Detailed report on starting a new business
For this item of course work I have been asked to produce a comprehensive study into starting an imaginary business of my choice in the Ballymena district in which I live. To help me proceed through this I will develop an inclusive action plan which will allow me to see how well I’m progressing through the time that I have been given. The action plan will also help me with the points that I must cover to ensure this study is comprehensive. In order for this study to be comprehensive and not lacking in detail or facts I must research all aspects of starting a business. I will be using books, the internet and contacting similar business to aid me in my research; this type is all classified as desk research, all the results will be quantitative rather than qualitative. I will also use field research such as questionnaires which is more qualitative.
I propose to start a large electrical superstore retail outlet; I have decided to make my business a LTD, as this lets me have full control and separates my company finances from my own. This wouldn’t be the easiest to initially set up but the benefits will be on going. I also will have to publish my accounts yearly and will be available to the public to view. The aim of my business would focus mainly on to competing with other similar businesses in the local area. Undoubtedly my business must at least make a profit, if not then break even. As with all small independent businesses the overall aim for the first six months is to survive. Survival and turnover are linked very closely, with good turnover the business will survive like wise if the business’s turnover is poor chances are the business will fail. Therefore narrowing down my main objective as profit.
The method I will use is random sampling in the Ballymena area. This is so that I can see what a wide range of people think and want in the local area. This is so that I get data that is relevant to me. I will use primary research, in the form of questionnaires. This is because the primary research will be accurate, and more relevant, as it is being carried out for a specific purpose. The reason that I am using a questionnaire is that it allows gathering very detailed information. The biggest drawback of this is the amount of time.
These results will affect the way my business is operated in a large way. This will determine what market segments the company will be aiming at. It will also affect the services and products offered and mainly price and quality. I will add these results to a database and filter it so I can see all the relevant data needed for me to judge all these factors. As shown on the page behind this will be the questionnaire that I will be giving out. I think it contains all the information that I will need in order to filter and process the data.
My pricing will need to be carefully calculated as this is the most important factor in my business. If I chose a low price I should get a high price, if I sell at a high price then the laws of supply and demand tell us that fewer will buy. The price also can indicate the quality of the goods. A lower price will attract people of a lesser social economic group than a higher price. If I chose a middle price it would seem I would get the best of both worlds. I think from my results that most people want a mid range appliance. This means that I can attract people from both ends of the social economic groups. This will be helpful in deciding the location of my business.
I will also need to add a small amount to contribute towards the delivery of the goods and installation. If I add a small amount on every item, and one in ten require delivery it is possible for the delivery to be paid off by the goods that didn’t require it. This is a company will bring out a new product and sell it very cheap, so that it gets in to market very quickly. When they have established the product in the market they will raise the price. When you first realise a product in to the market at a higher price then lower the price later. This is because sometimes customers will like the prestige of having your product first, before anyone else. This is called skimming as you skim your customers first selling to the richest.