Running a Self-Owned Business - Article Example

Running a Self-Owned Business In the current market environment, where the degree of competitive rivalry is very high, starting a new business involves several risks particularly when it is a sole trading firm. The success of a sole trading organization depends on the nature of its business to a great extent, and hence developing a potential business idea is the key to running a sole trading business ensuring profitably and long term sustainability. In addition to the intense competition threats, increasing legal and environmental regulations become potential barriers limiting the market scope of new business ventures. However, running a self-owned business is much better than being employed for someone and working all day. When running a sole trading firm, the business owner has his own freedom, and he/she is not required to subordinate to any one or act according to the directions of others. I was stunned when my friend Hussain revealed his decision to start a new business venture, because I could not even imagine the risks associated with running a self-owned business today. Being a graduate in HR management, I was happy to work for a reputed MNC then, because such a career choice would assist me to enjoy the benefits of risk-free earning. I realized Hussain’s decision was right when we celebrated his 3rd store opening yesterday, exactly after two and half years of the business establishment, at Grand Avenue Hotel. Business Planning Graduated from a reputed university, both Hussain and I were at the point of finding a job. As I was eager to start earning money, I soon joined a reputed MNC and began my career as an HR assistant. However, Hussain was very innovative and energetic, and therefore he was unwilling to restrict his potentials into the four walls of the office cabin. Although I often insisted him that he should join a company, he was very determined to start something his own, and hence he remained unemployed for more than a year. During this period, he was in continuous search for innovative and potential business ideas and he spent many hours on building social networks and slept only a few hours a day. Once he told me; “If you die as a reputed employee, your fame would eventually decline. But if you die as a reputed businessman, your business establishments would be there to keep you remembered for many decades to come”. Hussain was really aware of the growing concerns over environment pollution and he recognized the significance of promoting a sustainable business model. He strongly believed that it is easy to deal with brand positioning if the business model proposed is in line with current environmental notions of the society. As a result, he emphasized on business ideas that considered environmental sustainability as one of the primary concerns. After a series of discussion with some industry analysts and friends (including me), Hussain planned to launch a plastic recycling business. He decided to run the venture as a sole trading business. Hussain was really aware of the advantages and challenges associated with establishing his venture as a sole trading firm. Hussain thought that he could enjoy complete control over his business venture under sole trading approach, and hence he would be free to employ his own management style and market strategies. In addition, a sole trading venture could be established with minimal investment. Since Hussain is the only owner of his business, he does not have to share the profits earned. On the other hand, a sole trader has limited access to financial sources, and therefore it might be a challenging task for Hussain to raise initial capital. As Hussain is the only person responsible for his business, he should bear all the risks associated with the business such as net loss. Establishment as a Start-up Hussain estimated that a minimal initial investment of $100,000 was necessary to launch the business successfully. He acquired land on lease in order to minimize the initial cost of capital and to spend more on key supply chain activities. As Hussain was from a poor family, it was extremely a challenging task for him to find sufficient and potential sources of finance. We, three of his close friends, collectively lent him $25,000 on the promise that he would repay the money within two years. He also obtained governmental assistance because the government has been keen to encourage and support young entrepreneurs, who constitute one of the main pillars of the economy. In addition, he also took some bank loans. However, major portion of this initial capital ($40,000) came from two angel investors, who expressed their interest to finance the project in exchange for convertible debt. In the next phase, he acquired all the federal, state, and local licenses and permits essential to run the business. Since the US government is keen to support start-ups and young entrepreneurship, Hussain did not face any difficulty in meeting those legal formalities. He hired five employees through social media Ads so as to deal with plastic waste collection and the recycling process at the plant. Initially, Hussain hired two small trucks and drivers for collecting plastic wastes from different parts of the city and transporting it to the plant. In the plant, the plastic wastes collected are recycled into new items such as rope, brush bristles, household furnishings, medical equipments, and compost bins. Hussain rented two adjacent rooms in a building to sell the recycled plastic products. Since Hussain was badly in short of money, he did not use conventional promotion technique like TV Ads. Instead, he solely relied on social media advertising, which is a cost-free technique to promote products/services today. As Hussain had already built strong social networks though Facebook and Twitter, it was easy for him to publicize his new venture effectively. In addition, he sent messages and e-mails notifying the business launch to all his e-mail and phone contacts. My Contributions to the Business Although I tried to discourage Hussain initially, I eventually became confident in the feasibility of his project and was eager to support him in practical ways. My father worked in a popular web designing company that time, and therefore I could help Hussain to design the firm’s official website for a very cheap quote price. As I was well informed of the requirement of his business, I closely worked with the web designing team to develop a comprehensive official website for Hussain’s business venture. Similarly, I assisted Hussain to grow his business through social media promotion as well. I posted the details of his new start-up on my timeline and shared it on hundreds of public groups. Such campaigns were greatly beneficial to initiate public discussions about this newly launched plastic recycling service and its eco-friendliness. Those social media activities were also helpful to direct people to the firm’s official website that could give visitors comprehensive view of the various products and services offered by the business. Since Hussain had hundreds of other things to manage as a new start-up, I helped him keep the organization’s official social media pages up-to-date at the initial stages of business establishment. I also drew his attention to important customer feedbacks and suggestions we received through social media pages. Likewise, I supported Hussain in plastic waste collection operations. I asked families residing on my street to put their plastic wastes in a bin placed nearby their gate so that the collection trucks could easily gather them and transport to the plant. In addition, I requested my company’s senior officials to make arrangements for collecting plastic wastes in our organization and selling them to Hussain for a cheap price. I contacted many of my friends and relatives to inform them about Hussain’s new business venture and asked them to buy the recycled plastic products offered by the firm. I helped him conduct some online and telephone surveys to know what the public feels about the company and what they actually expect from it. When Hussain opened his second store, I assisted him to recruit employees and to develop a skilled sales team. Finally, I helped him raise funds in several occasions when he struggled to meet his daily business needs. Obviously, Hussain’s strong determination and extreme desire for success helped him establish and grow a potential business venture that promotes environmental sustainability. The eco-friendliness of this sustainable business model greatly assisted him to enhance brand recognition easily and to achieve great public as well as governmental support. By setting up this venture as a sole trading firm, Hussain enjoys full control over his venture, and he is able to manage the supply chain activities as he wishes. Although he does not need to share the profits earned with anyone, he is to bear all the financial losses as well (if any), for his liability is unlimited. As it was an entrepreneurial venture, Hussain’s efforts were greatly supported by local and state governments. He raised the initial capital worth $100,000 from bank loans, government grants, angel investments, and personal borrowings. I supported Hussain to grow his business by contributing to promotion efforts, lending money, and delivering HR assistance. Read More