Critical Factors of Success - Essay Example

BUSINESS PLAN EXPERIENCES The paper is a perspective report on an interview with an entrepreneur, my friend, who is the owner of a night club in Sunnyvale and also venturing into restaurant business. Anderson identifies some of his personal characteristics that motivated him in moving on with his business. Using PEST theory, the report also shows some of the environmental factors that guided my friend in venturing to his business. It analyzes how the business is financed and staffed. My friend also lists out his key fundraising strategy for his projects. Lastly, it identifies the staffing challenges and how he can overcome them. The report then analyzes the critical factors of success or the sustainable factors. From the report on my friend’s project, there are various lessons learned from the process of the early stage of the project. Introduction As an entrepreneur, in the early stage of a project, they are a lot of challenges. Thus, one has to come up with excellent strategies to overcome them and have a successful startup of the business. A good beginning of the company will promise an extremely profitable business. A business idea requires a strategic plan and performance so that nothing turns out unexpected and thus, having an organized performance (Pinson 20). Anderson owns a night club in Sunnyvale that has significantly controlled cities. According to Anderson, the club dazzles its customers with high-powered music, sounds, and lights. Averagely, people spend more than three to five hours per weekend around the entertainment environment and spend 30 to 60 dollars during that timeframe. The night club is opened every day from 6:00 pm to 3:00 am. Its primary revenue sources are high-volume traffic that spend nominally and the door charges. As the nightclub was being started, Anderson had to create strategies to guide him through his venture. He is also venturing into a restaurant bussiness that relies on the experience adopted from the first venture of the nightclub. Hence, being a businessman with significant ideas on the business perspective and high characteristics, my friend can start a night club and now a restaurant. Personal Characteristics Anderson is a hardworking man. At the start of the plan, he works up to extra hours to ensure everything gets performed as planned. In an interview, he acknowledges that he works many hours at the start of the project. Anderson also gets motivated to work harder for people who are more successful than him such as Bill Gates. Being a hardworking entrepreneur also motivates the other workers involved in the company to work hard. Hence, having diligent board will increase the chances of having a successful business venture (Pinson 20). Anderson studied business in college. Therefore, he is a skilled businessman having learned all the business tactics, theories and strategies from college. There are different business tactics, strategies and entrepreneur perspectives on business. Some of the strategies rise from SWOT and PEST analysis and other theories such as Porter’s theory of marketing strategy (Patrick & Suzanne 62). Hence, his business knowledge gives more ideas on how to carry out the business. Environmental factors The area in Sunnyvale is highly populated with youths and city centralized. Anderson takes advantage of that since the youth likes having fun and partying in the night. Being centralized located, many youths from different locations can be attracted to the club. The youth mostly came from the nearby colleges. In addition, it is also the key reason he also came up with the restaurant idea. Hence, due to high population of the youth, there are many customers in the club. According to Anderson, the growth of many colleges and institutions also influenced the idea of a night club business. It is because, many customers are students mostly aged from 19-35. Hence, as the institutions get opened; more students will reside in Sunnyvale area. Thus, the number of the customers in the night club will eventually increase. Venture formulation Anderson analyzed on what most of the people in the area like doing in their leisure time. He invented the plan of a night club after spending some time during the weekend in the college. He noticed that most of them went to a party in nightclubs that were way far from the college. Therefore, he thought it could be a good business idea if he started a nightclub since it saves them from traveling long distance for night parties. Using the PEST analysis, Anderson analyzed all the political, social, economic and technical factors that could affect his strategies (Patrick & Suzanne 62). Political factors such as taxes and licenses and social factors such as how people take night clubbing in the area. He also analyzed other clubs to see how much they profit from the clubs and if there are any technical factors that get considered in venturing into the business. After the analysis, Anderson planned his strategies on how to raise the business plan into action. The plan aimed to minimize extra costs that could be as a result of lack of strategy or plan. The programs are also meant to carry out the plan systematic to avoid living out any important plan of the business (Patrick & Suzanne 62). Hence, the strategy aimed to have a perfect launch of the business plan without forgetting any important feature or waste his income on something that is not beneficial to the plan. The business finance and staffing The business required more than a million to set everything for the launching of the night club. Hence, Anderson required sources to finance his business. Firstly, the business got financed through savings. From an interview, Anderson mentions that savings are his key fundraising. Most of his starting capital got raised through savings. He had savings in the bank from his prior business. The savings got used to buying facilities and pay the workers who setup the bar. Anderson also got some investors to support his business. He gave the investors the summary of his plan and had meetings with them to discuss it and tend to pursue them that it’s a good business to venture. In his presentation he presentation he presented specified his money request and also say what he plans to do with the money and explain using samples of present current results. The investors then checked his background information to determine his history in the business and then supported him with some amount of money for the business. Hence, the money from the investors got used to the setup of the club. Staffing is also part of Anderson’s business plan. Staffing is the method of deploying, retaining and acquiring a workforce with sufficient quality and quantity skills (Erick, Brian & Jay 99). The skills aim to create positive impacts towards the company effectively. Anderson planned to have a staff that can easily mingle with the customers and communicate well with customers. He had staffs that are responsible for customer service through the phone or one on one, serving the customers in their tables, cleaning the club and those responsible for financial recordings. In addition, there are staffs that are responsible for security and the DJ’s. All staffs are required to have qualifications on their specific tasks to enhance customer satisfaction. Anderson tried to mix the nightclub and a restaurant, and he got surprised to discover