CHE 458 Unit 3 Entrepreneurship and Business Development PDF

14/06/2024 CHE 458 – Entrepreneurship and Business Development (Unit 3) LECTURER: Kenneth Asamoah Boateng, PhD 1 Course Content CHE 458 Entrepreneurship...

14/06/2024 CHE 458 – Entrepreneurship and Business Development (Unit 3) LECTURER: Kenneth Asamoah Boateng, PhD 1 Course Content CHE 458 Entrepreneurship and Business Development (3, 0, 3) Entrepreneurship and free enterprise. Types of business and registration. Law of contract. Business planning and reporting. Product and service concept for new ventures. Market and market development. Organization and financing new projects. Current trend, e-commerce. Case studies. 2 1  14/06/2024 UNIT 3.0 NEW BUSINESS VENTURES 3 3.0 New Business Ventures Objectives: o Describe strategies that can make ventures profitable. o Compare advantages and disadvantages of different types of business organizations. o Describe key characteristics of a great start-up culture and explain their importance. o Identify internal and external sources of finance and explain how they are related to time and risk. o Assess which type of finance is required for a business. 4 2  14/06/2024 3.1 Legal Considerations The focus will be on how businesses should be organized. New ventures often begin as small businesses owned by one person but the structure could become complex as there is growth. Each type of business structure has its advantages and disadvantages. Objectives: Explain the legal framework for a new business. Compare the advantages and disadvantages of different types of business structures. 5 3.1.1 Legal Structure of a Business Typically, there are four main types of businesses: o Sole Proprietorships o Partnerships o Limited Liability Companies (LLC) o Corporations The entrepreneur should consider which business best suits the new enterprise they want to create. 6 3  14/06/2024 3.1.1 Legal Structure of a Business #1 – Sole Proprietorship It is an unincorporated company that is owned by one individual only. It is the simplest of the types of businesses. It offers the least amount of financial and legal protection for the owner. It does not create a separate legal entity for the business. The owner of the company shares the same identity as the company. The owner is fully liable for any and all liabilities incurred by the company. Sole proprietorship is relatively easy and inexpensive to establish. There are tax benefits; income is considered the owner’s personal income and therefore only taxed once. (Source: Corporate Finance Institute) 7 3.1.1 Legal Structure of a Business #2 – Partnership A partnership is a business owned by two or more people who are known as partners. The income is treated as the owners’ incomes so it is only taxed once like sole proprietorship. Owners in partnerships are responsible for the liabilities of the firm. There are different types of partnerships: a. General Partnerships, b. Limited Partnerships, and c. Limited Liability Partnerships. 8 4  14/06/2024 3.1.1 Legal Structure of a Business #2a – General Partnership The easiest type of partnership with few upkeep costs. Every partner is considered as participating in the operations of the business There is unlimited liability for every partner. This means that every partner’s personal assets can be used to repay the liabilities of the partnership. Each partner is responsible for every other partner’s actions. As an example, Emma and Fred are in a general partnership. If Emma is sued for malpractice, Fred’s personal assets may also be claimed against in the lawsuit. 9 3.1.1 Legal Structure of a Business #2b – Limited Partnership Limited partnership has at least one general partner. The general partner takes on unlimited liability for the partnership and manages the operations of the company. There are also limited partners in limited partnerships. Limited partners only take on as much liability as their financial stake in the business. As limited partners, they are not involved in management decisions and do not have any direct control over the company. 10 5  14/06/2024 3.1.1 Legal Structure of a Business #2c – Limited Liability Partnership (LLPs) LLPs are similar to general partnerships, where multiple partners are each responsible for the operations of the business. Partners in LLPs are not personally responsible for the actions of other partners or the debts of the business. Not all businesses can be LLPs. LLP is often restricted to certain professions, such as lawyers or accountants. In general partnerships offer more flexibility compared to other companies but they offer greater exposure to risk. 11 3.1.1 Legal Structure of a Business #3 – Limited Liability Company (LLC) Limited liability companies (LLCs) are one of the most flexible types of businesses. LLCs combine aspects of both partnerships and corporations. LLCs retain the tax benefits of sole proprietorships and the limited liability of corporations. LLCs are able to choose between different tax treatments. As long as the LLC chooses not to be treated as a C corporation, it retains its flow- through taxation status. LLCs benefit from limited liability status. In LLCs, the company exists as its own legal entity. This protects the owners of the LLCs from being personally liable for the operations and debts of the business. 