Good Essay On what If-Starting A Business
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Taking into consideration of the challenges that come along with starting a new business and be able to get a market niche and also the fact that am fresh from the university, am going to rely on my education and knowledge from the university and determination to open up a new business venture and succeed (Chesbrough, 2013). I will venture in to the hotel industry where I will open a fast food joint that will go by the name ‘’smart bite hotel’’. The reason as to why I chose to venture into the hotel industry is because fast foods’ market is large, profitable and I always dream of opening a classy hotel. The business is going to be strategically located at the shopping mall near the university campus (The U.S. Small Business Administration, 2015). Additionally, my business will also concentrate on events catering. The business will deal with offering fries, hotdogs, meat pie, sausages and soft drinks such as coca cola, Pepsi and sprite. The initial capital required to start this business is $5555 and employ seven employees for a start (Beesley, 2015).
The bigger challenge that the business will face is competition from other hotels that offer the same kind of services that I am planning to offer (Travis, 2011). There are over fifteen fast food joints around the shopping mall and the University. But I am getting into the market ready to fight for a market niche. I will provide quality food services that taste good and their nutrition value will not be compromised. I have realized that most of my competitors provide foods that are oily and precooked food to satisfy the poor customers who are in a rush and they don’t have time to notice the poor quality of what they are being served. My competitors are for the sake of making money and they don’t care about their client. As a result, I have noticed most of those customers usually come back complaining of the poor services rendered to them and stomach upsets. These are the kind customer exploitations that my business is out to address. Providing quality and healthy foods will be our first priority as a business. Most of my competitors are just there to make profits and not concentrating on the quality of goods and services part and if I can take advantage of this I will get most of their customers.
The second strategy am going to use to win the battle with my competitors is to offer my services at customer friendly prices since at the end of the day will I realize some profit not much but sufficient to sustain the business. I have noticed most of my competitors charge very high and exaggerated prices to their customers. If only we could charge prices slightly lower than they charge, then my business will win most of their customers. Consumers are very sensitive and they are rationale in their consumption and preference of goods and services (Prahalad, et al., 2013). Hence they will go for those goods and services that maximize their satisfaction at favorable price.
Another important factor that my business will use to win the market with my competitors is through advertisement of our goods and services. I will print brochures and posters that will be distributed around the town and at the University for Customers to see and familiarize what we offer. The business is also going to advertise our products online by opening a website and a facebook account where we will be interacting with our customer to answer their complains and suggestions of the things they need improved (Venture Kamloops, 2015). It will also be necessary to advertise our goods and services through road shows since we will get that chance to meet those customers who can not have access of our services at the internet. In term of distribution, some of my employees will be distributing foods in offices, shopping malls, University and any other place that we get order from a customer. Most of our my competitors do not offer door to door services and my business is planning to make a maximum use of this service to win customers.
A better approach for a new business to succeed in the market is to spot where the competitor is not performing well and take advantage of that. My business is also planning to undertake cost reductions mechanism such those of labor and purchasing of materials and other operational cost such as power, water and miscellaneous expenses. Since there is need to save for that money to be used to advertise and expand the business in future and this is one of the ways a business can use to beat competition.
There are a lot costs that the business is going to incur in the course of its operations. They include the advertisement cost, training cost, wages, consultancy fee and production cost as result of producing the goods (Beesley, 2015). Most of these costs are tax deductible and the remaining costs can be deducted in equal installments. The business will also incur capital expenses such as inventory and property. This capital expenditure does not qualify for deduction but they can be written off through how they have depreciated over time because some of the assets that am going to use are not absolutely new. Some have been used elsewhere. My business will use spreadsheets to make a list of expenses that am going to incur in starting a business not forgetting the capital expenditures alongside the assets that I have for the business and compare them so that the expenses will not come on top of the revenue or assets. Incase the expenses exceed the assets there will be a need to carry out a thorough cost assessment and cut some expenditures such as the advertisement.
Having a sustainable profit is big boost for my business. The only way I will be able to make profits is when am able to minimize wastages in business and manage my cost because most of my competitors might outspend me. The first step is addressing the purchasing cost by looking for those suppliers who will provide me with cheaper raw materials such as potatoes, salts, tomato sauces and meat. My business will look at reducing these costs by 5% every year. This percentage will be achieved by reducing the overheads and tax liabilities in every possible way (Beesley, 2015). The rents rate for where am planning to start my business are lower and this will boost my efforts of making a profit. Another possible way that my business will use is being flexible in their operation that is, always having a back plan incase one fails. This is because businesses are faced by complex situations in the course of their operation. In case of anything I should shift quickly from that step that is making me not make profits. My business will also take advantage of the technology to build a name for my business since it is cheaper and it will drive customers my way (Christensen, 2013). This is because by use of current technology in hotel business, I will be in a position to provide efficient services and give my client the confidence that the goods and services that am offering are of good quality and that they will meet their demands or standards. Additionally, my business has already chosen a target market and I will first concentrate in keep those customers to secure their loyalty before I move to a new market. What I have realized is that, it is cheaper to keep customer than looking for new ones. This strategy will work well for my business and it will help cut advertising expenditure. Once you get loyal customers getting new ones will be easier.
Caron_Beesley,. "How to Estimate the Cost of Starting a Business from Scratch The U.S. Small Business Administration SBA.gov." N.p., 2015. Web. 12 Apr. 2015. <https://www.sba.gov/blogs/how-estimate-cost-starting-business-scratch>.
Chesbrough, H. (2013). Open business models: How to thrive in the new innovation landscape. Harvard Business Press.
Christensen, Clayton. The innovator's dilemma: when new technologies cause great firms to fail. Harvard Business Review Press, 2013.
Jon Burgstone and Bill Murphy Jr. "How to Create a Profitable Business Idea." Entrepreneur. N.p., 2012. Web. 12 Apr. 2015. <http://www.entrepreneur.com/article/222710>.
MoreBusiness. "Fast Food Restaurant Business Plan | MoreBusiness.com." Start a Business with Our Business Plans, Sample Contracts and Expert Advice | MoreBusiness.com. N.p., 2011. Web. 12 Apr. 2015. <http://www.morebusiness.com/fast-food-restaurant-business-plan>.
Prahalad, Coimbatore Krishna, and Venkat Ramaswamy. The future of competition: Co-creating unique value with customers. Harvard Business Press, 2013.
The U.S. Small Business Administration. "Follow These 10 Steps to Starting a Business The U.S. Small Business Administration SBA.gov." N.p., 2015. Web. 12 Apr. 2015. <https://www.sba.gov/content/follow-these-steps-starting-business>.
Travis Ames. "How to Deal With Competitors | Chron.com." Small Business - Chron.com. N.p., 2011. Web. 12 Apr. 2015. <http://smallbusiness.chron.com/deal-competitors-52082.html>.
Venture Kamloops. "Venture Kamloops — 14 Steps to Starting a Business." Venture Kamloops —. N.p., n.d. Web. 12 Apr. 2015. <http://venturekamloops.com/business-services/14-steps-to-starting-a-business/>.
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