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Start-up capital: Free course.

The start-up capital is the first hand money- your personal money or money that  borrowed from a bank. In borrowing, entrepreneur think carefully, if they borrow more; they’ll pay more & sometimes it become difficult to repay. In bank, they see well thought out detailed plan of business so they can lend money to entrepreneurs (business men).

If you a sole trader not having enough money to start up the business, you can go with another who have; skills, qualifications and enough share for starting business. The partnership business signed an agreement- it include rules & regulations and share profit of the business.

Market Research

The group of interested people for buying particular product, make up market for that product. the place were buyers and sellers meet is also called market. In it, it consists of different desired group of customers for buying different selling items. The successful business person find information about market-a desire of buyers buying particular product. This is called Market Research, it enable entrepreneur to identify the market gap ( the spot where needs & wants are not being met) If market research is done well, it shows that outcome of that business will be viable (successful).


Franchising Business, free course:

In developed countries businesses operated as franchises– this is a small businesses operated under single name. These small businesses were referred as franchisees. The franchiser is the main business that registered all its small business under a particular name of his business & allow them to use product and system for a fee & usually a percentage of their revenue.

The franchiser started off with original business idea that has ended up being successful, their business name become well known throughout countries.  In various centers of the countries, the franchisees ( smaller businesses) operated by using franchiser’s facilities. The main business( Franchiser) taking responsibility for advertising.

The advantages for people who become franchisee (small businesses) sell products that proven to be successful and never think of original idea.  They get advises from (franchiser  main business) & buy all material from them.

However, their disadvantages are to sign agreement- which is called franchise agreement. It allows franchisees ( small businesses) to pay fee and percentage revenue to the main business ( franchiser). The Franchisee run businesses according to what the main business (franchiser) tell them to.

There are several advantages of franchiser. They do not find money to extent their business, franchisee (small businesses pays off). They get steady inflow of money & if more they register small businesses ( franchisee) in various location, their names become popular.

The name of Franchiser ( main business) is very important. They guide it well, if other business tries to use their name or similar name, they  take them to court. The franchisers are very cleaver in marketing & a very successful. Examples, of franchisee business are big rooter.

The Value of business (Net Asssets) = assets- Liability: free course.

If you are taking a business owned by sole trader or partnership, it would be wiser to help them pay the money the business owes to nay creditors; so that the value of liability is zero.

There legal consideration to this, as any money owing ( liabilities) is as a result of contract between the original sole trader or partner with the outside business (creditors).  The company is a legal entity, it is separated from the owner. The contract a made between company, supplier or bank, regardless of who the owner of the company.

The owner sell existing business above the value of the net asset. The regular customer & good business reputation adds value to the business. These type of business cost high because of its values. The good will is the difference between the assets & the price the business is being sold for. The accountant classified this type of asset as intangible asset-  The intangible means it cannot be touched. The motor vehicle, equipment and stockare tangible assets, because they a physical things and can be touched.

Ways of Setting up Business: Free course

The start-up capital is the first hands money invested to start business, it is their own money or borrowed money-either in bank, friends or family. The money’ are  spent by business to make money. For examples,  the owner buy printer machines, before he run his printing shop.

When having less money, it is not necessary to invest to find market gap- researching market gap requires lot of money; so it is better to assess your financial status. The person should think carefully in borrowing. Otherwise, business person borrows too much & later find difficult to repay the debt.  

If start-up capital is less, in short-term, person can look for ways to earn money- this can contribute to a full amount for business to start.

In order to start successful business, skillful business ideas & startup capital goes hand in hand. Thus, person must be skillful & have enough money. These is very important things. There’s no set of instruction to follow in starting business, therefore, person must make research or get information from other source to start up the business.

Purchasing an Existing Business

Instead of starting your business, you can buy an existing business. The first thing to consider is, why the owner of the business sell it. The owner may be old or just tired of running the business or business might be in trouble. Their business record (sales revenue & expenses must be checked) thoroughly, examined the various record that kept by a small business & find value of business assets. The asset is anything of value owned by a business- it include, equipment, stock & even debtors ( money owed to the business by other people). It is important to know that value of these assets is correct.

It is important to find out their liability. The liability is a money owed to someone outside the business. This could include the bank loan or money owned to creditor ( outside business that supplied goods on credit & a not yet been paid). The ways to value business is to subtract the liability from the assets.

Free Business Study course:


The pricing is important in marketing. The advertisement need pricing also to specified the value of the product. The two (2) main things to consider when deciding pricing are costing & price charge.

Firstly, cost need to be covered in order for business to make profit.