12 6  14/06/2024 3.1.1 Legal Structure of a Business #4 – Corporations Corporations are a separate legal entity created by shareholders. Incorporating a business protects owners from being personally liable for the company’s debts or legal disputes. A corporation is more complicated to create, as compared to the other three types of businesses. Articles of incorporation must be drafted, which include information such as the number of shares to be issued, the name and location of the business, and the purpose of the business. In sole proprietorships and partnerships, if one of the owners passes away or declares bankruptcy, the company is dissolved. Corporations exist as a legally separate entity. Therefore, they are protected from this situation and will continue to exist even if the owner of the business passes away. 13 3.1.1 Legal Structure of a Business Types of Corporations C Corporation: It is the most common form of incorporation. The corporation is taxed as a business entity and owners receive profits that are then also taxed individually. S Corporation: This is similar to a C corporation but may only consist of up to 100 shareholders. S corporations are pass-through entities like partnerships, so profits are not taxed twice. Non-Profit Corporation: Often used by charitable organizations, non-profit corporations are tax exempt. All forms of incoming cash flow must be utilized to spend on the organization’s operations or future plans. 14 7  14/06/2024 3.1.1 Legal Structure of a Business Examples of Types of Businesses A lot of businesses begin as sole proprietorships. They then convert to corporations as they grow and expand. eBay (www.ebay.com) is a very famous example of a sole proprietorship that eventually converted into a corporation. Hewlett-Packard (HP) has become a very successful partnership. Like eBay it was incorporated in 1947. HP began as a business partnership between two friends. 15 3.1.1 Legal Structure of a Business Examples of Types of Businesses Chrysler is one of the largest automobile manufacturers in the United States. Chrysler has maintained its status as a limited liability corporation (LLC) since its inception. Apple was incorporated soon after the company began its operations. Apple remains one of the largest companies in the world. It has continued to exist despite one of its co-founders, Steve Jobs, passing away. 16 8  14/06/2024 Company Registration 17 Activity 1 Company Registration Visit rgd.gov.gh Navigate the website to learn the following: How to register a company name How to register the various types of businesses Take note of the differences in the registration requirements 18 9  14/06/2024 Course Content CHE 458 Entrepreneurship and Business Development (3, 0, 3) Entrepreneurship and free enterprise. Types of business and registration. Law of contract. Business planning and reporting. Product and service concept for new ventures. Market and market development. Organization and financing new projects. Current trend, e-commerce. Case studies. 19 UNIT 3.0 NEW BUSINESS VENTURES UNIT 3.2 The Competition 20 10  14/06/2024 Unit 3.2 The Competition There is a need for the entrepreneur to identify the needs of potential customers in the market. But as a potential business person sees an opportunity, it is almost certain that others have seen the same or similar opportunities. One should always assume that others are providing similar services or products. If there is no active competition in a specific market, they may quickly enter that market if the profit opportunities present themselves. 21 Unit 3.2 The Competition Topic Objectives Explore: 1. How to assess the competition 2. How to create one’s own competitive advantage 22 11  14/06/2024 Unit 3.2 The Competition Who Are Your Competitors Consider the products and services that you propose to develop as part of your new business direction. Search for companies, institutions or government agencies that provide similar services or products. According to Stutely (2002) one must look at the industry as a whole to determine who else is serving the target market. Many companies provide similar services or products but may service industry sectors that you have no plan in supporting. 23 Unit 3.2 The Competition Why Analyze The Competition ? Collecting Data on the To determine…. Competition 1. Who is selling into the same Use similar techniques as done market? with market research – internet, 2. Who offers similar products and etc. services? Solicit information from 3. What the average price is for the potential customers whether proposed products and services? their requirements are support 4. What types of customer services and whether there is something and support the company needs your potential company can do to provide to satisfy the potential better. customers? 24 12  14/06/2024 Unit 3.2 The Competition Results of Competitor Analysis After competitor analysis a decision must be made whether the business idea has a chance of succeeding. If the competition: Then you should consider: Services the same target Changing your intended target market to one that market is underserviced. Produces the same products Thinking about different products or services that and services the competition is not providing; or Modifying your proposed products and Has a price point you find Designing products and services in a way that difficult matching would reduce cost and thus price point 25 Unit 3.2 The Competition The Competitive Advantage A competitive advantage can be one or more of the following: Price Point – The services or products are cheaper than the competitors. Quality of Products – The products will be better made than your competitors. Customer Service – The proposed company will provide supportive sales and timely customer service and support. Innovation – Strong research and development skills and effective and innovative solutions to the products and services you provide. Exclusivity – The company has exclusive rights to products or services that others do not offer. This is usually through the process of trademarking, patents or copyright enforcement. 