Starting a Business - Essay Example

STARTING A BUSINESS (Institutional Affiliation) Emergence and growth John after graduating from the university started a cleaning a business. The business that he wanted to get involved in is that where he could utilize low-costs and that which would get off the ground fairly with few challenges. This drew him in starting a cleaning business due to the low risks that the business entails. He had the knowledge that starting the business was simple but the business had a stiff competition with the market being occupied with many small businesses. There are several factors that he considered in starting and growing the business. The main factors that he considered in starting the business were location, pricing, resources, marketing and the target customers. The cleaning industry that he was involved has two main market groups, the commercial and the consumer. The consumer sector consisted mainly of residential maid services and also carpet cleaning services. The commercial field that he was to engage was that where he was to provide janitorial services. These services provided a wider range of services. After deciding the business was to consist of all cleaning services, both customer and commercial, he carried out a research on the market. The research was intended to identify the potential markets and the local demographics to determine the service that was much needed by the people in the area (Barrow, 2011). He considered what it takes to start cleaning services. Having graduated from the university with a degree in business administration, he had the skills that he could use in management of the business. There were also other necessary qualifications that he considered. He had the determination of making the business work. He also has a willingness to please the customers and provision of a thorough cleaning job (Barrow, 2011). From the onset, it was important for him to start thinking about the long term plans of the business. Franchising or independent action was also considered in the business. Franchising was that where he was to work close when starting the business and taking it to the point where it is needed when running the business becomes easy and profitable in advantage. There was finding that once he became established and secure financially, franchising was a great disadvantage to the business (Bukar and Timothy, 2013). He chose the business as a he wanted to manage it and choose the opportunity that has proven to be successful for those that had done the business before. He did not want to gamble on development of new system. Franchising system that he used enabled him to provide a degree of marketing support. This is mainly an area of national advertising and recognition of name. In the long run, he considered investing in a far less money operating system as an independent service than as part of the franchise. He was also not tied to any formula that had been established as he operated independently. This is both an advantage to the business and also a drawback. The drawback that he had here was that there are no guidelines that he was to follow in accessing the services that he offered to the customers. All that he carried out was out of trial and error. As an independent owner, he had to research on every aspect of the business. This was both during and before the lifetime of the business. This enables starting on the right and adapting to the changes that occur in the market. In purchasing equipment, there was need to find financing for the business. This will show that there are some cash that have been put into the business. The finances that were used were those from savings and loans that he obtained from the bank. He also adapted to selling assets to acquire more finances to buy more resources to use in the business (Deodhar, 2010). This was a decision after taking a look at the personal line of credit. He also used a strength that he has obtained from his university life that successful business depended on credit cards. He also approached his family and friends to help in financing the business. Those that he approached were those that believed in him and wanted him to succeed. He presented everything that he had in writing. He also considered that he did not want to borrow loans that the relatives could not afford to lose. In the establishment and growth of the business, he took advantages of government programs. He took the advantage of the local state and the federal programs that were mainly designed in supporting small businesses. He took his time to the small business administration and investigated various programs that were available to be used in the region. In growth and establishment, location was a factor that played an important role in stabilizing the business. One factor that enabled his success was that most of the business trends currently are home based and cleaning business was an excellent option. He made sure that the customers were not coming back to the industry as they had most of their services in their doorstep. This was not the reason that made him operate a home-based office (Deodhar, 2010). Many cities have decrees that restrict the nature and capacity of profitable activities that are able to happen in residential areas. Some absolute forbid the establishment of home-based businesses. Others may tolerate such enterprises but place restrictions concerning issues such as employees, traffic, signage, commercially noticeable vehicles and noise. Before he applied for his business license, he was able to find out what decrees govern home-based businesses; he needed to adjust your plan to be in obedience. He believed that in order to achieve authentic business growth. He believed that getting out of home and getting into a commercial facility. This helped increasing the success and the professional image. The selected an office with careful thought of what he needed. They are of office that he had been that with a small reception area and work space that was enough for him and the working staff. This made him also have a space where he was able to handle laundry and possibly even after laundry and a small work area Regardless of the type of cleaning business that he was involved, he remembered that chances are slim that customers will ever come to his office. So he looked