0 

  

The use of quality management training of workforce to improve the quality of Products in 

manufacturing sector in South Africa 

 

Collins MBHOMBHI 

2555983 

 

A business venture proposal project submitted to the Faculty of 

Commerce, Law and Management, University of the Witwatersrand, in 

partial fulfilment of the requirements for the degree of Master of Business 

Administration 

 

Johannesburg, 2025 

 

 

Supervisor: Dr McEdward Murimbika 

 

 

Ethics protocol number: WBS/BA2555983/774 

 

 

 



 

1 

 

 

Abstract 

 

The purpose of this research is to examine the planning and creation of a business venture aimed at 

providing quality management training in the manufacturing sector in South Africa, with a focus on 

SMMEs struggling to produce quality products. 

This research investigates the impact of quality management training on workforce performance and 

product quality within the manufacturing sector in South Africa. The study aims to identify how 

structured training programs can enhance employees' skills and knowledge, thereby improving the 

overall quality of manufactured products. The research employ qualitative approach, in which document 

analysis is used to identify the impact of training employees.  

Key findings indicate that comprehensive quality management training significantly boosts workforce 

efficiency, reduces error rates, and leads to higher customer satisfaction. The study concludes with 

recommendations for implementing effective training programs to foster continuous improvement and 

maintain competitive advantage in the manufacturing industry. The study does recommend the 

establishment of the training venture that focuses on quality management trainings in the 

manufacturing sector in South Africa as the market exists and this was done through a comprehensive 

business venture planning process which indicated positive feasibility of the establishment of the 

venture from operations, financial forecasts and marketing strategy. 

 

 

 

 

 

 



 

2 

 

 

DECLARATION 

 I, Collins Mbhombhi, hereby declare that this business venture report for the (MBA) in (Quality 

Management) submitted to the (Commerce, Law, and Management) at the University of Witwatersrand 

has not been submitted previously for any degree at this or another university. It is original in design and 

in execution, and all reference material contained therein has been duly acknowledged.  

 

Student:     Collins Mbhombhi    Date: 29 November 2024 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

3 

 

 

Acknowledgement 

I want to take this opportunity to express my deepest appreciation and gratitude to my beautiful wife and 

children for their unwavering support during the MBA journey in general and Applied Research Project 

Business venture in particular. It has been a difficult period for my family as I was constantly away and 

they had to bear with my absence, I deeply appreciate them for this support. 

I would like to thank my Supervisor Dr Murimbika for his guidance and support during this research 

journey. His rich and vast experience and his entrepreneurial acumen has made it possible for me to 

complete the research with meaning and purpose. 

Not forgetting Gibela rail consortium who has made it possible for me to study the MBA through their 

financial and time support. To my colleagues who held the fore in my absence when I was busy with the 

MBA journey, cheers to you.  

Lastly and overall I would like to thank God for his mercy, grace and love that enabled a gift of life and a 

gift to study, it is only him who have made it possible (James1 :17) 

 

 

 

 

 

 

 

 

 

 



 

4 

 

 

Document Information Overview 

Word Count 

• 7798 

Sections below are excluded from the word Count 

• Cover page 

• Abstract 

• Declaration 

• Acknowledgement 

• Table of Content 

• List of Figures and Tables 

• Executive Summary 

• References  

• Appendices  

 

 

 

 

 

 

 

 

 



 

5 

 

 

 

Table of Content 

Table of Content .................................................................................................................... 5 

Chapter 1 ................................................................................................................................ 9 

1.1 Overview ......................................................................................................................... 9 

1.2 Business Venture background ............................................................................................... 9 

1.3 Purpose of the Study ............................................................................................................ 10 

1.4 Business Opportunity .......................................................................................................... 10 

1.5 Objectives of the  Business venture .................................................................................... 10 

1.6 Scope of the study for Business Venture ............................................................................. 10 

Chapter 2: Literature Review............................................................................................... 11 

2.1 Introduction ......................................................................................................................... 11 

2.2 Feasibility Assessment – Literature Review ....................................................................... 11 

2.2.1 Act that Governs Training and Development in South Africa ......................................... 11 

2.2.2 Importance of Training and Development in the Manufacturing Sector in South Africa 12 

2.2.3 Cost of Poor  Quality ........................................................................................................ 13 

2.2.4 Consequences of producing poor quality Products on the organisation .......................... 13 

2.3 Business opportunity gaps ................................................................................................... 14 

2.4 Review of Business Models ................................................................................................ 14 

2.4.1 Traditional Classroom Training .................................................................................... 14 

2.4.2. Online Courses and E-Learning Platforms ...................................................................... 15 

2.4.2 Corporate Training Services ......................................................................................... 15 

2.4.4. Certification and Professional Development Programs .................................................. 15 

2.4.5. Freelance Training and Consulting ................................................................................. 15 



 

6 

 

 

2.5. Theories Supporting the Business Venture Research ......................................................... 16 

2.6. Rationale for Selected Business Model .............................................................................. 16 

2.7 Summary of the Literature .................................................................................................. 17 

Chapter 3: Research Methodology ...................................................................................... 20 

3.1 Introduction ......................................................................................................................... 20 

3.2 Research Design .................................................................................................................. 20 

3.3 Data Collection Methods ..................................................................................................... 20 

3.3.1 Population ......................................................................................................................... 21 

3.3.2 Sampling ........................................................................................................................... 21 

3.4 Research Instruments .......................................................................................................... 21 

3.5 Data Analysis strategies and interpretation ......................................................................... 21 

3.6 Limitations ........................................................................................................................... 22 

3.7 Quality Assurance ............................................................................................................... 22 

3.7.1 Transferability .................................................................................................................. 22 

3.7.2 Credibility ......................................................................................................................... 23 

3.7.3 Dependability ................................................................................................................... 23 

3.8 Ethical Considerations ......................................................................................................... 23 

Chapter 4: Results Analysis and Interpretation ................................................................... 24 

4.1 Introduction ......................................................................................................................... 24 

4.2 Findings and Analysis ......................................................................................................... 24 

Chapter 5: Business Venture Proposal ................................................................................ 29 

5.1 Executive Summary ............................................................................................................ 29 

5.1.1 Vision, Mission and Objectives ........................................................................................ 29 

5.1.2 Current state of the business ............................................................................................. 30 

5.1.3 Products and Services ....................................................................................................... 30 



 

7 

 

 

5.1.4 Strategy and Sources of sustainable competitive advantage ............................................ 31 

5.1.5 Customer Acceptance ....................................................................................................... 31 

5.1.6 Summary of Financial Forecasts ...................................................................................... 31 

5.1.7 Money required, timing and deal on offer ........................................................................ 32 

5.2 Basic Business Information ........................................................................................... 33 

5.4 Market Analysis ............................................................................................................. 33 

5.5 Situational Analysis (Environmental, Industry and Competitor Analysis) ................... 37 

5.5.1  Macro Environmental Analysis ....................................................................................... 37 

5.5.2 Industry Analysis .............................................................................................................. 37 

5.5.3 Competitor Analysis ......................................................................................................... 39 

5.6 Research and Development ........................................................................................... 40 

5.7 Management and Organisation ...................................................................................... 40 

5.8 Business Financials ........................................................................................................ 41 

5.9 Forecasts and Financial Data ............................................................................................... 43 

5.10 Operational Plan .......................................................................................................... 46 

5.10. 1 Geographical Analysis .................................................................................................. 46 

5.10.2 Operating Equipment ..................................................................................................... 46 

5.10.3 Staff Compliment ........................................................................................................... 46 

Chapter 6: Conclusion ............................................................................................................... 47 

6.1 Conclusion ........................................................................................................................... 47 

6.2 Business Risk Management ................................................................................................. 47 

7. References........................................................................................................................ 49 

Appendix 1: Projected Sales forecasts ...................................................................................... 52 

Appendix 2: Summary of Ratios ............................................................................................... 53 

Appendix 4: Ethics Documents ................................................................................................. 57 



 

8 

 

 

 

 

List of Tables and Figures 

 

Table and Figure Title Number Page 

Number 

Business Canvass Model for Quality School of Excellence           Figure 2.5.1                                                    16 

Preposition 1 Figure 2.6.1 17 

Preposition 2 Figure 2.6.2 18 

Thematic analysis of documents Figure 4.2.1 24 

Quality questionnaires response Figure 4.2.2 26 

Implementation of QMS by SMMEs Figure 4.2.3 27 

Summary of Projected Revenues Table 5.1.6.1 30 

Summary of Projected costs Table 5.1.6.2 30 

Summary of Projected Profits Table 5.1.6.3 31 

Basic Business Information Table 5.2.1 32 

PESTEL Analysis Table 5.5.1 36 

Industry Analysis – Porter’s five forces Figure 5.5.2 37 

SWOT Analysis Table 5.5.3.1 38 -39 

Business Organogram  Figure 5.7.1 40 

Income Statement  Table 5.9.1 43 

Net Profit for a period of five years Figure 5.9.1 43 

Balance Sheet Table 5.9.2 44 

Business Risk Management Table 6.2.1 47 



 

9 

 

 

 

Chapter 1 

1.1  Overview 

According to (South African Government, 1998) training for skills development is regarded as a 

crucial foundation for economic growth, stability, and success in South Africa. Consequently, training 

legislation was established in the country to manage and coordinate the activities related to skills 

development training. 

