Critical Issues in Business Success and Failure

Critical Issues in Business Success
and Failure
Program Support Notes by:
Samantha Eddy Bachelor of
Education (Social Science)
Produced by:
VEA Pty Ltd
Commissioning Editor:
Sandra Frerichs B.Ed, M.Ed.
Executive Producers:
Edwina Baden-Powell B.A, CVP.
Sandra Frerichs B.Ed, M.Ed.
VEA Group Pty Ltd 2012
Reproducing these support notes

You may download and print one copy of these
support notes from our website for your reference.
Further copying or printing must be reported to
CAL as per the Copyright Act 1968.
Critical Issues in Business Success and Failure
For Teachers
Introduction
The success of a business relies on many varied and important factors. The old adage fail to plan
and you should plan to fail rings true. This program investigates and outlines the factors which are
required to ensure the success of a business and the things that businesses do wrong, which lead to
failure. The main factors that are addressed are the business plan, technology, finance and
marketing. To assist in highlighting what businesses can do to survive, business people from varied
fields share some advice on what helped them succeed.
Timeline
00:00:00
00:03:55
00:07:01
00:09:34
00:12:17
00:15:36
00:16:44
The business plan - A map for success

Trend analysis - Why do businesses fail?
Management - Staffing and team
Balancing finances
Maintaining competitive
Credits
End program
Related Titles
Management Roles Planning, Organising, Leading, Controlling
Playing Your Part 1 Diversity in the Workplace
Playing Your Part 2 Workplace Relationships
Starting an Online Business Small Business Management Series
Recommended Resources
http://www.aussietycoon.com/showthread.php/1170-Small-Business-failures-and-why
http://www.thecoca-colacompany.com
http://en.wikipedia.org/wiki/Business_plan
2
You may download and print one copy of these support notes from our website or ClickView for your reference.
Further copying or printing must be reported to CAL as per the Copyright Act 1968.
Student Worksheet
Initiate Prior Learning
1. Brainstorm and mind map the factors you think contribute to the success and failure of a business.
Write the success points in blue and the failure in red.
2. Define and discuss your understanding of a business plan and its purpose.
3. Using a local business (or perhaps a scenario invented by your teacher), research some basic
information such as: location, competitors, products, innovations, concerns. Construct a SWOT
analysis (Strengths, Weaknesses, Opportunities, Threats). As a class, discuss why a SWOT
analysis is an important tool for businesses.
4. As a class or in a small group, work collaboratively to pinpoint a business or organisation that is
needed in your local community. Use the following steps.
Step 1: brainstorm your favourite shop outside the community they live in
Step 2: Are there any existing businesses that are similar?
Step 3: What 5 businesses can the students agree are suitable for their community?
Step 4: Students complete a short survey to hand out to their year group/ select classes/ school
which asks from the 5 listed businesses which ONE would they like to have in their community?
As a group or individually, present a business plan, including a design of the business, SWOT
analysis, financial plan, marketing plan, likely human resources requirement and what technology
would be utilised.
5. Rank the following from most important (1) to least important (6) to the success of a business.
financial planning _________
business plan _________
marketing _________
human resource management _________
technological implementation _________
research and development _________
Explain your reasoning.
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
3
Active Viewing Guide

The business plan a map for success
1. What is a business plan?
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
2. Outline the relationship between the business plan and finance.

_________________________________________________________________________________
_________________________________________________________________________________
3. Circle which type of goals a small to medium business might focus on.
Long
Medium
Short
4. According to Ben Skarrasbrek, when planning financial management what three things should your
aims be?
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
5. Identify the important role technology plays, as suggested by Alexi Terrov.

_________________________________________________________________________________
_________________________________________________________________________________
Trend analysis why do businesses fail?
6. List the top five reasons businesses fail, from most common to least common
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
4
7. From your list above, select one of the common reasons for failure and suggest a way that a
business could avoid falling into that pitfall.
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
8. a) What is a SWOT analysis?

_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
b) Why is a SWOT analysis a useful tool for businesses?

_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
Management staffing and teams
9. Consider what Danielle Stephenson has to say about client relationships. From the program and
using your own knowledge distinguish between repeat customers and referral customers.
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
10. What is identified as the reasons why having too few staff is a problem.
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
5
Balancing finances
11. From the following terms and using the information in the DVD as a guide sequence the order of
what might occur when there is a cash flow issue
Not able to pay debts

loan or overdraft
overextend finance
profits dont cover costs
be in a situation where you now have to pay back a loan
cover your costs and try to make a profit
dont have working capital
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
12. How does a budget assist in the business plan?

_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
13. What is the advantage of a bottom up budget?
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
6
Maintaining competitive advantage

14. Circle from below what is suggested as ways in which a business can remain competitive
Offer different products
Be smarter than your customers
Good robust information between all involved
One person doing all the work
Price
Efficient service
Good use of technology
Offer customers obsolete products
15. a) What are business ethics?

_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
b Why is it important to have ethical behaviour in business?

