DESCIPTION OF THE BUSINESS

A BUSINESS is an organization that uses resources to produce a good or service that meets a
customer’s wants with the aim of making profits.

KOOL AND ROMANTIC YOU (K.R.U.)

This is a SOLE TRADER business- a one owner business, one person provides the permanent finance
and has full control of the business and is able to keep all the profits. This business is engaging in the
production of local cosmetics from natural herbs. Its aims/main missions are:

 To make profit/gain wealth

 To provide training & employment in cosmetic production and marketing
 To inform citizens on the benefits of natural herbs and encourage them to use and abuse them
 To contribute to the country’s economy and enhance foreign exchange

The possible examples of goods and services that this business wishes to produce are:

 Soaps and other cleansing products;

 Creams, lotions, face masks, powders for the skin;
 Shampoos, conditioners, lotions, oils, waving agents, fixatives, bleaches, dyes and dye;
removers for the hair;
 Toothpastes and other oral care preparations;
 The Antiperspirants, deodorants and other personal hygiene products;
 Perfume and other aromatic substances; etc.

The production of the last three products is the business’s first priority then it should be able to start
the production of the other cosmetics.
 JUSTIFICATION OF LOCATION
KOOL AND ROMANTIC YOU (K.R.U.) will be located at Green St. Square, knock Patrick-
Mandeville.

Reasons for location justification

 Availability of market and easy access to business- There are nearby industries in this area,
therefore, the business can make immediate sale and transport cost can be avoided. This also
helps in the reduction storage cost for finished products.

 Availability of labour and land- There is available land for the firm to accommodate its
buildings and machines. Labour supply is great in this area and the firm will need the man
power to operate machinery and other production operations in order for effective
productivity.

 Availability of power and water- The production of cosmetics could take a lot of machine
operation, hence, a lot of electricity or gas. Hence, production is power intensive. There is
efficient service in this area in regards to power. In cosmetic production, water is very
important. The water must be sufficient in supply and always clean and flowing in order for
great quality and quantity output, and also made available to staff and customers in order for
there to be environmentally friendly business operations.
 SELECTION OF APPROPRIATE LABOUR
Type of labour necessary

The business requires skilled workers/ labours. This is because all cosmetic producing companies
are expected to follow a guide (FDA Guide) which states that “all workers must have a certain level
of education and should be able to maintain a certain quality system since it deals with drugs and
peoples body.”

POSITION NUMBER OF CLASSIFICATION MAJOR DUTIES/

WORKERS OF SKILL FUNCTIONS
MANAGERS-Manager 1 Manager MANAGERIAL They responsible for
and assistant manager 2 Assistants AND directing and controlling
PROFESSIONAL the organisations resources
SKILLS and operations.
MARKETING 14 Marketing SKILLED Responsible for finding out
WORKERS-Surveyors/pr workers what customers desire
omoters, etc. (through surveys), promote
products (through
advertising) and setting
prices and distribute
products.
FINANCE WORKERS- 5 Finance SKILLED Keep accurate and up-to-
Accountants book/keepers, workers date records of the
etc. business’s transactions and
productivity, budgeting and
making future plans.
PRODUCTION 7 Lab workers SKILLED Workers are to research and
WORKERS-Lab workers, 18 Production develop suitable products
extractors, etc. workers (lab workers), use most
appropriate method to
ensure high quality of
production and store
finished products and
materials.
PERSONNEL 3 Personnel SKILLED Responsible for building
WORKERS workers the work force- recruiting
and selecting suitable
workers, motivating them
with payment etc.
EMERGENCY 4 Security guards SKILLED Responsible for keeping the
WORKERS- Security 2 First aiders working community or
guards, first aiders, etc. 3 Maintenance business areas safe. They
workers are around for safety and
emergencies.
 SOURCES OF FIXED AND WORKING CAPITAL
Fixed Capital

This is sometimes referred to as physical capital. It comprises of the durable (long term) resources/
assets used for a long time for business operations and also production. Examples are: machinery,
vehicles, buildings, etc.

Two sources of fixed capital are:

 $3.5 million gained from family members to construct facilities on property owned
 The use of $2.5 million of personal saving to purchase machinery and motor vehicles

Working Capital

These are the stocks of materials and/or goods used in the day-to-day operations of a business and are
continually being used up. Examples are: cash, intermediate goods, raw materials etc.

Two sources of working capital are:

 Taking money from personal savings to finance business

 The use of money earned from the day-to-day operations of the business
 ROLE OF THE ENTREPRENEUR
An entrepreneur is someone who shows vision and creativity, taking on the risk of creating a new
business venture. The roles of the entrepreneur are to:

 Develop ideas
 Organise resources
 Take risks
 Enjoy profits

Three functions of the entrepreneur

 Manage financial affairs- Provide finance to cover all business operation expenses.
Examples are: maintenance costs, transportation costs and workers’ pay.

 Make effective decisions- Exercise good entrepreneur skills and behaviour so to help making
effective decisions so that the business can grow and workers and customers can also grow
and become more motivated.

 Evaluating overall performance- Continuously assessing and monitoring all aspects of

operations. Evaluating staff performance, making sure they are comfortable so they can work
efficiently and identifying problems and solutions.

 TYPE OF PRODUCTION
The type of production the business is engaging in is Secondary Production which is sometimes
called Manufacturing/ Construction Industries. The business is a part of a country that takes part in
surplus production.

Description of the type of production

Secondary Production-This includes manufacturing such as assembling, refining and construction

(building) industries. The raw materials used in this type of production come from primary
production.

