Advanced entrepreneurship - legal and financial decisions - Essay Example

?Part (a Every year thousands of new immigrants arrive in New York. The immigrants come with promising talent and academics, high hopes of living the American dream but little money in their pockets. Along with this, the natural increase in the population of a city resulted in a net population growth rate of 5% (“Current Population Estimates”). The inhabitable land definitely does not increase with the same rate and this result into densification of population in the city centers. The two – bed room apartment, with all the traditional bulky furniture, that can be bought in no less than $500,000 can hardly accommodate a family of four, let alone allow them a comfortable living. Hence a problem exists and with it comes new opportunities to do business. The Industry: This business idea is related to furniture industry. A new product called ‘Space Saving Furniture’ is presented to Triangle Solutions as a prospective business opportunity in New York City, Manhattan and similar densely populated metropolitan areas. The art of furniture design combined with the latest technology in engineering yields a broad range of multi-purpose furniture products. The new designs are more comfortable, occupy lesser space, and can be easily modified to fit different needs throughout the day. The catalog of product includes a study table that turns into a two tier beds for kids at night, a superb sofa set that turns in to a double – bed when needed, a shelf that can be disassembled to give four small chairs if required and so on. The list includes a whole range of easy to operate furniture products that can fit into offices, bed rooms, kitchens, bathrooms, study rooms etc. and can serve at least two, if not more, functions at a time. Market Size: There are at least 2.14 million apartments in New York City alone according to a survey conducted in 2008 (DiNapoli, 2009, p. 1). Most of the residents of these apartments suffer with the problems of low accommodation. Compared with the real estate prices and monthly rents, space saving furniture is a financially feasible option for the apartment dwellers to increase their accommodation. Hence it is estimated that the product will be extremely popular with the majority of the population. Competition exists in this market as well. There are a few companies such as Resource Furniture which are already marketing the product. However, we believe that a strong marketing campaign can certainly attract the so far untapped customer base. Team Requirements: The team for this business must consist of following experts. Interior Decorator: To design the aesthetics of the furniture Product and Industrial Design Engineer: For general product design Mechanical Engineer: For material selection, load calculations and hydraulic system design etc. Marketing Manager: For devising marketing and sales strategy and its implementation Director Operations: To manage the production, inventory and general operations. Finance Officer: To manage finances. Scalability of the Product: The product is scalable over a good range of production and sales volume. Looking at the costs break down, we can observe that the product has very high initial, fixed costs and comparatively low variable cost. The initial cost includes the cost of equipments and machinery required for production and the design expenses. The variable costs include the materials, marketing and energy bills. Hence increasing the production and hence the sales volume will result in lesser payback time and greater profits. On the contrary, if low sales are forecasted for a particular product, then the costs can be reduced by using simpler production machinery instead of highly specialized machinery for each product. This machinery will have low initial and running cost but has more production time. Financials: The business can be started by establishing an office / display center at Furniture Market in New York. A small manufacturing facility will be set up close to the display center. The initial capital required for it is $25,000. All the buildings will be rented at an estimated amount of not more than $8000 per month. The staff hired will be preferably less experienced but with an innovative approach. This will help reducing the monthly salary bill for the company without compromising on quality. A total marketing and organization budget is estimated at $10,000 per month. The sales price of our products range between $1500 and $5000 per unit while the variable costs on one unit lie between $500 and $1500. A sale of approximately 40 units will give the payback for initial investment. Afterwards, the break – even is expected at a sale of 15 units per month (approx.). Part (b): It is proposed that the idea should be implemented through a subsidiary company of Triangular Solutions rather than forming a team from within the company. As explained earlier, the team required for this business plan is very diverse in its expertise. The team includes artists, engineers and business personnel which have to come up with exciting new ideas to design new competitive products. The product designer has to think out of the box to come up with ideas that are both practical as well as attractive. The interior decorator at the same time has to make sure that the aesthetics are not compromised. Engineer and finance persons have to make sure that the product remains profitable. To make this idea a success an effective coordination between different team members is required. Concurrent engineering design approach has to be followed in which all the experts involved in the process participate in designing from its inception to final conclusion. This implies that a new culture of innovativeness has to be created which has in it, the passion to make this idea work. This may not be achievable from a team which is selected from within the organization and for which this business may look like just another assignment from the executives. Intrapreneurship at times is hard to achieve because the experienced executives of the company have an influence on the team and are naturally inclined towards maintaining the traditions. True spirit of entrepreneurship is hence important for this idea to be successful (Wily Amo, 2006, p. 285). References Current Population Estimates [Fact Sheet]. (2009, July 1). In New York City Department of City Planning. Retrieved April 8, 2011, from New York City Government website: http://www.nyc.gov/html/dcp/html/census/popcur.shtml De Bruin, A., & Dupuis, A. (2003). Entrepreneurship: new perspectives in a global age. Hamphire: Ashgate Publishing Company. DiNapoli, T. P., & Bleiwas, K. B. (2009). The Decline in Affordable Housing in New York City. New York City Public Information Office, 2. Hisrich, R. D. (1990). Developing Leaders for Tomorrow: Entrepreneurship/Intrapreneurship. American Psychologist, 45(2), 209 - 222. Resource Furniture [Official Website]. (n.d.). Retrieved April 8, 2011, from http://www.resourcefurniture.com/ Wily Amo, B. (2006). The influence from corporate entrepreneurship and intrapreneurship on white-collar workers' employee innovation behaviour. International Journal of Innovation and Learning, 3(3), 284 - 298. Read More