The quality of products and services offered by organizations is crucial for their survival in the market, 

as customers continuously seek high-quality offerings. The survival of businesses plays a vital role in 

the health of the economy.To be able to achieve right level of quality for product and services, quality 

management trainings plays an essential role in facilitating the knowledge and practical training of 

the work force to be able to produce product and services of high quality. The skills and development 

industry plays a crucial role in South Africa to facilitate the workforce training. 

With the view of the above, the business venture was set up to respond to the gap that already exists 

in the market. The research had informed the creation of the business venture planning which in the 

main provides training in the quality management in the manufacturing sector.  

1.2 Business Venture background 

Training plays a crucial role in enhancing the quality of manufactured products. The introduction of 

training programs and educational initiatives can boost employees' motivation to enhance product 

quality. Lean Six Sigma methodology, encompassing training and standard operating procedures 

(SOPs), is effective in diminishing product defects and elevating quality standards. The intensity of 

company-sponsored training escalates when product demand becomes more sensitive to quality, 

underscoring the significance of training in meeting customer expectations. Quality improvement-

centred training and educational schemes have demonstrated tangible and intangible benefits for 

manufacturing sectors, resulting in enhanced quality outcomes. Additionally, training positively 



 

10 

 

 

impacts innovation performance, particularly within service firms, by bolstering both product/service 

and process innovation efforts. (Pubgenius Inc, 2024) 

1.3 Purpose of the Study 

The purpose of the business venture research was to examine the planning of a venture which 

informed the creation of the business venture which primarily aimed at providing quality 

management training in the manufacturing sector in South Africa where a gap existed with a key 

focus on the SMMEs which are struggling to produce quality products to the market.  

1.4 Business Opportunity 

The research sought to determine the business planning which was used to introduce the business 

venture in the market in order to provide quality management training to capture the business 

opportunity that already existed in the market particularly in Manufacturing sector in South Africa 

for large and small manufacturing companies with a sharp focus on SMMEs as there is high failure 

rate of SMMEs in South Africa (Mbohwa C. , 2016) 

1.5 Objectives of the  Business venture  

The main objective of the business venture research was to examine the feasibility of creating a 

business venture through detailed business planning in order to provide quality management 

training in the manufacturing sector in South Africa with a sharp focus on SMMEs which struggles 

with producing quality products at infant stage.  

1.6 Scope of the study for Business Venture 

The research focused mainly on the feasibility of starting a business venture which focuses on 

training through the business planning and facilitating quality management trainings of the 

workforce in manufacturing sector in South Africa. This included reviewing of the secondary data and 

previous researches which talks to the successes and challenges companies had with poor quality. 

The study did not include service sector and the related impact that quality management trainings 

has on the quality of the services offered.  



 

11 

 

 

Chapter 2: Literature Review 

2.1 Introduction 

Previous literature suggests that learning and development are essential human resource 

management practices that enhance employees' knowledge, abilities, and skills within organizations. 

Skilled employees are crucial for effective task performance and productivity, directly impacting the 

organization's goals of maximizing production and profits. To achieve these objectives, organizations 

must provide relevant training tailored to meet employees' needs, ensuring tasks are completed 

efficiently within set timelines. Employees must also demonstrate a strong commitment to 

enhancing their knowledge and skills through effective learning programs. Embracing all 

opportunities for training and development is essential for improving daily task performance. 

Overall, prioritizing learning and development initiatives leads to the cultivation of high-quality, 

productive employees who contribute significantly to organizational success (Amin, 2022). 

2.2 Feasibility Assessment – Literature Review 

2.2.1 Act that Governs Training and Development in South Africa 

In South Africa, government legislation mandates the training and development of the workforce. 

The scarcity of skilled personnel poses a significant challenge to our industry's competitiveness. The 

Skills Development Act is designed to enhance the knowledge and skills of the labour force, with the 

goal of boosting productivity and increasing employment opportunities. One of the primary 

objectives of this act is to enhance workplace productivity and the competitiveness of employers, 

among other aims (Compiled by the parliamentary information services: Research, 2000).  

The objectives of the Act are to be realized through the establishment of an institutional and financial 

framework, which includes bodies such as the National Skills Authority (NSA), the National Skills Fund 

(NSF), the Sector Education and Training Authority (SETAs), and departments within the Department 

of Labour. The National Skills Authority was founded on 12 April 1999 by the Act. Its responsibilities 

encompass advising the Minister of Labour on national skills development policies and strategies, as 

well as providing guidance on implementing the national skills development strategy. Additionally, it 



 

12 

 

 

advises the Minister on the allocation of subsidies from the NSF and submits progress reports on 

strategy implementation. The NSA is also tasked with conducting investigations into any matters 

arising from the Act's application (Parliament of South Africa, 2000) 

The Skills Development Act mandates the Minister of Labour to establish and, where necessary, 

support a Sector Education and Training Authority (SETA) for each national economic sector. SETAs 

are required to devise and execute a sector skills plan aligned with the national skills development 

strategy. This involves crafting workplace skills plans through skills development grants and 

facilitating learnerships by identifying suitable workplaces for practical training experiences. SETAs 

are also responsible for overseeing the quality of education and training within their sectors and 

must collaborate with Employment Services, the NSA, and provincial bodies. Additionally, SETAs are 

obligated to report to the Director-General of the Department of Labour regarding the 

implementation of their sector skills plans, as well as their financial activities. They are funded 

through levies collected from their respective sectors and allocations from the National Skills Fund. 

(High Education and Training, 2010) 

2.2.2 Importance of Training and Development in the Manufacturing Sector in South Africa 

South Africa's economic prospects depend on the productivity of the country's labour force. 

Productivity accelerates economic development and this improves the standard of living and quality 

of life of people (World Bank, 2013) (GeorgeI, SurgeyI, & Gow, 2014). Productivity is increased by 

two key drivers, technological improvements and human capital. Productivity can be enhanced by 

improvements in one or both of these drivers. In this paper the focus is on human capital (GeorgeI, 

SurgeyI, & Gow, 2014) 

The more productive the national economy becomes, the higher the personal income of employees 

and the lower the rate of inflation in the long run. When the economy increases its productivity levels 

it becomes more competitive and this tends to decrease the unemployment rate. The more 

productive an enterprise or organisation, the more income it generates. In this scenario, more jobs 

can be created. Since increased productivity results in the more efficient use of resources, it 

contributes positively to sustainable development. Productivity can only be maximised when the 



 

13 

 

 

labour force possess the appropriate skills, hence the focus on addressing the level of skills within 

the country. (George, 2014) 

2.2.3 Cost of Poor  Quality  

The Cost of Poor Quality (COPQ) refers to expenses linked to delivering subpar products or services 

to intended customers. These expenses encompass both direct and indirect costs, including repair, 

labour, warranty issues, and returns (Petropoulos2, 2008). 

An organization encounters various types of quality-related costs, including Prevention Costs, which 

are aimed at averting issues before they arise. These expenses involve activities like staff training, 

certification, machine maintenance, quality assurance, quality planning, and effective management 

solutions. Appraisal Costs, on the other hand, are incurred to ensure that products meet required 

standards. This includes activities such as supplier rating, quality audits, and verifications. Internal 

Failure Costs refer to expenses incurred to address issues identified before delivery, such as waste, 

rectification, scrap, and failure analysis. External Failure Costs, meanwhile, encompass expenses 

related to resolving defects discovered by end-users post-delivery, such as service and repair, 

warranty claims, returns, and addressing complaints (Petropoulos2, 2008) 

2.2.4 Consequences of producing poor quality Products on the organisation 

Poor quality in products or services can have profound and multifaceted repercussions on an 

organization. Firstly, dissatisfied customers may cease patronizing the business, resulting in customer 

attrition and threatening its sustainability. Additionally, poor quality leads to reputational damage as 

negative feedback spreads swiftly through various media channels, eroding the organization's brand 

image and market share. Financially, the business faces setbacks due to the costs incurred in 

rectifying, replacing, or compensating for substandard offerings, directly impacting profit margins. 

Moreover, negligence in maintaining quality standards can result in legal ramifications, including 

fines and lawsuits, further damaging both finances and reputation. Operationally, inconsistencies in 

quality highlight deficiencies in processes and systems, leading to inefficiencies that hinder overall 



 

14 

 

 

performance. Lastly, poor quality outcomes demotivate employees, causing disengagement and 

reduced productivity, thereby exacerbating organizational challenges (Pannell, 2022). 

2.3 Business opportunity gaps  

Companies in South Africa recognize the crucial role of quality management training companies for 

various reasons. Firstly, adherence to international standards like ISO 9001 and compliance with 

regulatory requirements are imperative for business operations. Secondly, enhancing product and 

service quality is vital to maintain customer satisfaction and uphold brand reputation. Thirdly, 

streamlining operations, reducing waste, and optimizing resources through effective quality 

management contribute to operational efficiency and cost reduction.  

Many researchers in South Africa focused on the effects of Quality Management Systems or ISO9001: 

2015 as a basic training to improve the quality of products that businesses produces for their 

customers and this kind of training presents a blanket approach to quality as an improvement 

mechanism. This study will seek to research the effectiveness of job specific quality management 

training as the foundation of quality improvement. 

2.4 Review of Business Models  

The training industry encompasses a wide range of businesses providing educational and skill 

development services to individuals, organizations, and institutions. Here's a review of some common 

business models observed in the training industry. 