for a facility that meets the operational needs of the business and is in a reasonably safe location, but he did not pay for a prestigious address it is just not worth it. In the operation of a maid service, an economy car or station wagon was to do. He needed enough room to store equipment and supplies, and to transport cleaning teams, but typically he was hauling around pieces of equipment large enough to require a van or small truck. He opted to either provide vehicles or have employees use their own. In the vehicles that he provided to be used in the operation of the business, he printed the logo of his business to increase the knowledge of the others. For a Janitorial Business he was able to start with no employees--or just one or two part-timers. In situations where there was the capital availability and the business lined up, he had the need to hire more. He also wanted to consider an administrative person to handle the records and answer the phone during the day; after all, in situations where he was working at night, he needed to schedule some time to sleep (Eglash, 2001). As your business grows, he considered a salesperson, customer service manager, and crew supervisors as well as additional cleaning personnel. For the operation of Maid Service Business the staffing needs depended on how much capital the business had, how large a business was to be, and the volume of customers he could reasonably expect to service. Many independent maid services start with just the owner. Others will start with the owner and an appropriate number of maids. For his Carpet Cleaning Business he depended on the strength of his pre-opening campaign and his startup budget, hire at least one service person and possibly two as he was getting started, along with an employee knowledgeable in clerical work that can book schedules and handle managerial tasks. Though one person can likely handle most of the residential jobs he got, he considered staffing each truck with two people: a senior technician and a helper. The helper can assist with the prep work for each job empty bucket, mix chemicals and clean up afterward. This will make each work go faster, which is more effectual and cost-effective and also creates a greater degree of customer contentment. Pricing was also a factor that he considered as it is tedious and time-consuming. He did not at the initial time rush in this. He considered that low quotation would lead to robbing himself or that would force him to lower the quality of work that that meets the price. In situations when the quotations are too high, there is also probability of losing the contract altogether. During the initial gates of operation, there was going back and look at the actual costs of every job that is carried out in the business when it is competed to determine how the estimate that was done has come to reality. In teaching for the right prices in the organization, there was consideration of overheads, labor and materials and profit. Billing was also a strategy that was used in the business. In situations when he was extending credit to the customers, there was need to follow billing procedures. Coordination that he did to the business allowed the coordination between the payables of the customers in coordinates. Keep in mind that many large companies pay certain types of invoices on certain days of the month; find out if your customers do that, and schedule your invoices to arrive in time for the next payment cycle. The invoices that he used were those that clearly indicated the terms in which the credits were extended (Morris, 2011). Terms include the date the invoice is due, any discount for early payment and additional charges for late payment. Its also a good idea to specifically state the date the invoice becomes past due to avoid any possible misunderstanding. Marketing strategy was developed with the consideration that cleaning service is great. There was decision on a particular niche that he targeted. He had to make decision on want to do residential cleaning; he considered several questions that he learned from his degree course. Do you want to clean private homes, condos and apartments, or empty rental units? If youre starting a janitorial business, will you focus on offices, retail operations or manufacturing facilities? And will you target small, medium or large customers? As a carpet cleaner, will you clean residential or commercial facilities--or both? And what services other than shampooing carpets will you provide? Once there was decision on the market niche, he considered the geographical area that he wanted to serve. In the start of maid services, he was able to schedule cleanings that keeps him traveling time to a minimum. Part of your market analysis includes your costs to serve that market (Morris, 2011). A highly populated market allows him to serve a larger number of customers because his travel time is minimal, but it also means had been consuming more supplies. This needs to be planned for as well as factored into your rates. The threats in the business in future One threat that the business is exposed is protection of the properties of the business. There are properties of the business that are difficult to protect mostly since the business operate on small scale. Properties such as raw material and the inventories are the common assets that the business has. For long term security of the business, there is need to evaluate the potential threats that the properties that the company face and develop a plan to deal with the threats. The business is able to manage this through taking a complete list of the inventories and determine the losses that are able to occur in the business. There is a lot weight that is already in the budget but the mistake should not be that when it comes to management of property. Insuring the business is an option that can be used in reducing these threats. Business interruption is also a threat that the business is exposed. These are mainly natural calamities that are able to affect the business is located. Some insurers do not cover the risks that occur due to natural calamities. In cases where the risks occur, there is possibility of losing the assets that the business had. In mitigating this risk, there has been consideration of addition of business interruptions coverage to the property insurance