BSNS4701 Assessment 1 Brief

Weighting 

20%

Learning outcome

1. Develop a business plan for a small business in Aotearoa New Zealand.

Instructions

Complete and submit your assessment according to the Open Polytechnic’s Assessments webpage. This includes information on academic integrity, formatting, word limits and referencing.

• Include your name, student number, course number and the assessment number.
• Number your pages.

Submission

• Submit your assessment in one file.
• Submit your work through your iQualify course.
• Emailed assessments will not be accepted.
• You will receive an automated notice advising you of your successful submission.

By submitting your assessment, you confirm that it is your own, original work.

Scenario: Chalmers Garden Centre  

Anne and Ted Chalmers are a couple in their mid-40s who decided to turn their life-long interest in gardening into a business opportunity. They opened a garden centre in their provincial town location, and their goal was to live a lifestyle away from the corporate world but to generate a reasonable profit on which they could comfortably live.

They planned their business launch over two years, during which they studied bookkeeping and other small business skills and visited many nurseries around the country to pick up hints about this line of business.

The Chalmers purchased some land for the garden centre, and after using $125,000 cash from their personal savings, they raised a business loan of $200,000 secured against the land. This loan also allowed them to fence the property and construct a car park and a small building on it while retaining sufficient money for business cash flow, including stock purchases.

Anne and Ted intend to operate the business in line with their personal values. These include always giving your best, having a can-do attitude, treating customers like family and creating an environment that everybody wants to be a part of.

When the garden centre opened, Anne continued to work as a nurse to keep a flow of income while Ted started building the business full-time. He had previously worked in an administration role for a large corporation, which gave him a range of experience.

The first two years were very hard. Ted was manager, shopkeeper, purchaser and horticulturalist, and Anne was nurse, shopkeeper and bookkeeper. The hours were long, suppliers insisted on cash payment, and income was low. On day one, they had three customers. People weren’t aware their business existed and there were already two small, well-established garden centres on the other side of town.

Ted added marketer to his list of jobs. In time, though, the business established a regular clientele. Suppliers were now more confident and trusting, allowing larger quantities to be purchased on credit. The garden centre was also producing more home-grown plants on its own land. With fewer worries about cash flow, Anne was able to resign from nursing to help Ted.

After five years, the garden centre has become a seven-day-a-week operation: 9 am to 5 pm on weekdays and 8 am to 4 pm at weekends. It now employs four staff to serve customers (two full-time and two part-time). It averages 200 customers per day at an average spend of $40 each, with total sales of just $3 m per annum. The garden centre has exclusive selling rights for a popular range of garden accessories made by a renowned local craftsman. It is achieving an overall business profit of $100,000 per annum, which Anne and Ted consider a great return on their investment. A very recent initiative was to supply trailers for hire, as this would make it much easier for residential customers to make larger purchases.

However, the country is currently going through an economic downturn, which has a mixed impact on the garden centre: negative and positive. The government has responded to the economic challenges by increasing business tax rates. In addition, it has increased employee annual leave entitlements, which is a cost to the employer. On the upside, the unemployment rate is higher, which makes it easier for the garden centre to recruit new staff when needed. The Reserve Bank’s response to the economic downturn—reducing interest rates—results in more people having discretionary money in their pockets to spend.

Regional council statistics show that 42,000 people live in the town boundaries, and another 7000 people live in the outlying rural area. Several residential subdivisions are under development in the town’s immediate vicinity, and many of these owners will be purchasing outdoor plants for their property landscaping.

Recently, a major challenge has arisen: a nationwide garden centre chain is setting up a competing operation in a central and high-profile location. Anne and Ted have previously conducted research showing they had a 40% share of the garden centre market, but they’re now very concerned that this could drop dramatically in the short term. They decide to meet the challenge head-on by expanding their business offerings. They wish to open an on-site café and develop a mini-golf course on the land. Their thinking is that these activities will provide reasons for existing customers to keep coming and attract new customers. They will need to take on additional staff for the expansion.

This expansion will require additional funding of $105,000. Anne and Ted have $25,000 of their own and wish to borrow $80,000 from the bank. The increased scale of operation will require the business to update its infrastructure and operational processes. Although they already have an effective online presence for business marketing, they use a dated computer system, undertake manual stock takes and don’t really have any staff training system in place. The first action they intend to take is to start using barcode scanners to provide real-time information. On a positive note, the garden centre recently undertook an external audit of its health and safety procedures to meet its legislated compliance requirements and achieved an ‘impeccable’ rating.

Anne and Ted are aware that they are taking a personal financial risk with their planned expansion but feel it is a risk they must take for the business to survive.

Based on this scenario information, complete the following five tasks.

Task 1

Explain which phase(s) of the business lifecycle the garden centre is currently in.

(Word count guideline: 100 words)
(20 marks)

Task 2

Complete a SWOT analysis of the garden centre. You should identify three topics within each SWOT category. There is no need to provide explanations for your choices.

(Word count guideline: 100 words)
(20 marks)

Task 3

Complete a PEST analysis on the garden centre. You should identify two topics within each PEST category. There is no need to provide explanations for your choices.

(Word count guideline: 100 words)
(20 marks)

Task 4

Identify four sources the garden centre could use to gather environmental scanning information and explain the type of information to be found at each.

(Word count guideline: 100 words)
(20 marks)

Task 5

Explain how the garden centre will benefit by incorporating the partnership, participation and protection principles of te Tiriti o Waitangi | the Treaty of Waitangi and connecting with local networks and partnerships.

(Word count guideline: 200 words)
(20 marks)

(Total word count guideline: 600 words)
(Total marks: 100 marks)

BSNS4701 Assessment 1 Marking Schedule