2.4.1 Traditional Classroom Training 

In this model, training companies offer instructor-led courses conducted in physical classrooms or 

training centres. Revenue is typically generated through course fees paid by participants. Key activities 

include curriculum development, instructor hiring and training, and facility management. This model 

may face challenges with scalability and geographic reach due to the need for physical infrastructure 

(Jain, 2022). 



 

15 

 

 

2.4.2. Online Courses and E-Learning Platforms 

E-learning platforms offer digital courses and training materials accessible over the internet. Revenue 

streams may include subscription fees, one-time course purchases, or freemium models. Key activities 

include course development, platform maintenance, content updates, and marketing. This model 

offers scalability and accessibility but requires significant investment in technology and content 

development (Jain, 2022). 

2.4.2 Corporate Training Services 

Companies specializing in corporate training provide customized learning solutions to businesses and 

organizations. Revenue is generated through contract agreements with corporate clients for training 

programs tailored to their specific needs. Key activities include needs assessment, curriculum 

customization, delivery of training programs, and performance evaluation. This model offers 

opportunities for high-value contracts but requires expertise in understanding corporate training 

needs and aligning offerings with business objectives (Jain, 2022). 

2.4.4. Certification and Professional Development Programs 

Training companies offer certification programs and professional development courses to individuals 

seeking to enhance their skills and credentials in specific fields. Revenue streams may include course 

fees, certification exam fees, and partnerships with professional associations. Key activities include 

curriculum design, exam development, accreditation, and marketing to target audiences. This model 

provides opportunities for specialization and differentiation but requires maintaining credibility and 

relevance in rapidly evolving industries (Jain, 2022). 

2.4.5. Freelance Training and Consulting 

Freelance trainers and consultants offer expertise in specific subject areas to deliver training 

workshops, seminars, or consulting services. Revenue is typically generated through consulting fees, 

speaking engagements, and workshop facilitation. Key activities include marketing personal brand, 

networking, client relationship management, and continuous professional development. This model 



 

16 

 

 

offers flexibility and autonomy but requires strong networking skills and reputation building to attract 

clients (Jain, 2022). 

2.5. Theories Supporting the Business Venture Research 

There are many theories that supports the area of training and development of employees. However 

for the purpose of this research the human capital theory was explored. Human Capital Theory 

underscores the importance of investing in employees' education and training to enhance their 

productivity and performance. According to McConnell et al. (2009), individuals with higher levels of 

education and training can provide more valuable productive effort compared to those with less 

education and training. This theory is largely recognized for its contribution to enhancing 

organizational performance, emphasizing the importance of employees' skills, knowledge, and abilities 

as essential elements of value creation. Overall this theory was relevant for the study because it 

supports that training will improve organizational performance which includes quality performance 

(Research gate, 2020). 

2.6. Rationale for Selected Business Model  

Choosing a business model depends on a number of factors which are target market, industry trends, 

scalability, revenue potential, and the organization's capabilities and for this business venture the 

suitable and selected business venture is the corporate training services because the demand for the 

services are stable even during economic tough times. corporate training services carries high value 

contracts which most are long term and this will bring about stable revenue in the business venture. 

The last and crucial rationale for this business model is that corporate training services can still be 

scaled effectively by leveraging technology, standardized training materials, and efficient delivery 

methods. Below is the business model canvas of Quality School of Excellence. 



 

17 

 

 

Figure 2.5.1: Business Canvass Model for Quality School of Excellence 

2.7 Summary of the Literature 

The literature review offers an overview of management theories and models relevant to the 

proposed business venture focusing on training and developing the workforce within South Africa's 

manufacturing sector. Through an examination of the literature, it becomes apparent that investing 

in the training and development of the workforce brings about organizational change and enhances 

the quality of the products offered to consumers. To make it easy to study the training for 

manufacturing, the following propositions that have been developed for this study: 

Proposition 1: The return on investment  of quality training investments for organizations in 

terms of improved productivity, cost savings, and customer satisfaction 

Proposition 2: The alignment of quality training programs with relevant quality management 

standards to ensure compliance and promote organizational excellence. 

     
            

     
         

     
                     

              

          
        

            

              

                     

           

                       

                        

                            

              

                      

                       

                        

                             

             
                  

                                     

                

                                

                               

     

                       

                  

                     

                                   

                           

           

                            

                             

                  

                            

                       

           

                 

                         

      

                      

     

                               

        
            

                                

        

                               

                           

          

        

                       

                

                            

                        

              
         

                

                 

           

               

                                           

                                                      

                         

                     

 

 

 

 



 

18 

 

 

 

 

 

 

 

Figure 2.6.1: Proposition 1 



 

19 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure 2.6.2: Proposition 2 



 

20 

 

 

Chapter 3: Research Methodology 

3.1 Introduction 

This chapter focused on the research methodology of the business venture proposal and delved into 

the research design which included data collection methods, sampling and population and the 

methodology which was followed to collect data. In order to study the viability of the business 

venture proposal, the literature review and secondary data collection was crucial in order to highlight 

areas of opportunity and the actual need in the market. The research design focused on how the 

feasibility study will be conducted. 

3.2 Research Design  

The research design for this proposal aimed to evaluate the  establishment of a business plan of  a 

training business specializing in quality training within South Africa's manufacturing sector. 

Additionally, it intended to identify the market gap and demand for the proposed services. The 

primary approach adopted was qualitative research, which involved collecting and analysing non-

numerical data such as video, audio, or text. Qualitative research was utilized to comprehend 

intricate concepts, experiences, and opinions, as well as to develop new insights or research ideas. 

The study utilized secondary data review, which involved analysing existing data to enhance research 

effectiveness. This approach offered the advantage of saving time and resources while leveraging 

existing knowledge and expertise to draw insights and conclusions (Bhandari, 2023). 

3.3 Data Collection Methods 

Various techniques are employed to gather qualitative data, such as interviews, surveys, focus 

groups, document analysis and observations. Proficiency in comprehending the diverse methods 

utilized for qualitative data collection is imperative for achieving success in qualitative research 

(Austin, 2015). For the purpose of this research document analysis was used as an instrument to 

collect and collate data. 



 

21 

 

 

3.3.1 Population 

The research population comprised of academic reports, conferences and journal articles which were 

used to collect data from. These sources discussed quality management training and development 

within manufacturing sector and its associated effects. The main rationale for selecting secondary 

data  population in this research study was utilize the findings for application upon analysis. 

Population refers to the process of gathering and analysing existing data that has been collected by 

someone else or for another purpose (Thomas, 2023).  

3.3.2 Sampling  

The sample for this business proposal included academic reports from various university at masters 

level which reflects on the importance of quality management trainings . The sampling method used 

in this study was purposive sampling. An total 11 documents were sampled and reviewed as part of 

this research to collect data.  

3.4 Research Instruments 

Document analysis was used as an instrument for the purpose of this research. A document analysis 

guide is an instrument or resource that provides structured guidance on how to conduct document 

analysis as part of a research study. It typically outlines the steps, procedures, and considerations 

involved in analysing documents, such as texts, reports, records, or other written materials. Overall, 

a document analysis guide will help the research to conduct thorough, systematic, and reliable 

document analysis, leading to more robust research outcomes. The shortcomings of document 

analysis guides include potential subjectivity in interpretation, limited scope and applicability to 

diverse contexts, complexity that may hinder comprehension, time and resource intensiveness, 

rigidity that restricts flexibility, and insufficient coverage of ethical considerations. 

3.5 Data Analysis strategies and interpretation  

The data collection used the document analysis in which 11 relevant documents were selected and 

the following steps were followed to analyse the data using thematic analysis: 



 

22 

 

 

• Define the research questions i.e. importance of quality management trainings of the 

workforce to inform a business planning 

• Choose the relevant documents linked to quality management training  

• Prepared and organized the documents 

• Began initial review and codes 

• Analyse and interpret the data 

• Present findings and drew conclusion 

A total of 4 codes/themes namely 1) Productivity 2) Customer satisfaction 3) Employee satisfaction 

4) product quality were created and assigned to the 11 documents selected for the analysis.  

Thematic analysis is a qualitative research approach employed by researchers to methodically 

arrange and examine intricate datasets. It entails the exploration of themes that encapsulate the 

narratives within the dataset, achieved through meticulous reading and re-reading of transcribed 

data. (Lorelli S. Nowell, 2017).  

3.6 Limitations 

The limitation anticipated in this research was the fact that there might be no or little prior research 

on the subject which means that this study should be an exhaustive as possible to bring relevancy of 

the study to the fore. The availability of relevant documents to review might be a risk 

3.7 Quality Assurance 

3.7.1 Transferability 

The aim was to ensure that this business venture proposal research within manufacturing sector is 

transferable to other countries and also transferable to other sectors such as service. Transferability 

was attainable through the provision of a comprehensive depiction of the findings derived from 

multiple data collection methods (Applied Doctoral Centre, 2024).  



 

23 

 

 

3.7.2 Credibility 

The credibility of qualitative data was upheld by incorporating diverse perspectives throughout the 

data collection process to ensure its relevance and accuracy. This was achieved through various 

means such as data, theoretical triangulation and the rigorous methodologies employed during data 

gathering (Applied Doctoral Centre, 2024).  

3.7.3 Dependability 

Dependability of the research was guaranteed by employing meticulous data collection techniques 

and procedures, as well as well-documented analysis methods. Inquiry audit was conducted by an 

external reviewer to verify dependability.  

