Investing or starting a business
I have been hired as a business consultant for an entrepreneur called Sally Thomas. An entrepreneur is somebody who takes a risk with his or her money by investing or starting a business. A consultant is somebody who is hired to give advises on how well the business will do for a fee, taking into consideration all the influencing factors. Sally has savings/capital of 30000 and wants to open a business in the greater Peterborough area. Capital is the money that they have; this includes property that they own.
She wants to make a profit, profit is the money that she gets after paying the costs of her business, and wants me to prepare a business plan that will include recommendations to whether sally would be better being self employed or employing somebody else. How good Sally would be at owning the business. I will be saying what product or service the business could supply. Weather it would be better to own the business by her self or going into a partnership. Where she can get a source of money from i. e. a loan from a bank.
I will research the local area to see if there are any competitors trying
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It can also be used as a guide for future shareholders who want to know how successful the business might be. Is also used to keep the business on track and the plan has the aims and objectives in so they can check they are meeting them. Personal qualities The personal qualities needed to run a business are you have to be a self-starter; you have to be able to use your initiative. But if you need someone to tell you what to do to get started you can seek advice from a friend, family or a business consultant. You have to get on with other people.
You must be able to lead and motivate people i. e. your employees as if they are well motivated they will work harder. You must be able to take charge in situations and take responsibility for your employees and know what to do. You must be a good organiser, you will have to organise a plan and stick to it. You have to be a conscientious worker; you must go that extra mile to succeed. You must know how to make important decisions wisely and be able to correct any decisions you make wrong. You must be honest and trustworthy, as dealers will not trade with you if you lie to get what you want.
You will also not be able to borrow money if you have a bad reputation. You must be determined and willing to keep going no matter what to reach your goal. You must be very healthy and keep fighting fit. Also on the video from H. S. B. C. they case studied 5 businesses they said that 4 qualities needed to succeed were; good at making decisions, believe in yourself, want to succeed and you must adjust your own lifestyle.
Appraisal of sally’s qualities Sally has a lot of qualities that are shown on her C. V. and personal statement, she is a self starter as she mentions doing a lot of interesting things without being told to do them i. e. teaching English to local business people in Prague. She gets on with other people like the local businessmen and children in Prague and she thinks, “It is interesting to meet people from different cultures”. She must be good at motivating if she taught English to young foreign children. She says she likes to be in charge and make decisions; she also has experience in this, as she was a trainee manager for Sainsburys.
She is a good organizer as she manages to organise 2 holidays a year. She says she is determined which is an important quality that is needed to be in charge of a business. She says she likes to be in charge and make decisions and she has the experience, as she was a trainee manager. She is fit and healthy as she does a lot of sport and is an aerobics instructor.
I think that sally would make a suitable manager providing she is being truthful on her personal statement and C. V. Business opportunities Demand Demand is usually thought of as what people want but it is not, demand is also what they can afford to buy i. e. if a man want s a yacht and he doesn’t have the sufficient money to buy a yacht he does not generate demand. Demand could effect sally’s plans to set up a business as if she enters a market with a product that there is no demand for a bank won’t lend her money and if they do she will lose it as she will not sell enough to stay in the market. It will effect the profitability of sally’s new business as profit = revenue – cost, therefore if she is not selling she will have a low revenue and therefore make a low profit and might not be able to cover her costs.
Sally should be looking for a gap in the market where there is nobody supplying what the public wants, but the risk is that there is a gap because there is no demand and other businesses have failed there. Competition Competition is when a business makes or produces the same product or service and they are competing for the same customers. When doing this they usually lower their prices to attract customers or offer special deals i. e. buy one get one free. Competition could affect sally’s plans as if she enters a market where there is a lot of competition she might find it hard to get customers.
This will directly affect her profit as if she has no customers she will have no revenue and therefore make a low profit. Sally should be looking for a market where there is a very little competition (gap in the market). Industry trends This is when an industry produces a product that is popular but then nobody wants one so the market goes bankrupt. An example of this is the yo-yo as this was popular for about 6 months in 1999 but then it was left and children started buying scooters in stead then they died out.
This is an example of short-term industry trends, there are long term industry trends; these are when one thing is more popular. I. e. gambling was more popular in 1999 due to the lottery and scratch cards. Another example of this is holidays are more popular in the summer. This may effect sally’s plans as if she enters a market where the trend is low and not enough are buying she might not get a big enough share in the market to succeed as an independent business without any shareholders.
If she does not get enough customers she will not make enough revenue to make a profit and cover her costs. Sally should be looking for a market that is at the height of its trend to get her started. Start up costs Start up costs is the amount spent to open the business when it is opened. This could affect sally’s plan as if the start up costs are very high she will find it hard to keep going without a lot of money. If the costs are very high, according to profitability formula (profit = revenue-costs), she will no make a profit.
Sally should be looking for a market where there is not a big start up cost. Sally’s business skills Sally’s business skills are what she is good at and what she could put into the business. This could affect sally’s plans to start a business as if she doesn’t have the right qualities she will find hit hard to succeed. This could affect the profitability of the business as she might make a bad decision and cause it to shut down therefore making no profit. Sally should be looking to do some research and make sure she knows what she is doing.