26 13  14/06/2024 UNIT 3.0 NEW BUSINESS VENTURES UNIT 3.3 New Business Financing 27 Unit 3.3 New Business Financing Objectives 1. Identify internal and external sources of financing. 2. Identify what type of costs must be covered to start and run a business. 3. Venture capital, angel investors, investment concepts. 28 14  14/06/2024 Unit 3.3 New Business Financing Most start-up businesses fail because of insufficient funds. The need to identify and procure sufficient funds to support the implementation and growth of a start-up company is essential to the success of any new business. Identifying sources of financing and convincing others to invest in the proposed enterprise is an essential part of the business planning process. Managing limited funds and seeking new sources of revenue are essential skills for the new entrepreneur. 29 Unit 3.3 New Business Financing Basics of Finance Small business owner must identify the anticipated costs, estimate the potential revenues and produce a budget. Detailed financial plan that reflects the first two to three years of operation must be produced. Nieman, Hough & Nieuwenhuizen (2003) - three steps in the financial planning process: o Project the firm’s sales revenues and expense over the planning period. o Estimate the levels of investment in current and fixed assets that are necessary to support the projected sales. o Determine the firm’s financing needs throughout the planning period. 30 15  14/06/2024 Unit 3.3 New Business Financing Basics of Finance Criteria for assessing cash flow requirements: Amount of money required - project the minimum amount of financial support, at least until the sources of revenues have been established. How quickly the money is needed – The longer a business can spend trying to raise the money, the cheaper it will be to raise funds. The cost of borrowing become higher if the business needs the money quickly. 31 Unit 3.3 New Business Financing Basics of Finance (Cont’d) How quickly the money is needed (cont’d) - At times start-up funds come from the personal funds available to the entrepreneur and his or her family and friends. Most investors (be it family, friends or others) will want the entrepreneur to accept some of the financial risks by investing in his or her own business. 32 16  14/06/2024 Unit 3.3 New Business Financing Basics of Finance (Cont’d) The amount of risk involved in the venture needing the cash – A project which has less chance of leading to profit is deemed more risky than one that will result in a profit. Unless there is some guarantee that the money will be returned, potential sources of finance (especially external sources) may be reluctant to lend money to higher risk projects. 33 Unit 3.3 New Business Financing Basics of Finance (Cont’d) The length of time for repaying funds - The entrepreneur must make good judgement on the length of borrowing -whether the funds are needed for long-term or short- term and also decide on what type of finance to use. The longer it takes to repay the initial investors the more difficult it will be to get them to give up the money that is needed. 34 17  14/06/2024 Unit 3.3 New Business Financing Business Operating Costs Expenses to be considered when developing a financial plan. Start-up costs money. It may be some time before the business generates enough cash from sales to pay for these costs. It may take several months or even years for the business to reach break-even point (when revenue = expenses) 35 Unit 3.3 New Business Financing Business Operating Costs (Cont’d) Expenses to be considered when developing a financial plan. Start-up costs money. Sufficient funds are needed to operate the business until the break- even point is reached. Start-up costs include: oProcuring infrastructure, office space, furniture, computer equipment, etc. oInitial marketing materials. oLegal and accounting costs. oBusiness planning costs. 36 18  14/06/2024 Unit 3.3 New Business Financing Business Operating Costs (Cont’d) Day-to-day business operations continually draw on finances. These could include: oRent. oMonthly costs for phone, Internet, transportation. oMarketing and sales. oEmployee or contractor costs. oProduction costs 37 Unit 3.3 New Business Financing Business Operating Costs (Cont’d) Growing a business involves creating higher capacity and innovating with new technology to cut unit costs and keep up with competitors Examples of these costs are: Research and development costs. Consulting costs. Investment in new technologies or new equipment. 38 19  14/06/2024 Unit 3.3 New Business Financing Business Operating Costs (Cont’d) Developing and marketing your products and service. Is your business competing in a fast-moving market where the product is continually updated ? Is it necessary to conduct marketing research or to test new product? 