3.8 Ethical Considerations  

To ensure that the research for the business venture was ethical and beyond reproach, I followed 

the guidelines as stipulated in the ethics forms regarding researching and producing an ethical report, 

this was done through creation of a summarized checklist which constantly guided me of key ethical 

issues. The second part of ethical considerations was to go through the Wits ethics certificate process 

and lastly the review of peer review articles. 

 

 

 

 

 

 

 

 



 

24 

 

 

Chapter 4: Results Analysis and Interpretation 

4.1 Introduction 

The analysis and interpretation of data are crucial to determine the feasibility and need for 

establishing a quality management training business venture in South Africa. This venture aims to 

serve the underserved training market and improve the quality of products and services offered by 

companies, especially SMMEs. Product quality is a key competitive advantage for organizations. The 

data collected and analysed using the document analysis and thematic analysis respectively to 

identify positive contributions that quality management training has on organizations. The key 

purpose for the research was to establish the importance of workforce training in quality 

management and its effects on the business’s performance which must inform the creation of a 

business venture planning. The research have indicated that there is a positive relationship between 

quality management training and the productivity, customer satisfaction, employee satisfaction and 

product quality in an organization.  

4.2 Findings and Analysis 

Themes and Codes 

The study underscored the significance of training in enhancing employee productivity, with a clear 

plan for both on-the-job and off-the-job training being essential for predicting productivity 

outcomes. It highlighted that quality management training helps employees understand their roles 

in delivering customer quality, thus improving customer satisfaction through feedback and 

continuous quality improvement initiatives. While no direct relationship was found between quality 

management training and product quality, the research suggested that an effective training strategy, 

which includes quality awareness and process control training, is crucial for aligning employee efforts 

with customer satisfaction goals. Moreover, employee training not only improves decision-making in 

quality matters but also increases job satisfaction, which helps retain critical skills necessary for 

producing quality products and services.  This was achieved by developing a total of 4 codes/themes 

namely 1) Productivity 2) Customer satisfaction 3) Employee satisfaction 4) product quality were 



 

25 

 

 

created and assigned to the 11 documents selected for the analysis and below is a graphical 

representation of the importance of training management using the themes to represent the order 

of importance.  

 

 

 

 

 

 

 

 

 

 

Business Venture Creation 

The outcome of the study and analysis highlighted that training significantly boosts productivity. 

Organizations are constantly seeking ways to enhance their efficiency and effectiveness as discussed 

in (ASP Journals, 2021). A training venture can capitalize on this demand by offering specialized 

programs that focus on productivity improvement through quality management practices. Quality 

management is essential for producing high-quality products (Zinzi, 2011). The study underscored 

the importance of training in quality control, inspection, and continuous improvement. A training 

company can offer certifications and workshops on quality management tools and techniques, 

helping organizations maintain high product standards and reduce defects (Ngambi, 2015). The study 

concludes that training is a strategic investment with substantial returns. Organizations that invest 

in training see improvements in productivity, customer satisfaction, product quality, and employee 

Figure 4.2.1: Consolidated Thematic Analysis of Documents 



 

26 

 

 

satisfaction. A training company can position itself as a strategic partner, helping businesses achieve 

their goals through effective quality management training (Ngambi, 2015). 

The types of organizations analysed through the documents are manufacturing organizations in 

which the focus of the study was on. The type of reports that were analysed during the analysis were 

productivity reports, customer satisfaction reports, quality management reports, employee 

satisfaction reports and general organizational reports such as Enterprise and Supplier Development 

and annual reports which highlighted different organization’s productivity, customer satisfaction, 

product quality and employee satisfaction. The documents analysed were common documents from  

public sources.  

The study has shown that workforce training enhancing employee productivity, performance, 

motivation, and innovation. Both on-the-job and off-the-job training play significant roles in 

predicting productivity. Quality management training helps employees understand their roles in 

creating customer satisfaction, which is measured through feedback and continuous quality 

improvement initiatives. Although no direct link was found between quality management training 

and product quality, effective training programs, including quality awareness and statistical process 

control, support ongoing improvements in product quality and customer service (A.Y Magodi, A 

Cross-Sectional Pilot Study on Quality Management System in the Small and Medium Enterprise 

(SME) in South Africa, 2020). 

Additionally, training enhances employees' decision-making abilities in quality matters, leading to 

higher job satisfaction. This increased satisfaction reduces turnover and helps retain critical skills 

necessary for producing quality products and services. By equipping employees with quality 

management skills and knowledge, organizations can ensure that their workforce is aligned with 

achieving customer satisfaction a (Mbohwa L. S., 2016) and maintaining high standards of quality 

(A.Y Magodi, A Cross-Sectional Pilot Study on Quality Management System in the Small and Medium 

Enterprise (SME) in South Africa, 2020). 

In the study that was conducted by  it has indicated that of the 90 specimen sampled for the study 

in terms of SMMEs which have a quality department, 49% of the respondents have indicated that 



 

27 

 

 

they do not have quality department. This phenomenon creates a concerning trend that these 

SMMEs are not appreciating the importance of quality management and this is golden opportunity 

for the business venture to serve this underserved market by providing quality management trainings 

which serves as a foundation to establish a quality department. Below pie chart indicates the spread 

of the study in terms of the study as conducted by (Mbohwa L. S., 2016). 

 

 

 

 

 

 

 

 

The study have also shown that many SMMEs in South Africa in the manufacturing sector does not 

have quality management systems and this often leads to these SMMEs struggling to survive in the 

market, this assertion have been confirmed by the research conducted by (A.Y Magodi, A Cross-

Sectional Pilot Study on Quality Management System in the Small and Medium Enterprise (SME) in 

South Africa, 2020) whereby a total of 50 SMEs were sampled and only 62% of the participants 

implemented Quality Management Systems and the remain 38 % did not. This phenomenon further 

supports the planning to create a business venture that will provide training in Quality Management 

in the manufacturing sector in South Africa and also provides education on the need and importance 

of quality management system. Below is graphical representation of the SMMEs that implemented 

QMS and not. 

Figure 4.2.2.Quality Questionnaire Response 



 

28 

 

 

 

4.3 Conclusion 

The analysis and interpretation of the results of the study focused on evaluating the feasibility 

and need of creating a business venture planning which will provide quality management 

training in the manufacturing sector in South Africa. The study have underscored the 

significance need for venture creation to address existing market gaps, the significance business 

venture creation was highlighted by the existing market gaps, The specific areas where current 

offerings are insufficient, driven by economic and industry trends, target market demands, and 

competitive shortcomings. The analysis emphasized the importance of feasibility, sustainability, 

innovation, and differentiation for new ventures to succeed. By addressing these gaps and 

leveraging emerging trends, new ventures can achieve competitive advantage and contribute 

to economic growth and development and success of the manufacturing sector. The study have 

shown that launching a new venture to provide training in quality management is not only a 

response to the growing demand for skilled professionals but also a proactive approach to 

enhancing organizational efficiency, compliance, and sustainability. By bridging the skills gap 

and fostering a culture of excellence, such a venture can significantly contribute to the success 

and competitiveness of organizations across various industries. 

Figure 4.2.3: Implementation of QMS by SMMEs 



 

29 

 

 

Chapter 5: Business Venture Proposal 

5.1 Executive Summary 

The venture aims to establish a quality management training business to serve the manufacturing 

sector in South Africa, with a specific focus on SMMEs in both rural and urban areas. With 

manufacturing sector contributing 13% to the GDP of South Africa and with the sector forecasted to 

grow with an average of 5.7% per year over the next decade (PWC South Africa, 2024). This presents 

a significant opportunity for the business venture to services the manufacturing sector related to 

quality management.  

The primary objective of the venture is to partner and collaborate with manufacturing companies to 

improve the quality of the products that are served to the market which is a strategic move to gain 

competitive advantage by serving customers with quality products. 

The affordability and discounts of the services offered by the venture will ensure that the 

manufacturing companies do not burden themselves financially to allow cash flow and sustainability. 

The business venture will primarily target SMMEs in the province of Gauteng and this approach will 

provide the business venture with an opportunity to serve the SMMEs with quality management 

training and consulting which will in turn enhance the quality of the produced products to the 

market. 

The target market for the SMMEs will serve as an entry strategy and with time the venture will 

expand to large manufacturers in South Africa and Africa at large. The venture expands, the targeted 

customers will be the entire manufacturing sector including SOEs. 

5.1.1 Vision, Mission and Objectives 

Mission 

To deliver quality management trainings that are innovative, value-driven and drives operational 

excellence. 

Vision 



 

30 

 

 

Provide world class quality management trainings for our clients today to meet evolving industry 

needs tomorrow 

Organisational Objectives 

The following objectives direct the business venture’s priorities: 

• Delivering demand-driven training through various training solutions by employing 

qualified and experienced facilitators and trainers. 

• Deliver training content that is aligned to current global best practices and addresses 

key industry challenges and in sync with global quality organisations like ISO 9001 

• Offering cost-effective training solutions which will drive continuous improvement, 

empower workforce development and enhance customer satisfaction. 

• Deliver flexible and tailored affordable training solutions to enhance access to our 

training services for all businesses regardless of their financial muscles.  

5.1.2 Current state of the business 

 The venture intends to establish a quality management training company to address and serve the 

currently underserved market of quality management training and implementation in South Africa. 

