Sources of information and the link between the planning and operation of a business
HELLO MY friends. It is a pleasure to once again be presenting a lesson for you all. The specific objective of this lesson is that students should be able to identify sources of information for conducting research into the establishment of businesses. Also, the student should be able to explain the relationship between planning and the operation of the business.
SOURCES OF INFORMATION
The research plan can call for the gathering of primary data, secondary data or both.
Primary data, also known as field research, is research that collects original or new data, using various techniques. These techniques include:
Questionnaires. The questionnaire is the most common survey method. It may be written or orally administered. It is designed specifically for the task, and is normally completed face to face, by telephone or through the post or email.
Test marketing. A potential new product is marketed on a small scale regionally to gauge people’s reaction to it before committing the firm to production and national launch.
Consumer panels. A panel consisting of a small number of consumers is set up. They receive the product and comment on it.
Interviews. These may be formal or casual. They may be conducted on an individual or group basis.
Observation. People’s reactions are quietly watched or noticed while they shop. This provides information from the marketplace.
SAMPLING IN PRIMARY OR FIELD RESEARCH
If primary research is to provide relevant information, it must use a representative sample, i.e., consumers forming the sample must represent the market as a whole. The researcher must also decide how the respondent will be chosen and how large the sample will be.
THE SAMPLING METHOD USED MAY BE
(a) Random – where everyone in the population has an equal chance of selection, since no special criteria for selection is used.
(b) Stratified – where a subgroup of the population is selected, e.g., using age, sex, occupation, etc. Only those in the subgroup will be in the sample.
(c) Where a quota is set. Data is collected until the target quota is met. The larger the sample size, the more expensive and time consuming it is to collect the data.
DESK OR SECONDARY RESEARCH
This type of research uses existing information, such as information in the firm’s own records. This may include: sales records official publications statistical and newspaper reports government publications trade association studies university journals web sites text books, etc.
The major advantage of this type of research is that the information is readily available and can be stored for the future. Among the disadvantages is the fact that it is sometimes out of date and the research is more time-consuming than the primary type of research.
PLANNING AND OPERATION OF A BUSINESS
The link between the planning and operation of a business is that the planning stage is the first stage and the operation stage is the last stage. In-between these two important steps, there are a number of other steps, which include research and the acquisition of funds for the business. The plans are short term, medium term and long term. The long-term plans are the overall plans of the business.
However, in order to achieve these plans, interim or short-term plans and medium-term plans must be established in line with the long-term or overall plans. In other words, once the interim or short-term plans and the medium term-plans have been achieved, the long-term or overall plans will have been achieved.
The short-term and medium-term plans are the stepping stones to the long-term plans. If the entrepreneur tries to achieve longterm plans without short-term and medium-term plans, he is likely to fail in the achievement of such plans. Without proper planning, operation of any business is not likely to succeed.
Next week, we will outline some of the regulatory practices required by government in establishing a business, and also look at sources of capital for setting up of a business. See you then.