39 Unit 3.3 New Business Financing Business Operating Costs (Cont’d) Developing and marketing your products and service. Marketing costs could include: oCreation and maintenance of a web site. oRadio and paper based advertising. oPrinting and distribution of marketing materials. oAttendance at industry conferences where you will market your products. oCommissions paid to others who provide new customers. 40 20  14/06/2024 Unit 3.3 New Business Financing Business Operating Costs (Cont’d) Expanding and entering new markets can draw on funds for setting up new retail outlets and/or advertising in new areas. Acquiring or taking over a new business can involve “buying out” your competitor. Moving your business can include the cost of renting of removal vans, through to relocation packages for employees and the installation of machinery. 41 Unit 3.3 New Business Financing Types of Expenses and Revenues Every company has expenses to pay and requires revenues to cover the expenses. You must identify what your expenses and revenues are before you can determine how to finance the start-up and growth of the new company. While developing the detailed planning phase of your business you will need to produce a start-up budget and operating budget that reflect all the activities that must be supported as you sell your products and services. 42 21  14/06/2024 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) There are three types of Expenses and three types of Revenues that must be budgeted for: Types of Expenses Types of Revenues Start-up Expenses Revenue Generated from Sales Operating Expenses Revenue Generated from Borrowing Capital Expenses Revenue Generated from Sale of Shares in the Company 43 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Start-up Expenses Launching a new company takes funds to plan and eventually start the company Expenses will vary depending on the business model, scenarios and types of products and services the proposed company will offer Start-up costs will vary depending on the type of business 44 22  14/06/2024 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Start-up Expenses Legal fees and government fees for incorporation, naming, etc. Research and development costs to create new products or refine existing ones. Costs related to the completion of feasibility studies, market analysis and competitor analysis. Marketing expenses, including web site design, packaging design, etc. 45 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Start-up Expenses Production of initial products that can be used to show clients. Leasing costs to procure appropriate office space. Cost of furniture and office equipment. Cost of telecommunications and Internet installation and equipment. Purchase or lease of computer equipment and software. 46 23  14/06/2024 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Operating Expenses When the business is launched there will be ongoing expenses to keep the business operating from day to day These costs must be identified and estimated on a yearly basis 47 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Operating Expenses Some typical operating expenses include: Heating/cooling expenses. Electric and water bills, phone bills Internet and ICT connections. Monthly rent/leasing expenses. Employee salaries and benefits, Contractor/sub-contractor payments. Payment of any loans. Vehicle operating costs. Payment to suppliers and wholesalers used by the company. Ongoing marketing expenses 48 24  14/06/2024 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Capital Expenses Capital expenses are long term multi-year expenses that must be planned for and monies allocated over several years. A capital budget is usually necessary to support these types of expenditures. Capital expenses have a depreciated value over time. 49 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Capital Expenses Some examples of expenses incurred over several years are: 1. Purchase of a fleet of equipment. 2. Purchase and/or upgrading of computer equipment/hardware. 3. Building of an office or storage facility. 4. Investment in multi-year production requirements to support the creation of a new product. 50 25  14/06/2024 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Sales Revenues Revenues or company income is normally generated through the sale of products and services. Without steady and growing sales revenues a company will fail. The greater the sales volume the larger the revenues. Time and money must be spent in the marketing and sales of products and services. 51 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Sales Revenues Select a price point for the products and services that will generate more revenue. If the price of products and services are too high less sales will be generated. Large volume of sales can generate more revenue through lower prices and higher throughput. 52 26  14/06/2024 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Revenues Generated Through Borrowing In the start-up stage of a business or during a growth period, many businesses may not have the cash on hand or sufficient revenues to support this effort. In these cases the entrepreneur may need to borrow the cash to support the start-up or growth. 53 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Revenues Generated Through Borrowing Sources of borrowing include: Banks: Some banks or lending agencies will lend to new or growing businesses that have a sound business plan and ideally some form of collateral to guarantee the loan. At the start-up phase one may have little or no collateral and thus many entrepreneurs may have to use their assets to get the cash they need to start the business. 