Raw materials, herbs/plants will be bought from large farms in Mandeville, tested by our chemist and
then we will decide on the products they are most suitable for producing.
 LEVELS OF PRODUCTION
The business will produce at a Surplus Production level.

Description of the level of production

Surplus Production- Here the level of production is adequate to supply local demand and for export.
Large industries can produce large quantities of output to satisfy local consumption and foreign
exchange from export, for example, the sugar and banana industries.

This business will be catering for the surplus level of production. The town of Mandeville is its main
market. This business is to be dynamic rather than static, going out to businesses and communities to
inform, educate and market our products as it aims to market its products island wide and abroad.
 QUALITY CONTROL MEASURES
In order for K.R.U. Industry to perform effectively, the managing staff will have to take few quality
control measures and ensure workers are performing their tasks well.

Two quality control measures that the business will have to adhere to are:

 Only people who are skilled with knowledge and sufficient experience should be employed.
This enables the business to be able to meet other quality control measures and it also helps to
boost production.

 Ensure that the products being sold are safe (tested first), properly stored and are of good
quality so that customers will be satisfied and encouraged to support our business and we gain
their loyalty.
 CUSTOMER COMPLAINTS
K.R.U. Industries has customers’ complaints email address printed on all its products where we
enquire all customers to attach their complaints if they encounter any faults. If they don’t wish to
email us, we simply ask them to give their queries to the members of the survey team which visits
communities annually as many times as necessary.
 USE OF TECHNOLOGY
In modern society there has been vast development in technology usage and this industry has a need
for technology to improve the efficiency of the business. The technology the business will use is as
follows:

TECHNOLOGY USE HOW TECHNOLOGIES

WILL ENHANCE
EFFECIENCY
Agitator Shake or mix ingredients This technology has proven to
together be very accurate and produces
finished products of high
quality to sooth customers’
demands
Packaging equipment Very large machines that These technologies have also
automatically package product proven very efficient and
into containers once being accurate. Little or none of the
operated by humans. product will waste during
packaging and less time will be
spent packaging so the business
can spend more time working
on higher quality.
 LINKAGES
A linkage industry is an industry that depends on another industry’s output in order to produce goods
or services. For example:

A food canning factory that receives food from farmers.

This business will be taking part in Forward Linkage rather than Backward Linkage.

K.R.U. Industries will be benefiting from this type of linkage because finished products will be
presented and marketed in bulks.
 POTENTIAL FOR GROWTH
Internal Growth

Within the next 3-4 years, there will be a great infrastructural expansion. The business intends to
employ more persons, improve on its technology and purchase more assets.

External Growth

The business intends to have different branches in at least 7 parishes in Jamaica within the next 7-10
years. We also intend to make our company well known overseas and the other Caribbean countries.
 GOVERNMENT REGULATIONS
Government regulations are laws that act as monitoring system; they monitor productivity and/or
quality of products being produced. How the entire business operates is also monitored by
government regulations.

The two most important regulations pertaining to cosmetics marketed in some countries are the
Federal Food, Drug, and Cosmetic Act (FD&C Act) and the Fair Packaging and Labelling Act
(FPLA).

The FD&C Act defines cosmetics by their intended use, as “articles intended to be rubbed, poured,
sprinkled, or sprayed on, introduced into, or otherwise applied to the human body… for cleansing,
beautifying, promoting attractiveness, or altering appearance.”

This regulation monitors the use of products that are being produced by businesses. It has a lot of
impact on K.R.U. Industries as the industry will be producing both for medical and beauty purposes.
All our products must meet a specified quality and have specific ingredients. Our products must be
tested and approved of by the FDA before they go on the market.

The FPLA monitors all matters regarding packaging, labelling and branding. It works alongside the
FD&C Act.

The FD&C Act prohibits the marketing of adulterated or misbranded cosmetics in interstate
commerce.

“Adulteration” refers to violations of involving product composition- whether they result from
ingredients, processing, packaging or contaminants.

“Misbranding” refers to violations involving improperly labelled or deceptively packaged products.

Misbranding can occur from failure to present material facts like directions, warning etc.

If in any case the business fails to abide by any of these regulations, customers are entitled to lawsuits
against the business. The business will also face serious penalties.
 ETHICAL ISSUES
Ethical issues are problems or situations that require a person or organisation to choose between
alternatives that must be evaluated as wrong or right.

The business should avoid pollution and waste as far as possible. This issue is most common in
production. Workers have to ensure they avoid pollution during production for there to be a safe
environment and a healthy population.

If there is no pollution workers will be healthy, active and more productive. Customers and suppliers
will be encouraged to be a part of our environmentally friendly industry, which will result in more
support.
 PRINCIPLES
OF BUSINESS
SCHOOL
BASED
ASSESSMEN
T
KOOL AND ROMANTIC YOU
(SBA)
On Production

LOOK Name:
KOOL - Candidate no:

ACT School: Manning’s School

ROMANTI Territory: Jamaica

C Centre no: 100068

Exam Year: 2017

Introduction

This School Based Assessment is based on the area of Production. As each person should give details
on what he/she chooses to produce, inside contains all the necessary information on my business
“KOOL & ROMANTIC YOU” AKA “KRU” which engages in cosmetic production from natural
herbs. At the end of this SBA all readers should have a basic understanding of the purposes of this
business as it operates under the laws of the government. Readers will also learn of some wonderful
opportunities our services hope to offer, God’s willing.