The business venture seeks to improve the knowledge of the workforce in quality management and 

ultimately improving the quality of the products and services served to the market.  

5.1.3 Products and Services  

The business venture offers training and consulting services in quality management within 

manufacturing and services to meet the skills deficit amongst the workforce. The services offered by 

the venture are organized to be accessible, affordable and high quality to address quality challenges 

in the manufacturing and service sectors in South Africa. 



 

31 

 

 

5.1.4 Strategy and Sources of sustainable competitive advantage 

The business venture’s strategy seeks to take advantage of its first-mover advantage in introducing 

new training courses and new consulting avenues in quality management in the market. With the 

introduction of new offerings different from what current competitors offers, which underpins our 

differentiation strategy, the venture aims to capture a sizeable market-size. This will be realized by 

ensuring that the venture makes its offerings accessible, affordable and high quality. 

5.1.5 Customer Acceptance  

The venture foresees a high customer acceptance and response to its offerings largely because of 

the quality challenges that customers experiences and the associated costs resulting from poor 

quality of products and services from SMMEs in particular and large corporates in general. The 

accessibility, affordability and high quality services offered by the ventured will be at centre of the 

customer acceptance.  

5.1.6 Summary of Financial Forecasts 

The financial forecast includes projections for revenue growth, cost management, and profitability 

over five years. Based on assumptions such as market demand, pricing strategy, and operational 

efficiency, the forecast predicts steady revenue growth, positive cash flow, and increasing 

profitability over time. Below tables summarises forecasts: 

Projected Revenues Yearly Revenues in Rands (R) 

Year 1 R6480 000 

Year 2 R6868800 

Year 3 R 9707904 

Year 4 R12005441,28 

Year 5 R14498751,17 

Table 5.1.6.1: Summary of Projected revenues 

Projected Costs  Revenues in Rands (R) 



 

32 

 

 

Year 1 R6480 000 

Year 2 R6868800 

Year 3 R 9707904 

Year 4 R12005441,28 

Year 5 R14498751,17 

Table 5.1.6.2: Summary of Projected Costs 

Projected Profits Revenues in Rands (R) 

Year 1 R2855400 

Year 2 R3101824 

Year 3 R5070525,92 

Year 4 R6629553,494 

Year 5 R8316754,594 

Table 5.1.6.3: Summary of Projected Profits 

5.1.7 Money required, timing and deal on offer 

The venture needs R2000 000  to establish a training and consulting business in Quality Management 

in South Africa within 12 months. The money will be primarily needed to developing training material 

and purchase inspection tools required for consulting arm of the venture. Investors can invest in the 

venture which seeks to improve the quality of products and services offered by industries in South 

Africa which has a social impact on the customers purchasing these products and services. Investors 

will receive equity stakes in leu of their investment. 

 

 

 

 

 



 

33 

 

 

5.2 Basic Business Information 

The table below summarizes the basic venture information 

Name Quality School of Excellence Pty Ltd 

Business Contact Cell: 076 390 5439 

Sector  Skills development 

Industry  Education, training and Skills development 

Ownership 100% 

Number of staff 5 

Age of business 0 Years 

Target Market SMMEs and Large corporates in 

manufacturing  and services 

Capital structure Hybrid capital 

Suppliers Opaleng Business Institute & Inspection tools 

specialists 

Table 5.2.1: Basic Business Information 

5.4 Market Analysis  

Market analysis was used as a detailed assessment of the venture's target market and the 

competitive landscape within a specific industry. 

 



 

34 

 

 

Target Market and Segmentation 

The primary target market for the training and consulting in quality management is the neglected 

and underserved population of Small Medium and Micro enterprises within the manufacturing sector 

in South Africa. Amongst the reasons for SMMEs failure rate in South Africa, poor product quality 

plays a prominent role and the offerings by the venture will seek to embed quality from inception of 

these SMMEs in order to produce and serve quality products right first time. The primary customers 

of the business venture will be the SMMEs which seek to train their workforce in quality management 

and consulting on the implementation of quality management systems.  

Market Size 

The underserved SMMEs, large corporations and government entities within manufacturing sector 

in South Africa represents the untapped market which presents an opportunity for the business 

venture to introduce trainings and consulting services within the quality management. The market 

size in the quality management training and consulting space within manufacturing can be 

represented by the GDP contributed by the manufacturing industry and number of employees in the 

sector. According (PWC, 2023) in 2022 manufacturing sector contributed 11.4 % towards overall GDP 

(R 3 trillion) and around 1.5 million people are employed in the industry. According to the (Republic 

of South Africa - Presidency, 2022) there are about 2.4 and 3.5 SMMEs in South Africa and employs 

about 30000+ people. The ongoing effort by the government of South Africa to support SMMEs 

through funding and supplier development efforts, could potentially be viewed as an expansion 

opportunity and market for the venture. 

Market Trends 

With the increasing awareness of the importance of quality products in the market and the cost of 

producing poor quality products, many companies are increasingly aware of their quality obligations 

and this will drive the demand for quality management trainings and consulting up and the business 

venture will capitalize on this inevitable awareness. Moreover the government of South Africa is 

pumping billions in support SMMEs and particularly the reindustrialization of the South Africa 

economy to create more jobs is a potential market for the venture. 



 

35 

 

 

Market Needs 

Accessible, affordable and world-class quality management trainings and consulting services to 

ensure that companies are able to produce good quality right first time without incurring a cost of 

poor quality. 

Competitive Landscape 

There are about six or seven major training companies in South Africa. The competition in the training 

industry is very stiff.  

5.5 Marketing Mix 

The marketing mix details the collection of variables or controllable elements that a business employs 

to effectively and efficiently influence and meet the needs of its target customers. The elements 

includes the 4Ps of marketing: 

Product  

The core product and services offered by the business venture are the trainings and consulting 

services in quality management which are affordable, accessible and high quality. The venture will 

focus on offering a diverse range of trainings and consulting services to SMMEs, government entities 

and large corporates.  

Price 

Based on the research conducted, there are various pricing strategies which should be balanced and 

consider the affordability of the customers especially SMMEs with poor financial muscles. As an 

entrant in the market the venture preferred pricing model will include competitive pricing strategy 

in which the prices of the highest and lowest competitors will be averaged to formulate a prices for 

the products and services. To ensure affordability to the customers, specials and discounts will be 

made available to customers especially SMMEs. The competitive price list of the quality management 

training and consulting services is in appendix 1 as deduced from the price market analysis of training 

companies like BSi group, DQS and TIQMS.  



 

36 

 

 

Place 

By locating the venture in the heart of the economic activities is a strategic decision to cater and 

serve the underserved customers. Majority of the SMMEs, large manufacturing companies and 

government entities are based in Gauteng province, South Africa. To ensure the accessibility of the 

venture’s offerings  Gauteng province was the best and strategic placement. as part of expansion 

strategy, the venture will have presence in the Western Cape, city of Cape Town and KZN, Durban 

and Eastern Cape, Port Elizabeth.  

Promotion 

Product and services promotion will be done through different platforms which exists such as 

LinkedIn, seminars and conferences to meet potential customers. Data base of different customers 

will be built with emails in which emailing marketing will be used as part of promotion strategy. 

Search engines like google will be used as pop up when people are searching and the venture will set 

up a website which communicate and promote the products and services for the venture. Word of 

mouth will be crucial in promoting the product and services of the business venture.  

The ventures seeks to partner with Universities and Colleges that offer qualifications in quality 

management like University of Johannesburg in order to reach the greater population of clients who 

are representing their organizations in the university. 

 

 

 

 

 

 

 



 

37 

 

 

5.5 Situational Analysis (Environmental, Industry and Competitor Analysis) 

5.5.1  Macro Environmental Analysis 

Table 5.5.1: PESTEL Analysis 

5.5.2 Industry Analysis 

Porter’s five forces was used to evaluate the industry competition in order to comprehend the 

competitiveness landscape of the training industry in South Africa in manufacturing within the 

quality management training.  

 

 

 

 

 

 

Issue Business Impact Issue Business Impact

Government policy for skills devlopment through SETAs Opportunity for the venture to fill the gap
Economic growth and stability - Opposite of 
that is economic downturns

Companies continue to growth and new companies are created, need for 
training increases in the sector.
Companies scales or closes down and reduce training demand

Training and development skills 1% levy from all employees
Increase spending on training and development - 
opportunity for the venture Workforce development initiatives 

Government funded workforce projects drives corporate training services 
up

Government of national unity stability
Impact the stability of the training sector due lack of 
economic stability

Cost of training and expected ROI
Employers may evaluate the cost of training versus the expected returns in 
terms of productivity, overall performance and withdraw

Issue Business Impact Issue Business Impact

Changing worforce demographics 
Changing demographics such ageing population influence 
the types of training or skills required 

Digital and online learning and teaching Training market shifted towards digital platforms, courses offered online 
and virtual trainings. Venture to catch up with technology

Workplace culture and employee engagement

Companies continually seek to foster good culture and 
employee engagement, creates oppoerunity for the 
indystry

Learning Management System

Learning management systems (LMS) have become essential tools for 
delivering, tracking, and assessing corporate training programs, enabling 
organizations to streamline their training operations and monitor employee 
progress

Corporate social Responsibility  
Providing training and development oppoertunities to 
underserved communities

Emerging technologies

By integrating emerging technologies such as virtual reality 
(VR), expanded reality (AR), and artificial intelligence (AI), we convert 
business training status and provide immersive and personalized learning 
experiences.