Secondary, price charge will influence demand for the product. The demand is the desire of buyers to buy product in a given period of time. if there is less desire for buyers to buy particular item, it means the price is high so people won’t buy the product. Therefore, costing & price charge is two very important.

The Wholesaler & Retailers

The situation for wholesaler & retailer is different from manufactures when calculating break-even point. The break-even point for manufactures depends on the quantity they make as this affect variable cost. The wholesalers and retailers simply have to decide on what quantity of goods they will buy-simply they a given a discount for buying in large quantity. This is when business buying in bulk.

Calculating Cost –Into Store

The starting point for wholesaler and retailer is the price they pay for the goods. In the case of wholesaler is the price paid to the manufactures. In the case of retailer, is the price paid to the wholesaler. The wholesaler & retailer paid for transporting goods to their store. Their freight cost is the additional cost also.

Some retailer pay for insurance if they buy expensive goods.  When calculating the selling price, retailers are allowed to base on the total cost of getting the goods into their store. This cost is known as cost-into –store (CIS), and is made up of whole saler cost plus the cost of freight, & insurance.

What is mark-up?

The mark up refers to the amount of money that is added into the CIS of goods in order to find the goods selling price. The size of mark-up will change depending on the type of goods and where the store is. It has to be big enough to help cover all the other cost of running the business, as well as leaving enough profit for the business person.

The mark up is expressed as the percentage. For examples, the mark up on the range of product may be 30% percent. If the particular good has a CIS of K100.00, then 30% is added on as the mark-up. This means that the selling price would be K130.00  (K100.00 + (30% of K100.00)).

Applying discounts

The reduction in marked price of goods is called discount. The business usually sell their goods at the normal marked prices, but their a some situations when they a prepared to give a discount. This means that they will sell their product at the lower price. The most common type of discounts are trade discounts, sales discounts and cash discounts.

Trade Discounts

The trade discounts occurs when business buy in large quantity from another business ( cooperate customers). The purpose of trade discount is to encourage businesses to come & buy again in same business. If business not regular customers & want to buy in large quantities; it can be approved to give trade discounts.

Sales Discounts & cash Discounts

The business offers sales promotion, this is when they reduce the sales price because some goods are slow to sell. They sell goods in a discounted price. The cash discount is given in a condition that someone who does not have account who buy expensive items.

A business or person who does have an account with the business doing the selling is usually given thirty days to pay the amount owing of the statement of account. Special items may be offered in order to encourage them to pay the amount earlier. For examples, if the amount owing is paid back within 14 days, a 2.5 percent discount may be offered. This encourage the customer to pay more quickly and allow a faster flow of cash into the business.

Business study Free course:


The ways goods are moved from manufactures to consumers already learned in previous lessons. The wholesaler and retailer act as middle men. The distribution is the process of getting goods to the consumers & distribution chain is the stage of process connected to each other, it is made up of; Manufactures, wholesalers, Retailers and consumers.


The manufactures specialized in producing & sets its factory in a location best suited its need. They consider number of factors before setting the location. The factors are; availability of natural resources & workers, transportation access, Electricity and water.

If people who make up the market live all over the country, then manufactures will consider how these goods will reach these potential customers- they concentrate on what they are goods at-making goods. These manufactures rely on other businesses to get goods to consumers.

Distribution & Wholesalers

The local business make arrangement to import the product, if manufactures is in other countries These local business is referred to as distributor. They stored their product in ware house and sell it all over businesses within the country. They don’t want to sell their product directly to consumers.

The local manufactures within country, choose to sell its product to wholesaler. They perform much the same function as distributor.  Some wholesaler buy imported goods from distributor. The wholesaler do not sell directly to consumers. They buy goods in bulk from manufactures and distributors. These goods are stored in ware house.


The business that sell directly to consumers are called retailers. They buy goods directly to wholesalers, but in some cases, they buy it from manufactures and distributors. There are situation make up distribution chain;

  1. One-Step retailing: Manufacturer to Consumers
  2. Two-Step retailing: Manufacture to Retailer to Consumer
  3. Three-Step retailing: Manufactures to wholesaler to retailer to consumers
  4. Four step retailing: Manufactures (stays out of the country) distributors to wholesalers to retailers and consumers.

The four –step retailing occurs when manufacturers are outside the countries.  The sole distributors import certain goods within PNG- it means wholesaler have to buy from them. They play important role. It is not easy to arrange for imported goods; they consider currencies, shipping arrangements & insurance.