54 27  14/06/2024 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Revenues Generated Through Borrowing Family or Friends: In the early stages of business start-up you may need to borrow money from family or friends who have confidence in your ability to succeed in your business. If you do borrow money from relatives ensure you still have a legal contract that specifies the interest you will pay and a repayment schedule for the loan. 55 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Revenues Generated Through Borrowing Personal Assets: If you have confidence in your business plan then you should be willing to invest your own assets in the company. Although it may not cover all of the start-up expenses the banks, family and friends will feel that you have taken a considerable part of the financial risk by investing in yourself. 56 28  14/06/2024 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Revenues from Investors The difference between lenders and investors is that investors are buying a portion of your company and as such the investors may have a say on how you grow and operate the business. Without investors you own 100% of the company. When investors become sources of revenues you are selling them a portion of the company. Before you can offer investors an opportunity to buy into your company, the company must be incorporated and you must establish a board of directors. 57 Unit 3.3 New Business Financing Revenue from Investors The different type of investors includes: Family or Friends: The difference between being a lender as a family member and an investor is that you are giving your family member or friend a legal portion of the company and thus opportunity to share in any future profits. 58 29  14/06/2024 Unit 3.3 New Business Financing Revenue from Investors The different type of investors includes: Partners: Individuals who collectively join together to launch a new company should be willing to invest in the company. A partnership agreement must be entered into that specifies that amount of control that each partner has in the operation of the company. This is based on the amount of cash that they provided to support the initial start-up. If one partner provides 25% of the cash then he or she probably should have 25% of the voting rights when decisions are to be made. 59 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Revenues from Investors Angel Investors: Angel investors are individuals who are willing to provide the capital required to start the business in exchange for equity in the company. 60 30  14/06/2024 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Revenues from Investors Venture Capitalists: Venture capitalists are somewhat different from angel investors in that they are high risk investment companies whose aim is to buy into a new business venture with the expectation that they will make a quick profit. Often venture capital companies want a significant part of the company or even a controlling interest of the company. Usually they become engaged in the company in the early stages of its growth. 61 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Revenues from Investors Public/Private Offerings: Once the business has reached its first level of success and begins to turn a profit you wish to grow it to the next level. At this time you may want to make a public or private offering of stocks in the company to raise the cash reserves needed to grow the company. This is done by listing the company on a public or private stock exchange. The level of effort required to become listed is considerable. 62 31  14/06/2024 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Cash Reserves A business should have a cash reserve of at least three months to cover operations and expenses without any infusion of revenues. By contrast, you may be owed money. If you are a supplier to other businesses, you may be providing a trade credit. A special factoring company may offer to handle the debt collection process for a charge. The factoring company pays the business most of the value of the debt first and then collects the money from the debtor. This is a short term source of finance. 63 Unit 3.3 New Business Financing Types of Expenses and Revenues (Cont’d) Franchising Franchising is a method of expanding business on less capital than would otherwise be needed. Under a franchising arrangement, a franchisee pays a franchisor for the right to operate a local business, under the franchisor’s trade name. Although the franchisor will probably pay a large part of the initial investment cost of a franchisee's outlet, the franchisee will be expected to contribute a share of the investment himself. The franchisor may well help the franchisee to obtain loan capital to provide his-share of the investment cost. 64 32  14/06/2024 Activity 2 - Financing Identify the amount of funds you need (short term and long term), the potential sources of these funds and what risk you take on with the proposed type of financing. Type of finance Source of financing Short or long Amount to be Low or high risk term borrowed Banks Borrowing Family or friends Borrowing Family or friends Revenue from investors Partners Revenue from investors Angel investors Revenue from investors Low risk Venture capitalists Revenue from investors Short-term High risk Public/private offerings Revenue from investors Long-term 65 UNIT 3.0 NEW BUSINESS VENTURES UNIT 3.4 Marketing and Sales 66 33  14/06/2024 Unit 3.4 Marketing and Sales An effective marketing and sales plan is essential to the success of any new (or mature) business. Objectives 1. Describe the difference between marketing and sales. 