Entrepreneurs are likely to choose self-employment due to a variety of reasons. The first reason is economic freedom. Self-employment provides people with the opportunity to grow their income levels over a given period. Traditional jobs tend to limit people’s income. Apart from economic freedom, self-employment is preferable since it promotes work-life balance. Primarily, self-employment allows people to manage their work schedule effectively. Based on this schedule, an individual can prioritize the activities to perform. Self-employment provides people with more flexibility. It also increases a person’s productivity levels due to high job satisfaction levels. Self-employed persons have the privilege of choosing their preferred clients.
I will venture into the service industry. The service industry is preferable due to the low startup costs. It also has lower entry barriers than other industries. The lack of inventory is another reason why the service industry is preferable to other industries. Venturing in the service industry provides entrepreneurs with a unique selling proposition. It is a feature that can enable firms to differentiate themselves from competitors. A service business can adapt to consumers’ changing needs and wants. It can adapt to new demands in the market.
I will participate in the business by purchasing an existing franchise. The purchase of an existing business enables an entrepreneur to have a ready market for their products and services. An existing business also has established suppliers and vendors. Furthermore, it has a ready client base. Notably, an entrepreneur does not have to incur costs related to starting a business (Lussier, Corman, and Kimball, 2014). The other advantage of buying an existing business is the presence of skilled employees. Such employees are likely to provide the new owner with the opportunity to learn about the business. Therefore, the purchase of an existing business means immediate cash flow and profitability. Moreover, an existing business has a clear financial history. The financial history will enable the new owner to determine the business’ performance and profitability levels. Significantly, the new owner will be able to acquire existing customers and industry connections (Lussier, Corman, and Kimball, 2014). Compared to starting a business from scratch, the purchase of an existing firm tends to be less risky. The purchase of an existing business will also enable the new owner to experience the benefits associated with an established brand name.
Online marketing will be used to promote the company’s services and products. It requires an individual to use the Internet for advertising their companies’ services to potential clients. Online marketing initiatives are important since they enable companies to reduce their operating costs. They enable firms to measure and track the performance of their products and services in the market. Notably, online marketing initiatives allow firms to collect consumers’ data (Sfetcu, 2015). Through the data, a company will be able to develop products and services that meet consumers’ needs and preferences in the market. The data will also enable a firm to increase its sales and profitability levels. Apart from online marketing, physical marketing initiatives will also be used in this case. For instance, some of the company’s services and products will be advertised in print media channels such as television and newspapers. Print media channels are essential since not all consumers have embraced the use of the Internet.
The franchising business model will be used in this case. The risk associated with business failure is likely to reduce when an entrepreneur adopts the franchising business model. Moreover, an entrepreneur will be able to experience benefits associated with an established brand name. Compared to starting a new business from scratch, franchising tends to be less costly (Gillis and Castrogiovanni, 2012). According to the resource scarcity model, franchising enables companies to overcome challenges correlated with the lack of managerial skills. It also assists firms in acquiring information about the local market. Franchising provides companies with capital that they can use to expand their business operations to new geographical areas.
In this case, a partnership will be the preferred legal structure. I will enter into a partnership with likeminded persons. Through the partnership, we will develop procedures for sharing the realized profits. The partnership will be preferred to other structures since it is less expensive and easier to start. It is also vital since partners will be able to contribute resources that will be utilized to conduct the organization’s operations (Skripak, 2016). The shared financial commitment is essential since it reduces the burden of financing a business entity. A good partnership should experience the benefits associated with utilizing each partner’s expertise, skills, resources, and strengths. It also reduces entrepreneurs’ financial obligations. For instance, partners do not pay income tax. Improved management is possible under a partnership. Partners are likely to make decisions that can enhance a business’ profitability and performance levels. They have high borrowing capacity.
The partners will enter into a legal contract. The contract will define the conditions and terms of the business partnership. It will assist in solving disputes and conflicts among the partners (Boundy, 2012). Notably, the contract will be in writing. The business will also be required to register for a wide range of taxes. It will be required to register for value-added tax. Several countries have legal provisions that require businesses to pay VAT on their products and services (Bruhn, 2011). In most cases, the VAT is included in the product or service’s price. Consumers will bear the cost associated with the value-added tax. Apart from VAT, the business will be expected to register for turnover tax. The business’ income levels will determine the amount of the income tax a business entity ought to pay. PAYE is another tax that the business will be required to pay. The business will employ several individuals. Consequently, the employees will be expected to pay a certain percentage of their pay in the form of taxes. The business will be charged with the mandate of remitting the PAYE to the relevant authorities.