Transportation Method

There are different ways of transporting goods either see, land or air. The cost applied to each transportation according to how fast it will reach consumers depends. The retailers locate close to consumer so it help them to walk, but some takes PMV’s & other transportation means. There are transportation businesses to provide services for various transportation needs for business. The ability of retailers to sell goods largely depends on what transport options available to have goods brought to their store.

Land Transport

In the land, there are different transportation  to carry Freight-it is the name given to the cargo  carries by truck, ship or plane. The different freight transportations in land; Semi-Trailer carry general cargo, Tankers carries Patrols & Refrigerated trucks carries frozen goods. These trucks are very expensive & owned by companies.

The manufacturers & wholesalers have their trucks too. This is called in house transportation service.  The specialized transportation services provided by other transport companies to businesses are called, outsource transportation.

In the in-house transportation, business is in full control & not depend on other transportation service-this is their advantage. Their only disadvantage is, those fleet of vehicles are too expensive to own.

When business owned a number of ships, vehicles and trucks, we referred to as fleet. It is the groups of ships, planes and tucks.

The Sea & River Transport

The ship boats and canoes play major roles in distributing goods-either in see or rivers. In PNG, we have, Ramu, Fly and Sepik river. It’s possible for people to hire smaller boats. The transportation hired for specific journey is called carter.The exports & imports are carried in large ships. The sea & river plays major role in transportation service.

Air Transport

The air transport is the fastest & expensive in moving goods in an area where there is no road, sea & river linkage. In urgent, speed is very important to consider to move goods.  If goods or defects machines not transported quick, it affects business revenue, so in situation like this, business consider fastest transportation system.

Which Form of Transportation to Use?

The circumstances determine choice in selecting transportation. some factors include;

  • Availability: what means of transport are available? Are there road connecting two place? is there suitable port or airfield?
  • Cost: How much will it cost, if there are several option available. Land & sea are cheaper than air transport.
  • Speed: The time is important. In urgent situation, the air transport is okay compared to see and land.
  • Types of goods: There are perishable goods –goods cannot be preserved for the long time such as meat, fresh fish & vegetables. These goods are transported  with refrigerator fleets. None perishable goods– these packed goods like tin fish & rice. It cannot be spoil, it will stored for the long time.These factors need to be consider before choosing most suitable transportation.

Brand and Branding: Free course.

The name given by manufactures to one of its product is called brand. It can be the same name as the name of the manufactures or different name.  examples, Coca-Cala Amatil  make lot more product than coca-Cola, lot of dofferent name among this manufacture. The trademarks associated with brand name.

The consumers recognized trade & brand name with certain level of quality in order to buy best products. The business spent lot to advertise brand name. The Coka-Cola is worth billions of kina. If business steal other brand name, the can sue them to court. If trade name is registered in Government agencies (IPA), then no one is allowed to use it.

Consumer Demand

The brand become popular to customers through adverting and skillful marketing. The consumer buys over again because they like the name of the brand. The advertising and skillful marketing raised consumers demand.

Quantity and Quality

The same brand of product comes in different quantity, smaller or larger. It cost less to put product into larger package than smaller in manufacture point of view; so cost reduction can be passed to consumers in the form of lower prices. The manufactures maximize ( increase) profit by providing the same product in a range of different sizes.

There are different brand of the same product. The wise consumer looked at price and quality of goods. The cheapest brand may not be the quality or the cheapest brand may be the quality; so such things should be consider before buying the products.


The promotion similar to advertise but quite different. To make known the new products to customers is called advertising but known product in special sales, competition & give away is called promotion. Promotion is a short period while advertising is ongoing & both cost lot of money.

Advertising Media

 There are range of media to advertised, some are expensive & some are cheap. The media used are;

  • Print Media: It contain written messages & pictures. The common form of it appears in newspaper & magazines, posters, leaflets and brochures.
  • Broadcasting Media: It contain messages sent vi airwaves such as radio & televisions. Radio involved transmission of words and songs. The television involved sending out images, movies, visual advertisement etc.
  • Billboards & Signage: It is the large signs erected outside the building or at the side road where most people meet. Some billboard are made up of neon light, it lightened during the night.
  • On clothing: The business name, logo or brand name screened printed on cloths. This is part of promotion or ongoing advertisement.
  • The Internet: The internet through website advertise products outside different countries & millions of people. The united states business advertises more of their products in internet.
  • Word of mouth. This is very effective cheapest way of advertising. A product can be sold at market or store and recommended to friends and relatives by people who have tried it.

