What Is a Business Idea - Example

A feasibility report Name Institution Executive summary The feasibility report contains description of a business idea, which a small business. There is analysis of the industry through which the company operates. The report contains the target market of the business There is also description of the market competition, services, and associated products. There is the analysis of the marketing plan, which contains the pricing, promotion and place strategy of the business. The report contains the operation plan; that is, proposed location, premises acquired, service process, facilities and maintenance of facilities. There is analysis of required materials and suppliers, the inventory management process, strategies to manage seasonal changes, and legal issues The report identifies the human resource factors, such as employees, their remunerations, positions, legal requirements of employees. There is discussion of the legal form of the business, and product, market, and technical feasibilities Table of Contents Table of Contents 3 A description of the business idea 4 A description of the specific industry in which the business will operate 4 A description of the target market covering: 6 A description of the competition 7 A description of your services and any associated products. 9 The marketing plan showing: 9 Pricing 9 The promotion strategy 9 A place strategy 11 Present your operations plan which should cover the following 11 The proposed location 11 How the premises will be acquired 12 The service process; use a flow chart 12 A graphical illustration of the layout 12 The facilities (plant and equipment) required for operations 13 The processes to be followed to maintain the facilities 13 The materials and supplies required and suppliers or sub-contractors to be used 14 The inventory management system 14 Strategies for managing any seasonal variations in demand for the services 14 A discussion of all relevant regulatory and legal issues associated with the business 15 A human resource plan comprising: 17 Number of employees required and the positions 17 Training for each position and how to assess performance of employees 17 The remuneration package for each position including superannuation contributions 18 The legal requirements are associated with employees 18 The legal form of the business 19 The market, product and technical feasibilities of the business idea 20 References 22 A description of the business idea Business idea- Printing and stationary store The printing and stationary store is a limited liability company formed by two partners. The business is located in Perth WA, Australia. The shop is involved in printing of books, business cards, newspapers, labels, business forms, stationery, and other related products. The business prints the above materials in different designs depending with the interest and desire of the client. Other activities of the business include the following; bookbinding, data imaging, book repairing, and plate making. Plate making, data imaging, and bookbinding will be operated using different materials and the process depends with the material used (Greco, 2013). The business prints the above materials according to the orders made by clients. The shop offer delivery services to the clients especially when orders are taken to long distances. A description of the specific industry in which the business will operate The printing and stationary store operates in a printing and stationary industry in Australia. This is an industry where businesses conduct printing of different materials like books, magazines, directories, newspapers, journals, envelops and other materials like clothing (Fisher, 2010). The printing industry offers services to institutions, companies, and individuals in Australia. Many firms are connected to this industry where they conduct production and sale of the printed materials. This is an industry where printed publications are available all the time because of increased demand especially in the media and education institutions (Muchlinski, 2010). The industry is affected by some political factors, such as trade policies, government changes opinions from the stakeholders, as well as crisis in that; publishers operate in a number of states and it compete with other nations. Some of the economic issues facing the printing and stationary industry, like internal finance inadequacy, changes of the economy, taxation issues, importation and exportation policies, and employment challenges globally (Fisher, 2010). There are also the social-cultural factors affecting the industry and this include the attitudes of the consumers, demographics, ethical matters, shift of the consumer population, as well as the views of the media (Andrade, Míguez, Gómez, & Bugallo, 2012). There is also increase in the household income, growing number of retired baby boomers with time and finances to spend as they read the printed articles, a desire to read about the world, ready contact to information from the globe, and increased literacy levels among the world population. The industry is faced with technological issues as environmental factors affecting the industry and this comprises of the changes in the technology usage of the internet in activities, such as marketing, innovation, and technological research conduct, as well as going green (Lucas, Cunningham, & Lamberton, 2013). It is clear that advancement of technology has made people to stop reading printed articles, but read information from the internet. Printing and stationary industry is also faced with legal issues ad this includes issues like; global legislation, law of competition, law set by the consumers, and legislation of the companies (Fisher, 2010). In addition, there are some environmental factors faced by the industry and this comprises of; the values of the stakeholders, issues associated with going green, the culture of the company, and the staff morale as they work (Subramaniam, McManus, & Zhang, 2009). This environment of the printing industry in Australia enables it to focus in developing new working strategies and implementing them in the market in order to remain competitive in the international market. A description of the target market covering: The printing and stationary store