I have been asked to prepare a feasibility study for a business with a view to acquire a vacant property and develop it for a new business. I am planning to choose a business in the Earl’s Court Rd area. There are a number of businesses under consideration. The underlying consideration for selecting a business would be the long-term survival and profitability of the business. The road that has the shop premises vacant and available already has an assortment of shops. However there is a large catchments area as well that is a mixture of residential area and hotels.
The businesses under review are Newspaper shop, Internet Bureau de exchange and a flower shop. In order to attain my objective I would need to research the pros and cons of all types of businesses mentioned above. To do this, I would research into all aspects of a business, conducting a survey of the area, interviewing local people, using books, people and computer resources. I will create plans to help me, evaluate and redesign them as I proceed during the project. The reason for doing plans is to help keep track and organise what I am doing and it also shows points that I should cover for my study to implement it successfully.
I have observed the Earl’s Court area very carefully for a number of days and tabulated a schedule showing the number of shops in each category as follows, ` Newspaper 5 Flower 4 Bureau De Exchange 5 Internet Cafi?? 2 The road has reached a saturation point in respect of the first three options due to the existing numbers. However there is still a great deal of potential for some more Internet Cafes. This is due to the fact that there a number of hotels in the area . I have also taken into account the fact that a number of hotels offer in-house internet facilities.
However, my research shows that if the service is provided at a competitive rate, the business would attract customers to make it a successful venture. I have decided to have an Internet cafi?? (Net Palace(tm)) situated in the vacant area. I will explain the reasons why during the course of the project. The vacant business site is situated in a location where most of the shops provide the local population with everyday requirements. The shops on the same road as my local business site are Pizza Hut, a bakery, A coffee shop. There is then a restaurant and then my chosen vacant business site.
This is also the case on the opposite side of the vacant business site, where there is a Sainsbury’s local, a newsagent’s, and an international call centre. There is a train station extremely close to the vacant area; the significance of this being that there will be a lot of passing trade and the vacant business site will be prominent and conspicuous. The aim of Net Palace(tm) is primarily to be able to compete with the two other Internet cafes in the local area. Other aims are to break even and make a profit. However, my most important aim is to provide a high quality service to the public.
My task will involve me conducting market research in order to determine the local population requirements. There are many factors to consider when locating a new business which all play an important part in a successful sale of a product. The factors that I must consider are the infrastructure of a business site. My business would need good communication systems, telephone systems, fax, e-mail etc. Another factor is the geographical factor. I must have my business situated in the ideal location in order to have a good chance of making a profit.
The research will also give me a clear guide of what type of pricing I will set for the use of the internet and how I will price for the food and drink. My pricing strategy will depend on my area, so I will carry out a survey to see what pricing structure suits that area. I will then research pricing strategies by visiting other similar local Internet cafes and coffee houses. I will also have to research into any planning restrictions that are placed in the Earl’s Court area. Why I haven’t chosen the other business alternatives
Newsagent’s: As there are already five newsagents around the vacant site, it would be very unsuitable to have another newsagent’s. There are two main problems which would occur if I were to open up a newsagent’s. First of all, there is the customer’s loyalty. The customers would have and still probably go to the same newsagents due to the convenience and it is hard to change the habit of the customers. The second main reason is that the newsagents are conveniently situated where they are near flats, whereas the vacant site is situated in such a place that it is inconvenient for most people.
Flower Shop: The four flower shops are already most likely to be competing with each other, and adding another flower shops will not only put more pressure on them but also on me. I will have to have set prices at a competitive rate and keep updating my market research in order to have a clear idea of how to attract more customers and make sure I do not fall behind in setting prices at an attractive rate. Bureau De Change: Again, five of these is already more than enough as they are all conveniently situated. Two of them are situate very close to the train station, where there are a re lot of passing trade, and a lot of tourists.
What is the point of market research? I must find out how many people there are whom will use the facilities available in Net Palace(tm) and how many people there are whom will buy the products such as coffee, tea, pastries etc. This is where market research is extremely important. It is used to find out what products and facilities such as using the computer and internet do people like or dislike?. How much would they pay?. Who and where will people use and buy the product? Competition and are people thinking of using the Internet and the computer? The information can be gathered in two ways:
Primary research This is where data is collected for a specific purpose, this involves going out and carrying out questionnaires and interviews. This method of research can be expensive and time consuming. The different types of primary research are: questionnaires, interviews and testing and observing. Each method of primary research has both advantages and disadvantages: Questionnaires This is the most common method of primary research as it is the easiest. The advantages are that detailed information can be gathered and customer’s options can be obtained.
The disadvantages are that it would take time to carry out a questionnaire and analyse the results obtained and the questions must be well thought out, otherwise the results will be misleading. Interviews This is a face-to-face conversation. (An interviewer and an interviewee). The advantages are that questions can be explained if the interviewee doesn’t understand a question and very detailed information can be gathered. The disadvantages are that interviews are very time consuming and the interviewer may lead the interviewee’s answer to the questions.