Cost of Advertising

The cost of advertising depends on what they expect to get out of it. It leads to more product being sold, but revenue from extra goods sold must first pay the cost of advertising. The business paying for special promotion of its products hopes to get an immediate boost in sales.

They see benefit of long term advertisement too; so that brand name can be in the mind of consumers- this can lead to more goods can be sold over a period of time.

The revenue for business that publish News Paper and Magazines comes from advertising fees. The space in their News Paper & Magazines are paid for by businesses to advertise. They sell News Paper and Magazines too, to get money. The cost of advertising depends on space-how must it will be occupying. The full page & advertisement in colors are more expensive.

However, small business payed on small classified advertisement on less expense. The Classified Advertisement is to put printed messages under same heading with other advertising message.  Examples, some headings are; Automotive, Notices, Employment, General, Personal, Seasonal, Property/ Real Estate.

The Radio & Television cost depends on seconds, how the span it will be on air. The advertisement on Radio & Television also referred as commercial. The time is the factor influencing cost in commercial advertisement.

The prime time of advertisement occurs in a pic of time where many people observing popular programs. These popular program referred to as Prime Time. The businesses pays more on prime time.

Advertising agencies

Those business specialized in producing one types of products & services may not be so knowledgeable when advertising their product. It is not necessary to hired expert to promote their product.

However, the business specialized in producing different types of items may need  sales, promotion and marketing expert. These experts are called advertising agencies. The advertising agencies also a business. They earned their revenue through creative averment.

Low Cost Advertising

The small business first established need to keep their cost down. They need to make known to their target market of their products. There are low cost way of advertising like simple sign-this is to tell people about their product. Example, notice attached on board, carrying their product in streets, printing in flyers and advertised on social media, conversation etc. The small business need to aim target market not necessary the whole customers through simple signs of advertisement. This is the way of low cost advertisement.

Responsible Advertising

The responsible advertisement has its limit of how they can persuade their customers to buy their products & services. They allowed to make their product sound and look good, but there is the limit to how far they can go with the language.

It is illegal to make false statement to persuade customers to buy their product. The illegal advertisement & operation should be reported to (ICCC) Independent Consumer & competition commission. Therefore, it is better for businesses to engage in responsible advertisement. The responsible business advertisement are honest & provide relevant information about the product.

Packaging Labeling: Free course.

The items are wrapped & packed using; container, cardboard, plastic, tinned, glass or metal. The description of; weight, quantity, date, direction  and manufacturing details are written in  a packed items. This is called labeling.  The purpose of labeling is to protect the items.

The government enacted the law, “ Pure Food Act” for manufacturers & these act contain most of the things stated in packed items.

The manufactures pay artist to design on packed items-that is to encourage customers to buy it. This is an important part of packaging. The useful information used in packed items are;

  • Weight/ volume: it contain the amount of product that measured in; grams, volumes measured in liters & quantities measured is numbers.  
  • Use –by-date: The date are written in the packed items. It is to show span of time the items can be used; after required date, it is no longer usable for consumption.
  • Direction :  The instruction on how to use is also placed. It is important for consumer to use, if consumers not following well the instruction & defects the machines; or taking  wrong timing in medication, the manufactures will not responsible for it.
  • Nutritional Information:  stated amount of; salt, fat, carbohydrates and sugar. It is designed with artificial coloring & design. some people use carefully, according to their body requirement whether  not to use salt or sugar, they choose accordingly & buy these products.
  • Manufacturers details:  It contain manufactures name, name of place produced and countries that production takes place. the special logos are place to identified production companies & countries of production.

The Responding Marketing: Free Course.

The communication is an important part of marketing. The marketing involved customer willing & able to buy product depending on tasted & preferences. If more customers buy  particular items, it means the market of that items is high.

 On the other hand, if less customers buy particular product, the market is ineffective. Therefore, business advertise information on product & services to attract more customers to buy their items. The customer use advertising information to make decisions.

The advertising information aim to persuade people. Some advertisement contained less useful information. The business spent more to advertise to increase its sales. The customers need to aware of advertising information & screen it, either it will meet their needs & wants or not.

The business increase their market shares through business competition of advertisement. In such case, it is useful for customers to find out about different brand of the same type of product in order to choose the best.

The misleading advertisement is investigated by Independent Consumer & competition commission (ICCC). It is illegal according to the law. The large fine is paid by businesses who mislead customers. Some advertisement being legal, but when consumed in large amount, it becomes harmful. The junk food contains too much sugar and salt. It can cause serious health issues. In the case of children, parents are responsible for choosing their food to avoid health issue.

Selling Items (PNG Meri Blauses)

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