The business will also need to insure its operations and products. The insurance cover will protect the business from different liabilities and risks. Primarily, the general liability insurance will protect the entity from risks and damages that its employees or products may cause. Property insurance will also be important in this case. It will protect the business’ property from theft, vandalism, and fire, among others. Without an insurance cover, a business entity may be prone to several risks and threats in its operating environment (Barclay, 2011). Human resource is another crucial aspect of the business that should be considered. The business will need to recruit employees with the right skills and competencies. It will have managers who will be responsible for formulating policies that can assist the firm in enhancing its profitability and productivity levels. New employees will be trained on different aspects of the organization.
The other aspect of the business that will need to be considered is the corporate image. Several strategies will be used to enhance the business entity’s corporate image in the market. The first strategy will be to define the business’ values and goals in the market. The entity’s value proposition will be defined. In the target market, the company will only be successful if it has a unique value proposition. A value statement can also enhance a firm’s corporate image in the market. The business will develop brand messages that inform consumers of the value they will receive if they purchase its products and services. Communication strategies can further assist a company in enhancing its corporate image. The business will need to develop clear communication channels. Through these channels, the business entity will be able to address its consumers’ concerns and complaints. Moreover, they will enable the firm to receive feedback from clients. Based on this feedback, the entity will be able to improve the quality of services and products it offers its clients. The development of a strategic action plan will enable the business to enhance its corporate image in the market. The plan will enable the new business to determine its clients and ways of appealing to their needs and concerns. It will enable the entity to prioritize its clients’ needs and preferences. The business will only be productive and profitable if it meets its clients’ needs and demand. Public relations will also enable the organization to enhance its corporate image. The business entity will choose a spokesperson who will be responsible for addressing the public on any aspect. Such an individual will be required to speak on behalf of the organization.
The firm will be required to maintain a digital presence. It will have an official website. Through this website, the business entity will highlight its products and services. Moreover, it will highlight some of its values, vision, and objectives. The business entity will also maintain its presence in various social media platforms. Its SEO strategy would be to pay search engines such as Google and Yahoo to advertise some of its products and services (Engeldinger, 2014). Notably, such a strategy will enable the new business to promote its products and services to a large consumer base. Content marketing will allow the business entity to maintain a strong digital presence.
Before starting its operations, the business entity will be required to obtain certain licenses from the relevant authorities. Without these licenses, it will be difficult for the business to conduct its operations. Apart from these licenses, it will be necessary for the business entity to have an arrangement with some of the local financial institutions. The arrangement will enable the business entity to develop a plan for securing credit facilities. Moreover, it will define the terms and conditions for obtaining a credit facility.
The business entity will be financed through a wide range of initiatives. The partners will be required to contribute resources that will be used to finance the business entity. They will use their savings to finance different aspects of the firm’s operations. Credit facilities will also be used to finance the business entity. They will be obtained from the local financial institutions. Notably, the partners will be required to repay the loan within a defined period (Ryan, 2012). The partners will also ask their friends and family members to contribute money toward the business course. The business entity will enter into a contract with some of its suppliers. Based on this agreement, the entity will receive materials from the suppliers on credit. The credit will be paid after the entity has acquired a certain amount of profits.
Through the revenue and cost budget, the business entity will be able to estimate the amount of money it will raise from selling its products and services to consumers. Since we will purchase an existing business, historical data will be used to forecast the company’s sales and profits in the market. A business plan will be developed to determine the company’s sales. It will enable the organization to project its revenues in the market (Martin, 2016). The revenue and cost budget will also be used to determine the business’ production costs. It will enable the partners to analyze the costs they will incur to provide products and services to clients. In this case, the production cost will include the cost of purchases, materials, and labor. When formulating the budget, it will be imperative to consider changes in the prices of essential raw materials. The budget will further enable the partners to track the organization’s daily expenditures. Some of these expenditures may be in the form of asset depreciation, insurance costs, and rent expenses, among others. The partners will need to develop strategies that can assist them in controlling costs and expenditures. Maintaining a cost budget will enable the business entity to negotiate new contracts and analyze whether it should reduce the prices of its products and services.
