4.1 Market research, productioan and profitability  (Page 2/2)

Activity 6:

To calculate cost

[lo 3.1]

a) Write out a complete list of all the materials that you needed to make your card. Also determine the cost of each type of material.

Cost price is what it costs you to make the card.

b) What were the different tools that you used to make the card?

c) How much time did you need for making the final card?

d) Let’s decide that you would like to make 20% profits on each card that you sell. Calculate the cost price for the card. (as in a ) (as in a )

(NB. Selling price = Cost price + (20% of Cost price)

3. Profitability

• You have bought certain materials to make invitation cards to meet a particular need and have produced the cards. Now you have to try to sell them.
• The money that it costs you to start a business is the start-up costs . What you spend afterwards is known as the running costs . You have to add starting costs and running costs together to know what your enterprise will cost you.
• To make a profit, you therefore have to make more than this amount. From this you can determine the price of your product.
• Your educator can help you to test the market for your cards and to market and advertise your product. (See Addendum 2)

Activity 7:

To plan party decorations

[lo 3.1]

Provide examples of decorations and discuss the types of entertainment that would be popular at a party. Arrange an exhibition of different types of decoration. List ideas of what is possible.

Which theme have you chosen?

Activity 8:

To make decorations for a party

[lo 3.1]

• You, as a group, now have to plan and make decorations and plan entertainment to match the theme. The decorations may not cost more that R5 per person and you may therefore only spend R5 on the buying and making of it. Be creative and original.

Try to make use of recyclable materials. You have one week to do this. Your ideas

must be exhibited for evaluation on a table in room

on (date). The entertainment should be explained by

means of a poster that is exhibited together with the decorations.

Now is the time to ascertain whether your business idea is viable. Will it work? Is there a market for party accessories? To establish all of these, we are going to do a SWOT analysis.

WHAT IS A SWOT ANALYSIS? Answer the following questions:

S trong points: Where does your business venture address a gap in the existing market?

W eaknesses: Which part(s) of your business idea could possibly cause problems?

O pportunity: What do you see as the opportunity for selling your product? Will you find enough clients?

T hreats: What threatens the success of the business? What suggestions are you able to make?

Begin work without delay!

Assessment