targets the readers, that is, the ones interested in printed materials, such as students, education institutions, and newsreaders. Students; There are very many students in different learning institutions in Australia. The business prints books and reading materials to be purchased by students according to different courses and as per the student’s interest and preferences (Andrade, et al. 2012). Students require past papers of the examinations, books with the course materials, and revision kits to enhance them conduct their revision. Students ware very good customers to the business because they do not have a choice but purchase reading materials to boost what they are taught in classes. Education institutions; Different education institutions require reading materials based on the courses or the kind of education offered to students (Greco, 2013). The business prints different materials as ordered by the institutions. Education institutions make efficient customers to the business because their activities mush be conducted with availability of learning and teaching materials, which are mostly printed (Lucas, et al. 2013). Newsreaders; The business meets the interests of the newsreaders by printing news, journals, and other information materials and disperses them as per their interests (Subramaniam, et al. 2009). Some of the readers purchase magazines and journals for their entertainment or to read just for their leisure time. The prices for different printed articles are the same for all the market segments. In addition, the quality of publications are high and similar (Greco, 2013). There is after-sale service to those who make lump sum orders where the business will be offering delivery services to their stated destinations. For convenience, the business engages in printing activities and serving customers on 24 hours basis (Lucas, et al. 2013). It is clear that the current market is quite high and expected to drop with time. This is because of existence of reading materials in soft copies where people will prefer reading from online through the internet. The business revenue might fall from $ 7.2 million to a lower amount in five years. The sale of the printed materials will be affected by advancement of technology, the issue of seasonal demand, socio-economic trends and changing demand patterns, and government policy (Andrade, et al. 2012). However, the business will be expected to make the target revenue because of its improved services and goods to the potential customers. A description of the competition The business operates in the market with several direct competitors in Perth, WA, Australia and they include; 4 Aberdeen Street, 1204 Hay Street, 200 Adelaide Terrace, Newcastle Street, Street. Other competitors comprise of; 181 ST Georges Terrace, 181 St Georges Terrace, 976 Hay St, and 250 Beaufort (Muchlinski, 2010). All these companies deal with printing of materials in Perth, WA, Australia. Due to strong competition and domination of the market by the direct competitors, it will be challenging for new companies to enter into the market. This is also contributed by the condition of the economies of scale, cost disadvantage, capital requirements, switching of the costs, and the government policies. The quality of the new business makes customers have no bargaining power and it will win trust of the stakeholders because of its products (Andrade, et al. 2012). The market share of the printing businesses in Perth is as follows; 4 Aberdeen Street, is the industry leader having a market share of 37%, The printing and stationary store 23%, 1204 Hay Street, following with 13%, 200 Adelaide Terrace 4%, and Newcastle Street 3%, and other small manufacturers sharing the remaining 20% of the entire market (Muchlinski, 2010). From the above information, it is clear that printing industry in Perth is a perfect competitive environment with free entrance of market players. It is clear that, products of the industry do not have close substitutes and the costs of its products are favourable to all potential customers. However, the demand curve facing the industry is likely to be relatively elastic and this will give the new business the ability to ‘markup’ its price beyond marginal cost (Greco, 2013). There is high competition among the four leading business, but because of barriers to market entry, new market players requires to be very strong for them to survive in the market (Lucas, et al. 2013). There is no substitute products to the publications offered in the market, hence, not possible for customers to raise their bargaining power. The printing and stationary store is in second position following 4 Aberdeen Street compared to other rivals. This is because the business offers printing services that are of very high quality. The business also recognizes the importance of valuing its stakeholders and mostly the customers. The business offers high benefit to its customers in that it considers the opinions raised by its customers (Hatten, 2015). The business has the ability to improve the value of customers by considering their interests during operations. A description of your services and any associated products. Printing reading materials is a very efficient activity where the business serves customers according to their interests. There is also provision of stationary materials to customers according to the placed orders. The marketing plan showing: Pricing There will be different prices for different products; that is the books will be charged differently from the magazines, journals, newspapers, and other publications. In addition, the books will be charged differently according to the content and the size (Subramaniam, et al. 2009). This will also consider the target market, the prices charged by the competitors, and the economic condition of the market. The company will offer the publications at the same price with that of the competitors in order to attract many customers. The promotion strategy The printing and stationary store use and capitalize on word-of-mouth communications, customer driven and viral marketing techniques through surveying on the prospective customers (Greco, 2013). Nevertheless, this is where the business produces high quality products with the aim of attracting customers. Once customers are satisfied they are likely to share the good information about the products to others (Longenecker, et al. 2013). This is identified as customer evangelism because they inform others about the products through word of mouth. The company should also have a page in some of the online social networks where it displays its products for people to make comments and give opinions. In other words, the higher the number of evangelists, the higher the rate of marketing the printed products. It is necessary for the business to set customers free to talk about its products because this might influence the market in the favour of the company (Muchlinski, 2010). For effective marketing process of printed products, it is necessary for the company to look for diverse methods, such as internet and the media. Marketing is very important for the printing and stationary store because it deals with a very diverse market. In order to interact well in the market, and operate through the respective distribution channel, as well as achieving its objectives, the business has to involve unique marketing methods, such as internet and digital forms. This is because these are the best means to get to the target market (Lucas, et al. 2013). Through online channels of advertisement, it is possible for the company to reach the diverse market easily and quickly, thus more effort should be put for business to reach to the digital market where the young people are many. The business can drive customer-focused marketing and strategic innovation within the entire Australian organization through identifying the customer experience and taking the available opportunities for innovation and improvement of its operations (Silverbrook, Lapstun, & Walmsley, 2010). The printing and stationary store should consider the new and existing customers when distributing its products, whereby all activities aim at supporting the company’s goal. The company should engage in rapid innovation process in order to experience growth in its sales’ target (Hatten, 2015). Through considering the customer opinions and suggestions, it will be possible for the business to meet their needs, thus improved performance in the market. This should be set as a core policy in the entire organization whereby all stores and departments of the business should adhere. A place strategy Perth, WA, Australia is a very conducive location to operate a printing business because of concentration of education institutions in the city (Greco, 2013). This makes the printed materials to secure an effective market from the institutions themselves, students, and other interested readers. In addition, the population in this city is very high, thus increasing the level of interested readers or potential customers to the business (Longenecker, et al. 2013). Present your operations plan which should cover the following The proposed location Perth WA, Australia is a town with many education institutions, thus increased number of students of reading materials’ customers. The town is strategically located in a highly populated areas, thus the advantage of getting many customers (Subramaniam, et al. 2009). Additionally, Perth is a very successful town in conduct of different businesses and being the capital city in Western Australia, it is a famous town in the entire continent. How the premises will be acquired The business premised will be acquired through purchasing an already compete building, which is likely to cost the company $5.0 million to cater for all settling activities. The service process; use a flow chart The printing services will be delivered in the flowing format Customer placing orders Processing of the orders Request for payment Customer making payments Printing of the requested materials Delivery of the materials A graphical illustration of the layout Delivery of the products will be conducted after agreement with the customers through making of payments and confirmation of the printed materials from the customer. The facilities (plant and equipment) required for operations The business will require the business premises, printing materials, such as 5 printing machines, ink ad papers, 2 cutting and shaping materials, transportation vehicle, and calculation machine. The premises will be purchased the same case with other materials, tools, and equipments (Silverbrook, et al. 2010). The materials are estimated to cost the following prices Printers- $5000 Shredding and shaping gadgets- %250 Van- $3000 Calculating machine- $ 200 Ink and papers- $185 The processes to be followed to maintain the facilities The facilities will require effective maintenance processes in order to be profitable and to last for long. There will be monitoring of the conduct of the equipments where the company will have a committee responsible at monitoring how they operate in different occasions. In addition, the company will ensure employment of qualified and experienced workers to handle the facilities with care and effectively (Longenecker, et al. 2013). There will also be servicing of the facilities after a specific duration according to the type of machine or equipment to prevent their failure to operate. The materials and supplies required and suppliers or sub-contractors to be used The suppliers will be required to supply ink, papers, and packages, which will be required on regular basis (Hatten, 2015). There will also be need of supply of working machines like the printers, calculating machines and the cutting equipments, but these once will be supplied when necessary and during the beginning of the business where they will be mandatory for the company to start its printing activities. The company will also require to be supplied with the stationary in order to sell to different customers who will be ordering the printed materials against the stationary (Andrade, et al. 2012). The inventory management system The inventory management system of the company will engage discussion between the suppliers and the business owners where there will be discussion about the time to offer the suppliers, the stock levels, safety of the stock, the inventory levels, as well as storage issues (Greco, 2013). In addition, the time of ordering will be discussed with the customers in order to give the company time to get all things ready and to produce quality products (Lucas, et al. 2013). Strategies for managing any seasonal variations in demand for the services To effectively manage seasonal changes in the publications’ demand, the company will be publishing some materials that it will be sure to be at high demand during the high seasons, such as schools books and different educational materials. These will be publications that are not likely to change the content any time soon (Silverbrook, et al. 2010). The company will also be adding the number of employees to meet the customer interests during high seasons. Additionally, the company will be operating through quality technology and machines to enhance production of publications as per the orders placed by the customers. A discussion of all relevant regulatory and legal issues associated with the business The business is affected by legal issues in that it has to operate according to the legal requirements. Two partners own the business, the name of the business has words ‘Limited Liability’, the business does not hold annual meetings regularly, and its owners do management of the business (Benzing, & Chu, 2009). The business has the general members, a manager, and ten employees. Two members signed the certificate of organization of this business. The members of the business are not personally liable for obligations of the business. It is apparent that the members of this business do not experience restrictions on the number of shares (Fisher, 2010). The business became effective the moment the owners filed the approved certificate with the respective division (Tian, & Martin, 2010). According to the owners of the business, the personal motives for operating the business include; profit making. The two argued that they operate this business in order to make profit from its activities (Andrade, et al. 2012). Owning and taking control of their destiny; the two stated that they wanted to take control and make decisions regarding their destiny through running the business as they have the ability to direct the culture of their business (Subramaniam, et al. 2009). Source of employment; it was their wish to own a business rather than being employed where they have power to set their own business schedules. Provide employment to other people, as they have employed ten workers, take risk where they face bad situations, and maximize with good ones. Giving back to the community and connecting with clients (Tian, & Martin, 2010). To ensure compliance of the business according to the legal requirements, the business will operate through Licenses, zoning permits, health permits and environmental approvals, which will be offered according to its qualifications (Greco, 2013). The documentations require being renewed occasionally according to the regulatory changes that tend to affect the nature of the business and its operations. Wealth maximisation is the focus on the cash flow amount, which is generated from a course of action and it aims at maximisation of shareholders or the company share. Wealth maximisation allows a business to ensure that the future benefits are more that the costs of all financial actions and lead to creation of more wealth. This objective counts the time value of the money used and considers a long-term approach of a business. The above motives of running the business are different from the objective of wealth maximisation because they do not provide the highest possible business return as per the aim of wealth maximisation. Wealth maximisation aims at making sound financial investment decisions having considered all the risk factors that are likely to compromise and outweigh all the anticipated benefits of a business (Benzing, & Chu, 2009). Wealth maximisation objective is very important in a small business because it allows the business to consider not only profit maximisation, but also the future value of the business. The wealth of the business shareholders improves, as the share price increases. The wealth maximisation enhances a small business to earn the highest possible business returns. It is important in a small business because it enhances running of the business without losses (Tian, & Martin, 2010). A human resource plan comprising: Number of employees required and the positions The printing and stationary shop will employ ten employees who will be operating on full-time basis (Silverbrook, et al. 2010). Among the employees, two will be involved in office work of getting the orders, processing the, and communication with clients as they make their payments and as they pick their orders. Two of the employees will be involved in the fieldwork where they will be going for printing materials, delivering the printed articles to the clients, and conducting research and development activities. The other six employees will be engaged into the workshop where their work will be to print, cut, bind, and pack the printed articles according to the customer orders (Longenecker, et al. 2013). During the high seasons, the company will be engaging some extra workers on contract according to the level of work and according to urgency or orders placed by the clients. Training for each position and how to assess performance of employees The employees will be offered different training according to their duties. The once in the workshop will be trained on how to operate the printing and binding machines. There will also be training on how to set and operate the machines to enhance production of quality products and articles as per the client’s interests and specifications. The performance of the employees will be assessed by the results of their work and comparing the company’s expectations with their operations. There will also be setting of the target that the employees will be required to meet, that being a basis of assessing their performance as they meet their targets (Hatten, 2015). The customer comments and complements will be used in assessing the company’s workers performance, as this will enhance the company to understand its position in the market. The remuneration package for each position including superannuation contributions The two workers in the office will be paid a remuneration of $300 monthly this will be exclusive of the superannuation contributions where the workers and the employers will be required to contribute for their insurance and retirement benefits. The two workers in the field-work will be pain a monthly remuneration of around $280 and there will be deductions for the superannuation contributions to the insurance and retirement schemes (Benzing, & Chu, 2009). The workers in the workshop will be paid $290 monthly with some allowances because of being involved in operation of machine’s which might be hard for them especially during the high seasons. All the employees will be paid over time for the extra hours they will be working in the company especially during the seasons of high demand in order for the company to meet customer needs and enhance customer satisfaction (Fisher, 2010). The company will also be rewording the employees according to their overall performance at the end of the business year in order to motivate and encourage them to work more hard. The contract employees will be paid as per the agreement with the company owners during the period of contract, hence, no specific salary to be offered to the contract workers (Andrade, et al. 2012). The legal requirements are associated with employees The employees will have to meet the legal requirements where they will be licensed to operate the machines and to conduct the printing and delivery activities (Lucas, et al. 2013). The company will cover this where it will ensure that they all meet the requirements according to the legal bodies. The business will start by being registered legally and after acquiring the legal documentation, it will seek to get legal documentation of individual employees in order to operate effectively in the market (Tian, & Martin, 2010). For long-term business viability, the business will ensure that employee pay all the charges including tax and permit charges. The employees will also be trained in relation to the state laws and regulations that are likely to influence their duties and the company’s business. There will be strict following of the government policies during the business operations. The legal form of the business Formation of this business was done by following the requirements of a limited liability company. The business has limited liability that allows protection of members from being personally liable to the debts of the business, that is, when the business has debts, members are not liable to pay the debts, but the business itself. The members of this business are also protected from the business decisions and actions. It is clear that this business does less recordkeeping and during its registration, it did less paperwork. The two owners who are the members of the business do the management of the printing and stationery shop. The business has ten employees thus fitting in the characteristics of Limited Liability Company. The company’s name is Ryan and Migel, Printing and Stationery limited company. Profit of the business is distributed to members as they see it being right and the two members decide on the one to earn what percentage of the business profit. Two managers will manage the business, and they will be responsible for supervision of the ten employees who will be conducting the printing and packaging activities (Fisher, 2010). These managers will be the same owners of the business, thus no definite salary, but there will be equal sharing of the business profit. Ultimately, the personal objectives of the owners become the objectives of the small business; The owners as the members and managers manage the business. Their personal objectives are the same business objectives as they are the decision makers. The goals set for the business are as per the interests of the owners (Longenecker, et al. 2013). Ownership and management are not separate; the owners control the business and make the decisions; The owners of this printing and stationery shop are the same managers whereby the two owners take control of all activities taking place in this business. The two owners make all decisions regarding the running of the business. The two manages the business together and when one is absent, the other owner manages alone. There are fewer formal contracts than there are for large businesses; The formation of this business do not require many paperwork and the legal documents necessary during the formation are few compared to large business paperwork. The market, product and technical feasibilities of the business idea The business is likely to encounter a number of feasibilities, that is the capabilities and they include; technical, product, and market feasibilities (Silverbrook, et al. 2010). The technical feasibilities will include; adequacy of qualified and well trained technical workers to operate the machines using advanced technologies. This is because the business will be run at an era when majority of people have adequate and effective knowledge on how operate advanced technology. The business will be able to offer printing services at a reasonable cost because of having connections and network with well performing suppliers in the market. Ultimately, there will be market feasibility because of conduct of research and development activities where the company will have a number of employees to conduct market study (Benzing, & Chu, 2009). In addition, the business will enter into the market through conduct of effective promotion and advertisement activities. In order to produce quality products, the business will be providing training sessions to its employees to improve their skills, as well as offering a good working environment for them to enjoy their work in the company. References Andrade, L. C., Míguez, C. G., Gómez, M. T., & Bugallo, P. B. (2012). Management strategy for hazardous waste from atomised SME: application to the printing industry. Journal of Cleaner Production, 35, 214-229. Benzing, C., & Chu, H. M. (2009). A comparison of the motivations of small business owners in Africa. Journal of Small Business and Enterprise Development, 16(1), 60-77. Fisher, J. (2010). E-books and the Australian Publishing Industry. Meanjin, 69(3), 117. Greco, A. N. (2013). The book publishing industry. Routledge. Hatten, T. S. (2015). Small business management: Entrepreneurship and beyond. Cengage Learning. 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