that the two do not mix. The people in the club love dancing and they can easily knock down some of the tables meant to serve those who came just to take their meals. Hence, mostly, the people who come to club distract those who are there to take their meals and create a hostile environment to them. In addition, some of those who want to take meals in the restaurant want a quiet and cool environment for emotional relaxation, but with the noise from the night club makes it impossible for them. Hence, due to the disability of mixing the two, Anderson is coming with an idea of creating a separate restaurant. Challenges At the beginning of every business, there are challenges. Hence, Anderson experienced lots of challenges as he focused on stabilizing his business. First of all is integrity challenge. Business has never confronted challenges that it confronts today in the global economy (Patrick & Suzanne 62). Everybody is struggling to become more successful in their business to attain the following quarterly earnings estimate to maintain their big bonus earnings, job and compete effectively. Therefore, Anderson had temptations to omit information, cut corners, and do anything it takes to be ahead of what is occurring daily. These practices diminish the trust that is supposed to exist between the employees, employers, stakeholder, business partners, executives and shareholders to compete effectively. Secondly is the resource management and cash borrowing. A promising financial statement is good but if receivable collections and capital expenditures are draining the company cash, the business will not last for long. Into some extent, Anderson did not focus on the cash flow generation. He also had problems in the cash management during the recessionary times when there is slow cash flow into the business with less lenient creditors in extending paying time. Thirdly, increase of competition and selection is also a problem. It is never easy starting a business nowadays. These days if you can purchase a domain name and get your business registered online then you are in business (Patrick & Suzanne 65). However, remaining in business is the challenging part. The ease of beginning a business is also creating competition. Along the streets of Sunnyvale, there are plenty of spacious in clubs that create competition to the company. Hence, this development on more completion and selection made it more difficult for Anderson’s business to retain their customers that can change their suppliers. Fourthly, is the customer loyalty and marketing. Along with increased completion and selection, pose the similar challenge of maintaining customers effectively and attract potential customers. The social media, emails, twitter, texts and other communication links made it easy for Anderson to market his business. However, figuring out the correct marketing channel is the greatest challenge and the key towards a successful business (Patrick & Suzanne 66-7). Anderson had challenges with his competitors who keep on convincing them on their services that are best and cheap than his. Fifthly, is the challenge of getting the right staff. Finding and retaining the right staff is the biggest challenge that faced Anderson. He also added in an interview that it is difficult to find staff that can buy into the business visions. Despite the high rate of unemployment, many organizations find struggles to get individuals with the right skills (Patrick & Suzanne 63). Most of the new business needs high-tech skills such as IT skills, deductive reasoning skills and problem-solving activities. Hence, this made it more difficult for Anderson to employ effectively the potential workers. Sixthly, is a great discomfort and uncertainty. Anderson had uncertainties due to the economic struggles and global debt. Hence, the uncertainty factor leads to short-termed focus. Anderson tended to shy away from long-term plans thus, significantly destroying his company value. Therefore, businesses should learn to keep the balance on the reactive need on short-term focus with informed need for long-term strategies. Lastly, Anderson had challenges in risk management and problem solving. The main challenge for all companies is identifying, mitigating and assessing risks, including financial capital and human (Patrick & Suzanne 68). Lack of an appropriate problem-solving competency in Andersons Company limited its ability to correctly deal with risks that faced the business. Hence, the challenge resulted to some instance when he could escape a certain problem only to release he is in another problem. What was done to overcome the challenges? In order to manage the cash flow generation, Anderson ensured that the business has adequate capital. In addition, the business had to show its cash reserves to ensure it meets all the obligations as required and also handle emergencies and downturns that may arise. He also got assistance from cash managers in the bookkeeping. Hence, through the assistance, he excelled due to good cash management and records. In order to overcome the competition challenge, the company management has to have focus, perception, and marketing elements. In addition, the company should also give an appropriate customer service. Good customer service attracts more customers and makes existing customers remain in the club (Pinson 20). Hence, he can maintain some of his customers and avoid losing them to his competitors. Anderson tried to learn the key personalities of his staff in order to main his right staff. He figured out what drives them individually in the work and tailors his management accordingly. Learning their characters and treating them accordingly, ensures satisfaction for the worker, and they become comfortable in working around him (Pinson 20). Good communication between him and his staff will also make the staff free to express their problems to him and thus, solve it before he loses them to another company. Therefore, Anderson business was successful due to the strategic plan he had before carrying out the plan. He planned everything accordingly to avoid expenses and managed his cash well to avoid losses. Anderson also used his business techniques to minimize some of his challenges he faced hence, minimizing the chances of his business running going down. His key factor that contributes to his success is his good customer service that helps him attract more customers and maintain his potential customers. The main lesson learnt is to be strategic in business planning and be hardworking and patient. Conclusion Therefore, it is in conclusion that, for success in business one has to have strategic plans on how to venture into his business plan. They should identify all the risks that follow and know learn about their competitors and employ good staff that would maintain their customer to avoid competition. Work Cited Pinson, Linda. Anatomy of a Business Plan: A Step-by-Step Guide to Building a Business and Securing Your Company’s Future (6th Edition). Chicago, USA: Dearborn Trade. 2004. Pp.20. Print. Eric, Siegel, S, Brian, Ford R and Jay, Bornstein, M. The Ernst & Young Business Plan Guide. New York: John Wiley and Sons. 2008. Print. Patrick, Burkhart, J and Suzanne, Reuss. Successful Strategic Planning: A Guide for Nonprofit Agencies and Organizations. Newbury Park: Sage Publications. 2006. Print. Anderson, Mike. Personal interview. 15th November 2014. Read More