of sales x 100
Cost of sales 1 cost of sales
= 600 – 250 x 100 or 6 – 2.50 x 100
250 2.50
= 140% 140%