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Assignment 12 Making, outsourcing and supplies - Pg. 155

155 assignment 12 Making, outsourcing and supplies o rganizations are usually, in fact almost invariably, in the business of adding value to bought-in resources. These may be as trivial as station- ery for correspondence, packaging for software, or as complex as the many ingredients needed to make a computer or a motor vehicle, as in the case of Quantum Cars (see Assignment 6). Your business plan needs to show how you have addressed these crucial issues, as in the first place you must demonstrate that you have thought through how to turn what is in effect at this stage a concept into a `concrete' product or service that can be brought to market. You also need to show an awareness that value added is itself determined by the careful management of costs. Making and assembling If you need specific machinery, the general rule is that you should buy as little as possible as inexpensively as possible, as there is one certain fact about a new venture ­ after a few weeks or months of trading it will resem- ble less and less the business you planned to start. That in turn means that your initial investment in equipment could be largely wasted when you find you need to re-equip. Look back to the section on `Outsourcing' in Assignment 10, and consider whether there are any less risky or costly methods of getting your product ready for market. For machinery and equipment you should use a trade magazine to search out suppliers. Alternatively Friday-Ad ( www.friday-ad.co.uk >For Sale>DIY & Tools), and Machinery Products UK ( www.machineryproducts.co.uk ) have secondhand machinery and tools of every description for sale. If your business involves making or constructing products, then you should address the following issues in the business plan: