Enterprise and Entrepreneurial Management - Essay Example

Enterprise and Entrepreneurial Management Introduction Laundry service industry encompasses several services that include dry cleaning services, clothing repair and alteration, laundry services and textile rental. In the current world and trends, the commercial laundry providers are the main profitable firms while the consumer is facing high charges from different sections (Mendelson, 2005). Business plans earlier considered a corporate exercise, but currently they consist of the core financial support and staff recruitment. Competent business plans give an exclusive explanation on the how the business operates and mainly used in investor attraction. The competition in business industry has grown to a very different level (Chambers, 2008). The laundry business started will operate in London area; laundry and dry cleaning are the components of fashion and textile sector according to the national career service. The level of employment in the field has remained in a stable trend even under the current economic swings. Laundry and dry cleaning industry expects growth and increased employment in the coming years. The region where the business will operate is one of the largest regions in laundry and dry cleaning services in the United Kingdom. The business is launched because, in early childhood days, clothes washing took place at home but there were laundry services around the area. Washing and dry machines mostly considered expensive and hard to maintain. Although, the clothes were clean and smelled fresh the time taken and labor used remained high. According to statistics from the national association of laundry industry, laundry providers have decreased over the past two decades. In the early 1980s, the number was twelve thousand five hundred, but has since decreased by a margin of three thousand. The main reason cited by people in the industry is the cost of starting up a laundry service. The cost of launching a launderette ranges from sixty thousand to a hundred thousand pounds. The cost has minimized of competitors in the industry by a great extent. The family will provide financial support for starting the business through borrowing. The firm’s selling points include the modernization of laundry services from the common traditional forms. Reinvention and innovation are the key factors in the launch of the business. Equipping the business with flat screen televisions, introduction of gaming systems for the kids and having a cafe that serves food and beverages are some of the ways the firm will attract clients. People in the region are used to the traditional laundry services and bringing a new idea through innovation and creativity will help in establishing a clientele base. Technological advance from the coin slots machine to use of top up cards and credit cards will attract everybody both the young and old. The move from coin slot machines is to enhance customer convenience and confidentiality. The product, price, location and promotion are some of the key ideas factored in the firms launch. Establishing a difference in the factors from the rest of laundry service providers will help in the creation of a differential factor from the rest of providers. SWOT analysis will become handy in the determination of the firms strengths, weaknesses, opportunities and threats. The firm will operate in a sole proprietorship, mainly to reduce the time used in setting up the firm (Chell, 2001). The business workers will come from the family members, and they will offer free service until the firm establishes. The firm requires a Rota that will ensure staff members are constantly available, and the firm is not under or overstaffed. The owner with the help of an accountant friend performs the firm’s bookkeeping when it comes to tax returns. Business plan Keys to success The firm has several keys that promise its success, and they include location, convenience, environment and reputation. The location of the firm is strategic such that people will have a glance at it while walking at a distance. The location is such that other laundry service providers are a distant away and being the only one around competition will reduce. Full washing service, drying, folding and working at an extended hour services will help keep new clients. Mode of payment is another area the firm chose the most convenient and easy to use by the use of debit or credit cards (Abrams, 2003) environmentally, the firm will consider all the environmental rules. Providing a clean, friendly and professional services are the key concepts in conserving the environment while keeping the customers. The firm’s employees will offer friendly and professional services thereby creating a good rapport with the customers, leading to a good firm’s reputation (BBC, 2012). Summary of the business The firm will offer full washing, drying and other related services upon launching. The service offered will be of high quality, and this will ensure clean clothes and other household items. The firm will set itself apart from the rest through the offering of exceptional laundry services. Professional and friendly staff will ensure customers return. Convenience remains one of the keys in the current world and this mainly considered by the launching of cards for payments. Maximal use of the resources available to the firm will remain a key concept towards success (Brown & Osborne, 2012). Business mission The mission of the firm will be to provide customers with quality laundry and dry cleaning services in the region. The services offered by the firm will relieve the clients all the stress they have undergone while dealing with other firms offering the same service (Erickson, 2006). Business vision To be the leading provider of laundry and dry cleaning services in London Business objectives Dedicated to total client satisfaction To avail services in all market target areas To achieve superior and elegant performance through high quality services To be able to expand services to cover a wider area of London To commit itself in offering independent and give customers’ needs top most priority (Erickson, 2006). Start-up Summary The firm launching provides a platform in achieving one of owner’s dreams. A steady income and experienced staff members will help in the establishment and business progress. The firms operations will be the best in London area. Business location and facilities The firm will be located in London area, the size the firm will utilize will be one thousand five hundred square feet. The location of the firm is strategic and ensures that all clients can access the business and its services without many distractions. The location of the firm ensures that most of the population covered if not all. The firm operates as a full time laundry service hence services are of a wide variety. The firm will have 10 washers and 6 dryers for the start. The services that the firm offers include washing, drying, folding, gaming systems for kids and cafeteria services (Bangs, 2002). Competitive Comparison The firm will be set in a strategic location and will establish itself differently compared to others trough offering of cards to make payment. Convenience of the clients will remain a top priority for the company; hence, delivery and service will be of high quality. Convenience and location are some of the exceptional services that will set the firm apart from the rest. Marketing Strategy The strategy of advertise itself is a word of mouth. This method is one of the best, as good service to one client will attract others through curiosity generated. Incentive programs mainly offered to referrals prompt services, clean environment and quality services key priority in advertising (Mckeever, 2012) Target Market The firm targets every household and individuals who require laundry services in London area. The market targeted remains less segmented as such, hence provides a good base for business launch. According to market analysis, the number of clients in the region is many and yearns for exceptional services. The analysis indicates a potential growth of the business upon its launch (Squeglia, 1994) Management Summary The owner, who has extensive and exceptional leadership and managerial skills, will manage the business. On site, personnel will help in maintenance of machinery and other services in the firm. The cashier of the firm will be efficient, honest, professional and friendly to the clients. Personnel Plan A cashier or attendant employee whose duties include machine maintenance and storage services will be present. As the business grows, carrying out recruitment of more staff is mandatory as mentioned in the rota. Depending on the demand of the services, the firm may open other branches and hire more personnel to the growing team. The firm’s technician or firm that sold the machines will carry out machine repairs and maintenance. The servicing of machines will be prompt to maintain optimal performance (Jones, 2008). Handling of Money The money collected from the clients normally reflected in the firms account. This made possible using a debit or credit cards. The financial records require daily and annually maintenance to assess the firm’s position. Financial Plan The business revenue expected to increase by thirty per cent during winter because of the many machines drying. In the summer, the firm expects a reduction of a similar margin due to more sunlight hence less use of machine drying. With managerial guidance, the projected growth of the firm clients’ base will increase (Kraut, 2009). Critical Evaluation The proposed business involves setting up laundry unit. It will provide various services both in the domestic and commercial sectors. These services include washing, drying, pressing and even cleaning sensitive clothing like suits and blankets. An important factor in this business in cities like London is the opportunity rationale. This is because residences of the city find it affordable, reliable and convenient to have their clothes washed in laundries instead of at home. They argue that even the most efficient washing machine is still expensive and might not be reliable (Page, 2006). The business increases positive and minimizes negative social, economic and environmental effects along its service delivery chain. Sustainable laundry service never adversely affects people or the globe in its day-to-day activities. In reality, achieving sustainability is not easy; it requires a tradeoff between different effects and prioritized enhancements over the long, medium and short terms. Proper definition and communication of sustainable service considering all stakeholders especially customers, response to is an essential action in the plan (Inns, 2010). The business plan intends to employ the Strengths, Weaknesses, opportunities, threats, (SWOT) method of presenting the laundry industry analysis. It involves a procedure of scanning the inside and outside environment of the business, which is an essential part of the general strategic planning procedure. The environmental factors found inside the business usually categorized as strengths or weaknesses, and those outside the business categorized as opportunities or threats. A SWOT analysis of the laundry business is a significant method of combining in short the present and future status of the business. In creating a SWOT analysis, many factors improve the quality of the content material. The analysis is extensive as it has its own recommendations including (Bangs, 2002): Short and straight to the point statements Relation of strengths and weaknesses to the key success factors Strengths and weaknesses should be considering competition. It is ascertaining to be effective at the service, but it more appropriate to be better than the competitor is. Statements should not be general i.e. with general ideas probably known to the competitors or even everyone Analysis should differentiate between where the business wants to be and where its current location is now. The difference should be logical It is essential to be logical about the strengths and weaknesses of the business and its level of competition The SWOT analysis gives information that is useful in linking the business’s resources and capabilities to the prevailing, competitive environment in which it exists. This resulted into a strategic formulation and selection both instrumentally. The following show the fitting of SWOT analysis into the laundry business environment. Strengths Economies of scale Specialized marketing professionals Patents Innovative service Strategic site Advantages of costs through reduced labor costs Strong servicing network Strong brand names with good reputation Weaknesses Lack of marketing professionals Undistinguished services in relation to the competitors Poor siting of the business Weak servicing network Low quality of service Weak brand name and reputation in the market Lack of patent protection High expenditure structure Opportunities Creating and spreading the market Mergers, alliances or joint ventures Identifying a new attractive market Relaxing the rules and regulations A market dominated by a vulnerable competitor Unfinished needs and wants New methods and technologies Threats A new competitor in the local market Price fluctuations Competitor has a new innovative service New rules and regulations Taxation may be introduces on the service The Business’s Strengths and weaknesses The strengths are the resources and capabilities needed as reference for creating a competitive advantage. The plan is according to the strengths. The lack of some strength is considered the weakness. The realized ones are to be analyzed and corrected, ensuring that steps are followed to ascertain that the weaknesses will not repeat in the future. The business cannot proceed together with the weaknesses. Opportunities and threats in the outside environment and future The outside environment analysis may expose new opportunities for returns and development. The business opportunities need to be taken advantage of fast. Changes in the outside environment also may expose threats to the business. The threats should be identified as early as possible for them to be countered appropriately (Bangs, 2002). Analyzing the Forces of the business Environment The business plan also considers the applicable five forces of Porter. In conducting industry analysis, the business needs to analyze the forces that affect it and counter the forces appropriately ahead of competitors to have a competitive advantage. Porter created a framework that gave a guideline of the primary outside forces that shape competitiveness within an industry and their relation. The framework suggests that in order to create an effective business strategy, the business management needs to understand and subsequently react to five primary outside forces to develop a competitive advantage within the industry. The five forces include: • Substitution (threat due to substitutes): this entails analysis of dynamic costs, buyer submission to substitutes, price substitutes etc. • Buyer power (buyer bargaining power) • Industrial rivalry (the level of competitive rivalry); this entails analysis of; brand image, rival diversity, industry growth, service differences, value-added, exit barriers, corporate stakes, overcapacity etc. • Entrance barriers (the threat of capable new entrants into the business): this entails analysis of; cost advantages, economies of scale, brand image, capital requirements, access to service network, proprietary services, expected fallback etc. • Power of supplier (the bargaining supplier power): this entails analysis of; the supplier concentration, differentiation of inputs, cost relative to total expenditures, impact of inputs on cost etc. The goal and objective of Porter’s analysis is to examine how the business needs to create its strategy. This is in order to find opportunities in its environment and guard itself against competition and other business threats. The objective of the ‘5 Forces’ analysis is to investigate how the business needs to form its strategy in order to develop opportunities in its environment and protect itself against Competition and other threats (Perry, 2001). Operations within a laundry business The operations are regular and procedural. They involve interactions with customers and, therefore, require strategies of containing the customers (Feinstein & Stefanelli, 2007). Handling complaints from customers In case, a loss or damage, the management has a procedural way of dealing with the issue. The customer needs to raise the issue to the patron, who forwards the issue to the program manager. The manager ensures a settlement surfaces through compensation, replacement or repair. The complaint can always proceed to higher management in case a settlement does not surface. Management of the inventory An inventory of all records is maintained to keep the business at its best efficiency. All items are listed and accounted for i.e. funds, stock of items, facility records etc. Transportation logistics The business intends to have pick-up services where laundry pick-ups occur for various customers (Feinstein & Stefanelli, 2007). Laundry facilities The business utilizes laundry facilities, which can be cashless and only require credit or debit cards. These cards are available at the respective business offices. They can be topped up both online and at the offices. For any small businesses like this start up laundry business that employees few people, the management should consider incorporating in the planning activities comprehensive strategies to determine the extent of planning. This improves the chances of business survival and success. However, one practitioner-oriented recommendation (Perry, 2001). This business also employs the principle behind the product life-cycle concept on the service side. The concept can be used in improving the effectiveness of machines and in transforming the strategies, especially in such small businesses. It corresponds to the popular law of birth and death. The concept gives an overview of marketing decision options, mainly in the implementation and development phases (Kraus, 2009). Although there is no certainty of success when starting a business, the best method to counter failure is to develop a relevant business plan. A good one is an entrepreneurial strategic direction determinant that ensures the business is on course through its existence. In addition, the plan helps in raising the startup capital as investors or lenders always demand it. It is essential for the business plan to base on facts and logical assumptions. Nothing diminishes an entrepreneur’s credence faster than a presentation that lacks content and is considered by potential lenders and investors as just a wishful thought (Scarborough, Wilson & Zimmerer, 2008). It is difficult to quantify the size of the worldwide serviced market due to the challenges of getting accurate data, but the demand for services is rapidly on the rise. This demand rise is because of improved technologies and the need by people to have the convenience in the day-to-day lives (Xiaohu, 2005). An essential role of the laundry literature is the ability to give business tips that support the business (U.S. Small Business Administration, 1993). Conclusion The business and its plan analysis are comprehensive considering the current market situation in London. All forces driving the establishment of the business include; the large market in London, readily available funds & labor from family, diversity with the incorporation of a cafe. Other forces include; identified customer base, management by a sole trader, proper analysis of each marketing mix, use of cards and the SWOT industry analysis. The business is relevant, and its implementation is within an appropriate market. Bibliography Abrams, R & Abrams, R, M 2003, And The Successful Business Plan: Secrets & Strategies, The Planning Shop. Bangs, D, H 2002, Business Planning Guide, Kaplan Publishing. BBC, 2012, viewed on November 28, 2012. Available at: http://www.bbc.co.uk/news/magazine Brown, K & Osborne, S, P 2012, Managing Change and Innovation in Public Service Organizations, Routledge. Chambers, K, D 2008, Entrepreneurs Guide to Writing Business Plans and Proposals, Greenwood Publishing Group. Chell, E 2001, Entrepreneurship: Globalization, Innovation and Change, Cengage Learning EMEA. Erickson, M 2006, Start Your Own Coin-Operated Laundry, Entrepreneur Press. Feinstein, A, H & Stefanelli, J, M 2007, Purchasing: Selection and Procurement for the Hospitality Industry, vol.1, John Wiley and Sons. Inns, T 2010, Designing for the 21st Century: Interdisciplinary Methods and Findings, Gower Publishing, Jones, T, J, A 2008, Professional Management of Housekeeping Operations, John Wiley & Sons. Kraus, S, 2009. ‘Strategic management and entrepreneurship’, business science and applied management, vol .4, no.1, 39-46. Ltd. Kraut, C 2009, Moneywise: Your Guide to Keeping Ahead of Inflation, Taxes, and the Declining Dollar, Tate Publishing. Mckeever, M 2012, How to Write a Business Plan, Nolo. Mendelson, C 2005, Laundry: the Home Comforts Book of Caring for Clothes and Linens, imon and Schuster. Page, K 2006, British Qualifications: A Complete Guide to Educational, Technical, Professional and Academic Qualifications in the United Kingdom, Kogan Page Publishers. Perry, S,C, 2001, ‘The Relationship between Written Business Plans and the Failure of Small Businesses in united states’ , business management ,vol .39, no. 3, pp. 201-208. Squeglia, N, L 1994, Zero Acceptance Number Sampling Plans, Fourth Edition, ASQ Quality Press. Scarborough, N, M, Wilson, D, L & Zimmerer, T, W 2008, Effective small business management: an entrepreneurial approach, Pearson Prentice Hall. U.S. Small Business Administration 1993, Women business owners: selling to the federal government. Office of Women's Business Ownership. Xiaohu, T, T 2005, China Business Guide: Gateway to the Land of Opportunity, China Knowledge Press. Appendices Start up funds Start-up Funding Start-up Expenses to Fund $225,500 Start-up Assets to Fund $7,262 Total Funding Required $232,762 Assets Non-cash Assets from Start-up $ Cash Requirements from Start-up $7,262 Additional Cash Raised $0 Cash Balance on Starting Date $7,262 Total Assets $7,262 Liabilities and Capital Liabilities Current Borrowing $0 Long-term Liabilities $150,000 Accounts Payable (Outstanding Bills) $0 Other Current Liabilities (interest-free) $0 Total Liabilities $150,000 Capital Planned Investment Family $82,762 Other $0 Additional Investment Requirement $0 Total Planned Investment $82,762 Loss at Start-up (Start-up Expenses) ($225,500) Total Capital ($142,738) Total Capital and Liabilities $7,262 Total Funding $232,762 The firm’s operational costs REVENUE - Sales (On Average) $12,000 Supplies and Game Arcade Sales $1,100 Subletting  Revenue $500 Total Monthly Revenue $13,600 OPERATIONAL ADMINISTRATIVE EXPENSES - Rent $1,975 Garbage and Sewage $50 Business Insurance ($1,000,000 Liability) $107 Utilities (Gas, Electric, and Water) $2,300 Machine Maintenance $70 Payroll Expense $0 Direct Cost of Sales (Supplies, Miscellaneous) $300 Total Monthly Expenses $5,402 NET PROFIT (On Average) $8,798 Market analysis Year 1 Year 2 Year 3 Year 4 Year 5 Potential Customers Growth CAGR Local Laundry Users in London 2% 6,434 6,531 6,629 6,728 6,829 1.50% Other 0% 0 0 0 0 0 0.00% Total 1.50% 6,434 6,531 6,629 6,728 6,829 1.50% Read More