Human resources will be managed through a wide range of strategies. The first strategy that the business entity will use to manage human resources is employee training and development. Employee training and development programs will enable the organization to equip its employees with the necessary skills, competencies, and abilities. Moreover, these programs will be used to enhance employees’ job satisfaction and motivation levels (O’Riordan, 2017). Human resources will also be managed in the organization through performance management initiatives. The business entity will require employees to meet their performance targets. It will develop a reward structure. Based on this structure, the business entity will be able to recognize employees’ contributions and efforts. Notably, only employees who meet their performance targets will be rewarded. Those who fail to meet these targets will be placed on a performance improvement plan.
The business entity will further manage its employees’ welfare. It will ensure that it pays its employees a competitive compensation package. Such a move will allow the business to reduce employee turnover rate. Occasionally, the organization will conduct research to determine its employees’ opinions regarding wages, work conditions, and promotions. Apart from human resource management, the business entity will also be required to manage its relationship with different consumers. The organization will be required to collect data that can enable it to address consumers’ needs and demand in the market. With the core objective of managing its relationship with clients, it will be essential for the business entity to have in place a customer service representative. The representative will be charged with the crucial mandate of responding to consumers’ concerns and needs. Moreover, the organization will maintain a platform where clients can report their concerns and complaints. It will use social media platforms to interact and communicate with consumers. Customer service representatives will be expected to contact clients regularly. While contacting them, customer service representatives will be required to market the company’s new products and services. Sales agents will be expected to use the collected data to market the company’s products and services to clients.
Some indicators will be used to monitor business performance levels. The first indicator that will be used to monitor business performance is the profit margins. The business entity will be required to analyze its profit margins to understand how successful it is in the industry. The second indicator that will be used to analyze the business entity’s financial position in the market is costs. It will be utilized to determine the business entity’s effectiveness in managing and reducing its operating costs. Sales per region will further enable the enterprise to track its financial performance in the market (Marr, 2012). Apart from the financial metrics, some indicators will be used to determine the organization’s focus on consumers. Customer satisfaction is one of these indicators. Based on this indicator, the new business venture will determine the number of clients who are willing to continue purchasing its products and services. The net promoter score is another indicator available to this organization. Through the NPS, the organization will determine whether consumers are likely to recommend its products and services to others.
The business entity will also have indicators that highlight its focus on employees. For instance, employees’ turnover rates will be used to determine the number of workers who have left the firm in the recent past. The organization will be required to examine its compensation package and work environment if it has high employee turnover rates. Employee satisfaction levels will also be used to determine the number of employees who are willing to stay with the organization.
Online platforms will be used in local area marketing. The firm will maintain an online presence. It will use social media platforms for marketing its products and services to clients. In its social posts, the business entity will tag local geographic areas (Gordon, 2014). The organization will also localize its paid ads to market, advertise, and promote its products in the market. It will sponsor local events in the community. Such a move will enhance the firm’s image and reputation in the market. Notably, sponsoring local events will provide the business entity with the opportunity to market its products and services to potential clients. Collaborating with local businesses will further enable the organization to improve its image and reputation in the market (Gordon, 2014). A resource plan will also be developed. Through this plan, the enterprise will prepare a forecast on the number of employees required. Moreover, it will determine the amount of capital it will require to conduct its business operations. The plan will further enable the organization to develop the strategy of financing its operations and critical processes.
The enterprise will ensure that it maintains a positive relationship with its suppliers. It will maintain tight control of its internal inventories. Notably, the organization will distribute its products through different platforms. Moreover, it will maintain a list of its vendors and suppliers. The enterprise will have a supply manager who will be responsible for coordinating different aspects of the supply chain process. While managing the supply chain, the enterprise will ensure that it focuses on its clients (Law, 2019). The supply chain process will be aligned with the company’s goals and vision. Based on the plan, the business enterprise will ensure that it communicates with the relevant stakeholders. The communication will enable the firm to gain stakeholders’ support. The organization will further ensure that the supply chain process adapts to the changing business needs. It will also establish a plan for developing its intellectual property assets.
After about 25 years, the business shares will be sold to potential investors. Apart from selling the business, the other strategy that will be used to exit the business is to liquidate the company’s assets. The money received from the liquidation of these assets will be used to open other profitable business ventures (DeTienne, McKelvie, and Chandler, 2015). The liquidation of these assets will be based on market value. The revenue received will be used to pay loans and other financial obligations. Mergers and acquisitions may also be used as an effective business plan. Under extreme situations, the business will be passed on to a close family member.
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Engeldinger, N. (2014). Search engine optimization strategies for online retailers. University of Oregon
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