2. Explain the process of marketing and sales. 3. Examine the guidelines for pricing your products and services. 4. Identify the marketing and sales principles that all businesses should embrace. 67 Unit 3.4 Marketing and Sales 3.4.1 Marketing Vs. Sales The terms marketing and sales are often used interchangeably. In fact they are very different, but complimentary concepts that employ different strategies. Definitions. The American Marketing Association defines marketing as “the activity, set of institutions, and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners, and society at large”. The Chartered Institute of Marketing defines marketing as “the management process responsible for identifying, anticipating and satisfying customer requirements profitably”. 68 34  14/06/2024 Unit 3.4 Marketing and Sales 3.4.1 Marketing Vs. Sales The two definitions have the following: Marketing is a management process. Marketing is aimed at satisfying customer needs. Marketing is a communications process. Marketing provides value to the customer. 69 Unit 3.4 Marketing and Sales 3.4.1 Marketing Vs. Sales InvestorWords.com defines sales as the “total amount (dollar, Cedi, etc.) collected for goods and services provided”. BusinessDictionary.com defines sales as “the activity or business of selling products or services”. There are similarities to marketing in that: o Sales is a process. o Sales speak to the exchange of revenues for goods and services. 70 35  14/06/2024 Unit 3.4 Marketing and Sales 3.4.1 Marketing Vs. Sales The difference between sales and marketing according to Lake (n.d.): Marketing is everything that you do to reach and persuade prospects. The sales process is everything that you do to close the sale and get a signed agreement or contract. Both are necessities to the success of a business. You cannot do without either process. By strategically combining both efforts you will experience a successful amount of business growth. However, if the efforts are unbalanced it can detour your growth”. 71 Unit 3.4 Marketing and Sales 3.4.2 Marketing and Sales Process First Step: The Marketing Process begins the moment you decide you wish to offer products and services to potential customers. You must first complete market research about the customer needs and requirements. Customer needs should drive the types of products and services you offer. Market research should drive the design and development of the products and services. 72 36  14/06/2024 Unit 3.4 Marketing and Sales 3.4.2 Marketing and Sales Process Second Step: The next step in a simple marketing process is to decide on the price for your products and services. This requires an understanding of your target market, the competition and what others charge for similar products and services. The idea is to price your products and services in a way that gives your new business entity the competitive edge. 73 Unit 3.4 Marketing and Sales 3.4.2 Marketing and Sales Process Third Step: The third step in the marketing process is raising customer awareness and educating them about the products and services you are providing. You will need to implement a marketing plan and employ a variety of marketing strategies to introduce your products and services to your potential customers. 74 37  14/06/2024 Unit 3.4 Marketing and Sales 3.4.2 Marketing and Sales Process Fourth Step (Sales): Once the potential customers see a need for your products and services, the sales process should kick-in. A process of investigation and negotiation must be employed. You need to investigate and clearly define exactly what the customer needs. Second you need to negotiate the cost, delivery times, support and other activities needed to support the sale. Finally you need to close the deal with a formal contract or at best the exchange of monies for the products received. 75 Unit 3.4 Marketing and Sales 3.4.3 Marketing Strategies Marketing strategies will vary based on the potential target audience and the industry or sector you are trying to communicate with or sell into. Marketing strategies are used to raise awareness, communicate and educate potential clients. The strategies may be as simple as printed pamphlets, to as complex as a thirty minute info commercial. 76 38  14/06/2024 Unit 3.4 Marketing and Sales 3.4.3 Marketing Strategies Some typical marketing strategies include: Advertising in local, national or professional newspapers, journals or magazines. Creating radio or television advertising. Direct mail brochures. Presentations at trade shows or conferences. Information web sites, webinars or social media sites (LinkedIn, Twitter, Facebook, etc). Cold-calls on potential customers. 77 Unit 3.4 Marketing and Sales 3.4.4 Closing the Sale Often the process of closing the sale is overlooked. You must not only sell the product to the customer, but you must ensure the customer is happy with the product or service. You need to provide guarantees or return policies. 78 39  14/06/2024 Unit 3.4 Marketing and Sales 3.4.4 Closing the Sale (Cont’d) You need to ensure your company has established a customer service approach to support customers after the sale has been closed. This may include: oTechnical support. oA return desk. oFeedback sheets/surveys. 79 40