Issue Business Impact Issue Business Impact

Sustainability and Enviromental regulations 

With organizations increasingly adhering to sustainability 
including carbon footprint and enviormental awareness - 
Demand for training increases 

Intellectual Property rights
Corporate training providers must consider intellectual property rights and 
ensure compliance with copyright laws when developing and delivering 
training materials and content.

Remote and Virtual Training Solutions 
The training sector to invest on the technology of offerings 
on the virtual platforms

Data privacy and security 
With the increasing use of digital platforms and collection of employee 
data, organizations must comply with strict regulations regarding data 
privacy and security.

Climate change and weather patterns
Unable to travel other areas due bad weather and climate 
change topics such recent snow and floods in KZN

Compliance with regulatory bodies Training companies must comply with industry specific regulations when 
offering training services such as QCTO and varios SETAs

Political Factors Economic Factors

Social Factors Technological Factors

Enviromental Factors Legal Factors



 

38 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fugure 5.5.2.: Industry Analysis – Porter’s five forces 

Bargaining Power of 

Suppliers  

• Development capabilities of 
material developers 

• Suppliers with relationships 
with customers 

• Established companies have 
geographical coverage 
 

Competitive Rivalry 
 

• Well established training 
companies with global footprint  

• Financial muscles 

• Range of training courses 

• Technological advancement 
 
 

Threat of Substitutes 

• Low switching costs to replace 
offerings 

• Regulatory requirements 
favouring well established 
companies 

• Introduction of new courses in 
the market 

 
 

Bargaining Power of Buyers 

• Training not priority for SMMEs 

• Lack of capital to invest in 
training by SMMEs 

• Training provider loyalty 
 

 

 

Threat of New Entrants 

• Lack of funding for start-up 
companies 

• Low requirement to comply 
with regulatory framework 

• Use of technology to deliver 
trainings 

• Lack of industry expertise 
 



 

39 

 

 

5.5.3 Competitor Analysis 

Existing Training Companies; 

Obtaining QCTO accreditation is a crucial step for training companies looking to establish credibility 

and align with national standards in the dynamic field of occupational training in South Africa. But 

there are difficulties with this process, especially considering how competitive the market is and how 

many suppliers charge cheap prices for low-quality, frequently plagiarized materials. 

There are many providers fighting for market share in South Africa's fiercely competitive 

occupational training industry. Many of these suppliers rely on low-cost, inferior materials that are 

usually unoriginal and don't live up to the strict standards of QCTO accreditation. Such inexpensive 

options are widely available, which puts pressure on ethical businesses like the business venture that 

value compliance and quality over quantity and cost. Regrettably, low-cost providers frequently 

generate content that has been plagiarized and take shortcuts that compromise the integrity of the 

industry as a whole. The industry consist of private and non profit training providers. However the 

market is dominated by private training providers such as Bsi Group, DQS, SAQI, TIQMS and SGS SA 

to mention the few. The target market for these leading industry captains in quality management 

trainings are big corporates and large size manufacturers, this potentially leaves the SMMEs segment 

underserved in terms of trainings.  

SWOT Analysis 

Strength Weakness 

Focus on the underserved SMMEs  High operational costs to set up the venture 

Staff expertise in quality management Long processes of accreditation of the courses 

Integrate technology and innovation in 

training 

Implementation of learning management 

systems and Quality management system 

Government skills development program 

exploitation 

 Employee retention and engagement as a 

new venture 

Threats Opportunities 



 

40 

 

 

Rapid technological changes in delivering 

training 

High demand for workforce upskilling  

Intense competition with well established 

training providers 

Quest to serve the market with quality 

products 

Regulatory and compliance with QCTO and 

SETAs hurdles 

Foreign direct investment leading to supplier 

development projects 

Decline in manufacturing industry activities Government drive to support and resource 

manufacturing SMMES 

Table 5.5.3.1: SWOT Analysis 

5.6 Research and Development 

As part of seeking to continuously stay ahead of the competition curve, the venture will have a 

research and development department to continuously research the market to understands market 

demands and development products that the customers are yearning for. The following activities will 

be undertaken in order  to achieve our R & D goals: 

Continuous innovation: understand market trends globally and innovate new courses to respond to 

the ever growing need of training and development in manufacturing. 

Partner with global players: The business venture will to partner with key and big global big training 

companies in order to learn and benchmark their successful stories from developed countries. 

Academic partnerships: Join hands with high institution of learning in South Africa to leverage the 

academic repositories to understand new technologies and market demands in training industry. 

Regulatory bodies partnership: Partner with regulatory bodies such as a QCTO and SETAs in order to 

gain alignment with current and up to date training courses and respond accordingly. 

5.7 Management and Organisation  

Below is the management and organisational structure of the business venture which includes top 

management and middle management. 



 

41 

 

 

 

 

 

 

 

 

 

 

5.8 Business Financials 

The venture needs R2000 000  to establish a training and consulting business in Quality Management 

in South Africa within 12 months. The money will be primarily needed to developing training material 

and purchase inspection tools required for consulting arm of the venture. The capital seed of the 

venture will be primarily sought from the Industrial Development Corporation and long term debts 

from private lenders. 

Summary of operations  

The venture is going to focus extensively on the establishment of the operations of the venture. This 

will include detailing the operational foundation of the business and ensuring that a training venue 

is secured, material for the training are well understood and designed to respond to the thorough 

market research will confirm the demand of quality management training and consulting services 

and the best facilitators are employed who have extensive experience in quality management from 

different industries before the venture can approach funders, all these mentioned items needs to be 

finalized. Part of the market analysis the venture will seek to identify and analyse its potential 

customers based on the sizes of the companies such as big corporations and SMMEs, with the focus 

Figure 5.7.1: Business Venture Organogram 



 

42 

 

 

in helping the SMMEs to develop and produce quality competitive products. The venture will also 

ensure that the regulatory requirements are fulfilled such as QCTO and SETAs. 

Current Shareholders Loans Outstanding 

The venture is relatively at its infancy stage and it has not secured shareholders loans which are 

outstanding.  

Funds Required and Timing  

The business venture seeks to secure a capital seed of R1500 000 in order to kickstart the setting up 

of the operations of the venture in Gauteng province as the first location. The timing plan to secure 

the funding is between 12 to 18 months.  

Use of Proceeds 

The funds will be used to secure office space including training rooms, research and development of 

training of materials, training equipment, consulting equipment, regulatory requirements and 

employ consultant and facilitators. 

The Deal on Offer 

Investors are encouraged to plant a financial seed on this groundbreaking project in which they will 

participate in building a social vehicle which seeks to assist SMMEs in South Africa to solidify their 

operation excellence which in turn will ensure that they produce quality products which is expected 

by the market. The investors will receive equity stake in the business venture which is poised to 

grown in leaps and bounds in exchange of their much needed investment and with the possibility of 

paying dividends being paid in the future. 

Anticipated Gearing and Interest cover 

To facilitate the debt in proportion to equity capital to fund the business venture’s operations, the 

venture will seek to strike a balance between debt and equity in order to minimize borrowing money 

from lenders and rely heavily on the funding from the shareholders, as much the venture will find a 



 

43 

 

 

working formula to balance debt and equity while maximizing returns for investors and service the 

financial obligations including interests on debts.  

Expected Returns 

The investors can expect handsome returns on their investments as the business venture is poised 

to grow and capture a market share. This be will realized by maximizing growth in revenues in the 

niche market of SMMEs identified by offering high quality services to the underserved market 

coupled with the expansion strategy from Gauteng to Durban, Port Elizabeth and Cape Town and 

ultimately the whole South Africa and Africa, which will ensure sustainable profits for the venture 

and the investors. 

Exit Route For Investors 

The venture will make various exit options/strategies for the investors to ensure that the investors 

maximizes profits and their financial positions. Some of the options to be made available for the 

investors are liquidation, mergers and acquisitions, legacy, acquihires and sell stakes to an investor. 

5.9 Forecasts and Financial Data 

Summary of performance ratios  

Appendix 2 presents the financial ratios of the Business venture, which collectively illustrate a 

favorable trend, signifying robust financial health and operational efficiency. Profitability ratios 

indicate a steady enhancement, with gross and net profit margins rising consistently. Liquidity ratios 

reflect an improvement in liquidity positions, while efficiency ratios point to better inventory 

management. Despite a slowdown in the growth rate, the venture still demonstrates positive 

revenue growth. Return ratios reveal positive returns on both assets and equity, though with some 

variability. In summary, the venture's performance across several financial metrics indicates a stable 

and expanding business marked by effective management practices.  