policy that it is protected. This vital, though often ignored, attention safeguarded his business by covering operating expenditures and lost income while the long term business location is being fixed. Liability losses are also able to affect the operation of the business. No matter how well the plan of the company is formulated, running the business in a small scale can be fraught with unexpected surprises. He however has been a smart business owner through protecting the assets that the business has through carrying out general liability insurance. The insurance policy is that which provides coverage for the claims of body injury or any other physical injury in the process of operating the business. A general coverage has the adequate coverage limits that enable the business to continue the normal operations while dealing with the fraudulent claims of negligence or wrongdoings and at the same time providing coverage for the cost of defending and also setting the claims. Electronic data breaches are also a threat that the business is exposed. With consideration of the endless growing advancement in the technology sector, the most common threat that the small business is exposed is data breach (Schaffer, Harris and Simmer, 2015). There is lack of a perfect IT department that would prevent the breach that the business is exposed. There have however been easier that have been put into place but there are risks that the businesses find themselves in making the business need more protection. This can be done through obtaining cyber-liability insurance. Opportunities of the business One opportunity that the business has is flexibility. There is ability to change the plans that are already put into place. There is ability of bringing new product to the market when there are few people that are involved in creation. Since the business operates on small scale, there is no need of involving many people in production that brings about complexities in changing the business strategies. Closeness to consumers is an opportunity that the business is also exposed. This has brought about important success in the business. The business operates on a small scale making it have the ability of meeting the needs of the consumers more frequently and develop more professional relationship in the company. The complaints that the consumers have are able to be handled faster at more professional. This has led to the growth of the business as the customers feel satisfied with the services that they receive from the business. The business operates on a lean structure. There are fewer employees in the business with few layers of management. With the operation using few employees, there is less need to lay off associates in difficult times and this enables keeping the business operating more effectively. Few layoffs and layers of management makes decision making in the business to be simple allowing for flexibility and adaptation to be much easier as compared to those companies that operate on large scales. Inventiveness and innovation is also an opportunity for the business. Small businesses are well positioned to introduce and develop new ideas (Schaffer, Harris and Simmer, 2015). This is due to their owners not having to report or seek approval from anyone else. Entrepreneur as an option for university graduates There are different advantages of entrepreneurship that makes it a better option from those that graduate from the universities. One of the advantages that make graduates to be able to operate as entrepreneurs is on the flexibilities that they encounter as they operate. There is ability to change the plans that are already put into place. There is ability of bringing new product to the market when there are few people that are involved in creation. As a business owner, you have the ability to set your own wage and make an investment in your own company. The work that you do is for something that you own, which is a huge advantage when compared to working as an employee for a business that you do not have any ownership in.Since the business operates on small scale, there is no need of involving many people in production that brings about complexities in changing the business strategies. Entrepreneurship has become more and more popular as there is looking forward by many people as there is gaining a bit freedom from their employment. If you have an employer and are not the owner of the business, you must meet all requirements of your employer and have very little freedom at the workplace or on the job. However, if you are an entrepreneur and start your own business, you set your own schedule and also make your own demands. This is the reason why many graduates are involved in entrepreneurship. The graduates also have preferred getting involved in entrepreneurship as they are able to start their own business and earn money from the profits that the businesses they engage earn. The advantages that the graduates are able to obtain from the getting involved in entrepreneurship include freedom, stability and setting own earnings. As entrepreneurs, there is possibility that the skills that the company that have been set by one are met. This makes the company more profitable. In a situation that one manages his own business; there is possibility that there is increase in dedication in the activities that are done in the business increasing the profits that the business is able to attain. References Barrow, C. (2011). Starting a business from home. London: Kogan Page. Brockhouse, G. (2009). Starting a business. Toronto: Key Porter Books. Bukar, G. and Timothy, Y. (2013). Impact of Polytechnic Education on Enterprenuership Development in Nigeria. ILSHS, 15, pp.9-21. DEODHAR., (2010). From Enterprenuers To Leaders. Tata McGraw Hill Education Pvt. Ltd. Eglash, J. (2001). How to write a. business plan. New York: McGraw-Hill. Martin, C. (2012). Starting your new business. Los Altos, Calif.: Crisp Publications. Morris, M. (2011). Starting a successful business. London: Kogan Page. Schaffer, C., Harris, M. and Simmer, M. (2015). A guide to starting a business in Minnesota. St. Paul, MN: Minnesota Department of Employment and Economic Development, Small Business Assistance Office. Steingold, F. and Bray, I. (2001). Legal guide for starting & running a small business. Berkeley, Calif.: Nolo. Read More