The Process of the Business Start Up
The business is in an established market with many competitors. MQL is a fairly large company that has grown rapidly over recent years and it is now one of the leading quilting manufacturing company’s in the Midlands. It employs about 30 workers and is situated in Smethwick, West Midlands. At the moment the company only operates in the Midlands but the proprietor is considering expansion to other parts of the company.
His objectives for the business, apart from maximisation of profits, is to make MQL a large recognisable company with a good reputation. He feels that there are three steps that he needs to take. Firstly, to expand to other parts of the England. Secondly, expands to all parts of the England and finally, begin exporting goods to other parts of Europe. However, this process will take a long time.
The Market The quilting and manufacturing market in which MQL operates in is an established one as it has been running for many years. However, the amount of people entering the market does seem to be levelling off. A few years ago, there were many people entering the market and as a result the market was growing. However, in recent years, there have not been many people prepared to enter the market. I went around and asked a few owners of businesses in the market and they all seem to agree that there probably wont be a large amount of people entering the market.
Most young people nowadays tend to go on the computers side and not the quilting and manufacturing side. On the whole there does not seem to be a very big future in the market once the current crop of company’s decide to stop as many owners will find that they cannot pass it on to their children as they are not prepared to do it. On the bright side the market is going pretty well at the moment due to there being many competitors.
In the market, you will very rarely find one-off customers, there is a lot of loyalty in the market as customers tend to stick to their own suppliers as long as the goods produced are of good quality. If the goods are not up to the standard required then customers will find a new supplier mainly through ‘word of mouth’ and not investigation of the quality of the goods and service. The Competitors MQL has many competitors in the market and that means that quality of the goods and service must be high if they want to survive in the market. MQL have seen many competitors fail in the market due to lack of quality and due to the fact that they were unable to compete with other established rivals like MQL.
Due to the level of competition being great, MQL must keep a close eye on all its rivals to monitor any activities that they do to try and get customers. For example, price cuts, promotional activities etc. If any rivals do any marketing activities then MQL must act accordingly to keep customers.
The majority of MQL’s rivals are situated extremely close to each other- in Smethwick. This would make it easier for company’s to monitor each others progress. This increased competition is good news for customers and for the past 3 or 4 years, MQL have managed to beat off rivals and attract customers and gain a good reputation which has seen them emerge as an established company. For the past 2 years, there has only been approximately 2 newcomers in the market apart from that the company’s competing have been the same which means this competition has become more and more fierce.
The Process of the Business Start Up Below is the procedure that Mr Kuldip took in the process of starting up his business: Firstly, he had to decide whether or not to open up a business by himself or not. He was working at M.K Textiles in a partnership so he would have to know whether he could handle the business and its responsibilities by himself. He eventually decided that he could and was prepared to take the risk as he was effectively running M.K Textiles on his own as his partner was more involved with his other business.
Kuldip then prepared a business plan as that would help him get finance and enable him to start up his business effectively. Finance was the next problem- where would Kuldip get the necessary finance from? There was three sources from where Kuldip eventually got it from: Having been impressed with Kuldip’s business plan, his bank manager granted him a loan, which covered for approximately 60% of his start up costs. Now Kuldip had to raise the remaining 40%. He got most of the rest of the money from family and friends of whom already had businesses. All of this money was good for Kuldip because although he had to repay it, there was no time limit or any interest to be paid.