 

44 

 

 

 

Table 5.9.1 : Income statement ( Profit and Loss) 

 

Figure 5.9.1: Net Profit for a period of five years 

Revenue Year 1 Year 2 Year 3 Year 4 Year 5
Gross Sale 6480000 6868800 9707904 12005441,28 14498751,17
Costs 1875000 1912400 2016244 2134419 2267334
Gross Profit/Loss 4605000 4956400 7691660 9871022,64 12231417,41
Operating Expenses (Projected increase based on 2024 inflation rate of 6%)
Advertising 15000 15000 5000 2500 2500
Salaries 1160000 1229600 1303376 1381579 1464473
Equipment 20000 0 0 0 5000
Furniture 50000 0 0 0 0
Rent 120000 127200 134832 142921,92 151497,2352
Miscellaneous 10000 10600 11236 11910,16 12624,7696
Car Rental 20000 21200 22472 23820 25250
Petrol & Tollgates 50000 53000 56180 59550,8 63123,848
Telephone & WIFI 5000 5300 5618 5955 6312
Insurance 60000 63600 67416 71461 75749
Training material 50000 53000 56180 59551 63124
Employer Contributions 
i.e. UIF etc 163800 173628 184045,68 195088 206794
Pension Fund 
Contribution (12%) 151200 160272 169888,32 180082 190887
Total Expenses 1875000 1912400 2016244 2134418,64 2267334
Profit before tax 4605000 4956400 7691660 9871022,64 12231417,41
Corporate Tax Payable 
(27% Gross sale 1749600 1854576 2621134,08 3241469,146 3914662,815
Net Profit 2855400 3101824 5070525,92 6629553,494 8316754,594



 

45 

 

 

Deducing from table 5.9.1 (income statement) it is evident that the business venture will make a 

profit from year 1 and grow in its profitability right through to year 5. The income statement 

demonstrates a positive trend for the business venture with a steady growth in revenue, profitability 

and proper cost management. The key focus will be robust process to manage the expenses in order 

build a financial healthy business.  

 

                                                                           Table 5.9.2: Balance sheet 

The balance sheet as shown on figure 5.9.4 of the balance sheet highlights a healthy and intelligent 

business where there is a right balance between debt and equity. The positive bottom line confirms 

that there is value for the shareholders and owners in the company. 

Investment/Cash 2000000 1803400 1628504 1485849 1171572
Profit 4605000 4956400 7691660 9871023 12231417

Inventorty, Miscellaneous
10000 10600 11236 11910 12625

Total Current assets 6615000 6770400 9331400 11368782 13415614
Car 20000 21200 22472 23820 25250
Equipment 20000 0 0 0 5000

Furniture 50000 0 0 0 0
Total Fixed Assets 90000 21200 22472 23820 30250

Current + Fixed Assets 6705000 6791600 9353872 11392602 13445863

Rent 120000 127200 134832 142922 151497
Salaries 1160000 1229600 1303376 1381579 1464473
Employer Contributions 163800 173628 184046 195088 206794
Insurance 60000 63600 67416 71461 75749

Tax Payable 810000 931500 1071225 1285470 1606838

Total Current liabilities 2313800 2525528 2760895 3076520 3505350

    Pension contribution 151200 160272 169888 180082 190887

Total Liabilities Current + Long term 2465000 2685800 2930783 3256601 3696237

Net Asset/Owner's Equity 
(TA-TL) 4240000 4105800 6423089 8136001 9749627

Total Liabilities and 
stakeholder Equity 2625000 3266800 3501108 4029059 4772115

Long term Liabilities

Current Assets

Fixed Assets

Total Assets

Current liabilities



 

46 

 

 

5.10 Operational Plan 

5.10. 1 Geographical Analysis 

The business venture will be located in Johannesburg because JHB at most is considered as the 

economic hub of the South African and central to key targeted manufacturing hubs such as Durban, 

city of Cape Town and Gqeberha. The location is very strategic in that it will be easy for consultants 

to fly from OR Tambo to the aforementioned cities to provide trainings and travel by car to cover all 

cities in Gauteng. 

5.10.2 Operating Equipment 

The required equipment for the business venture will be the following in order to deliver the services 

on time, right quality and on cost: 

• Computer  

• LCD Projectors 

• Projection Screen 

• Presentation Pointer 

• White board and flip charts and markers 

• Stationery  

• Microphone and speaker system 

• Printer and paper 

5.10.3 Staff Compliment 

The business venture will initial have 5 employees with the CEO responsible for leading the day-to-

day activities of the business and assisted by three consultants who will be responsible for providing 

the training and the administration manager who will be responsible for planning, organizing and 

controlling the training and consulting activities of the business venture. 

 



 

47 

 

 

Chapter 6: Conclusion 

6.1 Conclusion 

In conclusion, launching a quality management training business is a promising proposal given the 

vast market that is currently underserved in the manufacturing industry, particularly among SMMEs. 

The business venture is anticipated to play a critical role in contributing to the success of SMMEs as 

it relates quality of the products and services. The establishment of the business venture is a positive 

significant opportunity to serve the market that is currently underserved and also to capitalize on 

the government program to reindustrialize South Africa through financial and other form of supports 

for SMMEs, which the business venture recognizes these development a huge opportunity. 

There are couple of challenges that the business venture needs to address before operations 

commence such as a funding, regulatory compliance, developing quality and affordable courses and 

recruitment of the experienced and skilled facilitators and consultants in order to offer quality 

services to the industry and improve its quality output. 

6.2 Business Risk Management 

Below is the business risk management analysis that the business venture conducted in order to 

identify potential risks, analyse and prioritize them in order to develop mitigation strategies to 

reduce or and eliminate the risks associated with the business venture.  



 

48 

 

 

 

 

 

 

 

Table 6.2.1: Business Risk Management Analysis 

 

 

 

HIGH Medium Low

RISK CATEGORY RISK DESCRIPTION IMPACT DESCRIPTION

IMPACT 

LEVEL (1- 

Low to 5 -

High)

PROBABILI

TY LEVEL 

(1- Low to 

5 -High)

PRIORITY 

LEVEL
MITIGATION NOTES OWNER

Unqualified and inexperienced 

employees
Poor training offered 5 5 25

Outsource recruitment process to 

ensure right people are employed
CEO

Not following procedures in 

delivering training

Unsatisfactory training 

outcome
4 4 16

Define and training facilitators on 

training procedures
CEO

Sub stabdard training material 

and content

Unsatisfactory training 

outcome
5 5 25

Training material and content to be in 

line with QCTO 
CEO

Market risk due to movement 

in financial instruments and 

interest rates

Impact business venture 

financial stability i.e. cash flow
3 3 9

Develop robust financial strategies and 

policies
CEO

Unable to fulfill financial 

obligations i.e. payable and 

receivable

Impact business venture 

financial stability i.e. cash flow
4 4 16

Develop receivable and payable 

policies i.e. 30 days, 60 days etc
CEO

Lack of initial captical seed Unable to start with operations 5 5 25 Diversify the sources of funding CEO

Competitive pricing strategy 

i.e.large discounts

Customer cannibilazation and 

impact revenues
5 5 25

Conduct SWOT analysis on competition 

landscape and capitalize.
CEO

Copyright and IP infringement Disadvantages the business 3 4 12 Transfer the risk to the legal team CEO

Lack of innovation
Outdated training material and 

content
4 5 20 Create research and development unit CEO

Operational Risk

Financial Risk

Competition Risk



 

49 

 

 

7. References 

A.Y Magodi, I. A. (2020). A Cross-Sectional Pilot Study on Quality Management System in the Small and 

Medium Enterprise (SME) in South Africa. Pretoria: Tshwane University of Technology,. 

A.Y Magodi, I. A. (2020). A Cross-Sectional Pilot Study on Quality Management System in the Small and 

Medium Enterprise (SME) in South Africa. Pretoria: University of Tswana. 

Amin, D. B. (2022). The Impact of Learning and Development on Employees’ . Journal of Positive School 

Psychology , 1. 

Applied Doctoral Centre. (2024). Trustworthiness of qualitative data. Applied Doctoral Centre, 1. 

ASP Journals. (2021). Influence of employees training on product quality potential of selected food 

manufacturing firms in south east Nigeria. Advance Journal of Management and Social Sciences. 

Austin, J. S. (2015). Qualitative Research: Data Collection,. Research Primer, 5. 

Bhandari, P. (2023). What Is Qualitative Research? | Methods & Examples. Scribbr, 4. 

BusinessTech. (2021). Uber and Taxify face legal trouble in South Africa as criminal drivers target 

passengers. Johannesburg: News24. 

Chilman, C. (2023). Data Analysis in Research | Methods, Techniques & Examples. Study.com, 3. 

Cocheu, T. (May 1992). Training with Quality. Chicago: Association for Talent Development (ATD). 

Compiled by the parliamentary information services: Research. (2000). The Skills Development Act, 1998. 

Cape Town: Parliament of South Africa. 

Crecelius, R. W. (2019). The First Principles of Marketing Strategy. University of Washington : Spring 

Nature . 

Elearnmarkets. (2024). Business Models – Example, Types, Importance & Advantages. Elearnmarkets, 1. 

George, G. (2014). South African Journal of Economic and Management Sciences. Scielo 15 South africa. 



 

50 

 

 

GeorgeI, G., SurgeyI, G., & Gow, J. (2014). South Africa's private sector investment in training and its 

erosion as a result of HIV and AIDS. South Africa journal of economic and management sciences, 

1. 

High Education and Training. (2010). National Skills Development Strategy III. Cape Town: Government 

of South Africa. 

Jain, M. (2022). Profitable Personal Training Business Models. Trainerfu. 

Johns, G. (2006). The essential impact of context on organizational behavior. Academy of Management 

Review 31, 386–408. 

KOPP, C. M. (2024). Learn to understand a company's profit-making plan. Investopedia, 1. 

Lorelli S. Nowell, J. M. (2017). Thematic Analysis. International Journal of qualitative methods, 4. 