_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
_________________________________________________________________________________
7
Extension Activities
1. Return to your ranking of the following, from before the program:
financial planning
business plan
marketing
human resource management
technological implementation
research and development
a) Have your ideas changed since watching the program? Why?
b) If your ideas havent changed, what parts of the program confirmed your opinions?
2. Students spend more time on the business they constructed before the task, make some
adjustments and present to the class. Students evaluate the success or address the chance of
failure might be for each presentation
3. Using ICT, research a successful business online (suggestions could include Billabong, Coke,
Starbucks, Apple). Construct a table outlining the factors that have contributed to the businesses
success.
4. As a class, allocate 30-60 minutes of prime-time television viewing per student. If possible, cover
all the commercial channels over several days. During their allocated time, each student should list
the commercials that were aired and note whether they were familiar brands or products. At the
end of a week (or the available time period), as a class, discuss how effective is marketing in the
success of a business? Consider the type of medium (i.e. television), the target market for the
commercials, the time of day they were aired, the program they appeared during, etc.
8
Suggested Student Responses

Initiate Prior Learning
1. Brainstorm and mind map the factors you think contribute to the success and failure of a business.
Write the success points in blue and the failure in red.
2. Define and discuss your understanding of a business plan and its purpose.
Answers will vary but should include:
A blueprint providing an analysis of the strengths and weaknesses of a business and
outlining its operations, organisation and direction for the future
3. Using a local business (or perhaps a scenario invented by your teacher), research some basic
information such as: location, competitors, products, innovations, concerns. Construct a SWOT
analysis (Strengths, Weaknesses, Opportunities, Threats). As a class, discuss why a SWOT
analysis is an important tool for businesses.
Answers will vary but basic structure of SWOT analysis should be integrated including
headings
4. As a class or in a small group, work collaboratively to pinpoint a business or organisation that is
needed in your local community. Use the following steps.
Step 1: brainstorm your favourite shop outside the community they live in
Step 2: Are there any existing businesses that are similar?
Step 3: What 5 businesses can the students agree are suitable for their community?
Step 4: Students complete a short survey to hand out to their year group/ select classes/ school
which asks from the 5 listed businesses which ONE would they like to have in their community?
As a group or individually, present a business plan, including a design of the business, SWOT
analysis, financial plan, marketing plan, likely human resources requirement and what technology
would be utilised.
Answers will vary; the teacher could revisit the outcome after the presentation
5. Rank the following from most important (1) to least important (6) to the success of a business.
financial planning _________
business plan _________
marketing _________
human resource management _________
technological implementation _________
research and development _________
Explain your reasoning.
Answers will vary; the teacher could revisit the outcome after the presentation
9
Active Viewing Guide

The business plan a map for success
1. What is a business plan?
A formal statement outlining a set of goals, why these goals are achievable, how they will
be achieved.
2. Outline the relationship between the business plan and finance.
The plan sets out what is the goals of the business the finances determines how and if they
are achievable
3. Circle which type of goals a small to medium business might focus on.
Long
Medium
Short
4. According to Ben Skarrasbrek, when planning financial management what three things should your
aims be?
Measureable, specific, achievable
5. Identify the important role technology plays, as suggested by Alexi Terrov.
Maintaining and access to all records
Trend analysis why do businesses fail?
6. List the top five reasons businesses fail, from most common to least common
Lack of management experience (most common)
Poor record keeping
Fluctuations in cost
Overuse of credit
Under-capitalisation (fifth most common)
7. From your list above, select one of the common reasons for failure and suggest a way that a
business could avoid falling into that pitfall.
Answers will vary but may include: developing a record-keeping system that all staff
understand and must follow; building some excess into estimated budgets to allow for cost
fluctuations; etc.
8. a) What is a SWOT analysis?
A SWOT analysis identifies the strengths, weaknesses, opportunities and threats of a
business.
b) Why is a SWOT analysis a useful tool for businesses?
It can increase the businesses chance of success by helping them avoid common
mistakes and identify why each of these are important or relevant to the business.
Management staffing and teams
9. Consider what Danielle Stephenson has to say about client relationships. From the program and
using your own knowledge distinguish between repeat customers and referral customers.
A repeat customer is a customer that returns consistently, a referred customer is a
customer that has been directed to the business by a satisfied customer and adds to the
customer base.
10. What is identified as the reasons why having too few staff is a problem.
People are put under pressure and may not deliver a product properly
10
Balancing finances
11. From the following terms and using the information in the DVD as a guide sequence the order of
what might occur when there is a cash flow issue
Not able to pay debts

loan or overdraft
overextend finance
profits dont cover costs
be in a situation where you now have to pay back a loan
cover your costs and try to make a profit
dont have working capital
(1) Overextends finances
(2) Profits dont cover costs
(3) Not able to pay debts
(4) Not have working capital
(5) Loan or overdraft
(6) Now have to pay back a loan, cover your costs and try to make a profit
12. How does a budget assist in the business plan?

A budget keeps track of finances and allows for future investment
13. What is the advantage of a bottom up budget?
A bottom up budget involves the actual people who do the work of the business (e.g. line
managers) telling upper management what their needs are, which means that the budget is
more likely to accurately reflect the actual requirements of business.
Maintaining competitive advantage
14. Circle from below what is suggested as ways in which a business can remain competitive
Offer different products
Be smarter than your customers
Good robust information between all involved
One person doing all the work
Price
Efficient service
Good use of technology
Offer customers obsolete products
15. a) What are business ethics?
Business ethics is doing the right thing, honest, fair and appropriate behaviour when
dealing with customers, suppliers, employees and other people who interact with the
business.
b Why is it important to have ethical behaviour in business?
If a business lacks ethics they will quickly lose customers and word will spread in a
negative way. They could also be investigated.
11

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Critical Issues in Business Success

VEA Group Pty Ltd 2012

Reproducing these support notes