Mbohwa, C. (2016). Causes of poor quality on SMMEs: A Case of Gauteng SMMEs, South Africa. IEOM 

Society International, 1154. 

Mbohwa, L. S. (2016). Causes of poor quality on SMMEs: A Case of Gauteng SMMEs, South Africa. 

Johannesburg: University of Johannesburg. 

Milhem, W. (2014). Training Strategies, Theories and Types. Journal of Accounting – Business & 

Management, 17. 

Ngambi, M. T. (2015). The Impact of Total Quality Management on Firm’s Organizational performance. 

American Journal of Management Vol. 15(4) 2015. 

Palmatier, R., & Sridhar, s. (2021). Marketing Strategy Based on First Principles and Data Analytics.  

Pannell, R. (2022). An Introduction to the Cost of Poor Quality. Tools and Techniques for cost of poor 

quality, 5. 

Parliament of South Africa. (2000). The Skills Development Act 97 of 1988. Cape Town: Parliament of 

South Africa. 

Petropoulos2, N. M. (2008). A literature survey of cost of quality models. Journals of Engineering Annuals 

of faculty engineering hunedoara, 275. 



 

51 

 

 

Pubgenius Inc. (2024). How does training affect the quality of manufacturing products? SCISPACE, 1. 

PWC. (2023). SA’s manufacturing sector must increase 4IR tech adoption, or risk falling behind global 

competitors. Manufacturing Workforce 2023, 1. 

PWC. (2023). SA’s manufacturing sector must increase 4IR tech adoption, or risk falling behind global 

competitors . Manufacturing Workforce 2023, 1. 

PWC South Africa. (2024). PwC’s South Africa Manufacturing Analysis 2024. PWC Manufacturing . 

Republic of South Africa - Presidency. (2022). Freeing Small Businesses . Leave No One Behind, 1. 

Research gate. (2020). The Theory of Human Resource Development, Implications, and Futu. Human 

Capital Theory:. 

South African Government. (1998). Skills Development Act 97 of 1998. Government Communications. 

Sridhar, R. W. (2021). Market Strategy. Washington : Bloomsbury Publishing. 

Thomas, R. (2023). Unraveling Research Population and Sample: Understanding their role in statistical 

inference. Enago Academy. 

Zinzi, N. (2011). An approach to improving quality management in small manufacturing firms in the 

Western Cape, South Africa. Cape Town: Cape Penisula University of Technology. 

 

 

 

 

 

 

 



 

52 

 

 

Appendices: 

Appendix 1: Projected Sales forecasts 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trainings
Trainings per 
week

Total trainings 
per month

Cost Per 
Training

Cost Per Class 
(Assuming min of 7 

learners)
Monthly Revenue per 

Training 
Annual Projected 

Revenue
YEAR ONE 6480000
Problem Solving 1 4 2500 15000 60000
PFMEA and QCP 1 4 2500 15000 60000
Defects management in production 0 0 0 0 0
Customer satisfaction survey 0 0 0 0 0
Built in Quality 1 4 2500 15000 60000
Cost of Poor Quality 0 0 0 0 0
Lean Six Sigma 1 4 10000 60000 240000
ISO9001: 2015 1 4 5000 30000 120000
Total Trainings 5 20 22500 135000 540000

YEAR TWO - ( The demand of trainings in year two are not projected to grow as the Venture is in infancy stage and increase in prices per course of 6% - Inflation rate6868800
Problem Solving 1 4 2650 15900 63600
PFMEA and QCP 1 4 2650 15900 63600
Defects management in production 0 0 0 0 0
Customer satisfaction survey 0 0 0 0 0
Built in Quality 1 4 2650 15900 63600
Cost of Poor Quality 0 0 0 0 0
Lean Six Sigma 1 4 10600 63600 254400
ISO9001: 2015 1 4 5300 31800 127200
Total Trainings 5 20 23850 143100 572400

YEAR THREE- ( The demand of trainings will increase by 40% and increase in prices of per course 6% - Inflation rate 9707904
Problem Solving 2 8 2809 16854 134832
PFMEA and QCP 1 4 2809 16854 67416
Defects management in production 0 0 0 0 0
Customer satisfaction survey 0 0 0 0 0
Built in Quality 1 4 2809 16854 67416
Cost of Poor Quality 0 0 0 0 0
Lean Six Sigma 1 4 11236 67416 269664
ISO9001: 2015 2 8 5618 33708 269664
Total Trainings 7 28 25281 151686 808992

YEAR FOUR- ( The demand of trainings will increase by 29 % and increase in prices per course of 6% - Inflation rate 12005441,28
Problem Solving 3 12 2977,54 17865,24 214382,88
PFMEA and QCP 1 4 2977,54 17865,24 71460,96
Defects management in production 0 0 0 0 0
Customer satisfaction survey 0 0 0 0 0
Built in Quality 2 8 2977,54 17865,24 142921,92
Cost of Poor Quality 0 0 0 0 0
Lean Six Sigma 1 4 11910,16 71460,96 285843,84
ISO9001: 2015 2 8 5955,08 35730,48 285843,84
Total Trainings 9 36 26797,86 160787,16 1000453,44

YEAR FIVE - ( The demand of trainings will increase by 35 % through introduction of X2 new course and increase in prices per course of 6% - Inflation rate14498751,17
Problem Solving 4 16 3156,19 18937,1544 302994,4704
PFMEA and QCP 1 4 3156,19 18937,1544 75748,6176
Defects management in production 0 0 0 0 0
Customer satisfaction survey 1 4 1500 9000 36000
Built in Quality 2 8 3156,19 18937,1544 151497,2352
Cost of Poor Quality 1 4 1500 9000 36000
Lean Six Sigma 1 4 12624,77 75748,6176 302994,4704
ISO9001: 2015 2 8 6312,38 37874,3088 302994,4704
Total Trainings 12 48 31405,7316 188434,3896 1208229,264     

    

    

    

    



 

53 

 

 

Appendix 2: Summary of Ratios 

 

 

 

 

 

 

 

 

 

 

Formula YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Profitability Ratios
Gross Profit Margin Gross Sale/Gross Profit & Loss *100 69,52 70,61 78,07 81,23 83,49
Net Profit Margin Gross Sale/Net Profit*100 42,52 43,61 51,07 54,23 56,49
Return on Investment Gross Profit & Loss/Investment*100 281,56 303,15 473,71 609,50 756,57

Liquidity Ratios
Current Ratio Total Current Assests/Current Liabilities 1,64 1,98 2,01 2,18 2,43

Quick Ratio
Current Assets - (Cost of material + 
Miscellanous/Current liabilities 1,60 1,90 1,96 2,14 2,39

Efficiency Ratios
Inventory Turnover Cost of sales/(Material costs + miscellaneous) 32,92 31,74 31,57 31,53 31,60

Growth Ratios
Revenue Growth Rate Gross Sales Yr 1/ (Gross Sales 2 - Gross Sales Yr1) N/A 6,00 41,33 23,67 20,77

Return Ratios
Return on Assets Gross Sales/Currents + Fixed Assets 1,06 1,03 1,05 1,06 1,09
Return on Equity Gross Sales/Net Asset/Onwer's Equity (TA-TL) 1,83 1,76 1,57 1,52 1,53



 

54 

 

 

 

Appendix 3: Year one Projected Cost Estimates 

Marketing Costs  

Promotional material 5000 
Design of Website and social media 10000 
Word of mouth N/A 
Total 15000 

  
Salaries Costs Per Annum 

Office and Admin Manager 315000 
Facilitator 315000 
Facilitator 315000 
Consulatant 315000 
Total 1260000 

  
Costs of  Tools and Equipmets  

Equipment  20000 
·       Computer 

  

·       LCD Projectors 
·       Projection Screen 
·       Presentation Pointer 
·       White board and flip charts and markers 
·       Stationery 
·       Microphone and speaker system 
·       Printer and paper 
Total 20000 

  
Cost of Materials 

Training material development 10000 
Training material production 40000 
Total 50000 

  
Cost of Rent - Space 

Accomodation 120000 
Furnuture  

50000 
·       Tables  
·       Chairs 
Total 170000 



 

55 

 

 

  
Miscellaneous 10000 

  
Others 

Car Rental 20000 
Petrol and tollgates 50000 
Telephone and WIFI 5000 
Total 75000 

  



 

56 

 

 

 

Promotional material 5000
Design of Website and social media 10000
Word of mouth N/A
Total 15000

Office and Admin Manager 215000
Facilitator 315000
Facilitator 315000
Consulatant 315000
Total 1160000

Equipment 20000
·       Computer
·       LCD Projectors
·       Projection Screen
·       Presentation Pointer
·       White board and flip charts and markers
·       Stationery
·       Microphone and speaker system
·       Printer and paper
Total 20000

Training material development 10000
Training material production 40000
Total 50000

Accomodation 120000
Furnuture 
·       Tables 
·       Chairs
Total 170000

Miscellaneous 10000

Car Rental 20000
Petrol and tollgates 50000
Telephone and WIFI 5000
Total 75000
Total of Year 1 total cost estimates 1500000

 

Salaries Costs Per Annum

Costs of  Tools and Equipmets 

Cost of Materials

Cost of Rent - Space

50000

Others



 

57 

 

 

 

 

 

 

 

 

Appendix 4: Ethics Documents 

 



 

58